Bachawat ADR

User Name: Navneet Krishn
Date and Time: 23 April 2020 13:49:00 IST

Job Number: 115254976
Documents (61)
1. S. 35. Finality of arbitral awards

Client/Matter: -None-
2. S. 36. Enforcement
3. APPEALS
4. S. 37. Appealable orders
5. MISCELLANEOUS
6. S. 38. Deposits
7. S. 39. Lien on arbitral award and deposits as to costs
8. S. 40. Arbitration agreement not to be discharged by death of party thereto
9. S. 41. Provisions in case of insolvency
10. S. 42. Jurisdiction
11. S. 43. Limitations
12. ENFORCEMENT OF CERTAIN FOREIGN AWARDS
13. NEW YORK CONVENTION AWARDS
14. S. 44. Definition
15. S. 45. Power of judicial authority to refer parties to arbitration
16. S. 46. When foreign award binding
17. S. 47. Evidence
18. S. 48. Conditions for enforcement of foreign awards
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19. S. 49. Enforcement of foreign awards
21. S. 51. Saving
22. S. 52. Chapter II not to apply
23. GENEVA CONVENTION AWARDS
24. S. 53. Interpretation
25. S. 54. Power of judicial authority to refer parties to arbitration
26. S. 55. Foreign awards when binding
27. S. 56. Evidence
28. S. 57. Conditions for enforcement of foreign awards
29. S. 58. Enforcement of foreign awards
31. S. 60. Saving
32. CONCILIATION
33. S. 61. Application and scope
34. S. 62. Commencement of conciliation proceedings
35. S. 63. Number of conciliators
36. S. 64. Appointment of conciliators
37. S. 65. Submission of statements to conciliator
38. S. 66. Conciliator not bound by certain enactments
39. S. 67. Role of conciliator
40. S. 68. Administrative assistance
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41. S. 69. Communication between conciliator and parties
42. S. 70. Disclosure of information
43. S. 71. Co-operation of parties with conciliator
44. S. 72. Suggestions by parties for settlement of dispute
45. S. 73. Settlement agreement
46. S. 74. Status and effect of settlement agreement
47. S. 75. Confidentiality
48. S. 76. Termination of conciliation proceedings
49. S. 77. Resort to arbitral or judicial proceedings
50. S. 78. Costs
51. S. 79. Deposits
52. S. 80. Role of conciliator in other proceedings
53. S. 81. Admissibility of evidence in other proceedings
54. SUPPLEMENTARY PROVISIONS
55. S. 82. Power of High Court to make rules
56. S. 83. Removal of difficulties
57. S. 84. Power to make rules
58. S. 85. Repeal and savings
59. S. 86. Repeal of Ordinance 27 of 1996 and saving
60. PROVISIONS OF 1940 ACT WHICH DO NOT FIND PLACE IN 1996 ACT — 1
61. PROVISIONS OF 1940 ACT WHICH DO NOT FIND PLACE IN 1996 ACT — 2
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S. 35. Finality of arbitral awards
Bachawat: Arbitration and Conciliation
Justice R S Bachawat
Bachawat: Arbitration and Conciliation > Bachawat: Arbitration and Conciliation > Volume II >
PART I ARBITRATION > CHAPTER 8 FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS >
FINALITY OF AWARDS
S. 35 Finality of arbitral awards
Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them
respectively.
The provisions of this section must be read as subject to the right of any appeal conferred by the Act or arising
under the rules of arbitral institutions.
”'Final’ in this context means that, as between the parties to the reference and persons claiming under them, the
award is conclusive as to the issues with which it deals, unless and until there is a successful challenge to the
award.”1 The award becomes immediately enforceable unless challenged under Section 34, and in that sense, it is
final.
In a dispute over properties between family members, division of the properties was effected by the arbitrator. He
distributed scheduled properties as well as Punja lands. The award was converted into a rule of the court. The
petitioning member of the family had taken his share of the property under the award. He did not question the
award. The court said that he was estopped from taking the plea that Punja lands were not the subject matter of
arbitration proceedings.2
The finality attached to an arbitral award has been discussed in Halsbury'S Laws of England in the following
manner3 —
“The effect of the award is such as the agreement of reference expressly or by implication prescribes. Where no contrary
intention is expressed and where such a provision is applicable, every arbitration agreement is deemed to contain a
provision that the award is to be final and binding on the parties and any persons claiming under them respectively.
Subject, therefore, to the arbitrator's power to correct slips, and to the court's power to remit the matters referred to
reconsideration, the making of the award determines the arbitrator's authority,4 and he cannot alter his award after making
it,5 even if he realizes he has misapprehended the effect of the evidence6 or made a mistake as to the extent of his
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jurisdiction.7 As between the parties to the arbitration agreement, the award gives rise to an estoppel inter parties with
regard to the matters decided therein analogous to that created by the judgment in an action in personam 8;
thus if the award was in respect of a breach of a contract, it may bar further proceedings even though fresh damage has
flowed from the breach.9 Once an award has determined the construction of a contract, the parties are bound by that
construction even though a new source of difference raising the question occurs.10 Since it is the duty of a party to bring
forward his whole case where the reference is of all matters in difference, he will, generally speaking, lose his right of action
in respect of any matter of difference not brought to the arbitrator's attention to the same extent as if it had been included in
the matters actually determined.11
The publication of the award thus extinguishes any right of action in respect of the former matters in difference12 but gives
rise to a new cause of action based on the agreement between the parties to perform the award which is implied in every
arbitration agreement.13
An award does not operate as a conveyance,14 although an arbitrator may normally decree specific performance of any
contract other than a contract relating to land or an interest in land.
An award which deals with and decides a claim under a contract is a bar to an action on the contract in respect of that
claim,15 but if the award does not deal with the claim but merely deals negatively with a question of the arbitrator's
jurisdiction, then the award is not a bar to the action.16”
See also Notes under Section 31 as to the requirement of finality.
ENFORCEMENT OF DOMESTIC AWARDS
Once a decree is produced for execution under the provisions of Order 21 of the
Civil Procedure Code , there is a presumption that the same is validly in existence and is passed by a
court of competent jurisdiction after following due procedure since the executing court is not competent to go behind
the decree and examine the relations between parties and merits of its existence. In the case of a decree passed by
any Indian court if any doubt is created about existence or genuineness, it would be within the reach of courts to
examine.17 Section 36 declares that an arbitral award has the force of a decree, though, in fact, it is not
a decree. The award is enforceable without court's further intervention by way of judgment according to the award
followed by a decree upon that judgment. The requirements of filing, judgement and decree in terms of the award
have been dispensed with by the
Arbitration and Conciliation Act, 1996 .
1. Russel On Arbitration, 21st edn., para 6-006, p. 252.
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2. Hariah Hegde v. Rukmini Heggadlathi,

AIR 2004 NOC 402 (Kant).
3. Halsbury'S Laws Of England, 4th ed. (1973), Vol. 2, p. 323, para 611.
4. Sutherland & Co. v. Hannevig Bros Ltd.,

[1921] 1 KB 336 .
5. Sutherland & Co. v. Hannevig Bros Ltd.,

[1921] 1 KB 336 ; Re Great Western Rly Co. and Postmaster-General,
(1903) 19 TLR 636 ; Re Stringer and Riley Bros,
[1901] 1 KB 105 .
6. Re Grant Western Rly Co. and Postmaster-General,

(1903) 19 TLR 636 .
7. Pedler v. Hardy,
(1902) 18 TLR 591 . See also Re Calvert and Wyler, (1899) 106 LT
Jo 288, and IRC v. Hunter,
[1914] 3 KB 423 at 428, Scrutton J.
8. Cf. Whitehead v. Tattersall, (1839) 1 Ad & El 491; Roland v. Hall, (1835)

1 Hodg 111; Smalley v. Blackburn Rly Co., (1857) 2 H &N 158.
9. Speak v. Taylor,
(1894) 10 TLR 224 ; and cf Clegg v. Dearden,
(1848) 12 QB 576 . But see E.E. and B. Smith Ltd. v.
Wheatsheaf Mills Ltd.,
[1939] 2 KB 302 :
[1939] 2 All ER 251 .
10. Gueret v. Andouy,(1893) 62 LJ QB 633, CA.
11. Smith v. Jonhson,(1812) 15 East 213; Dunn v. Murray, (1829) 9 B&C 780; Smalley v.
Blackburn Rly Co., (1857) 2 H & N 158; Hawksworth v. Brammall,(1840) 5 My & Cr 281; Rees v. Waters, (1847) 16
M&W 263. Cf. also Trimingham v. Trimingham,(1835) 4 Nev & MKB 786. But where a cause of action
existed without being actually a matter in difference at the time of the reference a party may not be precluded from
raising it after the award: Ravee v. Farmer, (1791) 4 Term Rep 146. This will be true more obviously in cases where
there has been concealed fraud: Charter v. Trevelyan,(1844) 11 Cl & Fin 714, HL.
12. Crofts v. Harris, (1961) Carth 187; Allen v. Harris,(1696) 1 Ld Raym 122; Boisloe v. Baily,
(1704), Holt KB 711; Gascoyne v. Edwards,(1826) 1 Y & J 19; Freeman v. Bernard,(1697) 1 Ld Raym 247 at 248; and
see also Norske Atlas Insurance Co. Ltd. v. London General Insurance Co. Ltd.,
(1927) 43 TLR 541 ; Allen v. Milner, (1831) 2 Cr & J 47; Commings (Cummings) v.
Heard,
(1869) LR 4 QB 669.
13. Bremer Oelstransport Gmbh v. Drewry,

[1933] 1 KB 753 , CA; Norske Atlas Insurance Co. Ltd. v. London General
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Insurance Co. Ltd.,

(1927) 43 TLR 541 .
14. Thorpe v. Eyre, (1834) 1 Ad & El 926.
15. Ayscough v. Sheed, Thomson & Co.,

(1924) 93 LJKB 924 , HL.
16. Pinnock Bros v. Lewis and Peat Ltd.,

[1923] 1 KB 690 .
17. Western Shipbreaking Corpn. v. Clare Haven Ltd.,(UK),

(1998) 1 RAJ 367 , 378 (Guj): (1997) 3 Guj LR 1985 : 1998 (Supp) Arb LR 53.
End of Document
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S. 36. Enforcement
PART I ARBITRATION > CHAPTER 8 FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS >
ENFORCEMENT OF DOMESTIC AWARDS
S. 36 Enforcement
Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such
application having been made, it has been refused, the award shall be enforced under the
Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the court.
Section 36 provides for enforcement of awards. Under the preceding Act of 1940, an award had to be filed in the
court for making it a rule of the court.1 Objections from the parties were invited. Where no objection was filed or was
sustainable, the court would pass a judgment in terms of the award and it was then converted into a decree for
enforcement.
Under the new dispensation in the

Arbitration and Conciliation Act, 1996 , the above procedure has been substituted by the simple
procedure of giving effect to the award as a decree. When the period for filing objections has expired or objections
have been rejected, the award can be enforced under the
Civil Procedure Code in the same manner as if it were a decree passed by a court of law.2
1. UNCITRAL Model Law
The provisions relating to enforcement of an award are contained in Article 35 of the Model Law.3
Analytical Commentary on Draft Model Law
Article 35. Recognition and enforcement
(1) An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon
application in writing to the competent court, shall be enforced subject to the provisions of this article and of Article
36.
(2) The party relying on an award or applying for its enforcement shall supply the duly authenticated original award
or a duly certified copy thereof, and the original arbitration agreement referred to in Article 7 or a duly certified copy
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S. 36. Enforcement
thereof. If the award or agreement is not made in an official language of this State, the party shall supply a duly
certified translation thereof into such language.
(3) Filing, registration or deposit of an award with a court of the country where the award was made is not a pre-
condition for its recognition or enforcement in this State.
Commentary
Appropriateness of including provisions on recognition and enforcement of awards irrespective of their

place of origin
1. The chapter on recognition and enforcement of awards presents the result of extensive deliberations on basic
questions of policy, in particular, whether the model law should contain provisions on recognition and enforcement
of domestic and foreign awards, and, if so, whether these two categories of awards should be treated in a uniform
manner, and how closely any provisions on recognition and enforcement should follow the corresponding articles of
the 1958 New York Convention. As evidenced by Article 35 and its companion Article 36 [Corr. to sec. 48], the
prevailing answer to these basic policy questions was that the model law should contain uniform provisions on
recognition and enforcement of all awards, irrespective of the place of origin, and in full harmony with the 1958 New
York Convention.
2. The main reasons are, in short, the following : While foreign awards are appropriately dealt with in the 1958 New
York Convention, which is widely adhered to, often with the restriction of reciprocity, and is open to any State
prepared to accept its liberal provisions, the model law would be incomplete if it would not offer an equally liberal
set of rules, in full harmony with the 1958 New York Convention, including its safeguards in article V, and without
adversely affecting its effect and application, in order to establish a supplementary network of recognition and
enforcement of awards not covered by any multilateral or bilateral treaty. While domestic awards are often treated
by national laws under the same favourable conditions as local court decisions, the disparity of national laws is not
conducive to facilitating international commercial arbitration and the model law should, therefore, aim at unifying the
domestic treatment in all legal systems, without imposing restrictive conditions.
3. Above all, these provisions on recognition and enforcement would go a long way towards securing the uniform
treatment of all awards in international commercial arbitration irrespective of where they happen to be made. To
draw the line between such “international” awards and “non-international”, i.e., truly domestic, awards (instead of
distinguishing on territorial grounds between foreign and domestic awards), would further the policy of reducing the
relevance of the place of arbitration and thereby widen the choice and enhance the vitality of international
commercial arbitration. This idea of uniform treatment of all international awards was the major decisive reason
which any State may wish to consider when assessing the acceptability of this chapter of the model law.
Recognition of award and application for its enforcement, paragraph (1)
4. Article 35 draws a useful distinction between recognition and enforcement in that it takes into account that
recognition not only constitutes a necessary condition for enforcement but also may be standing alone, e.g., where
an award is relied on in other proceedings. Under paragraph (1), an award shall be recognized as binding, which
means, although this is not expressly stated, binding between the parties and from the date of the award.4 An
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S. 36. Enforcement
award shall be enforced upon application in writing to the “competent court”.5 Both recognition and enforcement are
subject to the provisions of Article 36 and the conditions laid down in paragraph (2) of Article 35.
Conditions of recognition and enforcement, paragraph (2)
5. Paragraph (2), which is modelled on article IV of the 1958 New York Convention, does not lay down the
procedure but merely the conditions for recognition and enforcement. The party relying on an award or applying for
its enforcement shall supply, in an official language of the State, that award and its constituent document, i.e., the
arbitration agreement.6 According to the footnote accompanying the text, these conditions are intended to set
maximum standards; thus a State may retain even less onerous conditions.
No filing, registration or deposit required, paragraph (3)
6. The model law, which itself does not require filing, registration or deposit of awards made under its regime
(Article 31), also does not require such actions is respect of foreign awards whose recognition or enforcement is
sought under its regime, following the policy of the 1958 New York Convention of doing away with the “double
exequatur”.
UNCITRAL Report on Adoption of Model Law
Paragraph (1)
It was noted that the scope of application of Articles 35 and 36 was not identical to that of the 1958 New York
Convention and that the classification of awards was not the same as in that Convention. Articles 35 and 36
covered only those awards arising out of an international commercial arbitration in the terms of Article 1, even as
regards awards made in a foreign State. It was understood that that did not mean that the State in which the award
was made must have itself adopted the Model Law in order for those provisions to apply to the enforcement of the
award [Para 312].
It was noted that Article 35(1) did not determine the point of time when an award became binding. As regards
foreign arbitral awards, the question would have to be answered, in conformity with the rule laid down in Article
36(1)(a)(v), by the law of the State in which, or under the law of which, the award was made. As regards awards
made in the State where recognition or enforcement is sought under Article 35, the discussion of that issue was
subsequently held in the context of Article 31 (see above, paras. 256-258)7 [Para 313].
The Commission adopted the paragraph [Para 314].
Paragraph (2)
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S. 36. Enforcement
Paragraph (3)
It was suggested that the question as to whether an award must be filed, registered or deposited should be left to
each State. It was also suggested that it would be inconsistent for a State to require awards to be registered but to
enforce those awards even though they were not registered [Para 316].
The Commission deleted the paragraph [Para 317].
2. Constitutional validity of S. 36
The scope of S. 36 was considered, although not challenged, before the Supreme Court in National
Aluminium Co .8 It was pointed out that an automatic suspension on the execution of the award, the
moment an application challenging the award is filed under S. 34, leaves no discretion to put the parties on terms
and defeats the very objective of the Act. The Court however reserved its opinion on the matter, and only
recommended that Parliament look at the provision.
Section 36 was directly challenged in a later case before the Gujarat High Courton the ground that it is ‘beyond the
scope and the objectives’ of the Act. The argument was rejected since no unconstitutionality could be demonstrated
by way of S. 36 being either beyond the scope and objectives of the Act, or, outside the legislative competence of
Parliament or in contravention of any other provision of the
Constitution . The court was in agreement with the legislative wisdom of allowing for enforcement of the
arbitral award only after the time period in S. 34 is over so as to give the aggrieved party a reasonable opportunity
to set aside the award.9
3. Power of court to pass decree on award under 1940 Act
Section 14 to 17 (1940 Act) read together showed that the only prayer which a party could make in an application
under Section 14(2) [1940 Act] was that the award be filed in court. He was not required to pray for passing of the
decree on the award; for the decree had to follow in due course.10 An application to set aside an award before the
filing of the award under Section 14 was incompetent.11 No decree on the award could be passed in a proceeding
under Section 33 (1940 Act) without any prayer for the same by any party to the arbitration agreement.12
After filing of an award, a notice used to be issued to the parties. The period of limitation for filing objections started
running from the date of notice and not from the date of filing. The issuance of fresh notice did not have the effect of
negating the first service effected on the earlier date.13
It was open to the court before which an award was filed by one of the parties to pass a decree on the award and it
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S. 36. Enforcement
was not necessary that the award should have come before the court as a result of specific proceedings under
Section 14(2)[1940 Act].14 The filing of an application by a party to the arbitration agreement with a prayer for
summoning the award was not a condition precedent to the passing of a decree under Section 17[1940 Act].15 The
court could pass a decree on the award whether the award was filed by the arbitrator suo motu or was summoned
by the court on the application of a party.16 Execution of the award has to be in accordance with the provisions of
the
Civil Procedure Code . Section 31(4) of the 1940 Act had no application in that respect.17
Under the 1940 Act, no order under S. 17 [1940] Act could be passed when an appeal was pending before the
Supreme Court to set aside the award.18 In the case of the 1996 Act, however, it has been held that where an
appeal was pending before the Supreme Court against an order refusing to set aside an award, the Court said that
the refusal contemplated in S. 36 is a refusal by the Court of first instance and not by the appellate Court. It does
not imply final refusal after all remedies, including an appeal which is a continuation of the original proceedings,
were exhausted.19
4. Power of the executing court
The power of an executing court is limited in under the 1996 Act by the words of S. 36 and, unlike the 1940 Act,
there is no requirement of filing an application to make the award a rule of the court. The words of S. 36 do however
use the phrase “award”, and this casts an obligation upon the court to be satisfied that what is sought to be
enforced is an “arbitral award” which is the result of an “arbitration agreement”. Since an award rendered under the
1996 Act, unlike the 1940 Act, becomes enforceable without being made a rule of the court, it is a burden on the
enforcing party to satisfy the court that what is sought to be executed is an “award”, and that the same satisfies
other legal requirements, such as registration, impleading of necessary parties etc.20
For the purposes of s. 36, the court could not called upon to go behind the awarded amount and deal with the
processes by which the amount was arrived at. It was also held, that in case the award was challenged under S. 34
it could not be executed under S. 36.21 If on the other hand, an award is not challenged, then it attains finality and
can be enforced in a like manner as a decree of the court.22 Execution cannot be resisted on grounds that should
have been raised at the stage of challenge under S. 34. Thus, where an award attained finality, it was not open to
the judgment debtor to argue that interest awarded by way of decree was excessive. The Delhi High Court held in
strict terms23—
“[T]he course available to the judgment debtor was to have filed an application under S.
Section 34 of the Arbitration and Conciliation Act, 1996 . In the instant case, the [party] did not do so. If
objections of the kind raised by the [party] are permitted at the stage of execution, then it would defeat the scheme of the
Act. Clearly, this is neither intended nor permissible.”
The only permissible scope of challenge available at the stage of execution is if it can be shown that the court
passing the decree inherently lacked jurisdiction.24 The power of the executing court has been succinctly
summarised by Dhirendra Mishra J of the Chhattisgarh High Court in these words25 —
“It is settled law that the court executing the decree cannot go behind the decree. Any objection that the decree was
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S. 36. Enforcement
incorrect in law, in fact, cannot be entertained, until it is set aside by an appropriate proceeding in an appeal or in a revision.
A decree even if it is erroneous is still binding between the parties. When a decree is a nullity, i.e. where the same is made
by a court which had no inherent jurisdiction to make it, its nullity can be set up in an execution proceeding as lack of
inherent jurisdiction goes to the root of the competence of the court to try the case. The decree which is a nullity is void and
the same can be declared to be void by any court in which it is presented. Its nullity can be set up whenever it is sought to
be enforced or relied upon and even at the stage of execution or even in collateral proceedings. The executing court can,
therefore, entertain an objection that the decree is a nullity and can refuse to execute the decree. By doing so, the
executing court would not incur the reproach that it is going behind the decree, because the decree being null and void,
there would really be no decree at all.”
It may be noted that under the 1996 Act, the award is capable of being enforced in a like manner as a decree,
without any further judicial intervention.26 An award cannot, however, be equated to a decree of the court.
Commenting upon the words “as if” in S. 36 of the 1996 Act, Lakshmanan J noted27 —
“The words “as if” demonstrate that award and decree or order are two different things. The legal fiction is created for the
limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all
statutes, whether State or Central.”
Section 36 of the 1996 Act represents a marked departure from the scheme under Ss. 14 and 17 of the 1940 Act
where the award had to be filed before the court, and the court had to pass a specific decree in terms of such
award. In the context of the scheme of the 1996 Act, the situation described above, i.e. of the decree being passed
by a court which inherently lacks jurisdiction, will not arise at all. Under the scheme of the 1996 Act, the scope of
permissible judicial intervention, at the stage of execution of the decree, is therefore even lesser.
It is relevant to understand that for the purposes of S. 36, the award shall be enforced under the
Code of Civil Procedure, 1908 in the same manner as if it were a decree of the Court. Thus, a court
executing the award will exercise all powers under the
CPC which are available to a court at the stage of execution of a decree. This power is not limited by
any other provision in the 1996 Act. For instance, thoughs. 33 enables a party to correct typographical/clerical
errors, it does not take away the power of the executing court under S
s. 152 and
153 of the
CPC to make similar amendments.28
Grant of applicable statutory interest
Section 37(1)(b) of the Act recognises that unless the award otherwise directs, interest at 18% is applicable from
the date of award to the date of payment on the sums outstanding under the award. Grant of such applicable
statutory interest does not involve exercise of any powers by the executing court, and is hence not improper.29 The
executing court in such a situation is not modifying the award, or going behind such award, it is merely recognising
the rate of interest which the awarded amount is statutorily deemed to attract.
The executing court cannot however award interest where this has been rejected by the arbitrator.30
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S. 36. Enforcement
5. Suo motu refusal
There was a suo motu power on the part of the court to set aside an award and refuse a decree where no party had
filed any objection or opposed the award and the time for challenging the award had already expired.31 A Division
Bench of Kerala High Court 32 observed that the requirement was that the court had to be satisfied that
there was no ground for setting aside the award and if so satisfied to pass a decree. An order to set aside need not
necessarily be on the application of a party. An order of setting aside could be embodied in an order passed under
S. 17 [1940 Act]. Such suo motu power of the court to invalidate the award could be exercised only if there was any
patent illegality or voidness in the award or the award directed a party to do an act which was prohibited by law. If
such illegality was not patent but required an inquiry to find that out, the court could not be justified in exercising its
suo motu jurisdiction.33 Following the decision of the Supreme Court in Executive Engineer, Galimala v. Abhaduta
Jena 34 the court held that while the award of interest for the period prior to the initiation of the
proceedings could not be questioned, the arbitrator had no jurisdiction to award interest pendente lite or interest on
the amount of interest accrued due prior to the initiation of the proceedings before him.35
The fact that no objections had been filed did not absolve the court of its responsibility to see whether there was a
competent reference and whether the award was valid on the face of it. The matters which go to the root of the
award for its validity could not be ignored whether the same are pointed out to the court by the parties or not.36
Where the party who was liable to pay under the award absented himself from proceedings for filing of award, nor
made any application for setting aside, the court decision to set aside the award on the ground that there was no
dispute to refer was reversed because the dispute did exist. The court said that a failure to make a promised
payment and keeping mum as against notice of payment showed a state of disagreement with the demand. It,
therefore, constituted a “difference” within the meaning of S. 2(a) [1940 Act].37
The essential condition for the passing of the decree on the award was that the court must have given notice to the
parties of the filing of the award.38 The Court appointing the arbitrator would have jurisdiction for the purposes of
this section.39
The word “application” was not been defined either in S. 17 [1940 Act] or anywhere in the
Arbitration Act or in the
Limitation Act . “Application” as defined ins. 2 sub-rule (2) of the Civil Rules of Practice and Circular
Orders Vol. 1, contemplates an oral application also and therefore there was no need for an appellation, under S.
Section 17, Arbitration Act 1940, to set aside an award to be in any particular form with court fee
affixed. The counter affidavit filed by the respondents in application for passing a decree in terms of an award within
30 days of the service of notice of the petition counter attacking the genuineness and validity of the award and
praying that the court might be pleased to pass an order dismissing the petition was an application within the
meaning of S.
Section 17 of the Arbitration Act , 1940 with a sufficient compliance with the requirements of the
section. It was not necessary to make it in any particular form and to affix court fee stamp of any value.
This view gained support from a decision of the Bombay High Court.40 There, the learned Judges observed that it
was sufficient compliance with the requirements of S.
Section 17 of the Arbitration Act , 1940 if some notice given to the proper office that the party objected
to the award and that in that particular case the relevant affidavit had been brought to the notice of the proper office.
It was also pointed out that for purposes of the Indian
Limitation Act the date on which the application was filed was the date on which it could be said that
the application was made.
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S. 36. Enforcement
The judgment and the decree rendered by the civil court in respect of an award is merely to super-add its seal for
making the award enforceable through the same mechanism which would apply to the court's own decrees.41
6. Events subsequent to award
Section 17 [1940 Act] was merely a follow-up action to make the award executable. Quite independently of this
section the award was a final adjudication of the claims between the parties. This finality was not to be affected
merely because a decree had yet to be passed in terms of the award. Accordingly an amendment of the
Electricity Act in U. P. after the award but before the decree would not render the award open to
challenge or alteration on the basis of the substituted provisions.42 A resale of the property by the vendor after the
award did not affect the vendee in whose favour the award had gone though the award was still not registered.43
7. Judgment and decree followed award
The judgment and decree had to be according to the award. The court could not substitute another list in place of
the list attached to the award by the arbitrator,44 nor extend the period of time fixed by the award.45 There was a
difference of opinion if the court could grant instalments: one view was that it could,46 the other view was that it
could not.47 When the arbitrator granted instalments, the court could not alter them.48
Where a part of the award was admitted by both parties, it was held that the court could make the admitted portion
of the award a rule of the court because it was severable from the rest of the award. There was no question of
modifying, remitting or setting aside, the award to the extent to which it was agreed to between the parties. The
language of S. 17, [1940 Act] the court said, did not bar passing of successive decrees.49 The court followed the
Supreme Court decision in Mattapalli Chelamayya v. Mattapalli Venkatratanam. 50 The registrable
portion of an award which was not registered and, therefore, was not enforceable was separated from the rest so as
to enforce the rest. The court cited the observation from Amir Begam v. Badr-ul-din Hussain 51 to the
effect that where a severable part of an award cannot be given effect to for a lawful reason, there is no bar to
enforce the part to which effect could be justly given. When a separable portion of an award is bad, the remainder
of the award, if good, can be maintained.
8. Registration of award 52
Where the court found that the contents of the award were described on stamp papers and all the legal steps were
taken before the decree was obtained and the award was by an arbitrator who was appointed by the court in a suit,
it was held that the award was not required to be registered compulsorily.53 So far as the direction to pay a sum of
money by one party to another is concerned there can be no difficulty at all because that creates a personal liability
of the appellant to make good the money in excess of their shares from the family fund. An award containing such a
direction is not required to be registered.54 The award so far as it refers to the partition of immovable properties
does not purport to create or declare any interest or title in immovable property. The recital in the award was no
more than a reference to an existing fact and does not purport to create or declare by virtue of the award itself,
right, title or interest in immovable property. The award, cannot, therefore, be regarded as compulsorily registrable
on the ground that it embodied a partition.55
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An award made by a private arbitrator which was made a rule of the court under S. 17, 1940 Act, was held to be a
non-testamentary instrument within the meaning of
S. 17(1)(b) of the Registration Act, 1908 .56
An award, to require registration, must create a right or extinguish a right in praesenti or in the future, and must not
be only a declaration of pre-existing rights.57
An award which does not, by itself, create rights in immovable properties, but directs subsequent execution of
certain documents to create such rights, does not require registration.58
9. Unregistered partnership firm
The bar upon an unregistered partnership firm to enforce rights arising out of contract was held to be not applicable
to proceedings before an arbitrator. The proceeding was under S. 17 of the old Actfor making the award a rule of
the Court. This was held to be not a proceeding for enforcement of a right arising out of a contract. Such a
proceeding is not barred by S.
Section 69 of the Partnership Act, 1932 . The firm was also a defendant in the case.59
10. Compromise after award
The Actdoes not disable the parties from terminating their dispute in a way different from the award. If the parties
are dissatisfied with the award and want to substitute it by a compromise involving matters alien to the original
dispute which are inseparable, the court may supersede the arbitration and leave the parties to work out their
submission in accordance with the law outside the
Arbitration Act . The compromise may furnish a very good ground for superseding the arbitration and
thus revoking the award.60 It is necessary that the person entering into such a compromise on behalf of the parties
has the necessary authorisation and power to do so, and that the compromise is not vitiated by fraud or collusion.61
After the award was filed the parties entered into a compromise varying the mode of payment of the money
awarded by altering the dates and the amounts of instalments and the court passed a decree in accordance with
the award as modified by the compromise. It was held that there was nothing in the
Arbitration Act or in Section 15 [1940 Act] which disentitled the court from taking note of an agreement
of that character and the decree incorporating the award as modified by the parties could not be characterised as a
nullity and could not be challenged in execution proceedings.62
In proceeding under Section 14, [1940 Act] there were no plaintiff and no defendant. The court could pass a decree
in the absence of the parties. It was not necessary that the claimant should appear at court at the time of the
passing of the decree. A decree passed in the absence of the respondent was not strictly an ex parte decree and
the provisions of Order 9 Rule 13 of
Code of Civil Procedure and of the
Limitation Act , 1908 do not apply to an application for the setting aside of an ex parte decree.63 But the
court may set aside the ex parte decree for sufficient cause in the exercise of its inherent jurisdiction.64 An
application for setting it aside will be barred by limitation if it is not made within the period prescribed by
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Article 158 of the Limitation Act , 1908.65
Where the parties do not throw the award over board but modify it in its operation, the award so far as it is not
altered still remains operative and continues to bind the parties and cannot be revoked. In that contingency the
court follows one of the two modes indicated in Hemanta Kumari's case.66 If the whole of the subject matter of the
compromise was within the reference, the court could include in the operative part of the decree the award so
modified. But if it is not so, the court could confine the operative part of the decree to the award so far as accepted
and the other terms of the settlement which form a part thereof if severable and within the terms of the original
reference in the schedule to the decree. The portion included in the operative portion of the decree will be
executable but the agreement embodied in the schedule would be enforceable as a contract of which the evidence
will be the decree but not enforceable as a decree. The power to record such an agreement and to make it a part of
the decree follows from the application of the
Code of Civil Procedure by Section 41 of the 1940 Act and
Section 151 of the Code of Civil Procedure .67
Since the coming into force of the

Limitation Act, 1963 an application was eligible for condonation of delay under S. 5 of the Act if a
sufficient cause was shown for not filing objections within 30 days. Hence the expression in the section “time for
making an application to set aside the award,” must be taken along with the extended time, if any, under S.
Section 5 of the Limitation Act, 1963 .68
The arbitral award may itself provide for a compromise to be reached between parties. In disputes involving more
than two parties, this compromise need not involve all the parties to the dispute but can be between the
compromising parties inter se, so long as it does not detrimentally affect the interests of the other parties.69
A decision of the Allahabad High Courthas distinguished earlier authorities and held that under the 1996 Act, the
parties cannot modify or vary the terms of the award by agreement.70 The court faced before it objections to an
award on account of a subsequent agreement entered into by the parties. In a detailed judgment, Prakash Krishna
J. held that precedents under the 1940 Act permitting compromise subsequent to an award, were based on and
restricted to the scheme of that Act alone, which envisaged varying the terms of an award after it is rendered.
However, under the 1996 Act, like the 1899 Act which preceded the 1940 Act, the award itself is enforceable as a
decree. There is also no express power conferred on courts to modify the award.71 The court therefore revived the
principle laid down by the Privy Council in Jnanendra Mohan Bhaduri 72 as being applicable to the
situation under the 1996 Act.
Set-aside award left unchallenged upon compromise
In a case, an appeal against an order setting aside the award was dismissed as infructuous since a settlement had
been arrived at between the appellant and one of the parties. Subsequently, the award was sought to be enforced
against another party. It was held that the award was non-existent since the order of the judge setting aside the
award stood undisturbed.73
11. Declaratory award and decree
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A decree may be passed on a declaratory award merely declaring the liability but not the amount, but such a decree
cannot be enforced in execution.74 A decree on an award declaring the rights of the retiring partner as to the
amount to be paid after settlement of accounts in the manner indicated in the award cannot be enforced in
execution, but a subsequent suit to recover the amount due on the basis of the declaratory award and decree is
maintainable75 and was not barred by Section 32 [1940 Act]. The court could pass an executable decree on an
award made in a statutory arbitration under Section 7(1)(A)of the
Electricity Act instead of merely declaring the amount of the purchase price adjudged by the award.76
Under some statutes, e.g. the [English] Public Health Act, 1875 an award can be made only declaring the amount to
be paid but not deciding liability of the person called upon to pay; such an award cannot be enforced until the
liability is decided in other proceedings.77
A declaratory award is incomplete and not final and should be remitted to the arbitrator for reconsideration. There
were three contracts between the parties for purchase of cocoa and three contracts between them for sale of the
same commodity. The contracts were not for fixed quantities. An award directed set-off of the three contracts for
purchase against the three contracts for sale and payment of the difference by the respondent. The award was
remitted. It was held that the award could not be enforced as it was not for a sum certain.78 This was followed in a
case where the award providing for an award to the sellers of a certain sum less an unidentified and unqualified
deduction was held to be uncertain on its face and not an enforceable award. It was remitted to the board for further
findings. The court said that it was incumbent on the board to offer the buyers the opportunity to submit evidence as
to what deductions they contended for and to make final findings as to what sum should be deducted so that the
award ended up in a final and enforceable form.79 It is an implied term of an arbitration agreement that the award
should be in such a form as would make it capable of enforcement as a judgment under the
Arbitration Act .80
An award declaring that one party should pay to the other the difference between the contract price and the market
price81 or the losses for non-payment of documents on presentation and the arbitration fees and expenses82 cannot
be enforced as it merely declares the liability and does not provide for amount of payment. If a sum of money is
claimed, the award should be in terms of money and should not merely be declaratory.83 There is a difference
between ascertaining the amount to be paid and the liability in law to pay the amount. Where the order is for
payment of money, there must be a specific direction to pay a determined sum of money, otherwise the order is not
capable of being enforced in execution.84
A clause in a decree passed in terms of an award providing that in certain events the vendor shall be entitled to
take back possession of the property awarded does not make the decree declaratory so as to make it incapable of
execution. On the happening of the events, the vendor is entitled to apply for execution of the decree and take back
possession.85 It is not a pre-condition of the executability of a decree that it must provide expressly that the party
entitled to relief may file an execution application for obtaining the relief.86
12. Conditions for passing of decree
Before a decree on an award under Section 17 of 1940 Act could be passed the following conditions had to be
fulfilled:—
(a) The award had been filed in accordance with Section 14 [1940 Act].1
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S. 36. Enforcement
(b) The court approached should have jurisdiction to entertain the application for the filing of the award.
(c) The court had given notice to the parties under Section 14(2) [1940 Act].2
(d) The time for the filing of objections against the award had expired or such application having been made
had been refused.3
(e) The court saw no cause to set aside or remit the award.4
If the conditions were fulfilled, the court had no option but to pass the decree.5
An application for making the award a rule of the court could be filed only by a party to the agreement. When an
agreement was signed by a person in his official capacity and he, having retired, filed the application in his
individual capacity, the same was rejected.6
A decree passed by the court without allowing the parties thirty days’ time to file objections7 or without considering
the objections,8 or without giving opportunity to the parties to substantiate their objections by evidence could be set
aside in revision.9 But it was for the parties to move the court for time to lead evidence, it was not the duty of the
court suo motu to fix a date for the hearing of the evidence. An award providing that on the husband undertaking to
pay a fixed monthly sum to his wife by creating a first charge on certain properties, a plot of land in the name of his
wife would stand transferred to him was held to be compulsorily registrable enabling the court suo motu to refuse to
pass a decree on the ground of non-registration.10
When an order setting aside an award is reversed in appeal, another application could be made to the court under
S. 17 of the 1940 Act for a decree in terms of the award.11
A decree passed against a minor without appointing a guardian ad litem is a nullity. If the decree is indivisible it will
be set aside as a whole against the other parties also. The decree may be set aside on application.12 If the
application is not made within time, a sufficient cause for the delay would have to be shown within the meaning of
S.
Section 5 of the Limitation Act, 1963 explaining why the application was not filed on the last and also
explaining each day of delay.13
Burden of Proof
The burden of proof lies on the person who seeks to enforce an award to convince the court of its validity. A party
appointed his arbitrator but the other objected and refused to appoint. One party's arbitrator made his award. The
party found on advise that the arbitration proceedings were not in order. Another arbitrator was appointed who
made the second award and this was sought to be enforced. The Court of Appeal refused appeal to enforce the
award and said that the evidence before the court for ascertaining whether the second award was valid was
insufficient; that where there are matters which gravely affect the validity of an award it is proper that they should be
dealt with by an action in which the facts can be fully ascertained, and no order should be made giving leave to
proceed summarily under the award.14
13. Appeal from decree
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No appeal would lie from a decree under Section 17 [1940 Act] except when the decree was in excess of or not in
accordance with the award.15 No appeal could lie on the ground that the decree was passed after dismissing the
objections against the award16 or on the ground of misconduct or corruption of the arbitrator17 or on the ground that
the award was beyond the terms of reference and one of the parties was acting for a minor18 or on the ground that
the reference to arbitration was invalid19 or on the ground that the award was not valid or legal20 or on the ground
that the award was made out of time21 or on the grounds of challenge to the award agitated in an application under
Section 33 [1940 Act] which was dismissed.22 An appeal was inadequately stamped and on the request of the party
it was converted into a revision. In an appeal against this order the court found that no ground for appeal was made
out within the terms of S. 17 [1940 Act] and, therefore, the appeal was not maintainable and if an award was not
challengeable in appeal much less it would be challengeable on any other ground in revision.23
According to a decision of the High Court of Delhi an award which had been converted into a decree could still be
interfered with if there was an error apparent on the face of the record.24
No appeal would lie from the decree on the ground that the decree was passed before the expiry of the period for
the filing of the objection25 but the opposite view was also held.26
No appeal lies from a consent decree or order.27 A decree passed after withdrawal of objections under a
compromise is not a consent decree. If there is no adjustment by an agreement or compromise, the matter would
not be within the purview of Order 23, Rule 3,
CPC . The challenge to the decree would lie only within the framework of the
Arbitration Act .28
Explaining the reason why an appeal or revision does not lie against the decree making an award a rule of the court
and following the ratio of the decision of the Supreme Court in Union of India v. R D Gupta 29 the
Gauhati High Court 30 said that the

Arbitration Act is a self-contained code and as there is no provision in the Act for invoking the
revisional jurisdiction against the order passed by the lower appellate court by exercising revisional jurisdiction
under any other law,31 the court cannot interfere with the judgment of the lower appellate court. The court also said
that the
Civil Procedure Code was not applicable to the matter. The court noted that in Union of India v.
Mohindra Supply Co.,32 the question was whether in view of the provisions of Section 39 of the 1940 Acta second
appeal under Letters Patent was maintainable. Their Lordships held that the
Arbitration Act which is consolidating and amendingact, being substantially in the form of a Code
relating to arbitration must be construed without any assumption that it was not intended to alter the law relating to
appeals. Their Lordships further observed that words of theact are plain and explicit and they must be given their
full effect and must be interpreted in their natural meaning uninfluenced by any assumptions derived from the
previous state of law and without any assumption that the legislature must have intended to leave the existing law
unaltered. Their Lordships also observed that the legislature has made a deliberate departure from the law
prevailing before the enactment of the Actby codifying the law relating to appeals in Section 39 of the 1940 Act. [ S.
Section 37 of the Arbitration and Conciliation Act, 1996 ]. Their Lordships held that a second appeal
under Letters Patent was not maintainable.33
Where an award was modified and a decree was passed in accordance with the modified award, one view was that
an appeal could lie from the decree34 but the other view was that no such appeal would lie.35 An appeal could lie
from a decree partly based on the award and partly on the findings of the court.36
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In an appeal from the decree on the ground that the decree was in excess of or not in accordance with the award,
the appeal had to be confined to that question and no other question could be gone into by the appellate court.37
14. Proceeding against ex parte decree
Where objections were filed against the award being made a rule of the court, but the objector did not appear on the
day fixed for the hearing and a decree was passed in terms of the award, an application was then made praying
that the ex parte decree be set aside and the objections be restored, heard and decided on merit, the application
was held to be maintainable.38 The court described the opinion of the Calcutta High Court in Ganeshmal Bhawarlal
v. Kesoram Cotton Mills 39 to the effect that order 9 rule 13,
CPC did not apply to proceedings for setting aside an ex parte decree passed under S. 17 [1940 Act]
as no longer good law. The Calcutta High Court who was of the view that where formalities had been complied with
then even if the judgment was pronounced in the absence of the parties it could not be said to be an ex parte
judgment.40
In the case of Rajeshwar Pd v. Ambika Pd 41 the matter had been referred to arbitration under S. 21 of
the 1940 Act. One of the parties was a minor through his natural guardian, viz., the father. The father was also a
party to those proceedings and he had filed objections to the award under S. 30 which was on his own behalf only
and not on behalf of the minor, even though he represented the minor. It was held that it could not be said that a
decree passed on award was an ex parte decree within the meaning of O. 9, R. 13 of the
C.P.C. against the minor.
In Alvel Sales Dujadwale Industries 42 a notice of filing of the award in
court was served as required under S. 14(2) of the 1940 Act. No objections to the award were filed seeking to have
it set aside or remitted. On an application filed by one of the parties the award was made a rule of the court and a
decree was passed in terms of the award. This was sought to be set aside on the ground that the decree was an ex
parte decree. The Madras High Court held that the said decree was not an ex parte decree. It was also observed
that even otherwise under the
Limitation Act, 1963 the period for seeking to set aside the award had expired.43
After surveying all such authorities, the High Court of Delhi concluded :44
“It appears that after the objections are filed, the objector is entitled to show that the conditions as mentioned in Ss. 14
and/or 17 of the 1940 Act have not been complied with and that good grounds exist for either setting aside the award or
remitting it. Therefore, if after having filed the objections to the award the objector or his counsel is unable to appear when
the objections are taken up for hearing and if the application containing the objections is dismissed resulting in the award
being made a rule of the court and a decree being prepared in terms of the award then it may be difficult to accept the
absolute proposition in law that the provisions of Order 9, Rule 13 would not apply or for that matter that such a decree
would not be in the nature of an ex parte decree.”
Where a decree was passed even before the time for filing objections had expired, the court setting aside the
decree said that there was no scope for appeal against a decree because S. 39 [1940 Act] permitted appeal either
against the filing of an arbitration agreement or refusing to file it. Hence, the remedy was a revision under
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S. 115, CPC .45
Arbitration and Award by Court
An agreement to be bound by the decision of the court has the effect of preventing appeal against the decision. It
amounts to a surrender of the right of appeal so far as the decision of the court on the point of agreement is
concerned. On evidence it was found that not only the parties had the intention of deviating from the normal
procedure of recording the evidence but also to refer the matter to arbitration by the court. The court's decision
amounted to an award. There was no right of appeal against except as permitted by S. 39 [1940 Act].46
15. Valuation
The criterion of valuation of an application under Section 17 [1940 Act] for making an award regarding partnership
accounts declaring the amounts due to the partners on the basis of their respective shares and for purposes of
appeal to the Supreme Courtfrom an order under Section 17 [1940 Act] was the entire property dealt with by the
award and not merely the appellant's share in it.47 Where a slight error was found in the evaluation of the claim of
the petitioner, the award was modified for rectifying that error and made a rule of the court.48 That task became
easier because the arbitrator had given reasons for his award. The court cited the following passage from its own
earlier judgment in College of Vocational Studies v. S.S. Jaitley :49
“Where under an agreement the arbitrator is required to give reasons for his award, he is not required to give a detailed
judgment or detailed reasons. By reasons it means that the award should be speaking one. In a reasoned award what is
expected from an arbitrator is that he should indicate his mind whereby it can be ascertained as to how he has arrived at a
particular conclusion. In the case of a reasoned award, the arbitrator is required to indicate the trend of his thought process
but not his mental meandering, the purpose of commercial arbitration being speed, certainty and a cheaper remedy. When
the findings of an arbitrator are based on no evidence, then certainly the court can go into such findings and set aside such
an award as being perverse. The arbitrator is entitled to decide rightly or wrongly but if an error of law appears on the face
of the award, then the court can interfere and set aside the award.”
16. Court fee on decree
The decree passed on a reference in a suit was a decree passed in the suit and the court fee on it was leviable
under
Section 17 of the Court Fees Act .50
17. Payment of Decretal Amount
The decretal amount may be paid by the judgment debtor in any of the recognised modes under Or. XXI, Rule 1 of
the
Code of Civil Procedure, 1908 . Decretal amount may be paid either by deposit in the court, or out of
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court, or otherwise as the court (arbitrator) directs.51 In case the decretal amount is deposited in court, regard must
be had to the requirements for proper deposit laid down in Or. XXI. The judgment debtor's liability to pay interest
does not cease until deposit is made in the executing court and notice of the same is given to the decree holder.
There mere deposit of the amount without any notice, will not result in stopping the accrual of further interest.52
Where the deposit of the decretal amount was to escape the attachment of properties pending appeal, it was held
that such deposit would not absolve the judgment-debtor from payment of interest. The deposit of the amount in the
Court was not to satisfy the decree, but to purchase peace (stay on execution).53
Withdrawal of amount (Permissibility of deductions)
Any amount that is payable pursuant to an arbitral award is not liable to deduction of tax at source. Although the
amount may be payable for the work done under the contract, since the obligation to pay stands merged with the
decree of the court, no deduction is permissible from that amount.54
18. Decree operates as res judicata
A decree on an award passed in proceedings under Section 17 [1940 Act] has the same effect as an ordinary
judgment and operates as res judicata on a question dealt with in the award.55 An award was sent back to the
arbitrator solely on the question of escalation and quantum of interest. The arbitrator reduced the escalation amount
and also the rate of interest. The court said that these grounds became barred by res judicata. 56
A decree on an award was as binding as any other decree of court. After the decree was passed the award could
not be challenged on the ground that the submission had been revoked57 or that the reference was invalid58 or a
question of law had been wrongly decided by the arbitrator. Where the shipowners sought and obtained an order
enforcing the award, it was held that such action was an unequivocal act of approbation and, therefore, the
shipowners could not thereafter seek to reprobate it. They also could not show that the evidence on the basis of
which they were seeking to reopen the award, they could not have obtained earlier.59 Under the
Arbitration and Conciliation Act, 1996 an award is a decree in itself and all recourse against the award
would be a recourse against the award as well as the decree. The protection afforded by the procedure under the
1940 Act for getting the award converted into a decree through an order of the court is no longer available under
the1996 Act. Under the 1940 Act recourse against the decree would be available in all cases of recourse against
the award. However, under the 1996 Act also, an award becomes enforceable as a decree only after the period for
filing objections has expired or objections have been overruled.
The award does not have the effect of res judicata upon persons who were not parties to the arbitration
proceedings.60
19. Decision upon objections as res judicata
An award allowed claims for escalation and interest. Objections to the award were already decided in an earlier
proceeding. They were not allowed to be resurrected and tried for a second time. Any such attempt was barred by
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the principle of res judicata. 61
It is possible that the order of a court, even though setting aside the award, is decisive of the rights and liabilities of
the parties. In such a case, this attracts the principle of res judicata and a second reference cannot be sought to
resolve the same dispute between the same parties.62 Thus, a holding by a court that an arbitration agreement is
invalid, in proceedings for setting aside an award passed under that agreement, would act as res judicata and
prevent any subsequent revival of arbitration proceedings before a tribunal constituted under the same
agreement.63 Obviously, in case the matter is remitted back to arbitration, or the award is set-aside on procedural
grounds, and therefore the decision of the court is not a final determination on the merits of the dispute, the
principle of res judicata will not apply.64
Further Suggested Reading (Res Judicata in Arbitration)
1. Indu Malhotra, “Res Judicata in Arbitration”, 5(1) Nyaya Deep 109 (2004).
2. R Knutson, “The Interpretation of Arbitral Awards — When is a Final Award Not Final?” 11 (2) J Intl Arbn 99
(1994).
3. Hanotiau “The Res Judicata effect of Arbitral Awards”, ICC International Court of Arbitration Bulletin, Complex
Arbitrations, Special Supplement, pp. 43-51 (2003).
20. Appeal to Supreme Court and enforcement of award
It has been held that where an appeal against an award has been rejected and an appeal to the Supreme Court
has been filed against the refusal, the award may be enforced in the meantime. The court said that an award can
be enforced where no application has been filed against it within time or, where an application was filed, but has
been refused. The word “refused”, the court said, did not mean finally refused. It means refusal by the court of first
instance.65
21. Execution of decree
A suit did not lie to recover property allotted by the award, which was followed by a decree of the court. The remedy
of the allottee was to apply for execution of the decree within the time allowed for it by law.66 A judgment confirming
the award was allowed to be executed before the decree was drawn up when the judgment read with the award
showed what relief was granted.67
It is not possible to resist the enforcement of an award under the 1996 Act by saying that the award has not been
converted into a decree and the decree has not been attached to the application for execution. The award has now
to be enforced under the
CPC in the same manner as if it were a Court decree.68 In a dispute as to the licence relating to the
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S. 36. Enforcement
demised premises, the award was that the petitioners had a licence over a portion of the premises. The award
became final in the absence of any petition for setting aside. It was not contrary to the provisions of the Rent Act.
The award had the effect of a Civil Court decree. It was also executable because the petitioners were only
licencees and there was no relationship of landlord and tenant.69 Where no objections were filed under the 1940 Act
in the proceeding for converting the award into a decree and, therefore, a decree in terms of the award was passed
and application was made after one year for execution of the decree, it was held that the application was within
permissible limits and, therefore, no point could be made out of the delay.70
Lack of jurisdiction is a matter relating to the very foundation of the order and goes to the root. A decree without
jurisdiction is a nullity and this fact can be set up wherever and whenever it is sought to be enforced or relied upon
even at the stage of execution and also in collateral proceedings.71 This contention was held to be not tenable that
the parties were required under the 1940 Act to file their objections within 30 days of the receipt of notice of filing of
award.72
An application for enforcement cannot be made before the time for an appeal has expired or where an appeal has
been filed, before the appeal is dismissed. It follows that there cannot be any enforcement during the pendency of
proceedings for setting aside.73
The judgment or award of a tribunal which does not have the status of an Arbitral Tribunal cannot be regarded as a
decree for the purposes of enforcement under the Act. In this case, the award of the Film Makers Combine (FMC)
was held to be not a decree of an Arbitral Tribunal.74
Completion of Enforcement
The enforcement of an award is complete only when it has been enforced under
CPC in the same manner as if were a decree of the court.75
Injunction for Preventing other Proceedings
The High Court cannot grant the relief of declaration and permanent injunction restraining the respondent from
instituting any proceedings in any other court by exercising jurisdiction under S. 36.76
Enforcement of Part of Award
Where the main award was in favour of the claimant and the counter claim was against him and while he
challenged the counter claim, the other party presented no challenge to the main award, it was held that the main
award had attained finality and, therefore, became enforceable.77
A similar position exists in English law. The Privy Council has held that, where a part of an award is remitted to the
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S. 36. Enforcement
arbitrator, the party of the award that is not remitted is valid and can be enforced.78
A party cannot however seek execution of the favourable part of an award, while objections to the unfavourable part
are pending in an application under S. 34 of the Act. The question of severability of the award will apply only after
the application under S. 34 has been decided.79
Stay of execution
Although the time limits under S. 34(3) are strict, there may arise situations where courts have been known to allow
objections even though they are raised beyond the period prescribed in S. 34(3). Such situations may arise where
for instance a party avails the benefit of S.
Section 14 of the Limitation Act , or where objections, originally filed within the period of limitation are
rejected on technical grounds, and are re-filed beyond the limitation period etc.80 In such situations the court can, in
the interest of justice, stay the execution so that substantial justice is done between the parties.81
In case the award is challenged under S. 34, there is an automatic stay against enforcement of the award pending
disposal of the S. 34 application.82 There is however some controversy as to when an award, which has been
challenged under S. 34, can be deemed to be a decree and hence capable of enforcement under S. 36. This is
discussed elsewhere.83
Execution against amounts secured in another arbitration
In this case multiple arbitrations were being conducted against a party, and an award was made in one of them
which was at the stage of execution. In another arbitration, that was still pending, interim relief had been ordered by
the court, under S. 9(ii)(b), securing certain amounts that were in dispute in that arbitration. The decree holder in the
first arbitration, tried to execute the decree by taking recourse against the amounts secured under the other
arbitration. This was resisted by the party that was still in the arbitration. The court drew an analogy to Or 38 Rule
10 of the
CPC that recognizes the rights of other decree holders to apply for sale of property under
attachment.84 It was held that a decree holder could take recourse to the amounts secured even in another
arbitration, since securing of such amounts does not confer any title in or create any charge over such amount. In
the words of Dalvi J speaking for the court85 —
“If the arbitration petition [in the second arbitration] succeeds the amount so secured would be available to the petitioners in
those petitions pro rata along with the claims of the other decree holders. It is, therefore, merely an amount which
represents the assets of the judgment debtor just as any other assets. It would be used for the satisfaction of the claims of
a single decree holder or prorate the claims of a number of decree holders. Since at present the petitioners in [the first
arbitration] have already obtained the award, the award must be satisfied from the assets of the judgment debtor. One such
asset is the amount lying to the credit of the arbitration petitions pending against them.”
Compliance on exact terms
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S. 36. Enforcement
It is required that the judgment-debtor of an award complies with the exact terms of such award, and it is incumbent
upon him to pay the decree holder strictly in terms of the findings given in the award. It is not open to the judgment
debtor to make only a part payment and deduct certain amounts on the claim that these amounts were wrongly
awarded. An execution petition can be maintained to enforce compliance with the exact terms of the award.86
Perpetuation of mistake impermissible
Perpetuation of a mistake in compliance with an arbitral award is impermissible in proceedings before the executing
court. A party in whose favour an arbitral award was granted cannot take advantage of an error committed by the
other party while complying with such award, especially to the detriment of a third party whose rights are affected by
such mistake.87
Satisfaction at Option of Decree-holder
An award may provide an alternate means of satisfaction if a party is unable to pay the amounts within the time
specified. In this situation, upon such amounts being deposited after such date, the method of enforcement is at the
option of the decree holder. Thus, where the award directed that a party would get the conveyance of a particular
property in case of non-payment of monies owed under the award on a particular date, and the judgment-debtor
deposited the money after such date, the Court held that it was at the option of the decree-holder as to whether to
accept the money or the conveyance of the property in respect of satisfaction of the debt under the award.88
Obviously, if the latter was chosen, the money would be refunded to the judgment debtor.
Proceedings against transferee
In case the assets and liabilities of the judgment-debtor stand transferred to another party it does not render the
award against the judgment-debtor invalid. The transferee also takes over the liability to satisfy the award. Thus,
where the assets of the Rajasthan Housing Board were directed to be transferred to the Avas Vikas Sansthan, it
was held that the Sansthan shall also be responsible for executing the award that was taken out against the
Housing Board.89
Cross decrees or Cross claims under same decree
Applying the principle laid down in ITI v. Siemens, it is clear that the provisions of Or. XXI, Rules 18 and 19 will be
available to the parties when executing crossawards or cross-claims under same award.90 Thus, in case
applications are made to execute cross awards or cross claims under same award, execution shall be taken out
“only by the party entitled to the larger sum and for so much only as remains after deducting the smaller sum.” In a
case before the Supreme Court, on facts the conditions for cross claims were not satisfied, and therefore the court
refused the method available under Or. XXI Rules 18 and 19.91
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S. 36. Enforcement
Time for enforcement — “Expiry of time under S. 34” or “Refusal of objections”
It is important to note that although an award may be enforced in the same manner as if it were a decree, an award
cannot be equated to a decree.92 It is only for the purposes of enforcement under the
CPC that this legal fiction is created. Therefore, the issue is when does this legal fiction come into
play? This is answered in S. 36.
An award can only be enforced after “the time for making an application to set aside the arbitral award under S. 34
has expired” or “such application having been made, has been refused.” The question arises, when can an award
be said to have attained finality and hence be enforceable in the same manner as if it were a decree?
In case an award is not challenged, then the time limit calculated as per S. 34(3) will be applicable to initiate the
legal fiction of equating an award with a decree for the purposes of enforcement under the
CPC .93 In case, however, an award is challenged, it can only be enforced where such challenge has
been “refused”. There is conflicting case law on when such “refusal” can be said to have occurred.
On the one hand is the view that the “refusal” contemplated by S. 36 is the refusal to set aside the award by the
court of first instance and not by the appellate court. Thus, “refusal”, according to this view, does not imply a final
refusal to set aside the award after exhausting all remedies.94 The Calcutta High Court has remarked95 —
“In my view, of course, at this stage, prima facie, the right of appeal has been given to the unsuccessful litigant under S. 37
but filing of appeal does not operate as stay [on the execution] automatically. I am of the view that the stay of operation of
the award has to be obtained once the litigant is unsuccessful before the first court.”
Similarly, the Delhi High Court has noted96 —
“[I]f the execution of the Decree followed by Award is to be delayed... by treating the pendency of appeal as automatic stay
then the new legislation i.e., the Arbitration &
Conciliation Act, 1996 instead of being an efficient and speedy remedy would be reduced to a remedy worse
than what we already [have]... Had the legislature intended to give the provision of stay of execution on filing of an appeal
under Section 37 of the Act, it would have given the provision in the Act itself, in pari materia with Order XLI Rule 5 of the
Code of Civil Procedure . Since it has not been done by the legislature, in our view, it will not be possible to
provide unconditional automatic stay under the principle of merger. [F]rom whatever angle we examine this proposition, the
interpretation, in our view, falls in favor of non-automatic stay.”
On the other hand, it has been held in some cases that an award cannot be enforced until the time for an appeal
has expired, or an appeal, if made, has been finally dismissed. Since an appeal, is a continuation of the original
proceedings, there cannot be any “refusal” until the proceedings have been finally decided and dismissed.1
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S. 36. Enforcement
In this case, objections against an award had been rejected by a court on merits, when admittedly it did not have
jurisdiction to entertain the objections. An appeal was pending against this order, and in the meanwhile execution
proceedings were sought to be initiated on the basis of the award. It was held that since the first court did not have
any jurisdiction to hear the objections, it cannot be said that the decision of the court on merits amounted to a
“refusal”. Also, since an appeal was pending against such order, no “refusal” of the award can be said to have taken
place, till such appeal is finally decided.2
Restoration of application under S. 34 dismissed for default
Where an execution petition is filed after the dismissal for default of a S. 34 application, it shall not be rendered
invalid by the subsequent restoration of the S. 34 application. The restoration does not automatically affect the
orders passed in execution proceedings. However, if the challenge is allowed on merits, the execution petition
would automatically be dismissed. In this case, the S. 34 application was rejected on merits, and therefore, the
execution petition could continue to be heard.3
22. Challenge of award and decree in execution proceedings
A decree on an award could not be challenged as a nullity in execution proceedings on the ground that it was not in
accordance with the award4 or on the ground that it was passed in accordance with the award as modified by a
compromise between the parties5 or on the ground that the decree was passed in contravention of Section 17 [1940
Act] before the expiry of the full period of limitation or on the ground that the application to set aside the award was
barred by limitation6 or on the ground that the court passing the decree had no pecuniary,7 or territorial jurisdiction8
over the subject matter of the reference and to pass a decree on the award unless it was apparent on the face of
the decree that it was passed without jurisdiction.9 Where an award requires registration under the
Registration Act before a decree can be passed in terms of it and a decree is passed without any such
registration, such decree being void and without jurisdiction and this being ascertainable from the face of the decree
without inquiry into facts, even the execution court can refuse to execute it.10
The question of legal misconduct on the part of the arbitrator was not allowed to be raised in execution
proceedings. It was not a question relating to execution, discharge or satisfaction of the decree. The question
involved determination of the manner in which the arbitrator conducted the proceedings. The same could not be
agitated at the execution stage.11
An executing Court cannot go behind the decree.12 An executing court cannot look at an objection which had been
raised before it for the first time. Earlier the objecting party had participated in the proceedings.13
After a decree is passed on the award it is not open to the parties to the reference to raise any objection as to the
validity of the award. Nor can the decree be pronounced to be a nullity on the ground that the award was invalid. A
decree passed on an invalid award in arbitrations in suits under the second schedule to the
Code of Civil Procedure, 1908 , stood on the same footing.14
An award which directs a sum of money to be paid for vacant possession of premises does not have the effect of
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S. 36. Enforcement
transferring property and hence does not require registration.15
The decree could be challenged in execution proceedings on the ground that the passing of the decree was not
authorised by the
Arbitration Act , 1899 under which it was passed,16 for example, that it was passed without serving
notice under s. 14 (2) [1940 Act] or before the time for making an application for setting aside the award had
expired.17
An award was filed in the Court under S. Section 14 of the 1940

Arbitration Act and on notice to the tenants in their presence a decree was passed according to the
award unders. 17, 1940 Act. It was not open to the tenants to take the objection that the award was in excess of the
authority the arbitrators or was otherwise invalid. Having regard to the scheme of Ss. 14 to 17 and 31 to 33, 1940
Act all questions regarding the validity of the award had to be determined by the Court in which the award was filed
and by no other Court. An award which was invalid on any ground could be set aside under S. 30, 1940 Act. After a
decree was passed on the award it was not open to the parties to the reference to raise any objection as to the
validity of the award. As between them the decree conclusively determined that the award was valid. Nor could the
decree be pronounced to be a nullity on the ground that the award was invalid.18
Section 17 [1940 Act] did not apply to an application to record a compromise.19
Usurious Loans Act
Usurious Loans Act which allows courts to interfere where interest awarded is “substantially unfair” is inapplicable to
execution proceedings relating to an arbitral award because it applies only to “suits”.20
23. Comparison with English Law
The Supreme Court referred to S. 26(1)of the [English]

Arbitration Act , 195021, [since repealed] in its decision in Forasol v. ONGC 22. The court
said that in answer to an application for leave under S. Section 26(1)of the English Act, the respondent could set up
the defence that the award was a nullity, or was wholly or in part ultra vires or was bad on the face of it. If the
objection to the award was that the arbitrator had misconducted himself, or that the award was improperly procured,
his proper course would be to ask for setting aside and, if necessary, to ask for adjournment of the application for
enforcement of the award.23 None of these contentions was available to a respondent where an application for a
judgment in terms of the award was made under S.
Section 17 of the Arbitration Act , 1940. Such contentions could only be raised by way of an application
to set aside or remit an award after the award had been filed in the court and notice of it had been issued to the
parties under S. 14 of the 1940 Act. The period of limitation of such an application was prescribed by
Article 119 of the Limitation Act, 1963 . Where the period of limitation expired without any such
application being made, the court, if so applied for, had to proceed to pronounce judgment in terms of the award
and there upon a decree followed unders. Section 26(1)of the English Act, 1950. When leave was given to enforce
the award, it was not necessary that a judgment should be entered in terms of the award for enforcement. Under
the Indianact, before an award could be enforced, judgment had to be pronounced according to the award. A
decree that followed thereafter could alone be enforced under Order 21, Rule 11 of the
Civil Procedure Code, 1908 . Under S. 17 of 1940 Act judgment was to be pronounced “according to
the award”. The marginal note to the section spoke of “judgment in terms of award.” Under S. Section 26(1)of the
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S. 36. Enforcement
English Act, once leave was given an award became enforceable in the same manner as a judgment or order “to
the same effect.”Section 66 of the [English]
Arbitration Act, 1996 retains the same procedure of enforcement, namely, by securing the leave of the
court for enforcement.
24. Period of limitation
The period of limitation for making an application to set aside or remit an award under S. 17 of the 1940 Act was
prescribed by
S. 119(b) of the Limitation Act, 1963 . If the period of limitation expired without any such application,
the court, on receiving an application to that effect, had to proceed to pronounce judgment according to the award
and thereupon a decree followed. The court had no discretion in the matter except possibly in a case where the
award was on the face of it patently illegal or in violation of a legal provision. For this reasons. Section 26(1)of the
English Act, 1950 could be equated with S. 17 [1940 Act]. Under the English Act, the court had to grant leave for
the enforcement of the award.24 Under the 1996 Act also, leave of the court is necessary for enforcement.
Where the period for filing objections had expired, a second notice erroneously issued to the party was held to be
not having the effect of extending time. The award was made a rule of the court with 14% interest from the date of
the award till realisation.25
Where some delay was caused because of the factual error made by the counsel, the court said that a bona fide
mistake on the part of the counsel should not be allowed to jeopardise the interest of the litigant.26
The period of limitation prescribed under S. 34 for filing an application for challenging an award has been held to be
absolute and unextendable.
Section 5 of the Limitation Act has been held to be not applicable. This is further reinforced by the
provision ins. 36 which mandates the enforcement of the award in the manner of a decree under the
Civil Procedure Code after the expiry of the time prescribed bys. 34 for setting aside.27 In another
case, a delay of 406 days was not allowed to be excluded because S.
Section 5 of the Limitation Act, 1963 was held to be not at all applicable.28
As application for setting aside an arbitral award may not be made after a three months period from date of receipt
of copy of arbitral award. The further period of thirty days has been provided where applicant prevented by sufficient
cause from making application within period of 3 months. Award becomes immediately enforceable on expiry of this
period. There can be no recourse against an arbitral award in the Court beyond the period of four months from the
date of receipt of a copy of order.29
Time limit for enforcement
In a case before the Court of Appeal30 an action was brought six years after the breach of the contractual
undertaking the honour award. The question was whether the action was time-barred and whether the cause of
action arose upon the defendant's failure to pay the award within reasonable time or only when the defendant
unequivocally to refused to pay. The Court said:
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S. 36. Enforcement
The six-year limitation period for the enforcement of an arbitral award began whenever a claimant became entitled
to enforce the award. In legal terms, when his cause of action arose. Conceptually, such a claim arose under a
contractual undertaking to honour the award, which might render the party against whom the award was made
under an immediate obligation to pay the amount of the award. Alternatively, if the claim was for damages for
breach of the implied promise to pay, a reasonable period for payment should be allowed, three months at most,
but that period could not be extended by reference to attitudes of the parties and their representatives during the
process of seeking to enforce payment, nor could the claimant's cause of action and right to enforce the award be
deferred until the respondent had unequivocally refused to pay. It followed, on the facts, that the plaintiffs’ causes of
action had to have arisen before the end of 1984 and accordingly the applications made in 1993 were out of time.
The order setting aside the leave to issue and serve the 1993 proceedings was therefore upheld.
25. Rules of Administration of Justice and Police in Nagaland
Rule 34 did not allow an application to the High Court against an order unless a judgment was rendered in terms of
the award and decree prepared under S.
Section 17, Arbitration Act , 1940.31
26. Winding up petition on award
A winding up petition was not allowed to be filed on the basis of an award against a company which was not made
a rule of the court.32
When a party invokes the arbitration clause, he must exhaust all the provisions of the Arbitration, etc. Actfor
realisation of dues under the award. He cannot partly proceed under the Arbitration, etc. Act and also resort to the
remedy of winding up under the
Companies Act . The Arbitrator, etc.Act is a complete code in itself. It provides for all the machinery
right from initiation of proceedings for obtaining an award till its execution. The petitioner should follow the
procedure of enforcement under the Arbitration, etc. Actrather than the discretionary remedy under the
Companies Act .33
The Court of Appeal34 held in a petition for winding up on the basis of an unpaid award that the practice in cross-
claims was that where a company had a genuine and serious cross-claim which it had not been able to litigate the
petition should be dismissed or stayed unless there were special circumstances. Having held that the company had
a genuine and serious counterclaim in the arbitration which it had been unable to litigate, in an amount exceeding
the amount of petitioner's debt the Judge ought to have asked himself whether there were any special
circumstances which made it inappropriate for the petition to be dismissed or stayed. The finality and
unappealability of the interim award, the security for the company's counterclaim granted by the petitioner's P&I
club, the Judge's concern as to the potential commercial insolvency of the company and the fact that there was no
real evidence that the award could be paid, did not amount to special circumstances; the ability of a petitioning
creditor to levy execution against the company did not entitle him to have it wound up and an order that a company
be wound up was a draconian order, if wrongly made, the company had little commercial prospect of reviving itself
and recovering its former position. The corss-claim must be genuine and serious i.e., one of substance; it must be
one which the company had been unable to litigate and it must be in an amount exceeding the amount of the
petitioner's debt; all these requirements were satisfied and the appeal would be allowed and the winding-up order
discharged.
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S. 36. Enforcement
27. Act of insolvency
The award of an arbitrator has been held to be not a decree for purposes of S. 9(2) of the Presidency Towns
Insolvency Act, 1909, even though it may be enforceable as decree under S. 36 of 1996 Act. The Court said that a
petitioner under the Insolvency Act could not say that the award which he obtained was an act of insolvency on the
part of the debtor.35
On the other hand, a Division Bench of the same High Court held in Dhirendra Bhanu Sanghvi v. ICDS Ltd.,
36 that an award which has the force of a decree is a decree within the meaning of S. 9(2) of the Insolvency Act.
This proposition has been endorsed by a Division Bench of the Madras High Court in N Poongodi37 ,
where the court held that when an arbitral award obtains finality it obtains the force of a decree and is no different
from a decree passed by a court for the purposes of S. 9(2) of the Presidency Towns Insolvency Act, 1909.
The court said that no distinction of substance could be drawn between an award having the force of a decree
under S. 36 and a decree passed by a court. An award having attained finality is enforceable in the same manner
as if it were a court decree. Such an award is to be considered as constituting a valid foundation for issuance of an
insolvency notice under S. 9(2) of the Presidency Towns Insolvency Act, 1909.
The air has been cleared by an authoritative judgment of the Supreme Court in Paramjeet Singh Patheja which has
upheld the decision in Siddharth Srivastava.38 It has been held that the award itself does not become a decree of
the court upon attaining finality. The award, can be just enforced “in the same manner” as if it were a decree. An
award cannot, therefore, be equated to a decree of the court. Commenting upon the words “as if” in S. 36 of the
1996 Act, Lakshmanan J remarked —
“The words “as if” demonstrate that award and decree or order are two different things. The legal fiction is created for the
limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all
statutes, whether State or Central.”
Thus, the Insolvency Act, 1909 which deals with “debtors who have suffered a decree by any court for payment of
money” is not triggered by an award of the arbitrator since “an arbitrator is not a court, an arbitration is not an
adjudication and, an award is not a decree.”39 In the words of Lakshmanan J -
“For the limited purpose of enforcement, the provisions of

CPC were made applicable for realising the money awarded. However, the award remained an award and
did not become a decree either as defined in the
CPC and much less so for the purposes of an entirely different statute such as the Insolvency Act.”
In another context, while dealing with the interplay of the

SICA with the
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S. 36. Enforcement
Arbitration Act , it was observed by S.B. Sinha J40 —
“An award under the 1996 Act indisputably stands on a different footing vis-a-vis an award made under the
Arbitration Act , 1940. Whereas under the 1940 Act, an award was required to be made a rule of the court to
make it enforceable; the 1996 Act, however, raises a legal fiction. When an award is made, an application unders. 34 is
required to be filed questioning the validity thereof. Once such an application is filed, it remains under suspension in the
sense that it would not be enforceable. Only upon expiry of the period specified in S. 34 to challenge an award or when
such objection is refused, the same would be enforceable. Section 36 merely specifies as to how such an award can be
enforced by laying down that it can be enforced as if it were a decree. The legal fiction created under S. 36 has, therefore, a
limited application. An award is, thus, to be treated to be a decree even without intervention of the court only for the
purpose of its enforceability.” (emphasis added)
28. Sick Industrial Company
The BIFR and the AAIFR are the only competent forums to analyse the financial health of a company falling under
the import of the
Sick Industrial Companies (Special Provisions) Act , 1988. In case one of the parties to the dispute is a
sick industrial company and the BIFR grants permission for continuing the suit for making an arbitral award rule of
the court a procedure under the 1940 Act, it is not necessary for the BIFR to separately give permission for the
execution proceedings as well.41
In the instant case, the BIFR had not yet passed an order under
S. 22(3) of SICA and challenge proceedings against the award were pending under S. 34. It was held
that while no interference was allowed at any other stage of the arbitral proceedings, the provisions of S. 22(1)
would become applicable in the event of enforcement of an arbitral award.42 In the words of S.B. Sinha J43 —
“The court therefore, must proceed with the objection filed by the respondent under S. 34 of the 1996 Act. However, if the
objection filed by the respondent is rejected, the question of its enforceability would come into being. Once the arbitral
award having the force of a decree is put into execution, sub-section (1) of
Section 22 of SICA would come on in its way from being enforced.” (emphasis added)
Obviously, it is always open to the Board to exercise its powers under S. 22(3) and suspend the award. As
explained by S.B. Sinha J44—
“Sub-section (3) of
Section 22 of SICA provides for a specific power in the Board. The said provision contemplates a larger
public interest. In the event an arbitral award is held to be outside the purview of sub-section (3) of Section 22 thereof, it
may be difficult to frame a scheme or in a given case implement the same under
SICA ... The Parliament presumed that the suspension of an award shall not be for a long period. In a given
case, a party to an award may face some hardships owing to its suspension; but in such an event, it would always be open
to it to bring the same to the notice of the Board. The Board under sub-section (3) of
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S. 36. Enforcement
Section 22 of SICA may pass such an order or may not do so.”
29. Interim orders for effective enforcement
Section 9 of the Arbitration and Conciliation Act, 1996 empowers the court to take any interim
measures for protection of the property in question for facilitating an effective enforcement of an award. Under the
1940 Act, one aspect of this power was in S.18 which provided for protection of the property for assuring successful
enforcement of the decree which was to be passed in terms of an award.45
At any time after the filing of the award, whether notice of the filing had been given to the parties or not, the court
was empowered by Section 18 to pass an interim order if a party was about to take steps to defeat, delay or
obstruct the execution of any decree that may be passed on the award or if speedy execution of the award was just
and necessary.46
Section 18 empowered the court to choose an interim order in any form and the exercise of such jurisdiction is not
restricted to eventualities specified in rule 1 or rule 5 of Order 38 of the
Code of Civil Procedure . In view of the non-obstante clause, Section 18, [1940 Act] overrode Section
17 [1940 Act] to empower the court contrary to the scheme introduced by Section 17 [1940 Act] so as to enforce an
award even before the judgment was passed thereon in exceptional cases.47
Where the petition was for setting aside of an award and the court ordered the party under S. 18 [1940 Act] as a
precondition of admission of the petition to provide bank guarantee for the amount awarded, the order was held to
be without jurisdiction because none of the contingencies mentioned in S. 18(1) existed.48
Interim relief not available for dismissing Execution Proceedings
When an award is left unchallenged under Ss. 34 or 37 of the Act, it attains finality and may be executed through an
application under S. 36. An application under S. 9 is not the appropriate route for seeking dismissal of execution
proceedings as premature or seeking a stay on the enforcement of an ex parte award based upon allegations that
the party has not received a signed copy of the award.49
30. Jurisdiction
The definition of a “Court” in S. 2(1)(e)i.e. the Principal Civil Court of original jurisdiction, is determinative of the
proper court to institute execution proceedings under S. 36.50 The proper court for enforcement of an award is the
court which has the power under S. 34 for setting aside an award.51 The proper court also means the court which
would have the ordinary jurisdiction to entertain a suit relating to the subject matter of the arbitration agreement. A
suit was filed for execution of the award before the court Civil Judge (Sr Divn) Cooch Behar. The Court returned the
award saying that it was not the principal civil court as mentioned in S. 2(c). It was held that the court erred in this
respect. The court approached had the ordinary civil jurisdiction relating to the subject matter in question.52 The
court of senior civil judge was held not to fall within the definition of ‘court’ in S. 2(1)(e). Only the District Court had
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S. 36. Enforcement
the jurisdiction being the principal civil court of original jurisdiction in the District.53
The Madhya Pradesh High Court has held that in view of S. 42, an execution petition under S. 36 can be filed only
before the Court (as defined under S. 2(1)(e)) which has jurisdiction over the arbitration proceedings. Where an
award was passed at Indore, unless and until the court at Indore transfers the decree to the court at Delhi, it cannot
be executed in Delhi.54 The Gauhati High Court also espouses a similar position.55
The Kerala High Courthas however held that execution can be before any court where a decree would ordinarily be
executed as per the provisions of the
Code of Civil Procedure , and not a “Court” as defined ins. 2(1)(e) of the Act. Thus, it held that where
the District Court had the power, by virtue of a provision in the Kerala Civil Courts Act, to make over an execution
petition to an Additional District Judge, such judge would be competent to deal with the execution petition, even
though it might not be a “Court” (principal civil court of original jurisdiction) within the meaning of S. 2(1)(e).56
A further contrary position is, adopted by the Delhi High Court. It has held execution petitions to be outside the
scope of “applications” which are contemplated under S. 42.57 On a reading of Ss. 36 and 49, it held that for the
purposes of S. 36, a “court” does not refer to a court under S. 2(1)(e), and can be any court having territorial
jurisdiction in relation to the property or the person against whom the decree is sought to be enforced.58 The Delhi
High Court, speaking through Endlaw J commented as follows59—
“[I]n my view the expression “court” in S. 36 is not meant to be the court within the meaning of S. 2(1)(e). The definitions in
S. 2(1)(e) are, “unless the context otherwise requires”. The word “Court” is used in S. 36 only in the context of, by a legal
fiction, making the award executable as a decree of the Court within the meaning of
CPC . The word “Court” therein is used to describe the manner of enforcement i.e. as a “decree of the Court”
and not in the context of providing for the Court which will have territorial jurisdiction to execute/enforce the award. In this
context, the contention of the Counsel for the decree holder of the difference in language in S. 36 and in S. 49 is significant.
The Legislature has in S. 49 provided for the enforcement of foreign awards by deeming the said awards to be a decree of
“that Court” which would mean the decree of the Court which has adjudicated on the enforcement of the award. However,
the Legislature in S. 36 did not use the expression “that” and which is indicative of the reference to Court therein being only
to describe the manner of enforcement of the award as a decree of the Court. There does not appear to be a legislative
mandate to the effect that arbitral award has to be treated as a decree of that Court only which would have had the
jurisdiction to entertain the suit.”
The court went on to hold that in the absence of any rule mandating applicability of S
s. 38 ,
39 of the
CPC , the relevant ‘court’ which can execute the award-decree, can be any court which has jurisdiction
over the person or property of the judgment debtor. The observations of Endlaw J bear repetition60 —
“The purpose of execution is realisation of money from the person or the property of the judgment debtor. Thus while
territorial jurisdiction for suits is determined by place of occurrence of cause of action, residence of defendant, locus of
property, etc., the territorial jurisdiction for execution is determined only by locus of judgment debtor or the property. The
agreement between the parties restricting jurisdiction of one, amongst many Courts also does not extend to execution and
is applicable to the Court which will adjudicate the lis. I do not see any reason, why where an award has been made
executable as a decree, the execution cannot lie at a place where the property against which the decree is sought to be
Navneet Krishn
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S. 36. Enforcement
enforced is situated. That Court in my view would have inherent jurisdiction to execute the decree and in the absence of
applicability of mandate of
S. 38 of CPC , pedantic insistence on first applying for execution to one Court, merely to obtain transfer
would be also contrary to intent of expedition in the 1996 Act.”
Transfer of Execution Proceedings
If execution proceedings are filed in a court without jurisdiction, such court may dismiss the application. However,
the Allahabad High Court has held that the Court may also exercise its general power of transfer under
S. 24 of the CPC . It was held that an application under S. 36 of the Act would fall within the meaning of
the term ‘proceeding’ and hence, the court had the power to transfer the matter to another court of appropriate
jurisdiction.61
Further Suggested Reading (Enforcement of Domestic Awards)
1. K. Srinivasan, “Enforcement of Arbitral Awards”, 40 CLA (Mag.) 145 (2001).
2. D.R. Dhanuka, “Award under

Arbitration and Conciliation Act, 1996 and Insolvency Law”,
2007 (1) MLJ 1 [
LNIND 2006 MAD 3085 ].
3. Ashutosh Salil, “Role of Courts in the Enforcement of a Domestic Arbitral Award”,

(2005) 3 Arb LR 12 .
4. Pavit Singh & Preeti Bishnoi, “Problems with Enforcing Arbitration Awards”,
2006 (6) Kar LJ 33 .
5. Sarita Woolhouse, “India: Appeal from a Domestic Arbitration Award to an International Arbitration Tribunal —
Two Conflicting Awards”, 10(1) Int. Alr 8 (2007).
6. Aparna Mahajan, “Arbitration, appeal, Statutory grounds for setting aside and decisions regarding venue”, 14(2)
I.C.C.L.R. 13 (2003).
1. The provision in the preceding Act of 1940 was as follows:

17. Judgment in terms of award.—Where the Court sees no cause to remit the award
or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time
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S. 36. Enforcement
for making an application to set aside the award has expired, or such application having been made, after refusing it,
proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow,
and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance
with the award.
STATE AMENDMENT
Andhra Pradesh—To Section 17 of the principal Act, the following provisos shall be added, namely:—
“Provided that where an award pending in the court at the commencement of the Arbitration (Andhra
Pradesh Amendment) Act, 1990 or an award filed in the court, thereafter does not contain reasons therefor as required
by the proviso to sub-section (1) of Section 14 the court shall not proceed to pronounce the judgment according to the
award, but shall remit the award to the arbitrators or the umpire for giving reasons therefor as required by the said
proviso and thereupon the arbitrators or umpire shall, within thirty days from the date of remittance of the award to them
by the court give reasons for the award and file the same in the court:
Provided further that on the application of the arbitrators or the umpires and for reasons
to be recorded in writing, it shall be competent for the court, to extend the period of thirty days aforesaid for a further
period not exceeding fifteen days:
Provided also that where an award pending in the court as aforesaid does not contain
any reasons and there is no possibility to remit the award to the arbitrator or panel of arbitrators or umpire due to their
incapacity, negligence, refusal to act or death, the court shall set aside the award and direct the parties to initiate fresh
arbitration in accordance with the terms of the agreement.”—Vide A.P. Act 1 of 1990, S. 3. (w.e.f. 19-2-1990)
2. Tamil Nadu Electricity Board v. Sumathi,

(2002) 2 Arb LR 460 :
AIR 2000 SC 1603 [
LNIND 2000 SC 750 ]:
(2000) 2 RAJ 231 :
(2000) 4 SCC 543 [
LNIND 2000 SC 750 ], under the 1996 Act, it is not permissible to pass a decree in
terms of the award. Global Co. v. National Fertilisers,
(1999) 3 RAJ 573 :
(1999) 81 DLT 16 , the award can be enforced as a decree immediately on the
expiry of the period available for filing objections, the executing court can interpret the award to the extent of its being a
decree if it is found to be vague and uncertain. S. Kumar v. DDA,
(2003) 2 RAJ 161 (Del), award becomes enforceable as a decree when time for
filing objections had expired or, objections having been filed, have been rejected. Damodar Valley Corpn. v. CESC Ltd.,
AIR 2005 Cal 67 [
LNIND 2004 CAL 99 ], an application for execution of a part of the award is not
maintainable during pendency of application for setting aside award. Ramaswamy v. Principal Sub-ordinate Judge,
(2002) 4 RAJ 158 (Ker), enforcement cannot be refused by saying that no decree
was filed.
3. For text of Model Law, see Appendix 43.
4. As a practical matter, the award may, in fact, be relied on by a party only from the date of receipt.
5. The reference is to the competent court, and not to the court specified in article 6, because the model law
does not aim at unifying national laws on the organization of the judicial system and, in particular, because the
competence of courts for enforcement is normally linked to the residence of the debtor or location of property or assets.
6. As regards this second condition, it is submitted that an exception be made for those cases where an
original defect in form was cured by waiver or submission, for example, where arbitral proceedings were on the basis of
an oral agreement initiated and not objected to by any party. In such case the supply of an award, which records the
waiver or submission, should suffice.
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S. 36. Enforcement
7. See under Section 31.
8. National Aluminium Co. Ltd. v. Pressteel & Fabrications Pvt. Ltd.,

(2004) 1 Arb LR 67 :
AIR 2005 SC 1514 [
LNIND 2003 SC 1115 ]: (2004) 1 RAJ 1 :
(2004) 1 SCC 540 [
LNIND 2003 SC 1115 ].
9. Madhavpura Mercantile Co-op Bank Ltd. v. Shah Bimani Chemicals Pvt. Ltd.,
(2009) 2 Arb LR 287 , 291 (Guj).
10. Amod Kumar Verma v. Hari Prasad Burman,

AIR 1958 All 720 : (1958) 1 All 614; Rama v. Asha Films Exchange, (1981) 2 Mad
LJ 68; Travancore Cochin Chemicals Ltd. v. C.K.G. Nair,
(1990) 1 Arb LR 105 (Ker); Union of India v. Regal Scale Industries Ltd.,
(1988) 1 Arb LR 209 (Del), in all these cases decrees were passed in terms of the
awards because no objections were filed. Union of India v. Mohinder Singh,
(1988) 1 Arb LR 314 (P&H), objections overruled and award made rule of the court;
Union of India v. Sikaria Sons & Co.,
(1985) Arb LR 527 (Gau), award made rule of the court; Union of India v. Hind Wire
Industries Ltd.,
(1994) 2 Arb LR 70 (Del), unfounded objections rejected, decree passed.
11. See Sonapala Suryanarayana v. Sonapala Ramchandra,

AIR 1963 AP 8 [
LNIND 1961 AP 178 ]where it was held that no order could be obtained either under
S. 17 or S. 30 (1940) Act without filing the award in court, distinguishing Kuppuswami Chetty v.
Anantharamier,
AIR 1948 Mad 40 [
LNIND 1947 MAD 44 ]: (1947) 1 Mad LJ 297.
12. See Sonapala Suryanarayana v. Sonapala Ramchandra,

AIR 1963 AP 8 [
LNIND 1961 AP 178 ]where it was held that no order could be obtained either under
S. 17 or S. 30 (1940) Act without filing the award in court, distinguishing Kuppuswami Chetty v.
Anantharamier,
AIR 1948 Mad 40 [
LNIND 1947 MAD 44 ]: (1947) 1 Mad LJ 297. An award which was not made a rule
of the court was not enforceable, Satya Pal v. Ved Prakash,
AIR 1980 All 268 ; an award which satisfied the conditions was converted into a
decree, Villayati Ram Mittal v. Union of India,
(1987) 1 Arb LR 328 (Del); Kali Charan Sharma v. NOIDA,
(1994) 1 Arb LR 380 (Del), award allowing escalation made rule of the court with
interest from date of award. Villayti Ram Mittal v. Union of India,
(1994) 1 Arb LR 417 (Del), award converted into decree after rejecting objections
and prescribing 15% interest if decree was not satisfied within 2 months.
13. Gurbax Singh v. Punjab Mandi Board,

(2004) 1 Arb LR 73 :
AIR 2004 SC 1269 [
LNIND 2003 SC 1117 ]:
(2004) 1 RAJ 20 :
(2005) 10 SCC 575 .
14. Rahmatullah v. Vidya Bhushan,

ILR (1962) 2 All 463 :
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S. 36. Enforcement
AIR 1963 All 602 [

LNIND 1962 ALL 85 ]: (1968) All LJ 147explaining Amod Kumar
Verma v. Hari Prasad Burman,
AIR 1958 All 720 and Radha Krishan v. Madho Krishan,
AIR 1952 All 856 [
LNIND 1952 ALL 117 ]: 1952 All LJ 405; Chairman of the Board of Trustees of the
Port of Visakhapatnam Port Trust v. Gurucharan Singh,
(2004) 1 Andh LT 195 (DB):
(2004) 1 Arb LR 319 (AP).
15. District Co-operative Development Federation Ltd. v. Ram Samujh Tewari,

AIR 1973 All 476 : 1973 All LJ 579; Union of India v. S.B. Singh,
AIR 1982 All 318 : 1982 All WC 480. An application made by one of the parties to
an award for making the same a rule of the court and passing a decree in accordance with it was perfectly competent
under S. 17 [1940 Act] read with Rule 10 of the Rules framed by the High Court under S. 44, [1940 Act] L. Ganga Ram
v. L. Radha Kishan,
AIR 1955 Punj 145 differing from
Ganga Ram v. Radha Kishan,
AIR 1952 Punj 350 . The court also said that since S. 38 [1940 Act] gave right to
any party to obtain possession of the award through the assistance of the court, that left no doubt that the party must
have the right to file the award in court. Rule 10 was not inconsistent with the Act.
16. District Co-operative Development Federation Ltd. v. Ram Samujh Tewari,

AIR 1973 All 476 : 1973 All LJ 579; Union of India v. S.B. Singh,
AIR 1982 All 318 : 1982 All WC 480. An application made by one of the parties to
an award for making the same a rule of the court and passing a decree in accordance with it was perfectly competent
under S. 17 [1940 Act] read with Rule 10 of the Rules framed by the High Court under S. 44, [1940 Act] L. Ganga Ram
v. L. Radha Kishan,
AIR 1955 Punj 145 differing from
Ganga Ram v. Radha Kishan,
AIR 1952 Punj 350 . The court also said that since S. 38 [1940 Act] gave right to
any party to obtain possession of the award through the assistance of the court, that left no doubt that the party must
have the right to file the award in court. Rule 10 was not inconsistent with the Act.
17. N.V. Chowdary v. Hindustan Steel Works Constructions Ltd.,

AIR 2002 NOC 15 (AP).
18. Bharat Petroleum Corporation Ltd. v. Reliance Industries Ltd.,

(2007) 1 RAJ 19 (Bom).
19. Vipul Agarwal v. Atul Kanodia & Co.,

(2004) 2 Arb LR 335 [
LNIND 2003 ALL 559 ] :
AIR 2004 All 205 [
LNIND 2003 ALL 559 ]:
(2004) 53 SCL 189 :
(2004) 1 AWC 727 .
20. Diddi Kumaraswamy v. Pathakala Bhaskar,

(2008) 2 Arb LR 573 :
(2008) 4 RAJ 453 (AP), in the instant case existence of an arbitration agreement
was not shown, also the award which was dealing with transfer of immovable property was not on stamped paper.
21. National Buildings Construction Corporation Ltd. v. Lloyds Insulation India Ltd., 2005
(Supp) Arb LR 563:
(2005) 2 RAJ 96 :
(2005) 2 SCC 367 .
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S. 36. Enforcement
22. Morepen Laboratories Ltd. v. Morgan Securities & Credits Pvt. Ltd.,
(2008) 3 Arb LR 283 , 290 (Del-DB)upholding Morgan Securities &
Credits Pvt. Ltd. v. Morepen Laboratories Ltd.,
(2006) 3 Arb LR 159 , 176:
AIR 2007 (DOC) 3 : (2006) 4 RAJ 484:
(2006) 132 DLT 588 (Del).
23. Morepen Laboratories Ltd. v. Morgan Securities & Credits Pvt. Ltd.,
(2008) 3 Arb LR 283 , 290 (Del-DB)upholding Morgan Securities &
Credits Pvt. Ltd. v. Morepen Laboratories Ltd.,
(2006) 3 Arb LR 159 , 176:
AIR 2007 (DOC) 3 : (2006) 4 RAJ 484:
(2006) 132 DLT 588 (Del). See also Naresh Kumar v. Nanak
Chand,
AIR 2008 (NOC) 328 (P&H), S. 34 provides the ‘only’ available recourse to
challenge an award and it is impermissible to raise any such grounds to impeach the award at the stage of
enforcement, once an award is made in the form of S. 31 and no application under S. 34 is filed to challenge the award
within the time period in S. 34(3), the award becomes final and enforceable as a decree pursuant to S. 36 and cannot
be set aside on any ground.
24. Municipal Corporation of Delhi v. New Delhi Municipal Corporation ,

(2008) 5 RAJ 404 (Del) not proved that Court making decree rule of the court
inherently lacked jurisdiction, objections dismissed.
25. R.S. Bajwa & Co. v. State of Chhattisgarh,

(2009) 1 Arb LR 163 (Chhattisgarh):
(2009) 2 RAJ 657 , in disputes relating to a works contract, arbitral tribunal
appointed in face of legislative bar in C.G. Madhyastham Adhikaran Adhiniyam, 1983, the tribunal lacked inherent
jurisdiction, relying on Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman,
(1970) 1 SCC 670 [
LNIND 1970 SC 148 ] ; Sunder Dass v. Ram Prakash,
(1977) 2 SCC 662 [
LNIND 1977 SC 101 ] ; Sushil Kumar Mehta v. Gobind Ram Bohra,
(1990) 1 SCC 193 [
LNIND 1989 SC 558 ] ; Keshar Singh v. Sadhu,
AIR 1996 SC 751 [
LNIND 1995 SC 1214 ]:
(1996) 7 SCC 711 [
LNIND 1996 SC 210 ]; Rafique Bibi v. Sayed Waliuddin,
AIR 2003 SC 3789 [
LNIND 2003 SC 719 ]:
(2004) 1 SCC 287 [
LNIND 2003 SC 719 ].
26. Paramjeet Singh Patheja v. ICDS Ltd.,

(2006) 13 SCC 322 [
LNIND 2006 SC 897 ] :
(2006) 4 Arb LR 202 :
AIR 2007 SC 168 [
LNIND 2006 SC 897 ].

(2006) 13 SCC 322 [
LNIND 2006 SC 897 ]:
(2006) 4 Arb LR 202 :
AIR 2007 SC 168 [
LNIND 2006 SC 897 ].
Navneet Krishn
Page 35 of 60
S. 36. Enforcement
28. Manmohan Exims Pvt. Ltd. v. Sarju International, 2005 (Suppl) Arb LR 206, 211:
(2005) 6 Bom CR 249 [
LNIND 2005 BOM 895 ] (Bom)relying on Hemanta Kumar Ghosh
v. Rajendra Mondal,
AIR 1935 Cal 619 .
29. Union of India v. P.C. Sharma,

AIR 2007 Del 51 : (2007) 2 RAJ 309 (Del-DB), S. 31(7)(b) operates automatically
where the arbitrator does not award interest for post-award period, on facts, grant of 18% interest by executing court
where arbitrator had not given any interest, award of interest at execution stage held not improper since grant of
interest does not amount to modification of the award at all.
30. Coal Linker v. Coal India Ltd.,

(2009) 4 Arb LR 97 :
(2009) 9 SCC 491 [
LNIND 2009 SC 1786 ], award not challenged and application made for decree in
terms of such award under S. 17 [1940 Act], interference by executing court in awarding interest where none awarded
by arbitrator, held unjustified.
31. Union of India v. K.S. Kalra,

AIR 1992 MP 47 [
LNIND 1991 MP 79 ]at pp 48- 49.
32. P Mulji & Sons v. K.P. Exporting Co.,

AIR 1976 Ker 3 ;. Union of India v. Delhi School Teacher's Association,
(2009) 2 Arb LR 60 (Del-DB), even when no objections have been preferred against
an award, it is the duty of the court to examine the award and satisfy itself that no ground is made out to set aside the
award, due to the language of S. 17 of the 1940 Act.
33. Citing the minority judgment in Sahu v. Isher Singh Kripal Singh,
AIR 1956 Cal 321 [
LNIND 1955 CAL 183 ](FB) and Hastimal Dalchand v. Hiralal Motichand,
AIR 1954 Bom 243 [
LNIND 1953 BOM 76 ]. These cases were considered by the Supreme Court
in Madan Lal v. Sunder Lal,
AIR 1967 SC 1233 [
LNIND 1967 SC 67 ]:
(1967) 3 SCR 147 [
LNIND 1967 SC 67 ] and Hastimal Dalchand v. Hiralal Motichand,
AIR 1954 Bom 243 [
LNIND 1953 BOM 76 ]. The decision in Deep Narain Singh v. Dhaneshwari,
AIR 1960 Pat 201 is also to the same effect.
34.
AIR 1988 SC 1520 [
LNIND 1987 SC 665 ]:
(1988) 1 SCC 418 [
LNIND 1987 SC 665 ].
35. Reconsidered by the

Constitution Bench of the Supreme Court in Irrigation Secretary, Govt. of Orissa v. G.C. Roy, (1992) 1
Arblr 145:
AIR 1992 SC 732 [
LNIND 1991 SC 689 ]:
(1992) 1 SCC 508 [
LNIND 1991 SC 689 ].
Navneet Krishn
Page 36 of 60
S. 36. Enforcement
36. Ashlok Singh v. Jugeshwar Singh,

AIR 1981 NOC 68 (Pat).
37. Jhabbu Mal Jang Bhaadur v. Nanak Chand,

AIR 1982 Del 55 [
LNIND 1981 DEL 218 ]:
(1981) 20 DLT 210 [
LNIND 1981 DEL 218 ].
38. Baijnath Prasad v. Narain Prasad, 25 All LJ 787:

AIR 1927 All 614 ; Thakur Singh v. Kandhal, 1935 All LJ 986:
AIR 1935 All 852 ; Rangaswami v. Muthuswami,
ILR (1877) 11 Mad 144 ; Mani Ram v. Ram Asrey,
AIR 1921 Oudh 148 (1); Ramkumar v. Khusalchand Ganeshdas,
AIR 1928 Nag 166 ; Gurditta Mal v. Basant Mal,
AIR 1925 Lah 619 . Sudhir Bros v. D.D.A.,
(1994) 1 Arb LR 97 (Del), award made rule of the court after dismissing objections.
Modern Construction Co. v. Union of India,
(1994) 2 Arb LR 360 (Del), objection that one item was included into another
dismissed and decree in terms of award passed. Union of India v. Prince Muffakam Jah, II,
(1994) 2 Arb LR 503 SC:
AIR 1995 SC 227 : 1995 (Supp) 1 Arb LR 702 unless an award was challenged on
available grounds under the
Arbitration Act , 1940 it had to be honoured by both parties, the award concerned the take over of the
property of the Nijam of Hyderabad and was modified in reference to the items not taken over.
39. State of A.P. v. Om Metals,

(1988) 2 Arb LR 66 (AP).
40. Ramaswami v. Muthiralayee,

AIR 1954 Bom 560 .
41. Hemadri Cements P. Ltd. v. Wal Chandnagar Industries Ltd.,

(1996) 1 Arb LR 681 (AP). In this case, when the award was pending before the
court for making it a rule of the court, Ss. 14 and 17 were amended by a state amendment. The amendment was
procedural in nature. It was applied retrospectively. The arbitrator was required to proceed according to the
amendment.
42. U.P. State Electricity Board v. Pateshwari Electricals and Associate Industries P. Ltd.,
(1991) 1 Arb LR 397 SC: 1991 Supp (2) SCC 718; to the same effect, Satish Kumar
v. Surender Kumar,
(1969) 2 SCR 244 [
LNIND 1968 SC 300 ] :
AIR 1970 SC 833 [
LNIND 1968 SC 300 ].
43. Sardara Singh v. Mohan Lal, AIR 1990 P&H 254:

(1990) 2 Arb LR 270 (P&H).
44. Yeshwantrao v. Duttatrayarao,

AIR 1948 Nag 162 : ILR 1947 Nag 631.
Navneet Krishn
Page 37 of 60
S. 36. Enforcement
45. Abinash Chandra Das v. Hem Kumari Dassi, 40 IC 699. See also Madan
Mohan Agarwal v. Suresh Agarwal,
AIR 1998 MP 212 : (1998) 2 Arb LR 166, a supplementary award would have to be
incorporated into the decree before its enforcement.
46. Biswanath Ghosh v. Sudhir Kumar De,

AIR 1957 Cal 21 [
LNIND 1955 CAL 189 ].
47. Nayut Chand Gulabchand Weaving Factory v. Himatlal Ramesh

Chandra,
AIR 1962 Bom 40 [
LNIND 1961 BOM 20 ]; Mohd Ramzan Wegey v. Mohd Baba,
AIR 1978 JK 27 : 1978 Kash LJ 57.
48. J. Kaikobad v. F. Khambatta,

AIR 1930 Lah 26 .
49. Bharat Overseas Construction P. Ltd. v. University Teachers Co-op Housing Society Ltd.,
(1991) 1 Arb LR 234 Del:
AIR 1991 Del 20 [
LNIND 1989 DEL 295 ].
50.
AIR 1972 SC 1121 : (1972) 3 SCC 799 :
1972 UJ 579 .
51.
AIR 1914 PC 105 .
52. See further Commentary under S. 31 under the heading “Registration of Award”.
53. Sanjay Kaushish v. D.C. Kaushish,

AIR 1992 Del 118 [
LNIND 1991 DEL 488 ]:
(1992) 1 Arb LR 242 citing Hari Shanker
Bhargava v. Mohan Debi decided by A Vadh Behari J. on Aug 8, 1974 and reported in
ILR (1975) 1 Del 82 .
54. Mattapalli Chelamayya v. Mattapalli Venkataratnam,

(1972) 3 SCC 799 :
AIR 1972 SC 1121 .
55. Mattapalli Chelamayya v. Mattapalli Venkataratnam,

(1972) 3 SCC 799 :
AIR 1972 SC 1121 .
56. Sardar Singh v. Krishna Devi,

AIR 1995 SC 491 : (1994) 4 SCC 18:
(1994) 3 SCR 717 :
(1994) 3 JT 465 .
Navneet Krishn
Page 38 of 60
S. 36. Enforcement
57. N. Khosla v. Rajalakshmi,

(2006) 2 Arb LR 57 , 67:
AIR 2006 SC 1249 [
LNIND 2006 SC 160 ]:
(2006) 1 RAJ 587 :
(2006) 3 SCC 605 [
LNIND 2006 SC 160 ], award recording finding on the basis of gift deed, its
revocation and subsequent partition of property, held to be only declaration of pre-existing rights; Leela Goel v. Prem
Sagar Sharma,
(2006) 3 Arb LR 482 , 490- 491:
(2006) 4 RAJ 18 (Del), award merely declaratory, no registration required; Raj Rani
Sahni v. J.R. Sahni,
(2005) 4 RAJ 244 :
(2005) 125 DLT 29 , award merely recorded findings of earlier interim orders passed
with consent of parties, held registration not required.
58. Syed Zakir Ali Jawar Ali v. Syed Zahid Ali Jawar Ali,
(2007) 3 Arb LR 321 , 337:
(2008) 1 RAJ 608 :
(2007) 4 Bom CR 500 [
LNIND 2007 NGP 324 ] (Bom-DB), award directed parties to effect partition by
executing partition deed, held, no registration required relying on Kewal Krishna Hitkari v. Anil Hitkari,
(2000) 1 Arb LR 566 (Bom) and Lachhman Das v. Ram Lal,
(1989) 2 Arb LR 165 (SC).
59. Kamal Pushpa Enterprises v. D.R. Construction Co.,

(2000) 3 Arb LR 1 :
AIR 2000 SC 2676 [
LNIND 2000 SC 1019 ]:
(2000) 3 RAJ 106 :
(2000) 6 SCC 659 [
LNIND 2000 SC 1019 ], “at the stage of enforcement of the award by passing a
decree in terms thereof what is enforced is the award itself which crystallises the rights of parties [a]nd not any right
arising only from the objectionable contract. [P]ost award proceedings cannot be considered by any means to be a suit
or other proceedings to enforce any rights arising under a contract.” The case of Kamal Pushpa Enterprises was
followed in Noida Toll Bridge Co. Ltd. v. Mitsui Marubeni Corporation,
(2005) 3 Arb LR 234 , 240- 241:
(2005) 3 RAJ 487 (Del).
60. Munshi Ram v. Banwari Lal,

AIR 1962 SC 903 [
LNIND 1961 SC 449 ]at p. 910:
(1962) 2 SCR 477 [
LNIND 1961 SC 129 ] ; Prafulla Chandra Karmakar v. Panchanan Karmakar,
ILR (1946) 1 Cal 398 : 50 CWN 287:
AIR 1946 Cal 427 .
61. Mohd Yousuf v. Jamia Co-operative Bank Ltd., 2007 (Suppl) Arb LR 163, 165 (Del-DB),
case dealing with enforcement of award rendered in arbitration proceedings under the Delhi
Cooperative Societies Act , 1972, demand letters issued by General Manager of Bank claiming lesser
amount than what was awarded, found to be fabricated and issued in collusion with the debtor, held full award amount
may be recovered.

(1962) 2 SCR 477 [
LNIND 1961 SC 129 ] :
AIR 1962 SC 903 [
LNIND 1961 SC 449 ]at pp. 908, 909; Attar Singh v. Bishan Singh,
AIR 1945 Pesh 41 explaining Jananendra Mohan
Bhaduri v. Rabindra Nath Chakraborti,
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Page 39 of 60
S. 36. Enforcement
(1932) LR 60 IA 71 on appeal from Rabindra Nath Chakraborti v. Jnanendra Mohan

Bhaduri, ILR 58 Cal 1018 (where a decree passed on an award under the Indian
Arbitration Act was held to be a nullity),disapproving on this point Prafulla Chandra
v. Panchanan,
ILR (1946) 1 Cal 398 :
AIR 1946 Cal 427 ; Doolychand v. Mohan Lal, ILR 51 Cal 432;
AIR 1924 Cal 722 ; Brindaban Chandra v. Kashi Chandra,
AIR 1937 Cal 201 ; Motandas v. Wadhumal,
AIR 1948 Sind 74 an Behari Lal v. Dholan Das, 5 IC 994 (FB): Behari Lal's case
and Dholan Das's case were followed in Sahamari Bai v. Chatta Ram,
AIR 1914 Lah 313 and Usman Ali Khan v. Sagar Mal,
AIR 1962 MP 320 [
LNIND 1960 MP 55 ]. These cases must also be regarded as overruled by
Munshi Ram's case. See also Hakim Fazal Ahmad v. Enayat Ahmad,
AIR 1922 Oudh 181 ; Jnanendra Mohan Bhaduri v. Bhawani Charan Chakraborty,
AIR 1930 Cal 468 ; Saraswat Trading Agency v. Union of India,
AIR 2002 Cal 51 [
LNIND 2001 CAL 301 ], decree could be passed upon the award with compromise
appended to it though there is no express provision in the
Arbitration Act on the point. The agreement was for payment of a lesser amount than awarded.
63. Ganeshmul Bhawarlal v. Kesoram Cotton Mills,

AIR 1922 Cal 10 : ILR
(1952) 1 Cal 196 ; Roshan Lal v. Bidh Chand,
AIR 1924 Pat 608 ; Rajeshwar v. Ambica Prasad,
AIR 1956 Pat 28 . Govt of A.P. v. Bactehela Balaiah,
(1984) Arb LR 125 (AP), ex parte decree, non-applicability of Order 9 Rule 13,
CPC .
64. Ganeshmul Bhawarlal v. Kesoram Cotton Mills,

(1952) 1 Cal 196 ; Ramchander v. Jamnashankar,
AIR 1962 Raj 12 [
LNIND 1960 RAJ 122 ]:
ILR (1961) RAJ 76 .
65. Alvel Sales v. Dujadwala Industries,

AIR 1978 Mad 295 [
LNIND 1977 MAD 149 ]at p. 299:
(1978) 1 MLJ 171 [
LNIND 1977 MAD 149 ] ; Pratap Chandra Biswas v. Union of India,
AIR 1956 Assam 85 , limitation is not purely a question of law, but of law and fact.
66. Hemanta Kumari Devi v. Midnapur Zamidari Co., LR 46 IA 240 at p. 246:

AIR 1919 PC 79 at p. 81.

AIR 1962 SC 903 [
LNIND 1961 SC 449 ]:
(1962) 2 SCR 477 [
LNIND 1961 SC 129 ]. Signing of the award by the parties is a token of their
acknowledgement that it had been pronounced and that they have notice of it, and not that they have agreed to the
terms of the award, Satya Pal v. Ved Prakash,
AIR 1980 All 268 . A compromise by a special agreement while objections to the
award were pending under which the undertaking was to pay the bank guarantee amount was held to be enforceable,
Bhushan Industrial Co. P. Ltd. v. Harparshad & Co. Ltd.,
(1985) Arb LR 409 (Del).
Navneet Krishn
Page 40 of 60
S. 36. Enforcement
68. Ashok Leyland v. Union of India,

AIR 1980 Del 140 [
LNIND 1979 DEL 237 ].
69. Shiv Kumar Agarwala v. Jai Prakash Agarwala,

(2005) 3 Arb LR 201 , 206:
AIR 2005 Pat 153 : (2005) 3 RAJ 580 :
(2005) 2 Pat LJR 416 , disputes regarding joint family properties, award provided for
compromise inter se parties, two sets of parties compromised inter se, held justified even though other parties not
involved in the compromise.
70. A and A Restaurant and Hotel Pvt. Ltd. v. Dwarikajeet Restaurant Pvt. Ltd.,
(2005) 1 Arb LR 526 , 534 (All)distinguishing Munshi Ram v.
Banwari Lal,
(1962) 2 SCR 477 [
LNIND 1961 SC 129 ] :
AIR 1962 SC 903 [
LNIND 1961 SC 449 ].
71. A and A Restaurant and Hotel Pvt. Ltd. v. Dwarikajeet Restaurant Pvt. Ltd.,
(2005) 1 Arb LR 526 , 531- 534(All) relying on Jnanendra Mohan
Bhaduri v. Rabindranath Chakrabarti,
AIR 1933 PC 61 : (1932) LR 60 IA 71.
72. Jnanendra Mohan Bhaduri v. Rabindranath Chakrabarti,

AIR 1933 PC 61 : (1932) LR 60 IA 71.
73. Narayan Prasad Lohia v. Nikunj Kumar Lohia,

AIR 2009 SC 1531 [
LNIND 2008 SC 2296 ]:
(2009) 1 RAJ 483 , 487- 488:
(2008) 13 JT 355 .
74. Sant Lal v. Ramji Ram,

AIR 1938 Lah 177 .
75. Kailas Pati Singhania v. Ram Gopal Gupta,

AIR 1973 All 310 , 317 : 1972 All LJ 974.
76. M.P. Electricity Board v. Central India Electric Supply Co.,

AIR 1972 MP 47 , 51.
77. Willesden Local Board and Wright, Re,

(1896) 2 QB 412 at p. 417.
78. Margulies Bros. Ltd. v. Dafnis Thomaides & Co. (U.K.) Ltd.,
(1958) 1 WLR 398 :
(1958) 1 All ER 777 : (1958) 1 Lloyd's Rep 250.
79. River Plate Roducts Netherlands Bv v. Etablissements Coargrain, (1982) 1 Lloyd's Rep.
628 QB (Com. Ct.).
Navneet Krishn
Page 41 of 60
S. 36. Enforcement
80. River Plate Roducts Netherlands Bv v. Etablissements Coargrain, (1982) 1 Lloyd's Rep.
628 QB (Com. Ct.). A family partition award which was not valid was not allowed to be the basis of any proceeding,
Kalathoores Raghewareddi v. K.V. Kataraddi,
AIR 1955 AP 22 [
LNIND 1954 AP 12 ].
81. Cremer v. Samanta and Samanta, (1968) 1 Lloyd's Rep 156.
82. Montrose Canned Foods Ltd. v. Eric Wells (Merchants) Ltd., (1965) 1 Lloyd's Rep 597.
83. Oricon Woven-Handelsgesellschaft Bmbh v. Intergraan N.V., (1967) 2 Lloyd's Rep 82.
84. Commissioner, Kolhapur Municipal Coprn v. Fairdeal Constructions,

(2008) 1 Arb LR 312 , 316 :
(2008) 3 RAJ 692 :
(2009) 1 Bom CR 403 (Bom).
85. Prakash Chand Khurana v. Harnam Singh,

AIR 1973 SC 2065 [
LNIND 1973 SC 101 ]:
(1973) 2 SCC 484 [
LNIND 1973 SC 101 ].
86. Prakash Chand Khurana v. Harnam Singh,

AIR 1973 SC 2065 [
LNIND 1973 SC 101 ]:
(1973) 2 SCC 484 [
LNIND 1973 SC 101 ]. Where a family member took possession of property in
excess of the award and the question whether he had become owner by adverse possession, it was held that 12 years
were to run from the date when the award was made a rule of the court under S. 17 [1940 Act] and not from the date of
the award, Devaki Amma Mookambi Amma v. Meenakshy Amma Vijayama,
AIR 1990 Ker 37 [
LNIND 1989 KER 211 ].
1. See Binod Bihari Singh v. Union of India,

AIR 1993 SC 1245 : (1993) 18 Arb LR 313 :
(1993) 1 SCC 572 , here the award was filed by a party without the authority of the
arbitrator and, therefore, it was regarded as an application under S. 14(2) [1940 Act] for notice to the arbitrator for filing.
For detailed account see notes under S. 14 [1940 Act] under the heading “Filing of award by authority of the arbitrator;”
Fulmani Devi v. Sheo Govind Prasad
(1984) Arb LR 345 (Pat), agreement had also to be filed along with the award.
Koneru Venkala Subbaiah v. Koneru Venugopal,
AIR 2003 NOC 148 (AP), to make an award a rule of the Court under the 1940 Act,
the party had to make an application under S. 14 and not S. 17. The application was filed in this case after 2 years. It
was clearly barred by limitation.
2. A person who was never given notice nor made a party to the proceedings was held to be entitled to a
declaration under S.
Section 42 of the Specific Relief Act, 1963 to the effect that he was not bound by the award,Naoroiban
Bira Singh v. Waikham L Singh,
AIR 1958 Manipur 38 ; an ex parte decree was set aside at the instance of the party
who was supposed to have been served by delivery of the notice to his wife but she turned out to be some other
woman, Simon Anthony v. Raj Kumar
(1994) 1 Arb LR 52 (Del); State of Rajasthan v. Heera Singh Contractor,
Navneet Krishn
Page 42 of 60
S. 36. Enforcement
AIR 2001 Raj 47 : (2001) 1 WLC 99, the ground of non-issue of notice was found to
be not sustainable, the counsel of the applicant was present in the Court when the award was being passed as a
decree, the counsel earlier to that had asked for extension time for inspecting the award and for arguments. All this
showed that he had notice. Rameshwar v. Union of India, 2000 Supp Arb LR 594 :
(2003) 4 RAJ 379 (MP), proper notice was given to the parties’ counsels, no further
notice had to be given at the time of converting the award into a decree. Uttam Singh Duggal & Co. Ltd. v. Chief
Engineer, Project,
(2001) 2 RAJ 183 :
(2001) 91 DLT 108 (Del), filing of award for making it a rule of the court held to be
not proper. Parties directed to go for direct enforcement.
3. Ibrahim Ali v. Mohsin Ali,

ILR (1896) 18 All 422 (FB); Hargovind Jaggi v. D.D.A.
(1994) 2 Arb LR 92 (Del), award made rule of the court after rejecting objections.
Shiv Kumar Wasai & Co. v. D.D.A.,
(1993) 2 Arb LR 495 (Del), objections overruled because the award was based on
findings of fact by the arbitrator and the court would not sit over the views of the arbitrator; a decree was set aside when
an escalation award was outside the terms of the contract, Associated Engineering Co. v. Govt of A.P.,
(1991) 2 Arb LR 180 SC:
AIR 1992 SC 232 [
LNIND 1991 SC 299 ]; whether an award requires to be registered necessitates
adjudication for which reason the award was remitted to the trial judge to decide after hearing parties. Shah Hansraj
Veljee v. Shah Maganlal Veljee,
AIR 1980 Bom 237 [
LNIND 1979 BOM 20 ]:
1979 Mah LJ 530 [
LNIND 1979 BOM 20 ].
4. Ganeshmal Bhawarmal v. Kesoram Cotton Mills,

AIR 1952 Cal 10 [
LNIND 1951 CAL 1 ].
5. Ghulam Khan v. Muhammud Hassan, LR 29 IA 51:

ILR (1901) 29 Cal 167 (PC). M. Padmavati v. A.V. Subbarao
(1985) Arb LR 296 (AP), arbitrator filed both stamped and unstamped award, court
could accepted the stamped award. Walter Rosario v. Corporation Bank,
AIR 2001 Kant 483 , S
s. 17 &
18 of the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 , proceeding could not be
regarded a proceeding contemplated under S.
Section 17 of the Arbitration Act , 1940, and, therefore, the Court was not denuded of its jurisdiction of
making an award a rule of the Court.Delhi Auto & General Finance P. Ltd. v. Tax Recovery Officer,
(1998) 8 SCC 705 , a charge created by an arbitrator's award was held to be
ineffective because the award had not been made a rule of the court before the attachment of the property by the tax
oficer. Coal India Ltd. v. Chhindwara Fuels, (1987) Supp SCC 155, the arbitrator dealt-with each of the issues in the
claim, the award made rule of the court, rejecting the plea of remission. The court followed. Guru Nanak Foundation v.
Rattan Singh & Sons,
(1981) 4 SCC 634 [
LNIND 1981 SC 402 ] :
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ].
6. T.S. Narayanaswami v. Swayam Sewa Co-op. Group Housing Society,

(1998) 3 RAJ 368 (Del): 1998 Supp Arb LR 102.
7. Ravibhai Kashibhai v. Dayabhai Zaberbhai Patel, ILR 35 Bom 822:

AIR 1921 Bom 32 ; Rangiah Chetty v. Govindaswami Chetty,
AIR 1922 Mad 179 ; Maniram v. Ram Asrey,
AIR 1921 Oudh 148 (1); Udit Singh v. Ram Lakhan Singh, (1932) All LJ 149;
Navneet Krishn
Page 43 of 60
S. 36. Enforcement
AIR 1933 All 313 ; Subba Rao v. Ramalingayya, 67 Mad LJ 377:

AIR 1934 Mad 619 ; Indian Telephone Industries v. Jayaram Reddy,
(1985) Arb LR 510 (Kant).
8. Darbari Ram v. Bhika Ram,

AIR 1925 Lah 249 .
9. Bansilal Bansidhar v. Nandlal Sri Nath,

AIR 1975 MP 25 [
LNIND 1974 MP 19 ]:
1974 MP LJ 552 [
LNIND 1974 MP 44 ].
10. Nand Lal Bajaj v. Pritam Kumari,

AIR 1980 NOC 36 (Raj).
11. Union of India v. K P Mandal,

AIR 1961 Cal 118 [
LNIND 1960 CAL 72 ].
12. Dilip Singh v. Khilan Singh,

AIR 1949 MP 117 ; Arura Vir Singh v. Punjab Samindare Bank Ltd.,
AIR 1940 Lah 164 .
13. Soorajmull Nagarmal v. Golden Fibre & Products,

AIR 1969 Cal 381 [
14. Hindley & Co. v. Krogh, 1 Lloyd's. Rep 125. (CA). The court followed
Boks & Co. v. Peters, Rushton & Co.,
(1919) 1 KB 491 where the validity of the award was doubted because of the
illegality of the underlying contract and the parties were required to proceed by a regular suit instead of summary
procedure. In subsequent cases the approach has been that in all cases the summary method of enforcement should
be used except where there was a real ground for disputing the validity. See Middlemiss v. Hartlepool
Corpn
(1972) 1 WLR 1643 at 1647 :
(1973) 1 All ER 172 . M.C. Katoch v. Union of India,
(2005) 1 RAJ 158 (Del), burden of proof for establishing a ground for setting aside
lies heavily on the objector.
15. U.P. Power Corpn. Ltd., Lucknow v. Universal Insulators of Ceramics Ltd., Raibareli,
(2006) 3 All LJ 10 (DB), appeal against a decree under S. 17 [1940 Act] can be made on very limited grounds namely
“if the decree is in excess or not in accordance with the award”.
16. Gulab Khatun v. Chaudhuri, 32

IC 250: 99 PR 1915 :
AIR 1916 Lah 201 ; Sidh Nath Rai v. Jharbandhu Prasad,
AIR 1924 All 687 ; Chet Kunwar v. Puthu Singh, 27 IC 424: 17 OC 386 :
AIR 1914 Oudh 327 .
17. Hansraj v. Sundarlal, LR 35 IA 88: ILR 35 Cal 648 (PC); Behari Lal v. Chunilal, ILR 29 All
457 (FB); Yasodabai v. Gopaldas Haridas,
AIR 1942 Sind 144 ; Mac Cho v. U. Po Miya,
AIR 1940 Rang 238 ; Jain Pictures v. Supra Films,
Navneet Krishn
Page 44 of 60
S. 36. Enforcement
(2003) 4 RAJ 30 (RAJ) :

(2003) 3 Arb LR 44 , once an award was made a rule of the Court, it being a final
adjudication by the Court, was conclusive upon merits of the controversy unless impeached upon sufficient grounds
before an appropriate Court. Approaching another tribunal was an abuse of the process. Brij Ratan Mohta v. State of
Rajasthan,
(2003) 4 RAJ 673 (Raj):
(2003) 2 Arb LR 613 , award relating to property became final. The property had to
be handed over as awarded. But, instead, an SDM was approached, he attached the property to prevent breach of
peace. This was held to be an abuse of the process of the court.
18. Radhey Lal v. Kanhai Lal,

AIR 1939 Pat 526 : ILR 18 Pat 185.
19. Fazal Rahman v. Zainab Bibi,

AIR 1940 Lah 123 .
20. Chairman of the Purnea Municipality v. Siva Sankar Ram,

ILR (1906) 33 Cal 899 ; Khudiram Mahto v. Chandi Charan Mahto,
AIR 1916 Pat 190 at p. 192; Kanakka Nagalinga Naik v. Nagalinga Naik, ILR 32
Mad 510; Lulawani v. Lachyan,
AIR 1914 All 446 ; Rai Charan Purkait v. Amrit Lal,
(1910) 5 IC 98 .
21. Shib Kesto v. Satish, ILR 39 Cal 822.
22. Union of India v. N.P. Singh,

AIR 1963 Cal 1 [
LNIND 1962 CAL 72 ]: 66 CWN 1074.
23. Antarijami v. Ketaki Debi,

AIR 1952 Ori 173 [
LNIND 1951 ORI 51 ].
24. Food Corporation of India v. Arosan Enterprises Ltd.,

(1995) 1 Arb LR 585 (Del), facts showed that the seller committed breach whereas
the arbitrator found breach on the part of the buyer which was apparently wrong.
25. Koduri Krishnamma v. Koduri Channayya,

AIR 1949 Mad 276 [
LNIND 1948 MAD 110 ]; Monji Premji Set v. Maliyakel Koyassan Koya Haji, ILR 3
Mad 59; Vellu Pillay v. Appaswami Dandaram, 21 MLJ 444.
26. Najimuddin Ahmad v. Albert Puech, ILR 29 All 584; Ramjilal v. Ram Sanchi Lal,
AIR 1978 All 307 .
27. Union of India v. Mohinder Singh & Co.,

AIR 1971 JK 10 .
28. Narendra Kumar Das v. Upendra Kumar Das,

(1989) Arb LR 277 (Ori). The court followed Prakash Chand
Khurana v. Harnam Singh,
AIR 1973 SC 2065 [
Navneet Krishn
Page 45 of 60
S. 36. Enforcement
LNIND 1973 SC 101 ]:

(1973) 2 SCC 484 [
LNIND 1973 SC 101 ] to the effect that in the case of consent, the validity of the
decree flows from the consent. The court also referred to Arjun Singh v. Mohindra Kumar,
AIR 1964 SC 993 [
LNIND 1963 SC 296 ]:
(1964) 5 SCR 946 [
LNIND 1963 SC 296 ] to the effect that inherent powers cannot be used to override
the provisions of the
Arbitration Act .
29.
AIR 1969 SC 40 [
LNIND 1968 SC 143 ]:
(1969) 1 SCR 193 [
LNIND 1968 SC 143 ].
30. Union of India v. D.S. Narula & Co,

AIR 1992 Gau 13 [
LNIND 1990 GAU 8 ]at 16:
(1992) 1 Arb LR 444 .
31. The court was referring to the power under the Khasi Siemships (Admn of Justice) Order, 1950 :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]: 1962 All LJ 1 :
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ].
32.
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]:
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ].
33. At p 16,
AIR 1992 Gau 13 [
LNIND 1990 GAU 8 ]:
(1992) 1 Arb LR 444 . See further NBCC Ltd., v. Patel Construction
Co.,
(1993) 2 Arb LR 117 (Cal), where the validity of decree was not allowed to be
questioned on the technical ground of jurisdiction; or Shri Inder Khanna & Sons v. Union of India,
(1991) 1 Arb LR 411 (Del), that the notice of the filing of the award under S. 14
[1940 Act] carried no enclosures; or Popular Electric Works v. Union of India
(1991) 1 Arb LR 413 (Del), that the notice did not contain a copy of the plaint.
34. Jawahar Singh v. Mul Raj,

ILR (1886) 8 All 449 ; Ram Khelawan Singh v. Ram Nagina Pathak,
AIR 1935 Pat 109 .
35. Ram Babu v. Lakshmi Naraian,

AIR 1963 All 259 ; (1962) All LJ 999; Nanak Chand v. Ram Kissen,
AIR 1933 Lah 139 ; State of Kerala v. VM Kuriakose,
(2005) 1 Arb LR 133 , 138 (Ker-DB).
36. Tursi Ram v. Basdeo,

AIR 1926 All 567 .
Navneet Krishn
Page 46 of 60
S. 36. Enforcement
37. Bansi Lal v. Gopal Lal,

AIR 1928 Lah 849 .
38. Bhagwandas Bros v. Ghulam Ahmed Dar,

AIR 1992 Del 22 [
LNIND 1991 DEL 286 ]:
(1992) 1 Arb LR 346 . The court considered the decision in Government of A.P. v.
Bactchala Balaiah,
AIR 1985 AP 52 [
LNIND 1984 AP 164 ]:
1985 Arb LR 165 where the court noted a row of cases in which it was laid down
that an application under Order 9, Rule 13
CPC would not lie if an award had been made a rule of the court under S. 17 [1940 Act] and a decree
had been drawn up in terms of the award. The court distinguished the case from the decision in Ganeshmal Bhawarlal
v. Kesoram Cotton Mills,
AIR 1952 Cal 10 [
LNIND 1951 CAL 1 ]because no notice of the filing was proved and decree was
passed even before the time for filing objections had expired. Govt of A.P. v. Bactehla Baliah
(1985) Arb LR 165 :
AIR 1985 AP 52 [
LNIND 1984 AP 164 ], application under Order 9 Rule 13
CPC not allowed.
39. Bhagwandas Bros v. Ghulam Ahmed Dar,

AIR 1992 Del 22 [
LNIND 1991 DEL 286 ]:
(1992) 1 Arb LR 346 . The court considered the decision in Government of A.P. v.
Bactchala Balaiah,
AIR 1985 AP 52 [
LNIND 1984 AP 164 ]:
1985 Arb LR 165 where the court noted a row of cases in which it was laid down
that an application under Order 9, Rule 13
CPC would not lie if an award had been made a rule of the court under S. 17 [1940 Act] and a decree
had been drawn up in terms of the award. The court distinguished the case from the decision in Ganeshmal Bhawarlal
v. Kesoram Cotton Mills,
AIR 1952 Cal 10 [
LNIND 1951 CAL 1 ]because no notice of the filing was proved and decree was
passed even before the time for filing objections had expired. Govt of A.P. v. Bactehla Baliah,
(1985) Arb LR 165 :
AIR 1985 AP 52 [
LNIND 1984 AP 164 ], application under Order 9 Rule 13
CPC not allowed.
40. The opinion that such a judgment was not an ex parte judgment was followed in Soorajmull v. Golden
Fibre Products,
AIR 1969 Cal 381 [
41.
AIR 1956 Pat 28 . In Jayshree Distribution Piplani Katra v. Jayshree Tyres and
Rubber Products,
(1989) 2 Arb LR 221 :
AIR 1989 All 158 [
LNIND 1989 ALL 36 ]an ex parte decree was set aside on the condition that half of
the decreed amount should be deposited in the court by way of security.
42.
AIR 1978 Mad 295 [
Navneet Krishn
Page 47 of 60
S. 36. Enforcement
LNIND 1977 MAD 149 ]:

(1978) 1 MLJ 171 [
LNIND 1977 MAD 149 ].
43. The court followed the above cited Patna High Court case.
44. Bhagrandas Bros v. Ghulam Ahmed Dar,

AIR 1992 Del 22 [
LNIND 1991 DEL 286 ]at p. 27:
(1992) 1 Arb LR 346 .
45. Punjab Small Industries and Export Corporation v. Sardul Singh,

(1989) 2 Arb LR 225 (P&H). Referring to the authorities like Rewa Chand v. K.C.
Kapoor,
AIR 1954 Ajmer 9 J&K 133 which laid down that passing a decree was an order
filing the award and therefore appealable, the court said that that was not a good law. In Koduri Krishnamma v. Koduri
Channayya,
AIR 1949 Mad 276 [
LNIND 1948 MAD 110 ]where also the decree was passed before the time for filing
objections expired and the court held that the same was not appealable.
46. Kalu Singh v. Paras Mal,

AIR 1953 Ajmer 36 , relying on Ghisu Lal v. Gangaram,
AIR 1953 Ajmer 31 and Kunjammal v. Raja Gopala Iyer,
AIR 1949 Mad 267 .
47. Jagannath Prasad v. Hazari Lal,

AIR 1953 All 509 [
LNIND 1951 ALL 150 ]. An award which had the effect of transferring property would
require to be stamped and registered, a decree without such formality would be void, Sardar Singh v. Srishna Devi,
(1991) 2 Arb LR 201 (Del).
48. Mohinder Singh v. D.D.A.,

(1993) 2 Arb LR 271 (Del).
49.
AIR 1987 Del 134 [
LNIND 1987 DEL 47 ]:
(1987) 1 Arb LR 315 .
50. Nath Prasad v. Ram Paltan Ram,

ILR (1882) 4 All 218 (FB). Followed in Mahesh Chand v.Puran
Chand,
AIR 1969 Punj 159 : (1969) 1 Punj 618, the decree that followed was a decree in a
suit that put an end to the suit and, therefore, the provisions of S.
Section 11 of the Court Fees Act applied.ICDS Ltd. v. Mangla Builders P. Ltd.,
(2001) 4 RAJ 318 (Kar) question of jurisdiction under the Karnataka Civil Courts Act,
Principal District Judge.Kinetic Capital Finance Ltd. v. Anil Kumar Misra,
(2000) 3 RAJ 272 :
(2000) 87 DLT 405 : (2000) 3 Arblr 486 (Del), enforcement by Civil Court under
CPC . Khaleel Ahmed v. Haite Gold Mines Co. Ltd.,
AIR 2000 SC 1926 [
LNIND 2000 SC 512 ]:
(2000) 2 RAJ 1 :
(2000) 3 SCC 755 [
LNIND 2000 SC 512 ], territorial jurisdiction, a court of no territorial jurisdiction
Navneet Krishn
Page 48 of 60
S. 36. Enforcement
ordered attachment of property in execution of award even when an application for setting aside was pending in the
proper court, held not proper.
51. Gujarat State Co-op Grain Growers Federation Ltd. v. Union of India, 2007 (Suppl) Arb
LR 541, 545:
(2007) 1 RAJ 445 (Del-DB), specific directions issued for deposit of amounts,
judgment creditor allowed to withdraw sums upon furnishing bills, judgment debtor deposited the sums but did not allow
withdrawals even where bills were presented, held executing court may grant interest only for those sums which were
improperly withheld, no interest may be awarded on the rest of the amount.
52. Delhi Development Authority v. Bhai Sardar Singh &Sons,

(2009) 1 Arb LR 446 , 454- 455 (Del-DB) relying on P.S.L.
Ramanathan Chettiar v. O.R.M.P.R.M. Ramanathan Chettiar,
AIR 1968 SC 1047 [
LNIND 1968 SC 63 ]:
(1968) 3 SCR 367 [
LNIND 1968 SC 63 ]; Mathunni Mathai v. Hindustan Organic Chemicals Ltd.,
AIR 1995 SC 1572 [
LNIND 1995 SC 567 ]:
(1995) 4 SCC 26 [
LNIND 1995 SC 567 ] :
(1995) 4 JT 233 .
53. Kali Charan Sharma v. New Okhla Industrial Development Authority,

(2008) 4 RAJ 117 (Del) :
(2008) 149 DLT 244 relying on Ramanathan
Chettiar v. O.R.M.P.R.M. Ramanathan Chettiar,
AIR 1968 SC 1047 [
LNIND 1968 SC 63 ]:
(1968) 3 SCR 367 [
LNIND 1968 SC 63 ].
54. Unique Enterprises v. Delhi Development Authority,

(2006) 1 Arb LR 281 , 282 :
(2006) 127 DLT 401 :
(2006) 87 DRJ 220 [
LNIND 2006 DEL 108 ] (Del).
55. Gurudayal Singh v. Ramchandra,

AIR 1971 Pat 190 ; Gurucharan v. Umacharan, 26 CWN 940 (
CPC 1888); Wazir Mahton v. Chuni Singh,
ILR (1881) 7 Cal 727 (
CPC 1859); Vyankatesh v. Sakharam,
ILR (1896) 21 Bom 455 (
CPC 1859); Sibnath Saha v. Mohesh Chandra, 59 IC 89:
AIR 1920 Cal 674 (interpretation of contract); Harda Municipality v. Harda Electric
Supply Co.,
AIR 1964 MP 101 [
LNIND 1963 MP 104 ]:
(1964) MPLJ 579 (Do); Sasi Sekhariswar v. Lalit Mohan, LR 52 IA 79: ILR 52 Cal
314 : 29 CWN 633 :
AIR 1925 PC 34 ; Madan Mohan v. Narain Singh, (1929) All LJ 521:
AIR 1929 All 521 . Lahoriram Prashar v. State of WB,
AIR 1967 Cal 444 [
LNIND 1965 CAL 185 ], a cause of action on which an award has become final
cannot be the subject matter of a fresh arbitration. Sarkar & Sarkar v. State of West Bengal, 2006 (Suppl) Arb LR 418,
421 :
(2007) 5 RAJ 398 : (2006) 4 Cal HN 86 (Cal-DB), award rejecting claim for
pendente lite interest made rule of court, held no fresh reference possible for re-deciding the claim for interest.
Navneet Krishn
Page 49 of 60
S. 36. Enforcement
56. Subhash & Co. v. DDA,

(2001) 2 RAJ 510 :
AIR 2000 Del 423 [
LNIND 2000 DEL 534 ]: 2001 Supp Arb LR 164.
57. Chintamallayya v. Thadi Gangireddi,

ILR (1897) 20 Mad 89 .
58. B.S. Ranga of Vikram v. Asha Film Exchange, Indore, (1981-82). The Arbitration Journal
24.
59. Aiden Shipping Co. Ltd. v. Interbuick Ltd., (1985) 2 Lloyd's Rep 337.
60. Bhai Hospital Trust v. Dr. Parvinder Singh,

AIR 2002 Del 311 [
LNIND 2002 DEL 76 ], the plaintiffs who in the subsequent proceedings claimed that
they were the real trustees and not the defendants were not parties to the arbitration proceedings though they were
members of the family. Their suit was not barred by S. 32 of the 1940 Act.
61. Subhash & Co. v. Delhi Development Authority,

AIR 2000 Del 423 [
LNIND 2000 DEL 534 ]: (2000) 56 DRT 521.
62. Shakambari & Co. v. Union of India (South Eastern Railway), (2009) 1 Cal HN 260.
63. Shanmughasundaram v. Diravia Nadar,

(2005) 1 Arb LR 401 , 407- 409:
AIR 2005 SC 1836 [
LNIND 2005 SC 255 ]:
(2005) 1 RAJ 411 :
(2005) 10 SCC 728 [
LNIND 2005 SC 255 ], arbitration award set aside on ground that all co-owners of
property were not parties to arbitration agreement.
64. See Ircon International Ltd. v. R.S. Jiwani,

(2009) 3 Bom CR 446 [
LNIND 2008 BOM 1113 ] :
(2009) 2 Mah LJ 758 , where the arbitral award is set aside for reasons other than
on the merits of the case, the parties to the agreement may invoke the agreement again to refer it for arbitration;
Central Pollution Control Board v. Modern Decorators,
(2008) 4 RAJ 166 :
(2008) 149 DLT 323 , unreasoned award remitted back to the arbitrator, subsequent
reasoned award also challenged on grounds under S. 34, held that new challenge was not barred by res judicata since
in the former challenge the award was not set aside on merits, but only on formal non-compliance with the agreement
between the parties distinguishing Subhash & Co. v. DDA,
2000 (VII) AD 545 :
AIR 2000 Del 423 [
LNIND 2000 DEL 534 ].
65. Vipul Agarwal v. Atul Kanodia,

(2004) 2 RAJ 520 (All), this was a case under the 1996 Act per contra
Bharat Petroleum Corporation Ltd. v. Reliance Industries Ltd.,
(2007) 1 RAJ 19 (Bom), a case under the 1940 Act, where it was held that no order
Navneet Krishn
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S. 36. Enforcement
under S. 17 [1940] Act could be passed when an appeal was pending to set aside the award. See further Commentary
under S. 36 infra under the heading “Time for enforcement — ‘Expiry of time under S. 34’ or ‘Refusal of objections‘”
66. Sasi Sekhareswar v. Lalit Mohan, 29 CWN 633 (PC).
67. Guru Dayal Singh v. Ram Chandra Kushiari,

AIR 1971 Pat 190 . Chacko Geevarghee v. State of Kerala,
AIR 1982 Ker 333 [
LNIND 1982 KER 130 ]:
(1982) 2 Ker 589 , recoverable amount not mentioned in the decree does not make
it unexecutable; ascertainment of the property from which recovery has to be effected is permissible; J.D. Singh v.
Calcutta Port Trust,
(1994) 2 Arb LR 35 :
AIR 1994 Cal 148 [
LNIND 1993 CAL 3 ], decree in the name of partner, execution filed in the name of
his firm, ratification of mistake allowed. Narpat Singh v. Daver Credit P. Ltd.,
AIR 1998 Cal 332 [
LNIND 1998 CAL 190 ]: 1998 Supp Arb LR 355, appeal against appointment of
receiver not entertained, such application should have been filed in proceeding for execution of decree. In this case the
receiver was appointed in terms of the consent order passed in a suit filed under Sec.14(2) of the 1940 Act.
68. M. Banerjee & Sons v. M.N. Bhagabati,

AIR 2003 Gau 13 .
69. S.S. Fasteners v. Satya Paul Verma, AIR 2000 P&H 301:
(2000) 126 PLR 598 .
70. Bhawarlal Bhandari v. Universal Heavy Mechanical Enterprises,

AIR 1999 SC 246 : (1999) 1 SCC 558 :
(1999) 1 RAJ 1 :
(1999) 1 Arb LR 355 :
(1999) 1 SCJ 3 .
71. R.S. Bajwa & Co. v. State of Chhattisgarh,

(2009) 1 Arb LR 163 (Chhattisgarh) :
(2009) 2 RAJ 657 , where tribunal appointed in violation of C.G. Madhyastham
Adhikaran Adhiniyam, 1983 relating to disputes arising out of a “works contract”, the tribunal lacked inherent jurisdiction
and decree held a nullity.
72. Bhagat Construction Co. v. DDA,

(2003) 4 RAJ 221 (Del—DB).
73. Superintending Engineer, Highway and Rural Works,

(2004) 3 RAJ 96 (Mad).
74. Pride of Asia Films v. Essel Vision,

(2004) 3 RAJ 411 (Bom).
75. Paradise Hotel v. Restraurant v. Airport Authority of India ,

(2002) 4 RAJ 670 (Gau).
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S. 36. Enforcement
76. Florentine Estates of India Ltd. v. CREF Finance Ltd.,

(2004) 2 RAJ 131 (Del).
77. National Building Construction Corpn. v. Lloyd Insulations (India) Ltd.,

(2004) 1 RAJ 619 :
AIR 2004 Del 235 [
LNIND 2004 DEL 111 ]:
(2005) 2 SCC 367 :
(2004) 73 DRJ 142 [
LNIND 2004 DEL 111 ] : (2004) 109 ASWC 906, a part of the award can be
enforced when it is severable from the rest of the award.
78. Carter v. Harold Simpson Associates (Architects) Ltd.,

[2004] UKPC 29 .
79. Damodar Valley Corporation v. CESC,

(2005) 1 Arb LR 520 , 523:
AIR 2005 Cal 67 [
80. See Commentary under S. 34supra under the heading “Application for Setting Aside
(Limitation)”.
81. D. Gowadia v. Union of India,

(2009) 2 Arb LR 378 :
(2009) 3 Bom CR 127 [
LNIND 2009 BOM 207 ] (Bom-DB).
82. Radheshyam Shaw v. Union of India,

AIR 2009 (NOC) 309 (Cal).
83. See Commentary under S. 36infra under the heading “Time for Enforcement — ‘Expiry of
time under S. 34’ or ‘Refusal of Objections'”.
84. Angerlehner Michel Construction Pvt. Ltd. v. Shreemauli Builders,

(2007) 2 Arb LR 553 :
(2007) 4 RAJ 561 (Bom).
85. Angerlehner Michel Construction Pvt. Ltd. v. Shreemauli Builders,

(2007) 2 Arb LR 553 , 557:
(2007) 4 RAJ 561 (Bom).
86. Bhagyanagar Metals Ltd. v. Mahanagar Telephone Nigam Ltd.,

(2005) 1 Arb LR 184 , 186:
(2005) 4 RAJ 306 (Del), part-payment by judgment debtor on the ground that
liquidated damages were wrongly awarded, held unjustified, unless challenged award must be strictly complied with.
87. Bhola Nath v. Monika, 2007 (Suppl) Arb LR 435, 437:

(2009) 4 RAJ 359 :
(2007) 14 SCC 302 [
LNIND 2007 SC 1122 ], award holding that housing society should allot Plot No. 6,
but Plot No. 66 mistakenly allotted instead, held mistaken allotment in execution proceedings cannot be perpetuated,
Navneet Krishn
Page 52 of 60
S. 36. Enforcement
further, stranger to award has vested right as regards Plot No. 66, appropriate remedy is to enforce correct compliance
with terms of award.
88. Fab Leathers v. KND Engineering Technologies, (2009) 1 CLJ 49 (Cal).
89. Resident Engineer, Rajasthan Housing Board, Udaipur v. Narendra Kumar,

(2006) 3 Arb LR 282 , 284:
(2006) 2 RLW 1193 (Raj). See also
S. 146 of the Code of Civil Procedure, 1908 .
90. I.T.I Ltd. v. Siemens Public Communications Network

Ltd.,
AIR 2002 SC 2308 [
LNIND 2002 SC 404 ]: (2002) 5 SCC 510 :
(2002) 2 Arb LR 246 (SC). See Commentary under S. 5 under the heading
“Applicability of
Code of Civil Procedure, 1908 ”.
91. N.R. Constructions Pvt. Ltd. v. Ram Badan Singh,

(2007) 4 Arb LR 14 , 17:
(2007) 1 RAJ 1 .

(2006) 13 SCC 322 [
LNIND 2006 SC 897 ] :
(2006) 4 Arb LR 202 :
AIR 2007 SC 168 [
LNIND 2006 SC 897 ]followed in Aditya Fuels Ltd. v. BILT
Chemicals Ltd.,
(2007) 4 Arb LR 110 :
AIR 2007 Guj 140 [
LNIND 2007 GUJ 32 ]:
(2007) 4 RAJ 91 : (2007) 4 Guj LR 772.
93. See Notes under S. 34 relating to “Application for setting aside (Limitation)”.
94. Vipul Agarwal v. Atul Kanodia & Co.,

AIR 2004 All 204 followed in Décor India Pvt.
Ltd. v. National Building Construction Corporation Ltd.,
(2007) 3 Arb LR 348 , 352- 33:
(2007) 4 RAJ 425 :
(2007) 142 DLT 21 (Del-DB), appeal pending under S. 37, no automatic stay of the
execution of award.
95. Sarkar and Sarkar v. State of West Bengal,

(2006) 4 Arb LR 379 , 381:
AIR 2006 Cal 149 [
96. Decor India Pvt. Ltd. v. National Building Construction Corporation Ltd.,
(2007) 3 Arb LR 348 , 352- 353:
(2007) 4 RAJ 425 :
(2007) 142 DLT 21 (Del-DB).
Navneet Krishn
Page 53 of 60
S. 36. Enforcement
1. Superintending Engineer, Highway and Rural Works v. D.G. Deivasigamani,

(2005) 1 Arb LR 149 :
(2004) 3 RAJ 96 (Mad); Aditya Fuels v. BILT Chemicals Ltd.,
(2007) 4 Arb LR 110 , 120:
AIR 2007 Guj 140 [
(2007) 4 RAJ 91 : (2007) 4 Guj LR 772, “since the question regarding objections
under S. 34 is the subject matter of appeal, and till the appeal is finally decided, it cannot be said that the objections
raised by the present applicant under S. 34 are ‘refused’, as the said question is already sub judice.”.
2. Aditya Fuels v. BILT Chemicals Ltd.,

(2007) 4 Arb LR 110 , 120:
AIR 2007 Guj 140 [
(2007) 4 RAJ 91 : (2007) 4 Guj LR 772.
3. Sarkar and Sarkar v. State of West Bengal,

(2006) 4 Arb LR 379 , 381:
AIR 2006 Cal 149 [
4. Upendra Nath v. Gurupada,

AIR 1930 Cal 508 , award giving limited right but decree giving absolute rights in the
property.

AIR 1962 SC 903 [
LNIND 1961 SC 449 ]:
(1962) 2 SCR 77 .
6. Basant Lal v. Surendra Prasad,

AIR 1957 Pat 41 . Trivedi Mulshanker v. Narshidas,
AIR 1953 Sau 129 , a decree passed without waiting for 30 days is illegal or an
irregularity and is not a nullity and so cannot be questioned before the execution court. This would be more so where
the parties have consented to the award.
7. Gian Chand v. Chiranjilal,

AIR 1934 Lah 804 .
8. Dakoomal Ranoomal v. Khajumal Parumal,

AIR 1931 Sind 47 .
9. Ahmad Yar v. Co-operative Credit Society,

AIR 1926 Lah 647 (1).
10. Uttam Chand Matilalji v. Vasudeo Deoraa Digambar,

AIR 1946 Nag 311 .
11. Indian Commercial Co. Ltd. v. Amrish Kilachand,

AIR 2002 Bom 391 [
LNIND 2002 BOM 303 ].
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S. 36. Enforcement
12. Bhawan Vaja v. Solanki Hanuji,

AIR 1972 SC 1371 . The Supreme Court explained in this case the extent to which
the executing Court can examine the background of the decree. V.D. Modi v. R.A. Rehman,
AIR 1970 SC 1475 [
LNIND 1970 SC 148 ], as to examining the validity of the decree in the context of
jurisdiction of the Court which passed it. Jaimal Shah v. Ila Pandya,
2001 AIHC 3471 : (2001) 1 All MR 712 and Union of India v. Ajit Mehta &
Associates,
AIR 1990 Bom 45 [
LNIND 1989 BOM 285 ], under the 1940 Act the executing Court could see legal
misconduct on the part of the arbitrator because the award had to be made a rule of the Court. R.K. Textiles v. Sulabh
Textiles P. Ltd.,
(2003) 2 RAJ 236 : (2003) 1 Arblr 303 (Bom), powers of executing court stated, not
to examine the question of existence of agreement, decree can be questioned before the executing court only on
ground of jurisdiction. Subhash Projects & Marketing Ltd. v. Assam Urban Water Supply & Sewerages Board,
AIR 2003 Gau 158 : (2004) 1 RAJ 6, in view of clear language of
S. 47, CPC , the executing court cannot go behind the decree to determine its legality, but objections
regarding the validity of the decree has to be decided in execution proceedings. The objection must appear on the face
of the record and not one that would require a prolonged enquiry. Grounds stated in S. 34 cannot be used for
questioning validity of the award in execution proceedings. Andhra Stumb v. NDMC,
(2002) 1 RAJ 200 :
(2001) 94 DLT 248 : (2002) 1 Arblr 273 (Del), executing court not be required to
adjudicate upon the counterclaim which was not considered by the arbitrator. Amit Malik v. Kamlesh Malik,
(2006) 3 RAJ 432 :
(2006) 129 DLT 510 (Del-DB), enforcement of an arbitral award cannot be resisted
on the ground that a copy of the registered award was not provided to a party, especially where the original award was
signed by that party (on facts, time to challenge an award under S. 34(3) had also expired); Union of India v. S.M.
Construction Co.,
(2009) 1 Arb LR 271 , 276:
(2009) 1 Gau LR 38 (Gau), executing court cannot modify interest rates beyond
awarded amounts; Coal Linker v. Coal India Ltd.,
(2009) 4 Arb LR 97 :
(2009) 9 SCC 491 [
LNIND 2009 SC 1786 ], award not challenged and application made for decree in
terms of such award under S. 17 [1940 Act], interference by executing court in awarding interest where none awarded
by arbitrator, held unjustified.
13. Mallikarjun v. Gulbarga University,

(2003) 3 RAJ 570 :
(2004) 1 SCC 372 :
(2003) 3 Arb LR 579 .
14. Bahadur Singh v. Muni Subrat Dass,

(1969) 2 SCR 432 [
LNIND 1968 SC 312 ] :
1970 Punj LR 995 :
(1970) 6 DLT 532 .
15. Aruna Parwal v. Chasis Chattels P. Ltd.,

(1991) 1 Arb LR 48 Del: (1991) 1 Del 348.
16. Jnanendra Mohan v. Bhabani Charan, 34 CWN 268:

AIR 1930 Cal 468 .
17. Soorajmul Nagarmal v. Golden Fibre and Products,

AIR 1969 Cal 381 [
LNIND 1969 CAL 44 ]. Objection to the validity of the award must be made within
the time-frame permitted by Section 34 and not at the stage of enforcement of decree, Bhawarlal Bhandari v. Universal
Heavy Mechanical Lifting Enterprises,
(1999) 1 RAJ 1 :
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Page 55 of 60
S. 36. Enforcement
AIR 1999 SC 246 : (1999) 1 SCC 558 :

(1999) 1 SCJ 3 :
(1999) 1 Arb LR 355 .
18. Bahadur Singh v. Muni Subrat Dass,

(1969) 2 SCR 432 [
LNIND 1968 SC 312 ] :
1970 Punj LR 995 :
(1970) 6 DLT 532 .
19. Purna Chandar v. Jagat Bandhu, 45 CWN 381.
20. Morgan Securities & Credits Pvt. Ltd. v. Morepen LaboratoriesLtd.,

(2006) 3 Arb LR 159 , 168:
AIR 2007 (DOC) 3 : (2006) 4 RAJ 484 :
(2006) 132 DLT 588 (Del)upheld in Morepen Laboratories Ltd. v.
Morgan Securities & Credits Pvt. Ltd.,
(2008) 3 Arb LR 283 , 290 (Del-DB).
21. For text of English Act, 1950,see Appendix 34.
22. 1984 Supp SCC 263 :

AIR 1984 SC 241 [
LNIND 1983 SC 313 ]: 1984 Supp SCC 263: (1983) 3 Comp Cases 286.
23. Citing Halsbury's Laws Of England, para 630, vol 2, 4th ed.
24. Forasol v. ONGC, 1984 Supp SCC 263:

AIR 1984 SC 241 [
LNIND 1983 SC 313 ]. For text of English Act, 1950,see Appendix
34.
25. Pratap Singh & Sons v. Union of India,

(1992) 2 Arb LR 140 (Del).
26. Continental Construction Ltd., v. Continental Float Glass Ltd.,

(1977) 1 Arb LR 452 (Del); Prem Chand Garg v. Haryana State Industrial
Development Corporation Ltd., 2006 (Suppl) Arb LR 152, 157- 158:
(2007) 5 RAJ 308 (P&H), party not conversant with legal technicalities pursued his
application in several wrong forums on account of wrong advice given by his lawyers.
27. Union of India v. Popular Construction Co.,

AIR 2001 SC 4010 [
LNIND 2001 SC 2234 ]:
(2001) 3 RAJ 163 :
(2002) 8 SCC 470 :
(2001) 8 JT 271 :
(2001) 3 Arb LR 345 . See also Oil and Natural Gas Corpn. Ltd. v. Saw Pipes Ltd.,
(2003) 1 RAJ 587 (Bom), the court said: the finding which was arrived at by the
arbitrators was correct and did not call for any interference. The provision for arbitration under the contract between the
parties was invoked on 25th March, 1996. The subsequent letter dated 30th September, 1997 was only in continuation
of the earlier letter since by that letter all that the respondent stated was that it would no longer hold the arbitral
proceedings in abeyance, since the dispute in respect of the foreign exchange component was not settled. National
Navneet Krishn
Page 56 of 60
S. 36. Enforcement
Hydroelectric Power Corpn. Ltd. v. Asian Techs Rani Construction Joint Venture,
(2003) 1 RAJ 250 :
AIR 2003 Del 1 [
LNIND 2002 DEL 977 ]:
(2003) 1 Arb LR 320 , application not filed within 3 months, time lost in proceedings
under the 1940 Act not allowed to be excluded. Ghai Rice Mills v. Punjab State Civil Supplies Corpn. Ltd.,
AIR 2009 (NOC) 1436 (P&H), award can be enforced under S. 36 only after the
time period under S. 34 has expired.
28. S.L. Builders v. Union of India,

(2003) 1 RAJ 9 (Del).
29. Sukumar Chand Jain v. DDA,

(2002) 3 RAJ 157 :
(2002) 99 DLT 3 : (2002) AD (Del) 667, to the same effect is Vinay Bubna v.
Yogesh Mehta,
(1999) 2 RAJ 290 :
(1998) 3 Bom LR 739 ; MIC Electronics Ltd. v. Union of India, Deptt. of
Telecommunications,
(2002) 4 RAJ 611 :
(2002) 1 Arb LR 63 (AP); P.C. Sharma & Co. v. Union of India,
(2001) 3 RAJ 516 (Del), inordinate delay, slow motion Govt. procedures, no excuse
for seeking extension.
30. International Bulk Shipping & Services Ltd. v. MMTC of India,

(1996) 1 All ER 1017 : (1996) 2 Lloyd's Rep 474; International Bulk Shipping &
Services Ltd. v. President of India,
(1996) 1 All ER 1017 ; Himoff Maritime Enterprises Ltd. v. President of India,
(1996) 1 All ER 1017 .
31. Gulab Chand Jain v. Union of India,

AIR 1983 Gau 22 .
32. Punjab Recorders Ltd. v. Magnetic Information Technology Ltd., AIR 1995 P&H 29 :
(1995) 1 Arb LR 261 .
33. ICDS Ltd. v. Kumar Trading Co. P. Ltd.,

(2004) 1 RAJ 467 (MP).
34. Seawind Tankers Corpn. v. Bay Oil SA, (1999) 1 Lloyd's Rep 311 (CA). The Court
applied the decision in Re Portman Provincial Cinemas Ltd. v. abc, (1964) 108 Sol JO 581 and Re L.H.F. Wools Ltd.,
(1970) Ch 27 .
35. Sidharth Srivastva Re,

AIR 2002 Bom 494 [
LNIND 2002 BOM 336 ]:
(2003) 3 RAJ 34 :
(2003) 2 Arb LR 115 .
36.
(2003) 4 RAJ 12 (Bom DB) :
(2003) 3 Arb LR 82 .
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S. 36. Enforcement
37. N Poongodi v. Tata Finance Ltd.,

(2005) 3 Arb LR 423 , 428:
AIR 2005 Mad 270 [
LNIND 2005 MAD 606 ]:
(2005) 3 RAJ 363 : (2005) 2 Madlw 383 :
(2005) 4 CTC 577 [
LNIND 2005 MAD 606 ].

(2006) 13 SCC 322 [
LNIND 2006 SC 897 ] :
(2006) 4 Arb LR 202 :
AIR 2007 SC 168 [
LNIND 2006 SC 897 ]upholding In Re: Siddharth Srivastava,
(2003) 2 Arb LR 115 (Bom):
AIR 2002 Bom 494 [
LNIND 2002 BOM 336 ]:
(2003) 3 RAJ 34 .

(2006) 13 SCC 322 [
LNIND 2006 SC 897 ] :
(2006) 4 Arb LR 202 , 222- 223:
AIR 2007 SC 168 [
LNIND 2006 SC 897 ].
40. Morgan Securities and Credit Pvt. Ltd. v. Modi Rubber Ltd.,
(2006) 4 Arb LR 394 , 406:
(2007) 1 RAJ 422 on appeal from Modi Rubber
Ltd. v. BIFR,
(2007) 5 RAJ 127 (Del-DB).
41. Cement Corporation of India Ltd. v. AAFIR, 2005 (Suppl) Arb LR 307, 312- 314:
(2005) 1 RAJ 456 .
(2006) 4 Arb LR 394 , 411- 412:
AIR 2007 SC 683 [
LNIND 2006 SC 1148 ]:
(2007) 1 RAJ 422 :
(2006) 12 SCC 642 [
LNIND 2006 SC 1148 ]on appeal from Modi Rubber Ltd. v. BIFR,
(2007) 5 RAJ 127 (Del-DB). See also Jay Engineering Works Ltd.
v. Industry Facilitation Council,
(2006) 3 Arb LR 594 , 599 (SC).
(2006) 4 Arb LR 394 , 411- 412:
AIR 2007 SC 683 [
LNIND 2006 SC 1148 ]:
(2007) 1 RAJ 422 :
(2006) 12 SCC 642 [
LNIND 2006 SC 1148 ].
(2006) 4 Arb LR 394 , 412:
AIR 2007 SC 683 [
Navneet Krishn
Page 58 of 60
S. 36. Enforcement
LNIND 2006 SC 1148 ]: (2007) 1 RAJ 422 :

(2006) 12 SCC 642 [
LNIND 2006 SC 1148 ].
45. The provision was as follows :
Sec. 18. Power of Court to pass interim orders.—(1) Notwithstanding anything

contained in Section 17, at any time after the filing of the award, whether notice of the filing had been served or not,
upon being satisfied by affidavit or otherwise that a party has taken or is about to take steps to defeat, delay or obstruct
the execution of any decree that may be passed upon the award, or that speedy execution of the award is just and
necessary, the Court may pass such interim orders as it deems necessary.
(2) Any person against whom such interim orders have been may show cause against such orders, and
the Court, after hearing the parties, may pass such further orders as it deems necessary, and just.
46. Rashtriya Chemicals Fertilizer Ltd. v. Pertichem S.A.,

(1995) 1 Arb LR 411 (Bom), order to deposit award amount or furnish security
during the pendency of objections against award. Executive Engineer, Durgapur v. Emergency Construction,
(1983) Arb LR 407 : 88 CWN 262 (Cal), the court enforced the award by an interim
order even before passing a judgment in terms of award.
47. Executive Officer, Durgapur Notified Area Authority, City Centre v. Emergency
Construction, 88 CWN 262 :
1983 Arb LR 407 (Cal).. Naraindas R. Israni v. D.D.A.,
(1994) 2 Arb LR 2 Arb LR 301 (Del), here only a portion of the award was
challenged and the court accordingly passed decree for the unchallenged portion.
48. Enkay Texo Food Industries Ltd. v. Consite Engg Co P Ltd.,

(1995) 2 Arb LR 39 (Bom).
49. Inderjit Goel v. Punjab Reliable Investment (P) Ltd.,

(2005) 3 Arb LR 190 , 193- 194: AIR 2005 P&H 265 :
(2005) 3 RAJ 587 :
(2005) 2 Pun LR 598 .
50. Oil and Natural Gas Corpn. v. Hotel Paradise,

(2008) 4 Gau LR (NOC) 8 , 12, merely because the execution is under the
CPC , the definition of “Court” under the
Arbitration and Conciliation Act, 1996 will not be overridden by the provisions of the
CPC .
51. ICDS Ltd. v. Mangala Builders P. Ltd.,

AIR 2001 Kant 364 [
LNIND 2001 KANT 145 ], the petitioner was allowed to move the appropriate Court
within one month with a view to safeguarding their interests.
52. Gour Chandra Dutta v. State of WB,

(2004) 3 RAJ 16 (Cal). Engineering Projects (India) Ltd. v. Indiana Engg. Works P.
Ltd.,
(2004) 3 RAJ 156 (Del), the matter of an award which also involved winding up of
the company, was pending before the court in Ranchi, an application was made before the High Court of Delhi on the
basis of territorial jurisdiction for execution of award, the application was held to be premature and frivolous.
Navneet Krishn
Page 59 of 60
S. 36. Enforcement
53. Sri Prashanth Spinners Ltd. v. Chunnilal Pranjivandas & Co.,

(2004) 3 RAJ 173 (AP). The Court did not have the power to give a direction for
filing the application in a proper court. It can only declare that the petition was not maintainable. ITC Ltd. v. George
Joseph Fernandes,
(2004) 3 RAJ 693 :
(2004) 7 SLT 258 :
(2005) 10 SCC 425 [
LNIND 2004 SC 1160 ] :
(2005) 3 RAJ 283 :
(2004) 3 Arb LR 530 , the Supreme Court directed reference to arbitration. The
arbitrator filed his award in the Supreme Court. It was returned to be filed at Vishakhapatnam, the court there had
jurisdiction over the subject matter. Mahesh B Shah v. CV Joseph,
(2005) 3 Arb LR 483 , 485:
AIR 2005 Ker 290 [
LNIND 2005 KER 470 ]:
(2005) 4 RAJ 595 :
(2005) 3 Ker LT 787 :
ILR (2005) 3 Ker 653 , execution petition should not be filed before the Munsif Court
as it is not a principal civil court of original jurisdiction; Sri Prashanth Spinners Ltd. v. Chunnilal Pranjivandass & Co.,
(2005) 3 Arb LR 485 , 488 (AP), execution proceedings cannot be brought before
Court of Senior Civil Judge since it is not a “court” within the meaning of S. 2(1)(e); Union of India v. Kuttichand &
Sarojini Brick Kiln,
(2009) 1 Arb LR 102 , 104:
(2009) 2 RAJ 702 :
(2008) 4 Gau LR 381 (Gau), Notification No. HC. XI-01/96/1179/RC dt. 25.3.1998
relates to jurisdiction under S. 11 and does not affect jurisdiction of District Magistrate, Aizwal for executing award for
disputes above Rs. 20 lakhs.
54. Computer Sciences Corpn. India (P) Ltd. v. Harishchandra Lodwal, 2005 (Suppl) Arb LR
121:
AIR 2006 MP 34 [
LNIND 2005 MP 405 ]:
(2006) 1 RAJ 698 :
(2005) 4 MPLJ 164 :
(2006) 1 Civ LJ 914 .
55. Oil and Natural Gas Corpn. v. Hotel Paradise,

(2008) 4 Gau LR (NOC) 8 , 12, in case a S. 34 application has been filed before a
particular Court, execution under S. 36 must be sought from the same Court.
56. C.K. Muralimohan v. Ashok Finance Corporation,

AIR 2008 (NOC) 2715 (Ker).
57. S.K. Brothers v. Delhi Development Authority,

(2008) 3 Arb LR 272 , 274 :
(2008) 152 DLT 239 (Del)relying upon Pandey & Co. Builders Pvt.
Ltd. v. State of Bihar,
(2006) 4 Arb LR 192 , 198:
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ] ; followed in International Breweries Pvt.
Ltd. v. Mohan Meakins Ltd.,
(2008) 3 Arb LR 581 , 586 :
(2008) 153 DLT 399 (Del).
58. Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd.,

(2009) 3 Arb LR 524 :
2009 (159) DLT 579 .
Navneet Krishn
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S. 36. Enforcement

(2009) 3 Arb LR 524 :
2009 (159) DLT 579 .

(2009) 3 Arb LR 524 :
2009 (159) DLT 579 .
61. Shahab Uddin v. District Judge, Muzaffarnagar, (2009) 2 All LJ 275.
End of Document
Navneet Krishn
APPEALS
PART I ARBITRATION > CHAPTER 9 APPEALS
CHAPTER 9 APPEALS
(Appeal and Revision)
An appeal lies from the orders specified in Section 37(1) and (2) and from no others.1
1. G.C. Sharma v. University of Delhi,

AIR 1982 Del 227 [
LNIND 1981 DEL 254 ]:
(1982) 21 DLT 22 [
LNIND 1981 DEL 254 ].
End of Document
Navneet Krishn
S. 37. Appealable orders
PART I ARBITRATION > CHAPTER 9 APPEALS
S. 37 Appealable orders
(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals
from original decrees of the Court passing the order, namely :—
(a) granting or refusing to grant any measure under Section 9:

(b) setting aside or refusing to set aside an arbitral award under Section 34.
(2) An appeal shall also lie to a court from an order of the arbitral tribunal—
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16; or2
(b) granting or refusing to grant an interim measure under Section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall
affect or take away any right to appeal to the Supreme Court.
The position under the preceding Act of 19401 was that an appeal lay from orders specified in S. 39 clauses (i) to
(vi) and from no others, not from an order passed under Section 8 (1940 Act)2 or an order passed under Section 5,
revoking the authority of the arbitrator,3 an order under Section 12, removing an arbitrator and appointing another in
his place,4 an order extending5 or refusing to extend6 the time for the making of the award, an order directing the
officer of the court to send the award for registration to the Registrar of Assurances,7 an opinion of court given on a
case stated by the arbitrator,8 an order under Section 43 read with Schedule II appointing or refusing to appoint a
receiver9 or an order granting temporary injunction10, or an order refusing to remit the matter back to the arbitrator
for decision under S. 16,11 and an order revoking an order of reference12 [Section references are to the 1940 Act].
Where a legal right is in dispute and ordinary courts of the country are seized of the matter, the courts would be
governed by the ordinary rules of procedure applicable to the subject matter, an appeal would lie if authorised by
such rules notwithstanding that the legal rights claimed had arisen under a special statute, which did not in terms
confer a right of appeal.13
1. Appealable orders under Section 37 of 1996 Act
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The five appealable orders are :
(1) granting or refusing to grant any interim measure of protection by the court under Section 9;14
(2) setting aside or refusing to set aside an arbitral award by the court under Section 34;15
(3) accepting the plea of lack of its jurisdiction by the arbitral tribunal under Section 16(2)16;
(4) accepting the plea of excess of scope of its authority by the arbitral tribunal under Section 16(3);
(5) granting or refusing to grant an interim measure of protection by the arbitral tribunal under Section 17.17
2. Appeal from certain orders barred
Matters which are not appealable under the 1996 Act include the following :
(a) reference or refusal of reference of the parties to arbitration by a judicial authority under Section 8;18
(b) decision of Chief Justice on appointment or securing appointment of arbitrators under Section 11(4), (5) and
(6);19
(c) decision of arbitral tribunal on challenge to the appointment of arbitrator on grounds of doubts as to his
impartiality or independence and lack of agreed qualifications under sections 12 and 13;
(d) decision of the court on the termination of the mandate of the arbitrator on grounds of de jure or de facto inability
to perform his functions or failure to act without undue delay under Section 14(2);20
(e) rejection by the arbitral tribunal of the plea of lack of its jurisdiction or exceeding the scope of its authority under
Section 16(5);21
(f) termination or continuation of the arbitral proceedings by arbitral tribunal in case of defaults of a party under
Section 25;
(g) order of court on the application of a party or the arbitral tribunal seeking its assistance in taking evidence under
Section 27;
(h) order of arbitral tribunal terminating or refusing to terminate its proceedings on withdrawal of the claim by the
claimant under Section 32(2)(a);
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(i) order of the arbitral tribunal terminating its proceedings on finding continuation of the proceedings is unnecessary
or infructuous under Section 32(2)(c);
(j) reference or refusal of reference by court for ‘remission’ of award under Section 34(4);
(k) order of the court directing the arbitral tribunal to deliver its award on payment of costs into court by the party
under Section 39(2);
(l) order of the court in respect of costs of arbitration under Section 39(4).
(m) order of judicial authority for reference to arbitration in case of insolvency under Section 41(2);
(n) order of court extending time on ground of undue hardship in respect of submission of future disputes to
arbitration under Section 42(3).22
3. Appeals
There is no inherent right of appeal and the right to appeal is a creature of statute. The legislature, by using the
following language in Section 37,i.e. “an appeal shall lie from the following orders and from no others”, has taken
away the right to appeal against all orders except as specified in S. 37(1) and (2). The words “from no others”,
although not present within S. 37(2), also qualify the scope of appeals against orders of the arbitral tribunal under S.
37(2).23
If the Court refers a dispute to arbitration under an application made pursuant to S.

Section 8 of the Arbitration Act, 1996 , it is not possible to argue that this amounts to a rejection of a
plaint and therefore can be appealed against under
S 96 of the Code of Civil Procedure, 1908 ,24 nor is therefore a second appeal possible under
S. 100 of the Code of Civil Procedure, 1908 25 nor a Letters Patent Appeal.26
A Letters Patent Appeal did not lie against an injunction granted under S. 41(b) and Sch. II of the
Arbitration Act , 1940. Chances of appeal had to be probed under S. 39 of the 1940 Act. But there was
no such provision under that section.27 The court noted a decision of its own Bench28 which rejected the argument
that orders passed by a single judge are orders under
CPC and that would make the appeal maintainable. The Bench observed that when the court passed
an order under Order 39 of
CPC during the pendency of any proceedings commenced under any of the provisions of the
Arbitration Act , 1940, the court was in effect exercising jurisdiction under S.
Section 41 of the Arbitration Act , 1940 read with the Second Schedule, of that Act.
Section 39 of the Arbitration Act , 1940 clearly specified what were appealable orders. An order passed
under S.
Section 41 of the Arbitration Act , 1940 read with the Second Schedule and Order 29, Rule
s 1 and
2 ,
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CPC was not an appealable order.29
Revision is also not maintainable because interim orders do not finally adjudicate or dispose of any claim or dispute
between the parties.30
The
Arbitration and Conciliation Act, 1996 expressly provides ins. 37 that interim orders under S. 9 shall be
appealable.
No letters patent appeal could lie from an order passed under the 1940 Act for appointment of receiver31 or an order
of temporary injunction on an application purporting to be made under the
Code of Civil Procedure 32 though the order amounted to a judgment within the meaning
of the letters patent.
An appeal from an order of a single judge of a High Court lay under clause (vi) (1940 Act). Such appeal was
maintainable without obtaining the leave of the judge though such leave would have been required if a letters patent
appeal had been filed. Section 39 (1) of the 1940 Act prevailed over the letters patent.33
Where under an order disposing of an application under S. 20, 1940 Act (deleted from 1996 Act) for appointment of
an arbitrator, the relief prayed for had already been granted and nothing survived for the decision of the court, it was
held that the matter would not fall within the clauses of S. 39, 1940 Act and, therefore, no appeal was
maintainable.34
No appeal could lie against an order passed by a single judge of the High Court under
S. 115 of CPC by which a reference to arbitration had been superseded and the suit was directed to
be tried.35 The power of superseding reference which existed in the 1940 Acthas been dropped from the
Cross objections are maintainable in an appeal but matters of partiality of the arbitrator which were neither raised
before the lower court nor taken-up in the memorandum of appeal, were not allowed to be raised for the first time at
the hearing of the appeal.36 Cross-objections can be preferred if the applicant could have sought the same relief by
filing an appeal in conformity with the provisions of S. 39(1) of the 1940 Act. A cross-objection is not maintainable if
the subject-matter of the objection is to impugn an order which does not fall within the purview of the categories
contemplated by clauses (i) to (vi) of S. 39(1) of the 1940 Act.37 Cross-objections are not maintainable if the original
appeal itself was not competent or maintainable.38
A new matter relating to the jurisdiction of the arbitrator or umpire (1940 Act) was not allowed to be raised in appeal
when it was not raised either before the arbitrator or the single judge.39
In view of the crystal-clear provisions of S. 41(a) of the (repealed) 1940 Act, it could not be said that Order 41, Rule
3-A of the
Civil Procedure Code was applicable to appeals relating to arbitration proceedings.40
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An order rejecting an application for framing additional issues in arbitration proceedings is not appealable.41
An interlocutory order under Or 2 Rule 10 (mandating personal appearance), passed during the course of a S. 11
application is unappealable under both the Delhi High CourtsAct (since such order is not a ‘judgment') and under S.
37 of the 1996 Act.42
Letters Patent Appeal
It has been held by a Division Bench of the Calcutta High Court that the provision of a statutory appeal under S. 37
does not exclude the appellate jurisdiction of the High Courts under Letters Patent. Thus even where an order may
not be appealable in terms of S. 37, it may still be subject to challenge under a letter patents appeal.43
This decision appears however to be inconsistent with established authority. There is a catena of judicial authority,
under the 1940 Act,44 as well as under the 1996 Act 45 which clearly lay down that where an appeal is not provided
under S. 37, no appeal under Letters Patent will be maintainable.46
4. No appeal against consent orders
An appeal against an order passed with the consent of the parties is not maintainable. No appeal ought to have
been filed before the Supreme Court where an order for appointment of an arbitrator was passed with the consent
of the parties. The agreement in this case was in respect of supply of Sal seeds. Disputes as to the determination of
handling and supervision charges for lifting the Sal seeds arose. The High Court in an interim order fixing quantum
of handling charges that could be recovered pending disposal of the writ. An appeal was filed against the order.
Arbitrator was already appointed with the consent of parties. The Court said that it was not appropriate to consider
the validity of the order as the whole matter was already before the arbitrator who was to determine all claims.47
5. Powers of appellate court
It is open to the appellate court hearing an appeal under Section 39 to consider the legality, propriety and
correctness of non-appealable orders passed by the trial court and affecting the decision of the case.48 The right of
appeal is a statutory right. It cannot be lost by the mere fact that the second arbitrator passed his award in
accordance with court orders. Such award is also open to challenge. While considering the validity of the award the
court can examine the validity of the reference itself.49
While disposing of an appeal it is open to the court to set aside any consequential or incidental order passed by the
trial court.50
The appellate court cannot re-examine evidence considered by the arbitrator.51
Section 41, 1940 Act (repealed) attracted the provisions of
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Section 96 (3) of the Code of Civil procedure . In view of these provisions no appeal would lie from an
order passed by consent though the order would otherwise have been appealable under the Act.52
The Gujarat High Court restated the powers as follows:53
Powers contemplated under

Section 96 of the Civil Procedure Code (
C.P.C. ) following legal propositions may be highlighted which cannot be disputed:
(1) Court cannot substitute its own view in place of Arbitrator's view.
(2) Appellate Court cannot examine matter as a regular appeal or as a regular appellate authority.
(3) It is well known that Court while considering the question whether award should be set aside or not, Court does
not examine the question as an Appellate Court.
(4) While exercising such a power under Section 39 read with Section 33 of the 1940 Act the Appellate Court
cannot revaluate or reappreciate all the materials on the record for the purpose of recording a finding whether the
facts and circumstances of the particular case the award of the Arbitrator in question could have been made.
(5) Such award can be set aside on any one of the grounds satisfied in Section 30 of the Act read with Section 33.
Section 30 of the Old Actcorresponds to Section 40 of the older Actlike that Indian
Arbitration Act , 1899 and para 15 of the Second Schedule of the
C.P.C. The corresponding section of the English Act is Section 11 sub-section (2) of the Act of 1989.
(6) Section 11 of the Indian

Arbitration Act , 1899 was as follows:
“Where an Arbitrator has misconducted himself or an arbitration or award has been improperly procured, the Court may set
aside the award.”
Similar para 15 was incorporated in Second Schedule of

C.P.C.
(7) There does not appear to be any sure allegation of misconduct.
(8) So far as the hearing on the merits of the award is concerned, the Court has nothing to say good, bad or
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indifferent.
(9) It has no right to review award or reconsider it like the first Appellate Court under section, 96,
CPC .
(10) Unless and until the case, squarely, falls within one or more grounds incorporated in Section 30, award of the
arbitrator cannot be set aside.
(11) There is a purpose and policy behind such provision though there is an appeal provided for the simple reason
that the fundamental aim and design of settlement of disputes through the media or arbitration is to lead to
expeditious disposal or settlement of the controversy between the parties or differences between Tribunal justice is
one of the effective alternative dispute resolution, which is not only a call or the cry of the day, but is a creed of the
time.
(12) Parties having chosen to get dispute resolved through the arbitral, process, ordinarily Court should not interfere
unless one of the grounds incorporated in Section 30 is successfully pointed out or is spelt out.
(13) Merely because a different projection or perfection on issue was perceivable does not assume sufficient
launching for exercising appellate power.
(14) It is not open to the Court to speculate in a given case where the reasons are not given by the Arbitrator as to
what compelled Arbitrator to reach particular conclusion.
(15) It is not the function of the Court or an Appellate Court to make deeper probe about the psychological process
by which the Arbitrator has concluded in absence of terms of the award.
(16) Even if arbitrator commits a mere error of fact or law in reaching his conclusion on the disputed issue or
question it is not a good ground for interference by the Court.
(17) In a case of non-speaking award the power of the Court is still very much sunk down. No doubt if the Arbitrator
acted beyond the jurisdiction or any such act of misconduct is noticed or pointed out even award or Arbitrator can
be set aside.
(18) In order to ascertain as to whether the Arbitrator has made any deter or has selected any diversion from the
main highway of jurisdiction, it would be necessary to consider the agreement between the parties incorporation an
arbitration clause.
(19) Action of Arbitrator beyond his jurisdiction is altogether a different ground from the mere error on the fact of the
award.
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(20) With a view to ascertain as to whether the Arbitrator has exceeded his jurisdiction, what is to be considered is
whether the claimant has to give particular claim before the Arbitrator. If there is a specific permission in the
agreement or contract or the law which does not permit or give the Arbitrator power to decide the dispute or the
differences raised and referred to the Arbitrator, the scope will be limited.
(21) Truly the Arbitrator should not act arbitrarily, capriciously, irrationally, or emotionally or independently of the
contract.
(22) Arbitrator as a matter of fact is not an Arbitrator or a conciliator and, therefore, he cannot afford to by pass the
law in order to do which he thinks just and reasonable. Since the parties have selected domestic or arbitration
which is a tribunal. Therefore, the Tribunal resolving the controversy, difference or dispute between the controversy,
difference or dispute between the parties selected by the parties should be allowed to decide the dispute according
to law.
Grounds relating to merits of the controversy are not required to be looked into by the court.54 The court is not
empowered to reappreciate evidence so as to adopt a different view from that of the arbitrator.55
The scope for reappraisal of evidence in an appeal before a Division Bench under S. 37(1)(b) is even more limited
than the inquiry which may be conducted by the Single Judge in the S. 34 application.56 In contrast, an expansive
meaning has been given to the scope of powers of the appellate court under S. 37(2)(a), in so far as the court is not
faced with an appeal from an order under S. 34 under S. 37(1)(b). In the words of the Court57 —
“We are not unmindful of our power under S. 37 of the Act. Unlike under S. 34 read with S. 37 our jurisdiction as a first
appellate court [under S. 37(2)(a)] is not a restricted one. Therefore, it is open for us to consider all aspects of the matter
meaning thereby we can examine as to whether interpretation given by the learned arbitrator of a clause is correct or not.”
6. Concurrent finding of arbitrator and single judge
In the case of a concurrent finding of single judge and arbitrator, it was held that the appellate court not perceive
perversity. The upholding of the award by the single judge was affirmed.58
7. Scope of Section 37(1)(a)
Section 37(1)(a) provides for granting or refusing to grant any measure under Section 9. Section 37(1 )(a) of the Act
does not reflect the projection of truncated portion of Section 9 but it tends to cover Section 9 in its entirety. There is
no doubt that Clause (ii)(c) of Section 9 is very much within the ambit of Section 9 and if Section 9 is not capable of
being split up or fragmented or if it is to be viewed as a comprehensive genus then any species of orders coming
under
Section 9 of the Arbitration and Conciliation Act, 1996 becomes appealable.59
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The following explanation appears in a decision of the Delhi High Court 60 :
“The provisions of Section 37 take generally the form of Section 39 of the 1940 Act, but they are materially different
from that provision and it must be with a view to minimise the supervisory role of the Court in arbitral process which
is in consonance with the spirit of the Act as contained in Section 5. Sub-section 1(a) and (b) of Section 37 provide
for appeals against the order of Courts granting or refusing to grant interim measures under Section 9 and setting
aside or refusing to set aside an award under Section 34. Sub-section 1 emphasise that appeal shall not lie against
any other orders. This is a major departure from the 1940 Act whereas Sub-section 1 provides for an appeal from
Court orders specified therein, Sub-section (2) provides for an appeal to the Court from an order of an Arbitral
Tribunal, (a) accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16; and (b) granting and
refusing to grant interim measure under Section 17. The words “and from no other orders” appearing in Sub-section
1 of Section 37 are analogous to the provisions of
Section 39 of the Arbitration Act , 1940 and came to be interpreted by a Full Bench of this Court in the
case of Union of India v. A.S. Dhupar, 61 and the Supreme Court in the case of Mahindra Supply
Company v. ABC, 62 and the Supreme Courtheld that these words qualify the expression, “an appeal
shall lie from the following orders”, would qualify Section 39(2) as well, therefore, by the same analogy the
expression “and from no other orders” used in Section 37(1) of the Act would equally qualify Sections 37(2) and
37(3) of the Act. A conjoint reading of Section 5 and Section 37 makes it abundantly clear that the only orders
against which appeals would lie are the orders specifically mentioned in Section 37(1) in case of original decrees
passed by a Court and Section 37(2) in respect of orders passed by an Arbitral Tribunal. The contention that the
qualifying words used in Sub-section 1 being absent in Sub-section (2) of Section 37 and therefore an appeal can
also lie from an order of the Arbitral Tribunal even if the order is strictly not one falling under Clause (a) or (b) has
no merits and is liable to rejection because it goes against the very spirit and object of the Act. If this contention of
the appellant is accepted, it would mean that an appeal would lie from each and every order of the Arbitral Tribunal
which has even the slightest effect of causing prejudice to one or the other party. This Court is of the clear opinion
that a Court will be competent to entertain the appeals from an order of the Arbitral Tribunal falling under Clause (a)
or Clause (b) of Sub-section 2 of Section 37 of the Act and from no others.63
A court hearing an appeal under S. 37(1)(a) against an order under S. 9 must keep in mind that the challenge is
essentially one against exercise of discretion by the lower court. If the discretion had been exercised reasonably
and in a judicial manner, the appellate court should not interfere merely because a different view of the situation
may be possible.64
It is to be noted that an ad interim application, which is passed pending a final adjudication of the main application
under S. 9, is not appealable. However, a writ petition may be maintainable in the High Court, if the conditions
under Art. 226 are satisfied.65 For instance, an application under S. 9 prayed for inter-alia deposit of certain amount
with the court. The court, pending final disposal of this application, passed an ad interim ex parte order of temporary
injunction restraining the party from alienating certain properties. Holding this ad interim order to not be appealable,
the court observed66 —
“ S. 37 would relate to the appealable orders. Indeed, granting or refusing to grant any interim measure under S. 9 of the
Act is an appealable order. The nomenclature or usage of the word ‘granting’ under S. 9 of the Act would necessarily mean
the final adjudication of the application under S. 9 of the Act.”
8. Order under Section 39(1)(a)
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Appointment of Receiver
A receiver was appointed under S. 9 but subsequently the proceeding was dismissed for non-prosecution and this
resulted in the discharge of the receiver. A modification of this order was sought under
S. 151, CPC . This was rejected and an appeal was presented against this rejection. This was held to
be not an order under S. 37(1)(a) and, therefore, the appeal was not maintainable.67
Injunction issued without considering existence of arbitration agreement (S. 37(1)(a))
An appeal was allowed against an ex parte order granting an injunction without considering in the first place
whether an arbitration agreement existed between the parties. The court said that though the order was not final, it
affected the substantive right of the appellant.68
9. Setting aside or refusing to set aside award [ S. 37(1)(b) of 1996 Act]
This is the common ground between the repealed 1940 Act and the 1996 Act, namely, an appeal lies against
setting aside or refusing to set aside an award. The setting aside could be either in whole or in part.69 An appeal lies
from “an order setting aside or refusing to set aside an award”.70
Stating an award as non est does not amount to setting aside award. No appeal lies.71 An order refusing to remit an
award under S. 16, 1940 Act (repealed) was not appealable because it neither amounted to setting aside nor
refusing to set aside the award.72 This proposition applies to an order passed under Section 34(4) of the 1996 Act
for resumption of arbitral proceedings to eliminate the grounds for setting aside the award.
An application to remit the award under S. 16, 1940 Act (repealed) was not a method for revisiting the determination
of particular claims set aside by the Court.73
If no objection was filed by any party or if an objection was filed and subsequently withdrawn,74 or an objection was
filed after the expiry of the period of limitation and the court passed judgment on the award no question of refusing
to set aside the award arose and no appeal was maintainable.75 It appears that a similar position should continue
under the
Arbitration and Conciliation Act, 1996 as well.76
An appeal lay against an order setting aside or refusing to set aside an award in proceedings under Section 33,77
1940 Act (repealed), e.g., on the ground that it was “otherwise invalid” within the meaning of Section 30(e), 1940
Act (repealed).78 An order refusing to set aside the award,79 or an order which has the effect of doing so, e.g., an
order directing the preparation of a decree without considering the objections filed by a party80 or without giving
notice of the filing of the award to the parties81 or before the expiry of statutory period for stating objections,82 is
appealable. An appellate order setting aside an order dismissing objections, passing a decree was held to be an
order refusing to set aside the award and was appealable.83
An order passing a decree on the award without giving an opportunity to the parties to file objections within the time
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fixed for objecting to the award was held to be an order refusing to set aside the award,84 but the opposite view was
also held.85
An order which has the effect of setting aside the award is appealable though the order does not expressly say so,
e.g., an order dismissing an application for the filing of the award after allowing objections against the award86 or on
the ground that the award is a forgery,87 or on the ground that no valid arbitration agreement is in existence.88
Likewise an order in proceedings under Section 14, 1940 Act (repealed) passing a decree on the award after
overruling objections against the award amounted to an order refusing to set aside the award.89 An order refusing to
make the award a rule of the court had the effect of setting it aside and was, therefore, appealable.90 The procedure
of passing or refusing to pass a decree on the award is not applicable under the
An order passed by the arbitrator declaring that the agreement between the parties was not properly stamped and,
therefore, it was not admissible in evidence was held to be not an award, or an interim award. The court said that
the questioning of preferring an appeal against such an order did not arise. Even if the order was wrong, the party
had to wait till an award was passed which could have been assailed in appeal on the basis of a procedural
mishap.91
In an appeal against an award the court will only consider whether there has been an award and whether any
grounds for setting aside the award have been proved. The court will not review the award92 or reappraise the
evidence.93 The court will not consider a point not raised in the trial court,94 e.g., the point of vagueness
of reference and award95 or the contention that the claims made before the arbitrator were time barred96 or the
contention that the award was in excess of the jurisdiction of the arbitrator97 or the contention that the award did not
provide reasons1 or the contention that the award was perverse,2 or a point raised but abandoned in the trial court.3
The court will not consider pleas taken in amendments to the original objection petition, if such amendments have
been disallowed by the trial court.4 In fact, the scope for reappraisal of evidence and detailed factual inquiry in an
appeal before a Division Bench under S. 37(1)(b), challenging an order refusing to set aside an award under S. 34,
is even more limited than the inquiry which may have been conducted by the Single Judge in the S. 34 application.5
Acceptance of an award on certain points and its remittance for reconsideration on certain other points amounts to
an order refusing to set aside the award. The order which says that “it is not necessary to quash the award in this
case” leads to the inference that the judge accepted the points on which the award is not referred back; such order
would be appealable.6
This proposition has subsequently been examined by the Madras High Court, which, after noting these two
decisions, has adopted a restrictive interpretation. It was held that in the event of a part remission, an appeal would
exist only against that portion of the award which has been accepted.7
If the Court has refused to set aside the award on merits, indeed the order is appealable; but if the Court has
refused to set it aside on the ground of limitation, even then, it is a refusal to set aside the award. Since in the
instant case the learned Judge refused to set aside the award on the ground that objections to it filed by the plaintiff
were barred by time, it was held that the order made by him was appealable under Section 39(1)(iv) of 1940 Act,
now S. 37(1)(b) of the 1996 Act. The objection that the appeal is not maintainable cannot, therefore, succeed.
Indeed in the instant case, the plaintiff had out of abundant caution instituted the appeal as well as revision
application.8 Under the 1996 Act, there is authority to the contrary as well.9 These cases proceed on the basis that
where an application challenging the award has been held time barred, there is no determination on merits, and
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hence it does not constitute any ground of appeal under S. 37.10
An appeal against an order to set aside an award does not operate as stay of execution of the decree passed on
the award.11 An appeal against an order confirming award submitted after remittance is maintainable.12
Where the order of a single judge rejected an application for setting aside an exparte decree which had made the
award a rule of the Court, it was held that such order could not be treated as an order refusing to set aside an
award as no objection was filed for having the award set aside. No letters patent appeal was admissible in view of
the provisions of S. 39(1)(v) of the 1940 Act.13
An award contained detailed annals of the dispute till its pronouncement. The court said that while an award was
not expected to write a legal judgment, the arbitrator could not afford to emasculate judicial conscience by drafting
an award devoid of all detail.14
Rejection of petition for setting aside on the ground of jurisdiction is appealable. An application under S. 34 is
rejectable where none of the grounds mentioned in the section is applicable. Every such rejection is, therefore,
appealable.15
However, an order refusing to entertain objections on the ground of maintainability, e.g. that the Court is not a
“Court” within the meaning of S. 2(1)(e), does not amount to a refusal to set aside the award which may warrant an
appeal.16 The Supreme Court has observed17 —
“ Section 37 on which emphasis was given by the counsel for the appellant applies only when the preconditions mentioned
therein are satisfied. The submission of the learned counsel appearing for the appellant is that since the learned Single
Judge refused to set aside the arbitration award, therefore, an appeal could be preferred by the appellant as envisaged
under S. 37(1)(b). Court is again unable to pursuade itself to accept the aforesaid contention of the counsel appearing for
the appellant, for petition filed under S. 34 was dismissed on the ground of maintainability of the petition and not on the
ground of refusing to set aside the arbitration award.”
Where the Court did not dismiss an application under Ss. 30 and 33 but only directed it to be treated as an
application having been filed under S. 34, it was held to be not a refusal to set aside the award.18
10. Challenge under S. 16 on ground of Jurisdiction or Exceeding Authority. [ S. 37(2)(a)]
Also appealable is an order under S. 16 accepting the plea of lack of jurisdiction.19 This is provided in S. 37(2)(a) of
the 1996 Act which refers to an appeal to a court from an order of the arbitral tribunal “accepting the plea referred in
[ Ss. 16(2) or (3)]”. However, where such plea of lack of jurisdiction is ‘rejected’ by the tribunal, this order is not
appealable. The only remedy open to the party aggrieved by such an order is specified in S. 16(6),i.e. to make an
application to set aside the resulting award under S. 34.20 This has been recognised by the Delhi High Court in
these words21 —
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“The object of the [1996] Act is that the arbitral proceedings must continue unless an order is made which is subject to
appeal under S. 37 of the said Act. S. 37(2) of the [1996] Act specially takes care of a situation where a plea of lack of
jurisdiction is accepted and the object is clear i.e. where the arbitral proceedings would come to an end as a consequence
of the said adjudication, an appeal must be provided for. However, if the [tribunal] comes to the conclusion that it has
jurisdiction to proceed further in the matter, no such appeal is provided and the remedy would lie only under S. 34 of the
said Act.”
It may be noted that where the arbitrator has decided on the rights and liabilities of the parties, and not merely
rejected jurisdiction under Ss. 16(2) and (3), the order of the arbitrator will be an ‘award’ which cannot directly be
appealed under S. 37. It can only be challenged on one of the grounds for setting aside the award under S. 34.22
The difference between the two has been discussed elsewhere.23
11. Effect of Composite Order
A composite order could be passed by which objections against the award were rejected and a decree passed on
the award and an appeal lay against this order dismissing objections against the award.24 The two parts of the
composite order could be separated and though no appeal lay against the decree itself, an appeal lay against the
order dismissing the objections.25
If a composite order refusing to set aside the award and directing a decree to be drawn up was passed, an appeal
would lie from the order refusing to set aside the award.26 If under an erroneous but bona fide legal advice the
appeal was filed against the decree, the court could condone the delay in filing the appeal against the order
refusing to set aside the award and the appeal from the decree would be treated as appeal from the order.27
Where by the same order the court allowed the application to set aside the award and also dismissed the
application for judgment on award, an appeal against the order setting aside the award was competent. The mere
drawing up of the decree was not a bar to the maintainability of the appeal.28 A separate appeal from the order
rejecting the application for judgment on the award was not required.29
A composite order was passed dismissing the application under Ss. 14 and 17, 1940 Act (repealed) and allowing
application of the opposite party under S. 33, 1940 Act (repealed) about the existence of the arbitration agreement.
The order was held to be appealable under S. 39, 1940 Act (now S. 37 of the 1996 Act).30
In a case, a party challenged the award and simultaneously it was filed by the other party to make it rule of the
court. Both applications were disposed off by the court through a composite order, and the award was partially set
aside. It was held that the appeal by the aggrieved party need not be filed against both applications, and a single
appeal will be maintainable. The argument that a “common appeal” is hit by constructive res judicata by not being
specifically directed against the other application, was held without merit.31
12. Maintainability of writ
Undoubtedly, against an order under S. 9 a statutory appeal is maintainable under S. 37, but it cannot be said that
the same will be a bar for invoking writ jurisdiction. Since, in the given facts and circumstances, alternative remedy
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of appeal is not adequate and efficacious remedy, writ petition is maintainable.32 On the other hand, in this case a
party had applied for interim relief under S. 9. Upon realising that necessary parties had not been impleaded,
miscellaneous petitions were moved under Or 1, Rule 10 & Or 6, Rule 17 of the
CPC for impleading such parties. The court rejected the miscellaneous petitions and consequently
dismissed the application for interim relief under S. 9. It was held that the order rejecting the miscellaneous
petitions, although capable of being challenged under the appeal, would not be amenable to a separate writ
challenge. The rationale for such a policy of discouraging a writ remedy was explained by the court as follows33 —
“[W]e hold that as the

Arbitration and Conciliation Act itself is a special legislation which governs the disputes arising out of
arbitration proceedings and as legislature has, in its wisdom, not provided any appeal or revision against an order passed
on any miscellaneous petition filed before the court below, this Court in exercise of its jurisdiction under
Article 227 of the Constitution of India should not assume jurisdiction to correct a wrong decision of the
Court below as a matter of course. Such jurisdiction, however, must be restricted to cases of grave dereliction of duty and
flagrant abuse of fundamental principles of law and justice where grave injustice would be done unless the High Court
interferes.”
The position has been further clarified subsequent to the decision of the Supreme Court in Patel Engineering.34 The
court has held —
“We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is
capable of being corrected by the High Court under
Art. 226 or
227
Constitution of India of the . Such an intervention by the High Courts is not permissible... Therefore, it is
necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is
pronounced unless, of course, a right of appeal is available to them under S. 37 of the Act even at an earlier stage.”
These obiter observations of the Supreme Courtseem to indicate that with respect to matters where there does not
exist any further right of appeal under the Act, a party will not be allowed to invoke the writ jurisdiction of the
constitutional courts and defeat the “object of minimizing judicial intervention while the matter is in the process of
being arbitrated upon”.
This logic has been extended to judicial interference even at the post award stage. Thus, since a statutory appeal
has been provided under S. 37(1)(b) for challenging orders passed by the court under S. 34, the same cannot be
bypassed, and the Supreme Court cannot be approached directly under
Art. 136 of the Constitution .35
However, it is not as if the arbitral tribunal is totally immune from the writ jurisdiction. In case of statutory
arbitrations, where the challenge is not just to an order of the tribunal, but to the very rules under which it acquires
jurisdiction, a writ petition would be maintainable.36
13. Stay of invocation of bank guarantee
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Where a contractor had asked for arbitration proceedings and a single judge granted an interim injunction under S.
41(b) read with para 4 of Schedule II, 1940 Act (repealed) preventing the invocation of the bank guarantees
submitted by the contractor, it was held that no appeal would lie against the order under clause 15 of Letters Patent,
because clause 15 is subject to the provisions of S. 39, 1940 Act (now S. 37 of the 1996 Act).37
A bank is not liable to honour invocation of a bank guarantee if it is not in accordance with its terms. In the present
case, the bank guarantee stood discharged on satisfactory completion of the work and the maintainable period of
12 months thereafter. No outstanding liability remained. The respondents did not produce before the court their
invocation letter and also unreasonably and under undue influence sought extension of the date of the guarantee
causing loss to the contractor. Who had to keep the guarantee alive for 10 years. The respondents were restrained
from invoking the guarantee and the contractor was allowed reimbursement for expenses in keeping the guarantee
alive.38
14. No direct appeal from order of remission of award
No appeal was allowed from an order remitting an award under Section 16(1), 1940 Act (repealed)39 or refusing to
remit it.40 Where an award was remitted and the arbitrator refused to reconsider the award which became void
under Section 16(3), 1940 Act (repealed) and the court passed a decree on the merits of the case, the legality of
the award could be challenged in appeal.41 If the court passed a decree in accordance with the revised award after
the award had been remitted, no appeal would lie against the decree on the ground that the order of remittal was
wrong.42 An appellate court will not ordinarily interfere with the discretion of the trial court in declining to remit the
award unless there are no grounds for not remitting it43 or the discretion has been exercised on wrong principles.44
An order of court directing the arbitrator to make a fresh award amounted to refusal to file the award and was not
appealable.45
Different views exist with regard to the scope of the right to appeal in situations where part of the award is
confirmed and another part is set aside and remitted for reconsideration. The Nagpur High Court had expressed the
view that when an award is accepted on certain points and is remitted for reconsideration only on the remaining
points, then the order would amount to a refusal to set aside an award on the points for which the award is
accepted and, as such would be appealable.46 The Madras High Court 47 has interpreted
this decision of the Nagpur High Court to state the restricted proposition that an appeal would exist only against that
portion of the award which has been accepted. The Madras High Courtheld that in principle there is no
difference between a case where the award is set aside in its entirety and thereafter remitted for fresh consideration
and where the award is set aside in part and that part is remitted for fresh consideration. Even where an award is
partly confirmed and another part of the award is remitted for fresh consideration, the court held that such part of
the order of the trial court remitting the matter for fresh consideration is not appealable under Section 39 of the Act.
The court noted however that the Orissa High Court 48 has on the contrary held that when an award is
set aside in part and that part is remitted to the arbitrator for fresh consideration, an appeal can be filed. However,
the Madras court declined to hold likewise interpreting various decisions of the Supreme Court as supporting its
stand on the issue.49
15. Award of costs
The award of costs raises the same considerations and the same principles become applicable whether it was an
award by a Judge or an arbitrator. The ability to challenge the award is limited since the awarding of costs involves
an exercise of a judicial discretion not the recognition of a legal right. It therefore became a question of showing that
the tribunal failed in its duty to exercise its discretion on costs and to do so judicially. The court said that there was
no longer any power to remit under S. 22 of the 1950 Actwhere there was a reasoned award; the application had to
be brought under S.
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Section 1 of the Arbitration Act , 1979 (i.e. leave to appeal). The leave to appeal was not granted. It is
very difficult to pursuade a court to interfere in the discretion as to costs.50
The powers of the Court to interfere with an award of an arbitrator as to costs have been held to be limited in that a
Court has no power to intervene merely because it considered that it would have made a different order as to costs
from that made by the arbitrators. A Court cannot intervene unless the party who complained of the arbitrators’
award could show that there was no material before the arbitrator on which he could properly justify the exercise of
his discretion in the manner in which he in fact exercised it. Under the 1979 Act this had to appear from reasons
given by the arbitrators.
The principle that courts have been applying are that costs followed the event; the successful party should recover
his costs; and an arbitrator should apply the same principle.
As a matter of law arbitrators should only take into account whether the claimant had achieved more in respect of
principal and interest by going on with the arbitration than he would have achieved if he had accepted the sealed
offer as to costs which was invited by the arbitrators.
On the facts set out in the award there were no grounds on which the arbitrators could properly in law have
exercised their discretion as to costs in the way that they did by inviting a sealed offer.
Since the arbitrators had stated what order they would have made if they had paid no regard to the sealed offer the
court said that the award would be varied so that the charterers and owners would each bear their own costs of the
reference.51
16. Forum of appeal
The appeal lies to the court authorised to hear appeals from original decrees of the court which passed the order.52
This rule continues to be applicable to appeals under S. 37(1) of the 1996 Act.53 Appeals under S. 37(2), on the
other hand, may be preferred before any relevant “court” as defined under S. 2(1)(e). The Supreme Court has even
gone to the extent of holding that even the exclusivity rule under S. 42 which applies to “applications” under Part I,
will not be applicable to “appeals” under S. 37(2).54 The section does not provide for any period of limitation for filing
the appeal.55 In case of orders passed by the Calcutta Civil Courtan appeal lies to the High Court under Section
8(1) of the Calcutta Civil Courts Act and limitation for such appeal is provided by Section 8(2)(a) of that Act and not
by
article 116 of the Limitation Act, 1963 .56
Where the subject matter of an application for filing an arbitration agreement was over Rs. 5,000/- an appeal from
an order refusing to file the agreement would lie to the District Court.57
An appeal from the interlocutory order refusing to stay legal proceedings had to be heard by the court competent to
hear appeals from original decrees of the court passing the order. Having regard to the provisions of the Karnataka
Civil Courts Act, 1964 and the Karnataka High Court Act, 1961, such appeal had to be heard by a Division Bench of
the High Court and not by a single judge where the value of the subject matter exceeded Rs. 50,000/-.58
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17. Bar of second appeal from orders specified in section
The section prohibits a second appeal from an order passed on appeal under this Act. The expression “second
appeal” includes a Letters Patent appeal from the judgment of a single judge of a High Court and consequently no
Letters Patent appeal will lie from an appellate order passed by a single judge of the High Court.59
A “second appeal” means any further appeal from an order passed in appeal under S. 37 and it is not used only in
the context of an appeal under
S. 100 of the Code of Civil Procedure .60 The second appeal contemplated under S. 37(3) also includes
an appeal under the Letters Patent, and since there is express prohibition to file such appeal, no Letters Patent
would lie.61
Since S. 5 bars judicial intervention unless specifically provided for in the Act, it has been commented that S. 37(3)
is really superfluous since second appeals will not be permissible even if S. 37(3) had not been enacted.62 The
Supreme Court recently noted this view, and has gone further to cast doubts over whether S. 37(3) would bar an
appeal against an appellate order passed under S. 37(2).63 It may be noted that the wordings of the provision are
clear and these obiter observations cannot support a position inconsistent with the express wordings of the statute.
An appeal was possible from a decree pronounced on an award in so far as the decree was in excess of or
otherwise not in accordance with the award and a second appeal would lie from such a decree under
Section 100 of the Code of Civil Procedure .64
No second appeal would lie from an appellate order affirming a decree of the trial court passed in terms of the
award,65 after overriding objections to the award or affirming a composite order of the trial court decreeing the suit
and rejecting the objections against the award.66 The court on review set aside an earlier judgment of the court in
which it was held that a second appeal would lie in such a case.67 No second appeal will lie from an order of the
appellate court on the ground that the appellate court had no jurisdiction to hear the appeal.68
A second appeal was not allowed against the decision of a single judge. The agreement provided for the
appointment of an arbitrator by the State, but the State did not do so inspite of demands. The single judge revoked
the authority of the State and appointed an arbitrator. The appeal of the State against this decision was dismissed
by a Division Bench. An appeal against this was dismissed by the Supreme Court. A second appeal was not
maintainable. Since the matter was also not covered by any of the clauses of the section no appeal was at all
maintainable including Letters Patent appeal.69
No second appeal lies from an order of the lower appellate court reversing a decree based on the award and setting
aside the award.70
Where there was an adjudication on merits regarding maintainability of an appeal, such adjudication on merits was
held to have vested the order with characteristics of an order in appeal and, therefore, no further appeal was
allowed against it.71
Where objections for setting aside the award under sections 30 and 33 of the 1940 Act were rejected and an appeal
against the order was also dismissed, a petition against the order by invoking the extraordinary jurisdiction of the
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High Court was held to be not permissible. The Court said that a second appeal could be filed before the Supreme
Court under S. 39(2) of the 1940 Act (now S. 37) and
Article 136 of the Constitution .72
The legislature has used the words “no second appeal” in Section 37 of the Actunlike the words “no appeal” in the
provision of Sub-section (2) of
Section 104 of the Code of Civil Procedure . The remedy of appeal enacts from the relevant Statute, in
the present case, theact. Hence, what is important is to find out the nature of remedy as contained in Section 37 of
Act itself. The crucial test for finding out whether the appeal contemplated under Section 37(1)(b) of the Act would
be First Appeal or Appeal from Order is whether the rights of the parties concerning particular proceeding are finally
adjudicated by the lower Court. In other words, whether the decision on the particular application under the Act
would amount to final adjudication of the rights of the parties or not would be the real test for determining the
remedy.73
18. Procedure
Adjournment
The party prayed for time to fulfil condition for obtaining interim stay. The court said that this did not deprive the
party if the right to finally challenge the order and contend that the order should not have been passed in the first
place.74
Re-filing of application
In case an incompetent application is filed and subsequently withdrawn, it does not preclude that party from re-filing
a proper application.75
Order sheet presumed to disclose correct narration unless immediately disputed
In case an appeal is preferred against an order of the court, the narration of events in the order sheet is presumed
to disclose a correct description of such happenings in the court. These may only be doubted if a party, immediately
after the records are prepared by the court, files an affidavit disputing such recording and bringing the correct facts
to the notice of the court. Thus, where the order sheet disclosed that a party had given up certain arguments before
the court, it was not allowed to later argue, in the absence of any affidavit filed to the contrary, that this never
happened.76
19. Revision
The Special Leave Petition was held to be not maintainable since an efficacious alternate remedy of revision under
S. 115, CPC available. Merely because the second appeal is barred by the provision of Section 37(3),
remedy of revision does not cease to be available to petitioner since City Civil Court deciding an appeal under S.
37(2) remains a court subordinate to the High Court within the meaning of
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Section 115 CPC .77
20. Second appeal and revisional application
Revisional application is not a second appeal envisaged under Section 39(2) of 1940 Act : S.37(2) of 1996 Act.
A revisional application before the High Court against an appellate order passed under
Section 39 of the Arbitration Act was maintainable. There is no express provision in the
Arbitration Act putting an embargo against filing a revisional application against appellate order under
Section 39 of the 1940 Act. The
Arbitration Act has put an embargo on filing any second appeal from appellate order under Section 39
of the 1940 Act. The
Arbitration Act is a special statute having limited application relating to matters governed by the Act.
Such special statute, therefore, must have its application as provided for in the statute. The revisional jurisdiction of
the High Court under the Code or under any other statute therefore shall not stand superseded under the
Arbitration Act if the Act does not contain any express bar against exercise of revisional power by the
High Court provided that the exercise of such revisional power does not mitigate against giving effect to the
provisions of the
Arbitration Act .78
In R. Mcdill and Company Ltd. v. Gauri Shankar Sarda, 79 the Supreme Courtheld that
Section 41 of the Arbitration Act of 1940 provided that the provisions of

Civil Procedure Code shall apply to all proceedings before a Court under the Act. As the
Arbitration Act had not expressly taken away the applicability of Order 23 of the
Civil Procedure Code in an application under Section 34 of the said Act, such provision of Order 23 of
the
Civil Procedure Code was applicable.
Even if a special statute expressly attaches finality to an appellate order passed under that statute, such provision
of finality will not take away revisional powers of the High Court under
Section 115 of the Code of Civil Procedure .80 There is also no such express provision in the
Arbitration Act attaching finality to the appellate order under Section 39 of the said Act. Only bar under
sub-section (2) of Section 39 is of a second appeal from an appellate order under Section 39.81
The Supreme Courthas held under the new Act that on order passed by a Civil Court in appeal under S. 37 of the
new Act was revisable by the High Court under
S. 115 of the Civil Procedure Code . The section only bars a second appeal and not revision. The
applicability of the
Civil Procedure Code is also not expressly prohibited. It cannot be inferred that the Code is not
applicable. It also cannot be said that a revision under S. 115 would be a judicial interference of such a nature as is
not contemplated by S. 5 of the Act.82
Second appeal to the Supreme Court is not barred. Writ petition is an extra ordinary constitutional discretionary
remedy. In this case, certain objections under sections 30 and 33 (1940 Act) were dismissed. An appeal against
this dismissal was also dismissed. Against the dismissal of this appeal, the extra-ordinary constitutional remedy was
tried. The court said that this was not permissible in regular course under normal situations as a substitute for
second appeal. The writ petition was not permissible because of the availability of a remedy under S. 39(2) of 1940
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Act and S. 37(3) of the new 1996 Act.83
21. Revision
Section 39, 1940 Actdid take away the revisional powers of the High Court under
Section 115 of the Code of Civil Procedure to interfere with a case decided by a subordinate court
from which no appeal lies.Section 115 applies to jurisdiction alone, irregular exercise or non-exercise of it or the
illegal assumption of it.84 Proceedings before appellate courts under the section are judicial proceedings and the
judge exercises judicial powers. Hence they are amenable to the revisional powers of the High Court in respect of a
decision of a sub-ordinate court against which no appeal lies. The High Court has revisional powers against such
orders under the section.85 An order setting aside an award is a case decided.86 No revision will lie against the
decree on the ground that the suit was not cognisable by the civil court where the issue as to jurisdiction was
referred to arbitration and was decided in the affirmative.87 No revision will lie against the decree when the award is
on matters within the scope of the authority of the arbitrator,88 or against an order refusing to modify the award if the
judge after consideration of the submission of the applicant came to the conclusion that there was no obvious error.
But the order is open to revision if the court declined to consider the submission on the erroneous view that it has
no power to amend the award.89
A revision petition is competent against appellate orders in all respects contemplated by the section.90
Revision will lie against the decree if there is a question of jurisdiction involved,91 e.g., if the court had
no jurisdiction over the subject matter of the reference and therefore no jurisdiction to pass the decree,92 against an
order of the lower appellate court without jurisdiction because the appeal was incompetent,93 an order directing the
return of the application for the filing of the award in the proper court under Order 7 Rule 11
CPC on the ground of want of jurisdiction,94 an order refusing to consider objections to the award on
the ground that they are untenable,95 and an order refusing to file the award on the ground that the provision of
Section 14(2), 1940 Act (repealed) had not been complied with.96 Revision lies against the decree on the ground
that the reference by the order of court was made though there was no real dispute.97
Where a judge misconstrues by giving himself jurisdiction when he has none or by refusing jurisdiction when he has
it, then he makes an error which goes to the matter of jurisdiction.1 No court has any jurisdiction to make an error on
which the decision of the case depends.2 While rejecting an application for removal of umpire, the court extended
time for making the award and directed him to decide after giving hearing to parties, it was held that the direction
related to the conduct of proceedings by the umpire and being in excess of jurisdiction but being severable from the
valid part, the excess part of the order was reversed.3 If the judge construed the words in a section too narrowly
then he made an error of law which made him refuse jurisdiction when he ought to have entertained it.4
A revision would lie where the lower appellate court entertained an objection not raised in the trial court.5
Passing of a decree without waiting for the full period fixed for the filing of objections was an irregular exercise of
jurisdiction and the decree was liable to be set aside in revision.6 But if the parties desired that the decree be
passed immediately, or if they stated before the court that they had no objection to make,7 the court could pass the
decree without waiting for the full period.8 But it had been held that even if the parties made such a statement, they
would have a locus penitenteal and could retract the statement and a decree passed without waiting for the full
period would be liable to be set aside in revision.9 The court could not cut down the period fixed by the legislature
for the filing of objections and if it did so, the filing of the objections within the shorter period fixed by the court was
not a waiver of the objection.10 If after the filing of the award in court, the court took up the hearing of the suit in
which the award was passed before the expiry of the full period without any objection from any of the parties or any
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request for them to wait for the full period, the decree passed in the suit was not open to challenge.11
The court in its revisional jurisdiction could set aside a decree passed without giving notice to the parties of the filing
of the award12 or passed after dismissing objections erroneously holding that they were time-barred13 or under a
misconception of the nature of the proceedings.14
If a court omits to consider a material on the record having a vital bearing on the question to be decided by it or fails
to apply its mind to or to record a finding on a crucial aspect of the case which cannot be ignored in determining the
controversy, the court acts with material irregularity and revision lies.15
The question whether the arbitrator has been guilty of misconduct is a jurisdictional fact, upon the determination of
which the court requires jurisdiction to try the suit.16 A plea of res judicata or a plea of limitation concerns the
jurisdiction of the court. A finding on these pleas in favour of the party raising it would oust the jurisdiction of the
court and falls within the purview of
Section 115, CPC .17 A decision on a question of enlargement of time under Section 28, 1940 Act
(repealed) was held to be not revisable under
Section 115, CPC .18 If by an erroneous decision on a question of law or fact touching its jurisdiction,
e.g., upon a preliminary fact upon the existence of which its jurisdiction depends, the subordinate court assumes
jurisdiction not vested in it by law, revision lies to the High Court under clause (a) of
Section 115 of the Code of Civil Procedure .19 On the other hand, it has been held that an order of the
subordinate court on a mistaken view as to what constitutes misconduct or not is not open to revision.20
An order superseding arbitration on the ground of misconduct for making private enquiries though such enquiries
were authorised by the agreement of reference was held to be without jurisdiction and revision was allowed against
it.21
Revision was allowed against an order refusing to extend the time for the making of the award on the ground that
the arbitration tribunal having allowed withdrawal of the reference had lost session of the matter. The arbitration
tribunal has no power to allow withdrawal of the reference and its order allowing the withdrawal was void and had
no effect. The reference being still in existence the application under Section 28, 1940 Act (repealed) [dropped from
1996 Act] could be made. The order refusing to extend the time was not appealable22 though it was appealable
under the
Code of Civil Procedure .23
No revision will lie on a case stated by the arbitrator as there is no error of jurisdiction.24 This procedure is not
applicable under the
The High Court may interfere in revision where the lower court assumes jurisdiction on an erroneous finding as to a
jurisdictional fact e.g., where the lower appellate court sets aside the decree passed by the trial court on the
erroneous finding that the reference by the court was invalid as all interested parties did not join in the reference25
or where the lower court passed a decree on an award which was beyond the scope of the reference26 or where the
lower court refused to stay the suit under Section 34, 1940 Act (repealed) on the erroneous view that the dispute
was not covered by the arbitration clause.27 A point which goes to the root of the validity of the award has been
allowed to be taken for the first time in revision though not taken in the trial court.28
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In revision the High Court will not interfere with discretionary orders e.g., an order refusing extension of time to
make the award though the refusal was not justified.29 No time for making an award has been prescribed under the
Arbitration and Conciliation Act, 1996 . Therefore, the procedure as to extension of time is not
applicable under the new Act.
An order of subordinate court awarding arbitrator's fee is a case decided and revision lies against the order if the
amount of fees awarded is so excessive that the order amounts to an irregular exercise of jurisdiction.30
The interference by the High Court in revision is a matter of discretion.31 The power of revision being an
extraordinary power should be confined to cases where the illegality or material irregularity is such as has
occasioned or will occasion substantial failure of justice.32 The decision of the lower court should not be set aside
on a mere technicality33 e.g., on the ground that all that interested parties did not join in the reference.34
If an application in revision is avowedly an application to set aside an award e.g., if the main purpose of the revision
petition is to put forward an objection which should have been but was not filed within the prescribed period of
limitation, the revision petition may be treated as barred by limitation.35
No revision lies against an opinion of court given in a special case stated by the arbitrator.36 This procedure is not
applicable under the 1996 Act.
Revision will not lie against an order when the final decision of the subordinate court will be an appealable order.
The illegality of the interlocutory order may be canvassed in the appeal from the final order.37
An order remitting an award for reconsideration is not a case decided and no revision will lie against it.38
Where one of the arbitrators named by the parties refused to act and the court fixed a date for hearing without filling
the vacancy or superseding the arbitration, it was held that this was a grave error making revision necessary.39
22. Revision in connection with setting aside
In a petition under S. 34 for setting aside, the petitioner proposed that issues or points for determination should be
framed. This was rejected by the Trial Court to permitting the parties to adduce evidence by way of affidavit. It was
held that a revision against this order was maintainable. The Court said that as per
S. 115, CPC , the High Court may entertain a revision petition when the subordinate court has not
exercised a jurisdiction vested in it. The lower court rejected the proposal of the petitioner for framing of issues. This
was a refusal to exercise a jurisdiction which was vested in the Court. This landed the court into error causing
thereby failure of justice. The revision petition was thus maintainable.40
23. Judicial Review [ S.

Section 69 of Arbitration Act, 1996 (UK)41]
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Exclusion of Judicial Review
Section 3 of the [English]

Arbitration Act of 1979 permitted in reference to arbitrations, other than those of domestic and other
special category arbitrations, exclusion of judicial review. Thus parties to an international contract could exclude
judicial review in advance, as part of their arbitration agreement. Rules of Conciliation and Arbitration of the Court of
Arbitration of the International Chamber of Commerce provide in Article 24.
“1. The arbitral award shall be final.
2. By submitting the dispute to arbitration by the International Chamber of Commerce, the parties shall be deemed to have
undertaken to carry out the resulting award without delay and to have waived their right to any form of appeal insofar as
such waiver can validly be made.”
The question arose in Arab African Energy Corpn. Ltd. v. Olieprodukten Nederland BV, 42 whether this
article had the effect of excluding judicial review in advance. A dispute arose. The arbitrators made their award. The
sellers applied to the court for leave to appeal against the award. The buyers objected saying that the Rules had the
effect of incorporating an exclusion agreement in advance. The court agreed that the parties by adopting ICC
Rules43 had excluded judicial review under the 1979 Act [repealed]. Leggatt J said :
“ Section 3(1) of the 1979 Act[incorporated in S.

Section 69 of the Arbitration Act, 1996 (UK)] does not require the overt demonstration of an intention to
exclude the right to appeal. True it is, that formerly the court was careful to maintain its supervisory jurisdiction over
arbitrators and their awards. But that aspect of public policy has now given way to the need for finality. In this respect the
striving for legal accuracy may be said to have been overtaken by commercial expediency. Since public policy has now
changed its stance, I see no reason to continue to adopt an approach which might well have been appropriate before it had
done so. In my judgment, the phrase ‘an agreement in writing. . . . . which excludes the right of appeal’ is apt to apply to an
exclusion agreement incorporated by reference. I reach this conclusion unpersuaded to the contrary by the decisions of the
European Court which I consider might be misleading in this essentially domestic context.”
There is the following comment upon the importance of this decision:44
“By way of comment, it may be observed that the judgment of the learned judge is in harmony with the spirit of the 1979 Act
and, if upheld by the Court of Appeal, its consequences will be far-reaching. ICC Arbitration is the most popular machinery
of dispute settlement in international contracts, other than commodity and maritime transactions. The ICC Court of
Arbitration has to deal annually with 250 to 300 cases. The decision of Leggatt J. will be welcomed by the international
business community.”
The Court of Appeal in its decision in Marine Contractors Inc. v. Shell Petroleum Development Co. of Nigeria Ltd.
45 held that the adoption of the ICC Court of Arbitration operated as an exclusion agreement under the
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Arbitration Act , 1979 (repealed). This is the effect of Article 24 of the ICC Rules.
Questions of General Importance or which require Consideration by Court of Appeal [ S. 69(8)]
An appeal was filed against an interim award. The award was upheld. The leave for appeal to the court of appeal
was also refused. The question was whether the court had power under S. 69(8) to grant leave and the power to
review the refusal of leave. The court cited S. 69(8) :
“The decision of the court on an appeal under this section shall be treated as a judgment of the court for the purposes of a
further appeal.
But no such appeal lies without the leave of the court which shall not be given unless the court considers that the question
is one of general importance or is one which for some other special reason should be considered by the Court of Appeal.”
It was argued before the court that the provision had the effect of denying the benefit of S. 55 of the Access to
Justice Act, 1999. The Court said that it would not be right to construe S. 55as having impliedly repealed S.
Section 69(8)of the Arbitration Act, 1996 .
“ Section 55 of the Access to Justice Act, 1999 had no effect so far as S.

Section 69(8)of the Arbitration Act, 1996 was concerned. It was very unlikely that the Parliament or the
draftsman could have intended that leave to appeal should be obtained twice over and the legislation did not require it. If
the Court who had heard the appeal from the arbitrator granted leave to appeal to the Court of Appeal that meant what it
said and there was no additional requirement to obtain the permission of the Court of Appeal.”
Leave for Appeal on Question of Law
Where the question whether the arbitrators failed to apply the relevant Articles of the Vienna Convention and
whether it constituted a serious irregularity in the conduct of arbitration the court said :46
“the test to be applied was clear; it was not enough to say may be the arbitrators were wrong or even that there was only a
possibility that they were right ; the Court had to be satisfied that the arbitrators were obviously wrong on a question of law;
the arbitrators’ decision on the contract point was not obviously wrong ; there was obviously material from which they could
reach the conclusion they did and leave to appeal would not be given on this point. Art. 38 only required examination within
as short a period as was practicable; where carriage was involved examination might be deferred until the goods had
arrived at their destination; while the language the arbitrators had used in expressing their findings might be open to
criticism, looking at the relevant passage of the award as a whole, the arbitrators had not so obviously misapplied the
provisions as to justify leave to appeal being given the contract was subject to Swiss law; its construction and the
application of the provisions of the Vienna Convention were matters of Swiss law for the arbitrators to determine; Swiss law
was foreign law and in their application of that foreign law the arbitrators were not dealing with a question of the law of
Navneet Krishn
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England and Wales ; S. 69 of the 1996 Act only permitted appeals on questions of law which were defined by S. 2(1) of the
Act as a question of the law of England and Wales; the rejection point raised no such questions and S. 69 did not apply;
Egmatra also failed in their alternative application under S. 68; there was no substantial injustice in the arbitrators’ refusal to
allow expert evidence to be put before them and the submission that the arbitrators failed to deal properly with the issues
would be rejected; the application would be dismissed.”
Renewed Application
The court has no jurisdiction to entertain a renewed application for a certificate of appeal under S. 1(7) of the 1979
Act on the ground that a case arising out of an arbitration involved a question of law which was of general public
importance or which should for some other special reason be considered by the Court of Appeal when an
application for a certificate had already been refused. On the true construction of S. 1(7) the procedure for
appealing from a judge's decision on an arbitration award envisaged that only one application for a certificate could
be made. The certificate was a condition precedent to the right of appeal, the application had to be made within the
time limited for appealing. The tenants’ new application for a certificate was dismissed.47
24. No security for costs in ICC Arbitrations
In Bank Mellat v. Helleneki Techniki SA 48 the Court of Appeal held that in ordinary arbitrations under
49
the ICC Rules of Arbitration the court would not normally make an order for security of costs, though it may in its
discretion do so. Kerr L J. said that all the powers of the court under Section 12(6) of the Act were wholly
discretionary and their grant or refusal would take account of the relevant contractual provisions and of the
requirements of justice in the circumstances of each case. In an international arbitration, particular regard was to be
given to the connection which the parties or the arbitration had with this country : where foreign parties had agreed
to arbitrate in this country under some foreign or international set of rules, such as those of the ICC, the case for the
exercise of a purely English discretionary jurisdiction was inevitably weakened.
The case should be compared with Mavani v. Ralli Brothers Ltd., 50 in which Kerr J. (as he then was)
made an order for security for costs in an arbitration under the Rules of the Refined Sugar Association. These
Rules clearly provided that the law of the contract and of arbitration proceedings was English law, whereas in Bank
Mellat v. Helleneki Techniki SA the substantive law was Iranian. Kerr J., however, emphasised that he exercised his
discretion in favour of an order because the case was “not an ordinary case”; in an ordinary arbitration which
proceeded simply on documents and written submissions he would generally exercise his discretion against an
order : the purpose of countless international arbitrations decided on the Baltic Exchange and before other trade
associations on documents alone between parties not carrying on business in this country was that they should be
conducted with the minimum of complexity, delay and expense—a purpose which would be substantially weakened
if the practice were to make orders for security for costs more or less automatically.51
In a matter before the House of Lords the insolvent respondent's claim was being funded by a third party, the
Kenyan Government, which stood to gain if the respondent was successful in the arbitration but would bear no
responsibility for costs if the respondent was unsuccessful, leaving the appellants with an empty order if costs were
awarded in their favour. It was appropriate therefore that, exceptionally, the court should make an order for security
for costs.52
Where the parties agreed that the arbitrator should seek legal opinion and that the opinion should form the basis of
the award, and the arbitrator made his award, it was held that the parties were bound to accept the award, unless
there were strong and compelling reasons for not accepting the award.53
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25. Arbitration proceedings and EEC Law
There was some controversy about the question whether the arbitrator had power to make a reference to the
European Court in Luxembourg under Article 177 of the EEC Treaty if a point of EEC law arises in arbitration
proceedings.54 The decision of the Court of Appeal in Bulk Oil (Zug) AG v. Sun International Ltd. 55
clarifies this issue. Ackner LJ said that Article 177 of the EEC Treaty did not authorise an arbitrator to refer an issue
to the European Court. The Court of Appeal held that if such an issue arises in arbitration, the judge should allow
the judicial review of the EEC point of law, if that point is new, capable of serious argument and is likely to be of
potentially great importance and far-reaching effect. The judge may then refer the issue to the European Court, if he
considers it necessary. The contract was for the sale of UK crude oil. It carried the following clause : “Destination
free but always in line with exporting country's government policy.” Those responsible at the UK loading port
refused to load on the ground that the declared destination of the oil was Israel and the export of North sea crude oil
to Israel was said to be contrary to the UK Government policy. The arbitrator decided that there was no breach of
contract on the part of the seller in his failure to fulfil his commitment. An application was made for leave to appeal
on the ground that this UK policy was void or unlawful under EEC Law in so far as it restricted the export of such oil
to Israel. Bingham J was of the opinion that, on the materials presented to him, the arbitrator was right and that he
would have decided the question in the same way as the arbitrator did. He was of the view that the Nema tests
might not be applicable in such situations. He said :56
“On a point of English law, an English judge can reasonably be expected to take a view. On reading an award and hearing
summary argument, whether he considers an arbitrator's award to be right or wrong. . . . It is a very much harder task for
him to undertake on a point of Community law and harder still for him to do with any confidence of being correct. The cases
show that even where English judges have been confident that a point of Community law should be decided in one way, the
Court of Justice of the European Communities has not infrequently decided it in the other.”
The sellers appeal against this decision was dismissed by the Court of Appeal.57 The seven factors which
influenced judgment were stated as follows :58
“1. The point was an entirely new one on which there was no authority.
2. It was a question of potentially very great importance, not only to the State of Israel, but to any country not falling
within the group formed by the International Energy Agency, the member states of the Community and Finland.
3. It was accordingly important that authoritative guidance be given and there would remain none without the grant
of leave.
4. That the point was capable of serious argument.
5. That it involved potentially a very large sum of money (the final award has now been made and including interest
the total figure awarded is nearly $15,000,000).
6. It involved a question of Community law of complexity upon which the view which both he and the arbitrator had
formed could well be wrong.
7. That if the point was decided in the buyers’ favour then, for the reasons given by the arbitrator. . ., the sellers
would have been in breach of contract in failing to load the vessel with the declared destination in Israel and the
buyers would have succeeded in the arbitration.”
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26. Condonation of delay
Delay in filing appeal or revision is condonable under S.

Section 5 of the Limitation Act, 1963 on proof of some “sufficient cause”. Each day of delay would
have to be accounted for. No vague excuses can be accepted to cover up what so obviously looks to be an
inordinate delay in filing a revision petition.59 The provisions of Order 41, rule 3A of the
CPC do not apply to condonation of delay in preferring appeals.60 Court must record its satisfaction
that the explanation for the delay was either reasonable or satisfactory. Delay of 565 days in filing first appeal by
respondent-State against judgment and decree of Sub-Judge in an arbitration application and no explanation, much
less a reasonable or satisfactory explanation was offered by the respondent-State for condonation of the delay.
Application for condonation of delay, though seriously opposed was allowed by the High Court on merely observing
that “taking into consideration the averments contained in the affidavit filed in support of the petition to condone the
delay, we are inclined to allow the petition” It was held that the High Court was not justified in exercising its
discretion to condone the delay.61
27. Superseding arbitration [ S. 39(1)( i ), 1940 Act].
An order under S. 39 clause (i), 1940 Act presupposed the existence of an arbitration agreement.62
Sections 19 and 35 of 1940 Act (repealed) expressly provided for an order superseding arbitration. Other orders
which have the effect of superseding the arbitration were appealable under clause (i), e.g., an order directing that
the arbitration agreement would cease to have effect.63 These provisions do not exist in the
Arbitration and Conciliation Act, 1996 . An order refusing to enlarge the time to make an award,64 an
order holding that there was no valid reference to arbitration,65 an order deciding that there was no arbitration
agreement,66 an order removing an arbitrator and appointing a new arbitrator,67 or an order dismissing an
application for supplying the vacancy of an umpire on the ground that there was no evidence showing the existence
of the arbitration agreement did not amount to an order superseding the arbitration.68 It had, however, been held
that an order setting aside the appointment of a sole arbitrator was such an order and was appealable.69
It had also been held that an order refusing to enlarge time to make an award amounted to and had the effect of
superseding arbitration agreement and was, therefore, appealable.70 The arbitrator was not the person aggrieved
for the purposes of appeal when there was refusal to enlarge time.71 The arbitrator died during the pendency of
appeal. The appeal was held to have abated. No party was to be transposed in his place as an appellant.72 If an
arbitrator makes an award after the expiry of time in violation of the injunction issued by the court restraining him
from making the award, such an award cannot be legalised by extending time for the award.73
Where both parties appointed their respective arbitrators but that appointed by one of them refused to act and the
court while fixing the case for hearing neither filled the vacancy nor exercised the discretion under S. 25, 1940 Act
(repealed) for superseding the proceeding, it was held that the action of the court did not amount to superseding the
award and therefore was not appealable,74 but that it would be open to revision under
S. 115 CPC and Ss. 8(1)(b), 12 and 25 of the
Arbitration Act , 1940 (repealed). The failure of the court first to pass the requisite order superseding
arbitration and also in filling vacancy, amounted to a grave error making interference in revision necessary.
A refusal to grant extension of time under S.

Section 28 of the Arbitration Act , 1940 had the effect of superseding arbitration and, therefore, became
appealable.75
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28. Statement of award in form of special case [ S. 39(1)(ii),1940 Act]
An appeal lay from an order on an award stated in the form of a special case.76 No appeal was allowed from an
opinion of court given on a special case stated by the arbitrator.77
29. Modification or correction of award [ S. 39(1)(iii), 1940 Act]
An appeal lay from an order modifying or refusing to modify an award, e.g., an order refusing to give costs in
accordance with the award.78
Where the court adopted all the terms of the award and remitted that portion of it which could not be considered
earlier, it being covered by a Supreme Courtdecision which came to be reversed, it was held that the remand in
question was not a modification within the meaning of S. 15 [1940 Act] and, therefore, an appeal against the order
was not competent.79
An objection was made against an award that the amount under claim had not been identified. The District Judge
remanded the case to the sole arbitrator for quantification of the amount allowed under the award. It was held that
this did not amount to interpretation of the award or correction of any error or mistake.80
A finding of fact by an arbitrator is not to be interfered with under an appeal.81
30. Filing or refusing to file arbitration agreement [ S. 39(1)(iv ), 1940 Act]
An appeal was allowed from an order filing or refusing to file an arbitration agreement.82
An order of reference to an arbitrator not named in the arbitration agreement set out in the petition83 or an order
appointing a person other than the person named in the arbitration agreement was an order refusing to file the
arbitration agreement.84 An appeal lay under clause (iv) from an order directing the filing of an arbitration agreement
though no order of reference to an arbitrator was made.85 An order rejecting an application to file an arbitration
agreement, was appealable though the order was passed on the preliminary ground of jurisdiction only.86
Appeal under clause (iv), 1940 Act (repealed) lay from an order passed on an application under Section 20 and not
from an order refusing to make an order of reference in a pending suit under Section 21.87 No appeal lay under
clause (iv) from an order refusing to set aside an award made on a reference under Section 20.88
Sections 20 and 21 of the 1940 Act do not figure any where in the 1996 Act.
The decree of a court in the terms of an award had the effect of an order filing the award and was therefore
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appealable. As such a revision petition against the judgment or the orders was incompetent.89
In Uttar Pradesh the following clause (iv) had been substituted with effect from 30.12.1976.
“Clause (iv) under Section 20, 1940 Act (repealed) making or refusing to make a reference”.90
31. Staying or refusing stay of legal proceedings [ S. 39(1)(v), 1940 Act]
An appeal was allowed under clause (v) staying or refusing to stay a suit including an order refusing to stay a suit
on the ground that there was no agreement for reference to arbitration.91 Under the
Arbitration and Conciliation Act, 1996 , such application is filed unders. 8 for reference of the parties to
arbitration. Section 37 of the 1996 Act does not provide for an appeal against an order under S. 8.
Appeals from orders of special tribunals created by special statutes are confined to appeals provided by the statute
which created the tribunal. No appeal lies under clause (v) from orders of such tribunals, e.g., an order of a tribunal
constituted by the Displaced Persons (Debt Adjustment) Act.92
The appellate court did not interfere with an order of the trial court under Section 34, 1940 Act (repealed) unless the
order had been passed unreasonably and capriciously and not judicially.1 A mere filing of appeal or other
proceedings does not operate as a stay of proceedings. There has to be a specific order to that effect from the
court.2
Proceedings had necessarily to be stayed where the circumstances were such that the very purpose of seeking
stay would be defeated if the award happened to be delivered in the meantime.3
The appellate authority is empowered to interfere in the discretionary orders passed by the subordinate court. The
power is not automatically exercisable, but only when it is shown that the order complained of is arbitrary, perverse,
or capricious and that interference is just and proper.4
In House of Lords allowed an appeal against the refusal to stay a suit on a subject matter which was covered by the
arbitration agreement.5
32. Every Order not appealable
It has been held that an appeal does not lie from each and every order of tribunal. An appeal can be entertained
only when the order of the tribunal comes within the scope of Section 37(2)(a) or (b). In this case the sole arbitrator
had made certain observations but had not passed any order as an interim measure. No appeal was allowed
against such observation.6 After considering the arrangement of statutory provisions the court noted with
emphasis:7
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“It is, therefore, manifest that one of the main object of the Act is to minimise the supervisory role of the Courts in the
arbitral process. This has been so held in the case of United India Insurance Co. Ltd. v. Kumar Texturisers, 8
9
in the following words: “It is therefore clear that a Court can intervene only in the event a remedy is provided under the Act.
The
Arbitration and Conciliation Act, 1996 , has repealed
Arbitration Act , 1940 and the Foreign Awardact, 1961 as also another legislation. One of the main objects of
theact is to minimise the supervisory role of Courts in the arbitral process. The question which has arisen, therefore, will
have to be decided by considering S. 5 and the object for which the Act of 1996 has been enacted.”
“The Court can intervene also on an application under S. 14(2) of the Act of 1996. In other words, a conjoint reading of S.
5, S. 34,S. 37 and S. 14(2) of the Act of 1996 will show that the Court can intervene only in cases covered by S. 14,S. 34
and S. 37.”
The provisions of S. 37 take generally the form of S. 39 of the 1940 Act, but they are materially different from the
said provision and it must be with a view to minimise the supervisory role of the Court in arbitral process which is in
consonance with the spirit of the Act as contained in S. 5, sub-sec. 1(a) & (b) of S. 37 provide for appeals against
the order of Courts granting or refusing to grant interim measures under S. 9 and setting aside or refusing to set
aside an award under S. 34. Sub-sec. (1) emphasise that appeal shall not lie against any other orders. This is a
major departure from the 1940 Act whereas sub-sec. (1) provides for an appeal from Court orders specified therein,
sub-sec. (2) provides for an appeal to the Court from an order of an arbitral tribunal (a) accepting the plea referred
to in sub-sec. (2) or sub-sec. (3) of S. 16; and (b) granting and refusing to grant interim measure under S. 17. The
words “and from no other orders” appearing in sub-sec. (1) of S. 37 are analogous to the provisions of S.
Section 39 of the Arbitration Act , 1940 and came to be interpreted by a Full Bench of this Court in the
case of Union of India v. A.S. Dhupia, 10 and Hon'ble Supreme Court in the case of Union of India v.
Mahindra Supply Company, 11 and the Supreme Courtheld that these words qualify the expression, “an
appeal shall lie from the following orders”, would qualify S. 39(2) as well, therefore, by the same analogy the
expression “and from no others” used in S. 37(1) of the Act would equally qualify S. 37(2) and 37(3) of the Act. A
conjoint reading of S. 5 and S. 37 makes it abundantly clear that the only orders against which appeals would lie
are the orders specifically mentioned in S. 37(1) in case of original decrees passed by a Court and S. 37(2) in
respect of orders passed by an arbitral tribunal. The contention of the learned counsel for the appellant that the
qualifying words used in sub-sec. (1) being absent in sub-sec. (2) of S. 37 and therefore an appeal can also lie from
an order of the arbitral tribunal even if the said order is strictly not one falling under clause (a) or (b) has no merits
and is liable to rejection because it goes against the very spirit and object of the Act. If this contention of the
appellant is accepted, it would mean that an appeal would lie from each and every order of the arbitral tribunal
which has even the slightest effect of causing prejudice to one or the other party. This Court is of the clear opinion
that a Court will be competent to entertain the appeals from an order of the arbitral tribunal falling under Clause (a)
or Clause (b) of sub-sec. (2) of S. 37 of the Act and from no others.
33. Fee for appeal
The Kerala High Courtheld that only Article 3 of Sch. II of the Kerala Court Fees and
Suits Valuation Act , 1960 which deals with memorandum of appeal is applicable to appeals from
orders to the High Court and not Article 4 of that Schedule. Accordingly, the fee payable on an appeal under the
1996 Act would be the same as on other appeals. The reason is that the 1996 Acthas not been incorporated under
Article 4 of Sch. II of the Kerala
Court Fees Act .12
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Where an interim was sought for the purpose of operating a cash-credit account, it was held that the limit of the
cash-credit account was the valuation for the purposes of appeal.13
No interference through Special Leave Petition
Where an order is appealable under S. 37, the Supreme Court said that an appeal against it could not be interfered
with by proceeding under
Article 136 of the Constitution .14
An appeal was filed within limitation under Rule 24 of the khasi syiemship (Administration of Justice) Order, 1950.
The court said that if the appeal was not maintainable under that Rule, it could be converted into an appeal under S.
39 (1940 Act) by invoking the provisions of
S. 151 CPC or by reading Rule 24 with S. 39 for the ends of justice and the matter decided on its own
merit.15
Order of Single Judge
The opinions differed (difference of opinion at Supreme Court level) as to whether an appeal to Division Bench
would lie against the order of a single judge under S. 33 (1940 Act) (application for contesting arbitration or award),
the matter was referred to the Chief Justice for reference to a larger Bench.16
An order was passed by a single judge under S. 41 (1940 Act) dealing with an application under S. 20 of that Act.
An appeal was maintainable because such an order could not have been passed collaterally.17
The Division Bench has no jurisdiction to enter into the facts of the case and to interpret the agreement and
correspondence which was a part of the agreement. What should be the price of the commodity which was to be
paid by one party to the other was essentially a question of fact.18
First Appeal to High Court
There was dissatisfaction with the quantum of compensation awarded. No objection was filed against the award
and the same was made a rule of the court (1940 Act). It was held that an appeal under S. 39 (1940 Act) being
barred by S. 17, was not maintainable under
S. 96,CPC .19
Appeal in the matter of commencement of new Act
Where the arbitration proceedings had not commenced under the old Act before Jan. 26, 1996 in any manner
whatsoever, it was held that the provisions of the old Act could not held attracted to the case. An appeal against the
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order was not allowed under S. 39 of 1940 Act.20
34. Award exceeding claim
It is permissible to interfere in appeal where an award is for an amount larger than the claim amount though it had
already been made a rule of the court (1940 Act). In that respect the arbitrator exceeds his jurisdiction. Courts have
to be extremely vigilant wherever large public funds are involved.21
35. Award of compensation in violation of Contract Act
The court said: The arbitrator in the present case acted mechanically in awarding compensation and damages, and
the Court made the award a rule of the Court in a ritual and routine manner without looking into the unfair and penal
provisions in the agreement which were not enforceable in view of Section 74 of the Contract Act. This Court will be
failing in its duty if the error apparent on the face of the award is not rectified in exercise of its power under Section
39 of the 1940 Act. The Court will award reasonable compensation instead of enforcing the penal clauses, in the
agreement. Award of interest at the rate of 12% per annum would be reasonable in the circumstances of the case.
That part of the award, which is invalid, can be set aside.22
36. Appeal procedure under

CPC
In the absence of any special provision or special procedure to be followed, the normal procedure of a court or
forum to which an appeal has been filed from an order under S. 37 (1)(a) would apply and there would be no
exemption from hearing under Order 41, Rule 11 of
CPC . 23
37. Limitation
The appeal was against the order of a single judge against under S. 20, (1940 Act). Appeal to Division Bench was
allowed under S. 39. Time taken in pursuing SLP before the Supreme Courtwas to be excluded under S.
Section 14, Limitation Act .24
A totally misconceived application does not give a ground for condonation of delay, as such an exercise cannot be
termed as a bona fide pursuit of another remedy.25
In the context of appeals against orders granting or rejecting applications for interim relief under S. 17, the
legislature has not provided any limitation period. The Bombay High Court, while not disputing that an appeal must
be filed within a reasonable period of time, has held that any delay would not affect the maintainability of the appeal,
but rather, it will only be a factor to be kept in mind while granting discretionary reliefs.26 In so far as no specific
limitation period is provided for any ground of appeal under S. 37, the conclusions reached by the court are general
in nature, and must be noted27 —
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“Perusal of the above quoted provisions of S. 37 shows that S. 37(2) in terms provides for an appeal against the order
granting or refusing to grant interim measure under S. 17. Perusal of S. 37 also shows that there is no period of limitation
laid down for filing an appeal under that provision. Perusal of the provision of S. 34 shows that there is a clear provision
made for filing an application under that provision for challenging an award made by the arbitral tribunal. Therefore, when
the legislature provided the remedy against the arbitral award, it also provided a period of limitation for making an
application under S. 34. Perusal of the provisions of Ss. 11, 13 and 16 shows that the legislature has mentioned a period of
time for taking various steps. Therefore, it is clear that while the legislature was aware of the necessity of providing a period
of limitation and wherever the legislature thought that providing a period of limitation is necessary it has been so provided
for by various provisions of the Act. However, while providing an appeal under S. 37, the legislature has chosen not to
prescribe any period of limitation. In this view of the matter, therefore, in my opinion, the Court will not be justified in
importing the period of limitation provided by S. 34 for filing an application and making it applicable to an appeal filed under
S. 37.”
The court continued28 —
“ S. Section 43(1)makes the provisions of the

Limitation Act applicable to arbitration as it applies to proceedings in Court. Perusal of the provisions of the
Limitation Act also show that the
Limitation Act does not provide for any period of limitation for filing an appeal unders. 37. It is Second
Division of the Schedule to the Limitation which deals with appeals. Perusal of those provisions show that Arts. 114 and
115 lay down [the] period for filing an appeal under the
Code of Criminal Procedure and Art. 116 provides for limitation for filing an appeal under the
Code of Civil Procedure and Article 117 provides period of limitation for filing an appeal from decree or order
passed by the High Court to the same Court. Thus, in the
Limitation Act there is no provision made prescribing the period of limitation for filing an appeal unders. 37.
Perusal of Art. 119, which is found in Third Division, the heading of which is ‘Application’ shows that there is a period of
limitation laid down by Art. 119 for making application under the
Arbitration Act 1940. The intention of the legislature, in my opinion, therefore, is clear that there is no period
of limitation for filing an appeal unders. 37.”
Further Suggested Readings (Appeals)
1. Craig, “Uses and Abuses of Appeal from Awards” 4 Arbn Intl 174 (1988).
2. R Holmes & M O'Reilly, “Appeals from Arbitral Awards : Should Section 69 be Repealed?” 69 Arbitration 1
(2003).
3. H Dundas, “Appeals on Questions of Law: Section 69 Revitalised” 69 Arbitration 3 (2003).
2. See Scan Organics Ltd. v. Mukesh Babu Financial Services Ltd.,

(1998) 3 RAJ 240 (Bom) :
(1988) 1 Arb LR 685 appeal against acceptance of plea.
Navneet Krishn
Page 34 of 70
1. The corresponding provision under the 1940 Act was in S. 39. That was as follows :
39. Appealable orders.—(1) An appeal shall lie from the following orders passed under
this Act (and from no others) to the Court authorised by law to hear appeals from original decree of the Court passing
the order :
An order—
(i) superseding an arbitration;
(ii) on an award stated in the from of a special case;
(iii) modifying or correcting an award;
(iv) filing or refusing to file an arbitration agreement;
(v) staying or refusing to stay legal proceedings where there is an arbitration agreement;
(vi) setting aside or refusing to set aside an award :
Provided that the provisions of this section shall not apply to any order passed by a Small
Cause Court.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this
section shall affect or take away any right to appeal to the Supreme Court.
STATE AMENDMENT
Uttar Pradesh.—In Section 39 of Act 10 of 1940, in sub-section (1), for the existing
clause (iv) the following clause shall be substituted, namely:—
“(iv) under Section 20, making or refusing to make a reference;”—U. P. Act 57 of 1976, S. 22, w.e.f. 1-1-
1977.
Note : See also Ss. 37 and 38 of U. P. Act 57 of 1976 given at the end.
2. Union of India v. R.D. Gupta, Civil Appeal No. 163 of 1965 decided on 24.3.1965 (SC);
Union of India v. Mohammad Nisa,
AIR 1965 All 269 : (1964) All LJ 771 :
ILR (1964) 2 All 120 ; Union of India v. S. Mohinder Singh,
AIR 1979 Del 342 ; State of J&K v. Megha Enterprises AIR 1996 J&K 67:
(1996) 2 Arb LR 548 (J&K), appeal lies only under S. 39 and not from any other
order, not appealable under Cl. 12 of Letters Patent.
Civil Procedure Code applies where no specific remedy under the Act.Telecommunications
Consultants India Ltd. v. Nangia Constructions (India) P. Ltd.,
(1998) 2 RAJ 146 (Del), where no appeal was filed against an order of appointment
of arbitrator, the court said that the appointment attained finality. Garg Trading Co. v. Union of India,
(2003) 3 RAJ 331 :
(2003) 3 Arb LR 318 (SC), an application filed under S. 8 (1940 Act) read with S. 20
(1940 Act) for appointment of an arbitrator, rejected because of bar of time, appeal also rejected by the High Court as
filed time-barred, held improper. Rejection of application under S. 20 on the ground of limitation tantamounted to refusal
to file arbitration agreement, hence it was appealable. Chairman & Managing Director, NTPC v. Raj kishan & Co.,
(2001) 4 RAJ 9 : (2001) 5 AD (Del) 242, where an appeal was not maintainable
under S. 39 of 1940 Act, it was also not maintainable under S. Section 10 of the Delhi High Court Act, 1966. The
objection was against appointment of new arbitrator after revocation of the authority of an earlier arbitrator.
3. Union of India v. Md. Usman,

AIR 1965 All 269 reversed on another point in Md. Usman v.
Union of India,
AIR 1969 SC 474 [
LNIND 1968 SC 292 ]:
(1969) 2 SCR 232 [
Navneet Krishn
Page 35 of 70
LNIND 1968 SC 292 ]; Bhaiyalal Ghuratia v. Sawai Singhai Pannalal,

AIR 1944 Nag 152 : (1944) Nag LJ 167; Uttam Singh Duggal & Co. Pvt. Ltd. v.
Hindustan Steel Ltd.,
AIR 1982 MP 206 [
LNIND 1981 MP 101 ]:
1982 MPLJ 598 [
LNIND 1981 MP 101 ].
4. Nawabzada S.M. Ali Dabir v. Nawabzada Ali Kabir Khan,

AIR 1964 All 185 (1963) All LJ 58.
5. Union of India v. Consultants For Industries Ltd., 80 CWN 662.
6. R.N. Rice Mills v. State of Orissa,

AIR 1959 Ori 4 [
LNIND 1958 ORI 29 ]; Krishnawati Devi v. Lala Harjas Mal Misra,
AIR 1974 All 209 .
7. Bejoy K. Swaika v. Shyam Sundar Swaika,

AIR 1977 Cal 455 [
8. Purshottamdas Ramgopal v. Ramgopal Hiralal, ILR 35 Bom 130 : 12 Bom LR 852.
9. Union of India v. South India Corporation,

AIR 1960 AP 346 [
LNIND 1959 AP 210 ]; Krishnawati Devi v. Lala Harjas Mal Misra,
AIR 1974 All 209 .
10. State of H.P. v. H.S. Sobti &

Co.
AIR 1973 HP 1 [
LNIND 1972 HP 36 ]: (1992) 2 Sim LJ (HP) 370; Sharma Ice Factory v. Jewal Ice
Factory,
AIR 1975 JK 25 ; Deepak Nitrite v. Gujarat State Fertilizers, (1977) 18 Guj LR 660;
Shiv Onkar Maheswari v. Bansidhar Jagannath,
AIR 1956 Bom 459 [
LNIND 1955 BOM 113 ].
11. Vaish Brothers v. Union of India,

(2009) 2 Arb LR 530 , 535 (Del-DB).
12. Hafiz Zahur Ahmad v. Taslim-un-Nisa,

AIR 1926 All 55 : ILR 48 All 27 : 23 All LJ 891. The fact that the memorandum of
appeal stated it to be an appeal under
S. 96, CPC instead of stating that it was an appeal under S.
Section 39 of the Arbitration Act , 1940 the appeal was not vitiated by that reason because in its tenor it
was an appeal against the order rejecting objections to the award, nor was it vitiated by the fact that there was excess
court fee on the memorandum of appeal,Uti v. Ati,
AIR 1963 Punj 32 : 64 Punj LR 860.
13. Rattan Lal v. Krishan Kumar,

(2002) 2 RAJ 504 : (2002) 1 AD (Del) 80 (DB); Delhi Development Authority v.
Hindustan Constn. Corpn., Engineers & Contractors,
Navneet Krishn
Page 36 of 70
(2001) 4 RAJ 150 :

(2001) 94 DLT 502 :
(2002) 1 Arb LR 98 (Del), no relief allowed because of negligence of the officers of
the authority before the arbitrator. They were discourteous to the arbitrator though he was a retired Supreme Court
judge. The court recommended inquiry into their conduct.
14. Hindustan Antibiotics Ltd. v. Hindustan Max GB Ltd.,

(2002) 1 RAJ 428 (DB) :
(2001) 91 DLT 688 , an appeal against order granting status quo maintainable.
Where an application for vacation of an interim order is not disposed of within 30 days, an appeal is maintainable.
Jabalpur Cables Network P. Ltd. v. ESPN Software India P. Ltd.,
AIR 1999 MP 271 : (2000) 4 RAJ 72, appeal against order not granting ex parte
injunction, the order indicated reasons and being a formal expression of adjudication, an appeal lay. Sundaram Finance
Ltd. v. Radhamma,
(2004) 1 RAJ 302 (Ker) :
(2003) 3 Arb LR 302 , about Court fee in Kerala, Grid Corpn. of Orissa Ltd. v. AES
Corpn.,
AIR 2004 Ori 186 : (2005) 1 RAJ 163 (Ori), an application for interim relief under S.
9 was dismissed for not proper impleadment an order for amendment for rectifying the defect was passed. District
Judge dismissed both the petitions. The District Judge dismissed both the orders. An appeal filed against this dismissal
was tagged with the appeal under S. 9.
15. Chief Engineer & B.P.D.P./R.E.O., Ranchi v. Scoot Wilson Kirpatrick India Pvt. Ltd.,
(2006) 4 Arb LR 241 , 246 :
(2007) 1 RAJ 63 :
(2006) 13 SCC 622 [
LNIND 2006 SC 947 ].
16. Ashalata S. Lahoti v. Hiralal Liladhar,

(1999) 1 Mah LJ 352 :
(1998) 3 Arb LR 462 .
17. Pradeep Anand v. ITC Ltd.,

(2000) 4 RAJ 518 : (2000) 3 AD (Del) 965, an appeal lies against no other rights;
Subhash Chander Chachra v. Ashwani Kumar Chachra,
(2007) 1 Arb LR 288 , 298 :
(2007) 1 RAJ 600 :
(2007) 137 DLT 401 (Del), the scope of interference by the court in interim
directions given by the arbitral tribunal is extremely limited.
18. Tata Iron & Steel Co. Ltd. v. Standard Chrome Ltd., 2006 (Suppl) Arb LR 342, 347 :
(2007) 5 RAJ 492 : (2006) 2 Cal HN 378 (Cal-DB), no appeal shall lie against the
order of a court rejecting an application for referring the parties to arbitration under S. 8 of the Act; Canbank Financial
Services Ltd. v. Haryana Petrochemicals Ltd.,
(2008) 2 Arb LR 365 [
LNIND 2008 DEL 1105 ] :
(2008) 4 RAJ 394 (Del-DB), order referring a dispute to arbitration under S 8 of the
1996 Act, not appealable followed in Roshan Lal Gupta v. Parasram Holdings Pvt. Ltd.,
(2009) 1 Arb LR 304 , 310 :
(2009) 157 DLT 712 [
LNIND 2009 DEL 226 ] (Del), a second appeal under S. 100 is also not possible
against an order under S. 8 and Rites Ltd. v. JMC Projects India Ltd.,
(2009) 2 Arb LR 64 (Del-DB), no appeal from an order under Sec. 8 even by way of
letters patent; Shakuntala Vasant Aggarwal v. Five Star Poultry Farm,
(2009) 4 Bom CR 462 [
LNIND 2009 BOM 247 ], no appeal from a rejection of an application under S. 8.
Navneet Krishn
Page 37 of 70
19. It may be noted that subsequent to the decision in Patel Engineering, a judicially devised system of appeal
has now been introduced in relation to S. 11 which is separate from the procedure under S. 37. See Commentary under
S. 11 under the heading “Appeals”.
20. Shyam Telecom Ltd. v. ARM Ltd.,

(2008) 3 Arb LR 615 :
(2009) 2 RAJ 4 (Del-DB), order under S. 14 not one of the appealable orders under
S. 37(1), appeal held not maintainable in view of general embargo in S. 5 and specific embargo under S. 37; State of
W.B. v. Gourangalal Chatterjee,
(1993) 3 SCC 1 [
LNIND 1993 SC 448 ] :
(1993) 2 Arb LR 95 , no appeal lay from an order which was not covered by any of
the six clauses of sub-s. (1) of S. 39, (1940 Act). The order of a single judge of the Delhi High Courtrevoking the
authority of the Chief Engineer in his failure to act as an arbitrator in terms of the clause in the agreement and directing
a retired chief engineer to act as the sole arbitrator, held this order was not covered by any of the clauses of the
section.
21. Union of India v. East Coast Boat Builders & Engrs. Ltd.,
AIR 1999 Del 44 [
LNIND 1998 DEL 624 ]:
(1999) 4 RAJ 365 :
(1999) 2 RAJ 221 :
(1998) 76 DLT 955 :
(1998) 2 Arb LR 702 , provisions in S. 16 enacted to only minimise the suprevisory
role of courts in arbitration process.
22. Sanshin Chemicals Industry v. Oriental Carbons & Chemicals Ltd.,

AIR 2001 SC 1219 [
LNIND 2001 SC 432 ], the parties agreed for referring their dispute to arbitration, the
decision as to venue of arbitration required to be determined by the Joint Arbitration Committee. The Court said that
such decision as to venue was not a decision as to the agreement, nor it was an award or an interim award. Besides,
bearing in mind the object behind the
Arbitration and Conciliation Act, 1996 , as has been emphasised by this Court in the case of Konkan
Railway Corpn. Ltd. v. Mehul Construction Co.,
(2000) 7 SCC 201 [
LNIND 2000 SC 1131 ] : 2000 AIR SCW 2960 :
AIR 2000 SC 2821 [
LNIND 2000 SC 1131 ]:
2000 CLC 1609 , which is in consonance with the UNCITRAL model law, it would
not be conducive to interpret the decision of the Joint Arbitration Committee with regard to the venue to be an interim
award, conferring a right of challenge to an aggrieved person under Section 34 of the Act.
23. Union of India v. Mohindra Supply Co.,

AIR 1962 SC 256 [
LNIND 1961 SC 295 ]:
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ]; P.S. Sathappan v. Andhra Bank Ltd.,
AIR 2004 SC 5152 [
LNIND 2004 SC 1053 ]:
(2004) 11 SCC 672 [
LNIND 2004 SC 1053 ] :
(2004) 8 JT 464 followed in Arun Kapur v. Vikram
Kapur,
(2002) 4 RAJ 414 :
AIR 2002 Del 420 [
LNIND 2002 DEL 111 ]:
(2002) 1 Arb LR 640 (Del); National Thermal Power Corpn. Ltd. v. Siemens
Atkiengesellschaft (SAG),
(2005) 2 Arb LR 172 , 195 :
(2005) 121 DLT 36 :
(2005) 83 DRJ 46 [
Navneet Krishn
Page 38 of 70
LNIND 2005 DEL 460 ] (Del), “conjoint reading of Ss. 5 and 37 makes it abundantly
clear that only orders against which appeals would lie are orders specifically mentioned in S. 37(1) in case of original
decrees passed by a Court and S. 37(2) in respect of orders passed by an arbitral tribunal” upheld on
appeal in National Thermal Power Corporation Ltd. v. Siemens Atkiengesellschaft,
(2007) 1 Arb LR 377 , 386- 387 :
AIR 2007 SC 1491 [
LNIND 2007 SC 263 ]:
(2007) 2 RAJ 1 :
(2007) 4 SCC 451 [
LNIND 2007 SC 263 ] . Canbank Financial Services Ltd. v. Haryana Petrochemicals
Ltd.,
(2008) 2 Arb LR 365 [
LNIND 2008 DEL 1105 ] :
(2008) 4 RAJ 394 (Del-DB), words “from no others” qualify the scope of all appeals,
no appeal can be maintained against any order other than that specified under Ss. 37(1) and 37(2).
24. Canbank Financial Services Ltd. v. Haryana Petrochemicals Ltd.,

(2008) 2 Arb LR 365 [
LNIND 2008 DEL 1105 ] :
(2008) 4 RAJ 394 (Del-DB)followed in Rites Ltd. v. JMC Projects
India Ltd.,
(2009) 2 Arb LR 64 (Del-DB), even though order under S. 8 is passed in a civil suit,
S. 37 can be invoked to bar the appeal relying on Union of India v. Mohindra Supply Co.,
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]:
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ].
25. Roshan Lal Gupta v. Parasram Holdings Pvt. Ltd.,

(2009) 1 Arb LR 304 , 310 :
(2009) 157 DLT 712 [
LNIND 2009 DEL 226 ] (Del).
26. Rites Ltd. v. JMC Projects India Ltd.,

(2009) 2 Arb LR 64 (Del-DB), no Letters Patent appeal is possible under S. Section
10 of Delhi High Court Act, 1966 read with S. 104 (1)
CPC from an order under S. 8 of the 1996 Act.
27. N.C. Bhalla v. R.C. Bhalla,

(1990) 2 Arb LR 395 (Del). The court followed Shah Babulal
Khimji v. Jayaben D. Kania,
AIR 1981 SC 1786 [
LNIND 1981 SC 605 ]:
(1981) 4 SCC 8 [
LNIND 1981 SC 605 ]; Chowdhary's case, (1882) 10 Ind App 4 (PC); Mohindra
Supply Co's case,
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]at 266; United India Ins Co. v. Darbar Co. Mills,
(1984) Raj LR 405 , an appeal lies only within the framework of the
Arbitration Act .
28. Subhash Chander Kakkar v. D.S.I.D.C., (1990) 2 Del Lawyer 21.
29. The Bench relied on Banwari Lal Radhey Mohan v.

Punjab State Co-op Supply and Mktg. Fedn. Ltd.
AIR 1983 Del 402 [
LNIND 1983 DEL 150 ]; Also see Judgal Kishore Paliwal v. Satjit,
(1984) 1 SCC 358 ; University of Delhi v. Hafiz Md Said,
AIR 1972 Del 102 [
Navneet Krishn
Page 39 of 70

(1972) 8 DLT 151 .
30. Hindustan Steel Works Construction Ltd. v. Tarapore & Co.,

(1990) 1 Arb LR 221 :
AIR 1990 Cal 75 [
LNIND 1988 CAL 268 ], encashment of Bank guarantee.
31. Rebati Ranjan Chakravarti v. Suranjan Chakravarti,

AIR 1963 Cal 642 [
LNIND 1963 CAL 11 ]; Union of India v. A.S. Dhupia,
AIR 1972 Del 108 [
ILR (1972) 2 Del 13 .
32. Union of India v. N.K. Pvt. Ltd.,

AIR 1972 Del 202 [
LNIND 1971 DEL 333 ]:
ILR (1972) 2 Del 122 .
33. Balde Pentaiah v. Bulaganti Mallaiah,

AIR 1968 AP 228 [
LNIND 1965 AP 101 ]. A petition purporting to proceed under the provisions of the
Arbitration Act for a certificate of High Court for leave to appeal to theSupreme Court has been held to
be misconceived. Union of India v. Nalini Rajan Guha,
AIR 1955 Cal 257 [
LNIND 1953 CAL 185 ]: 57 Cal WN 304. A person who had ample opportunity to file
objections to the award, did not do so and a decree was passed in terms of the award, he was held to be debarred from
subsequently challenging the award in revision, Jiwanand v. Ram Kishan,
AIR 1955 HP 1 [
LNIND 1954 HP 16 ].
34. Vijay Singh Amar Singh v. Hindustan Zinc Ltd.,

AIR 1992 Raj 82 : (1992) 2 Arb LR 203. Inadequate court fee on the appeal papers
was allowed to be made up instead of dismissing the appeal.
35. Mathuraman Chettiar Re,

AIR 1953 Mad 395 [
LNIND 1952 MAD 257 ].
36. Bihar S.E.B. v. Khalsa Builders,

AIR 1988 Pat 304 : 1987 Pat LJR (HC) 322.
37. Municipal Corpn. of Delhi v. Intl. Security & Intelligence

Ltd., Agency
AIR 2003 SC 1515 [
LNIND 2003 SC 170 ]:
(2003) 1 RAJ 169 :
(2003) 1 Arb LR 432 . The Court overruled the decision in Superintending Engineer
v. Subba Reddy, 1999 AIR SCW 1479 :
(1999) 2 RAJ 152 :
(1999) 4 SCC 423 [
LNIND 1999 SC 460 ] :
(1999) 2 SCR 880 [
LNIND 1999 SC 460 ], wherein it was held that cross-objections were not at all
maintainable.
Navneet Krishn
Page 40 of 70
38. Ibid.. The Court approved the decision in Chanchalgauri Ramanlal v. Narendra Kumar
Chandalal,
AIR 1986 Guj 55 [
LNIND 1984 GUJ 48 ]and declared not good law which was laid down in the
following cases: Shankar Lal v. Sarup Lal,
1912 ILR 34 All 140; Nanak Baksh v. Wazir Singh,
(1909) 4 IC 625 .
39. Oil and Natural Gas Corpn. Ltd. v. Comex Services,

(2003) 3 RAJ 578 :
(2003) 3 Arb LR 197 (Bom).
40. R.C. Choudhary v. Prestige Finance and Chit Fund Co. P. Ltd.,
AIR 1996 Del 382 [
LNIND 1996 DEL 561 ].
41. State of J&K v. Megha Enterprises,

(1996) SLJ 21 (J&K) :
(1996) 2 Arb LR 548 , the matter was under
Section 39 of the Arbitration Act , 1940.
42. Econ Puri Consortium v. Puri International Pvt. Ltd.,

(2009) 2 Arb LR 394 , 396- 397 :
(2009) 159 DLT 458 (Del-DB), no appeal lies under S. 37 against the decision in a
S. 11 application and therefore appeal from an interlocutory order in such proceedings can also not lie.
43. Great Eastern Shipping Co. Ltd. v. Board of Trustees for the Port of Calcutta,
(2005) 1 Arb LR 389 [
LNIND 2003 CAL 382 ], 397 (Cal-DB), letters patent appeal entertained against
order passed in respect of application under S. 11(6)relying on Vanita M. Khanolkar v. Pragna M. Pai,
AIR 1998 SC 424 .

(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ].
45. Hardayal Singh v. Joginder

Singh,
(2009) 1 Arb LR 25 , 36 :
(2009) 2 RAJ 187 :
(2008) 156 DLT 28 (Del-DB), interpreting S. 39 of the 1940 Act, which is pari
materia to S. 37 of the 1996 Act; Rites Ltd. v. JMC Projects India Ltd.,
(2009) 2 Arb LR 64 (Del-DB), no appeal from an order possible under S. 8 even by
way of Letters Patent under S. 10 of the Delhi High Courts Act, 1966 and
S. 104 of the CPC following Canbank Financial Services Ltd. v.
Haryana Petrochemicals Ltd.,
(2008) 2 Arb LR 365 [
LNIND 2008 DEL 1105 ] :
(2008) 4 RAJ 394 (Del-DB), no appeal possible under Clause 10 of Letters Patent.
46. See Commentary under S. 37infra under the heading “Bar of second appeal from orders specified in
section”.
Navneet Krishn
Page 41 of 70
47. State of Madhya Pradesh v. Bastar Oil Mills & Industries Ltd.,
(2001) 4 RAJ 7 :
(2001) 2 SLT 336 (SC).
48. Suraj Prasad v. Munna Lal, (1957) All LJ 51. Karnataka State Road Transport Corpn. v.
VM Keshava Rao,
(2004) 1 RAJ 646 :
AIR 2004 Kar 109 , the question whether the clause in question is an arbitration
clause or not cannot be taken up by the court in appeal.
49. State of Kerala v. Valliammal Bhaskaran,

(1990)1 Arb LR 83 :
AIR 1990 Ker 83 .
50. Amod Kumar v. Hari Prasad,

AIR 1958 All 720 , followed in Government of A.P. v. Gammon
India Ltd.,
AIR 1984 AP 230 [
LNIND 1983 AP 243 ]:
1983 Arb LR 345 ; Grid Corporation of Orissa Ltd. v. AES Corpn.,
(2005) 1 Arb LR 115 , 120- 123 :
(2005) 1 RAJ 163 (Ori-DB), order dismissing S. 9 application and dismissing
miscellaneous petition for impleading necessary parties, appeal directed at dismissal of S. 9 application, appellate court
can also look into orders dismissing miscellaneous petition.
51. State of Orissa v. R.N. Misra,

AIR 1984 Ori 42 : 1983 Arb LR 355.
52. Union of India v. Mohinder Singh,

AIR 1971 JK 10 .
53. Oil and Natural Gas Commission v. Essar Steel Ltd.,

(2001) 4 RAJ 174 (Guj).
54. Delhi Development Authority v. Hindustan Construction Corporation Engineers &

Contractors (DB),
(2001) 4 RAJ 150 :
(2001) 94 DLT 502 : (2001) 7 AD (Del) 1132 :
2002 RLR 35 (N) :
(2002) 61 DRJ 299 [
LNIND 2001 DEL 1287 ] :
(2002) 1 Arb LR 98 (Del).
55. Engg. Projects (India) Ltd. v. SPR Reddy,

(2000) 1 RAJ 215 (AP).
56. Shree Vinayak Cement v. Cement Corporation of India, 2007 (Suppl) Arb LR 437, 440 :
(2007) 4 RAJ 253 :
(2007) 142 DLT 385 (Del-DB), court refused to interfere with arbitrator's award
upholding invocation of bank guarantee against partnership firm.
Navneet Krishn
Page 42 of 70
57. Sarkar & Sarkar v. State of West Bengal,

(2007) 2 Arb LR 396 , 398 :
(2007) 3 RAJ 689 (Cal-DB).
58. Sanyuki Nirmala v. Union of India,

(2002) 3 RAJ 425 (Del).
59. Harbhajan Singh Kaur v. Unimode Finance (P) Ltd.,

(1998) 2 Arb LR 125 :
(1998) 3 RAJ 389 (Cal).
60. Arun Kapur v. Vikram Kapur,

AIR 2002 Del 420 [
LNIND 2002 DEL 111 ].
61.
AIR 1972 Del 108 [
LNIND 1972 DEL 66 ](FB).
62.
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]:
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ].

(2002) 4 RAJ 414 :
AIR 2002 (Del) 420 [
LNIND 2002 DEL 111 ]:
(2002) 96 DLT 757 [
LNIND 2002 DEL 111 ] :
(2002) 3 AD (Delhi) 824 :
(2002) 1 Arb LR 640 [R.C. Jain, J.]
64. Deccan Asian Infrastructure (Mauritius) Inc v. BPL Communications Ltd.,

(2005) 2 Arb LR 450 , 462 :
(2005) 3 RAJ 163 :
(2005) 3 Kant LJ 143 (Kar-DB)following Wander Limited v. Antox
India Private Limited 1990 (Suppl) SCC 727 :
(1990) 2 Arb LR 399 (SC).
65. Symphony Services Corpn. (India) Pvt. Ltd. v. Sudip

Bhattacharjee,
(2008) 3 Arb LR 295 , 299- 300 :
AIR 2008 (NOC) 38 : (2009) 1 RAJ 609 : (2007) 6 AIR Kant R 84 :
(2008) 2 Kant LJ 24 :
2008 AIHC 278 .
66. Symphony Services Corpn. (India) Pvt. Ltd. v. Sudip

Bhattacharjee,
(2008) 3 Arb LR 295 , 299- 300 :
AIR 2008 (NOC) 38 : (2009) 1 RAJ 609 : (2007) 6 AIR Kant R 84 :
(2008) 2 Kant LJ 24 :
2008 AIHC 278 .
Navneet Krishn
Page 43 of 70
67. Ambica Enterprises v. Trishna Bose,

(2003) 3 RAJ 482 (Cal—DB).
68. Paradise Hotel & Restaurant v. Airport Authority of India,

(2002) 4 RAJ 670 :
(2002) 2 Arb LR 497 (Gau).
69. Joseph Vilangadan v. FACT,

AIR 1998 Ker 99 [
LNIND 1997 KER 355 ]; Bhopal Singh v. Nagendra Narain Singh,
(2001) 4 RAJ 397 (Pat), appeal maintainable only when it comes within any of the
clauses of the section.
70. The provisions of the Act are applicable to Sikkim also and, therefore, an appeal against rejection of an
application for setting aside an award was allowed, Asharam Agarwala v. Union of India,
AIR 1982 NOC 310 (Sikkim), High Court of Judicature (Jurisdiction and Power)
Proclamation of 1955, S. 6(b); Article 371F(
Constitution of India ,k), (n); State of Karnataka v. Naveena Constructions,
(1995) 2 Arb LR 556 (Karn). Mohanlal Dungarmal Futnani v. Vishanji Dungarmal
Futnani,
AIR 2001 Cal 122 [
LNIND 2001 CAL 74 ], an order setting aside an award is appealable. Manager
Electric (DHP) v. Om Raj Manhas, AIR 2001 J&K 59, an order refusing to set aside an award, appealable; Chief
Engineer & B.P.D.P./R.E.O., Ranchi v. Scoot Wilson Kirpatrick India Pvt. Ltd.,
(2006) 4 Arb LR 241 , 246 :
(2007) 1 RAJ 63 :
(2006) 13 SCC 622 [
LNIND 2006 SC 947 ].
71. State of Bihar v. Khetan Bros,

AIR 1984 Pat 74 : 1984 BLJR 136.
72. Sachidananda Misra v. Executive Engineer,

AIR 1975 Ori 203 [
LNIND 1975 ORI 10 ]: 41 Cut LT 454. There is no separate provision for remission
in the 1996 Act.

(2009) 2 Arb LR 530 , 535 (Del-DB), claims arising out of award were set aside on
the ground that the reasons given were not supportable in law, instead of an appeal under S. 39 (1940 Act) the party
made an application under S. 16 (1940 Act), held not allowed.
74. Nilkantha S. Ningashetti v. Kashinath S.

Ningashetti,
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] :
AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 669 para 14; Ram Behari Mehrotra v. Smarts (Pvt.). Ltd.,
AIR 1973 Del 133 [
LNIND 1972 DEL 157 ]; Roshan Lal Budh Prakash Sethi & Co. v. State of J&K, AIR
1975 J&K 46.
75. Nilkantha S. Ningashetti v. Kashinath S.

Ningashetti,
AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at pp. 667, 668, 669 paras 5 and 14;
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] ; Madan Lal v. Sunder Lal,
Navneet Krishn
Page 44 of 70
AIR 1967 SC 1233 [

LNIND 1967 SC 67 ]:
(1967) 3 SCR 147 [
LNIND 1967 SC 67 ]; Girdhar Prasad v. Ambika Prasad Thakur,
AIR 1969 Pat 218 : (1969) 17 BLJR 1096; Balakrishna Naidu K.P.V. v. Karamuthu
Sivalingam Chettiar,
AIR 1956 Mad 395 : (1956) 1 MLJ 293 (it is submitted that the decision to the
contrary in Holaram Verhomai v. Governor General of India,
AIR 1947 Sind 145 and Mafizuddin v. Alimuddin,
AIR 1950 Assam 191 stand overruled). The Orissa High Court in State of Orissa v.
Shanti Devi,
AIR 1992 Ori 144 : (1992) 2 Arb LR 226 did not allow a party to challenge the
validity of award of interest for the first time in appeal when no such challenge was presented before the trial court.;
Shiv Kumar Agarwala v. Jai Prakash Agarwala,
(2005) 3 Arb LR 201 , 206 :
AIR 2005 Pat 153 : (2005) 3 RAJ 580 :
(2005) 2 Pat LJR 416 , objection petition filed only after 7 months without any
application for condonation of delay, furthermore objection petition left unpressed, lower court had no option but to
pronounce judgment as per award, held no appeal maintainable against such judgment following
Madan Lal v. Sunder Lal,
AIR 1967 SC 1233 [
LNIND 1967 SC 67 ]:
(1967) 3 SCR 147 [
LNIND 1967 SC 67 ].
76. Union of India v. Radha Krishna Seth,

(2006) 2 Arb LR 441 , 446 (All-DB), no appeal lies against order refusing
condonation of delay and dismissing objections as time-barred, such order can be challenged only in revision; State of
Maharashtra v. Ramdas Construction Co.,
(2007) 2 RAJ 492 (Bom), order passed under S. 34(3) cannot be appealed under S.
37 since it is limited to analysing the cause for delay and does not include a ruling on merits.
77. Prasad Gope v. Makhan Gope,

AIR 1969 Pat 307 ; Sashi Prasad v. Baleshwor Prasad Mandal,
AIR 1974 Pat 63 .
78. Indurthi Srinivasa Rao v. Indurthi Venkata N. Rao,

AIR 1963 AP 193 [
LNIND 1962 AP 102 ].
79. P. Mulji & Sons v. Keral Produce Exporting Co.,

AIR 1976 Ker 3 .
80. Swastika Scientific Engineering Co. v. Union of India,

AIR 1953 Punj 129 .
81. Gopal Das v. Kesar Singh, AIR 1966 J&K 133.
82. Punjab Small Industries and Export Corporation Ltd. v. Sardul Singh,
(1989) 1 Arb LR 239 :
AIR 1989 Punj 21 .
83. Kanpur Nagar Mahapalika v. Naraindas Haribansh,

AIR 1964 All 25 [
LNIND 1963 ALL 24 ]; P.K. Damodaran v. T.K. Bhaskaran
(1989) 1 Arb LR 46 (Ker), here the application for setting aside was dismissed
Navneet Krishn
Page 45 of 70
being out of time. The order being appealable, a revision petition was not maintainable in view of S. 115 (2)
CPC ; Hind Construction Co. v. Dwarika Nath Sen,
AIR 1953 Cal 289 [
LNIND 1952 CAL 19 ], objections dismissed, amounts to refusal to set aside, hence
appealable, application was also not filed within 30 days. An appeal would lie outside the
Arbitration Act if it could be established that the reference itself was invalid.
84. Ratanji Virpal & Co. v. Dhirajlal Manilal,

AIR 1942 Bom 101 : ILR (1942) Bom 452; Najm-ud-Din Ahmed v. Albert Puech,
ILR (1907) 29 All 584 ; Maharaja Jaymangal Singh Bahadur v. Mahun Ram, 23
Suth WR 429 (PC); Brahim Ali v. Mohsin Ali,
ILR (1896) 18 All 422 (FB).
85. Ram Chander v. Jamna Shankar,

AIR 1962 Raj 12 [
LNIND 1960 RAJ 122 ]:
ILR (1961) 11 Raj 76 [
LNIND 1960 RAJ 122 ]; Koduri Krishnamma v. Kodri Chennayya,
AIR 1949 Mad 276 [
LNIND 1948 MAD 110 ]: (1948) 2 Mad LJ 365.
86. Nawab Syed Hasan Ali Khan v. Askari Begum,

AIR 1959 All 777 [
LNIND 1959 ALL 54 ].
87. Jagdish Mahtao v. Sundar Mahto, ILR 27 Pat 86 :

AIR 1949 Pat 393 .
88. Makeshwar Misra v. Laliteshwar Parsad Singh,

AIR 1967 Pat 407 : ILR 46 Pat 411 (FB).
89. Baijuri Ramkistam v. Bhupati Somalingam,

AIR 1962 AP 492 [
LNIND 1962 AP 6 ].
90. Ashlok Singh v. Jogeshwar Singh,

AIR 1981 NOC 68 Pat :
1980 BLJR 585 .
91. M.A. Mohd. Amanulla v. B.R. Chandrashekar,

(2005) 1 RAJ 47 (Kar).
92. Chouthmal Jivrajjee Poddar v. Ramchandra Jivrajjee Poddar,

AIR 1955 Nag 126 : ILR (1955) Nag 321; Tulsiram v. Jhanaklal,
AIR 1936 Nag 197 : ILR 1936 Nag 44; Union of India v. Col. L.S.N. Murthy,
(2006) 3 Arb LR 552 , 557 :
(2006) 4 Andh LT 256 (AP-DB).
93. Maung Tun U. v. Meung P. Shok,

AIR 1923 Rang 199 ; Shivlal Prasad v. Union of India,
AIR 1975 MP 40 ; Rajasthan State Road Transport Corporation v. Indag Rubber
Ltd.,
(2006) 3 Arb LR 567 , 572- 574 :
Navneet Krishn
Page 46 of 70
(2006) 3 RAJ 286 , issue of fact cannot be raised at the stage of appeal against
decision on a challenge to an award.
94. Roshan Lal Budh Prakash v. State of J&K,

AIR 1975 JK 46 ; Maung Tun U. v. Maung P. Shok,
AIR 1923 Rang 199 ; Shivlal Prasad v. Union of India,
AIR 1975 MP 40 ; Manganese Ore (India) Ltd. v. Ram Bahadur Thakur Ltd., 2006
(Suppl) Arb LR 315, 318 :
(2007) 5 RAJ 484 :
(2006) 4 Bom CR 152 [
LNIND 2006 BOM 482 ] (Bom-DB). See further Commentary under S. 34 under the
heading “Objection not raised before Appellate Court”.
95. V. Anjaneya Setty v. M.G. Brothers,

AIR 1981 AP 250 [
LNIND 1981 AP 80 ]: (1981) 2 Ard LT 34.
96. V. Anjaneya Setty v. M.G. Brothers,

AIR 1981 AP 250 [
LNIND 1981 AP 80 ]: (1981) 2 Ard LT 34.
97. State of Orissa v. Consolidated Construction & Co.,

AIR 1981 Ori 166 : (1981) 52 Cut LT 63; Union of India v. Radhanath Nanda,
AIR 1961 Ori 143 ; Krishna Bhagya Jal Nigam Ltd. v. G. Harishchandra Reddy,
2005 (Suppl) Arb LR 470, 479 :
(2005) 2 Kant LJ 409 (Kar-DB)upheld on appeal in Krishna
Bhagya Jala Nigam v. G. Harishchandra Reddy,
(2007) 1 Arb LR 148 :
AIR 2007 SC 817 [
LNIND 2007 SC 34 ]:
(2007) 1 RAJ 537 :
(2007) 2 SCC 720 [
LNIND 2007 SC 34 ], where a party throughout contested award only on merits and
did not protest lack of jurisdiction of the tribunal at any stage, it could not do so for the first time in an appeal under S.
37(1)(b).
1. Union of India v. Des Raj Nagpal, 2005 (Suppl) Arb LR 386, 390 (J&K) award contested
throughout on merits, the plea of failure to provide reasons could not be raised at the appellate stage.
2. State of Orissa v. Kirtan Charan Mohanty,

AIR 1983 Ori 170 : (1983) 1 Civ LJ 368.
3. Premchand Manickchand v. Fort Gloster Jute Manufacturing Co. Ltd.,

AIR 1959 Cal 620 [
LNIND 1958 CAL 255 ]: 64 CWN 103.
4. Sunder Dass & Co. v. Jind Cooperative Sugar Mills Ltd., 2007 (Suppl) Arb LR 567, 576 :
(2008) 5 RAJ 120 (P&H), improper for appellate court to readjudicate validity of
appointment of arbitrator, if such challenge is already rejected by appointing court as well as revisional court.
5. Shree Vinayak Cement v. Cement Corporation of India, 2007 (Suppl) Arb LR 437, 440 :
(2007) 4 RAJ 253 :
(2007) 142 DLT 385 (Del-DB), court refused to interfere with arbitrator's award
upholding invocation of bank guarantee against partnership firm.
Navneet Krishn
Page 47 of 70
6. Jayantilal Keshavlal Dave v. Surendra,

AIR 1956 Nag 245 ; an order of remission which also had the effect of setting aside
was held to be appealable, Duryodhan Mohapatra v. Executive Engineer,
AIR 1984 Ori 217 [
LNIND 1984 ORI 79 ];
1984 Arb LR 60 .
7. Govt. of TN v. Nilakantan & Brothers Construction Pvt. Ltd., 2005 (Suppl) Arb LR 577,
582- 583 :
(2005) 3 RAJ 286 (Mad-DB).
8. A passage in the judgment in Patel Purshottamdas Motil v. Patel Chhotabhai Motibhai, (1979) 20 Guj LR
918cited in Sundaram Finance Ltd. v. Govind Swarup Mittal,
AIR 1999 Guj 74 at 78 :
(1999) 1 Arb LR 460 .
9. Union of India v. Radha Krishna Seth,

(2006) 2 Arb LR 441 , 446
(2006) 3 AWC 2754 (All-DB), no appeal lies against order refusing condonation of
delay, challenge possible only in revision.
10. State of Maharashtra v. Ramdas Construction Co.,

(2007) 2 RAJ 492 (Bom), order passed under S. 34(3) cannot be appealed under S.
37 since it is limited to analysing the cause for delay and does not include a ruling on merits.
11. Voltas Ltd. v. Central Stores, (1980) Mad LJ 539. Under the
Arbitration and Conciliation Act, 1996 , by virtue ofs. 36, an award is a decree in itself.
12. Union of India v. Ashok Tshering Lama,

AIR 1983 Sikkim 19 .
13. Union of India v. Aradhana Trading Co.,

(2002) 1 Arb LR 691 :
AIR 2002 SC 1626 [
LNIND 2002 SC 248 ]:
(2002) 2 RAJ 1 :
(2002) 4 SCC 447 [
LNIND 2002 SC 248 ].
14. Natwarlal Shamaldas & Co. v. MMTC,

(2002) 3 RAJ 505 : (2002) 5 AD (Del) 229.
15. Uttar Pradesh Co-operative Sugar Factories Federation Ltd. v. P.S. Misra,
(2003) 2 RAJ 498 (All—DB) :
AIR 2003 All 123 [
LNIND 2002 ALL 1179 ]:
(2003) 2 Arb LR 102 .
16. Hindustan Copper Ltd. v. Nicco Corporation Ltd.,

(2009) 3 Arb LR 16 :
(2009) 6 SCC 69 [
Navneet Krishn
Page 48 of 70
LNIND 2009 SC 2981 ] :

(2009) 7 JT 475 .
17. Hindustan Copper Ltd. v. Nicco Corporation Ltd.,

(2009) 3 Arb LR 16 , 19 :
(2009) 6 SCC 69 [
LNIND 2009 SC 2981 ] :
(2009) 7 JT 475 , per Mukundakam Sharma J.
18. Mahanagar Telephone Nigam Ltd. v. Unibros,

(2009) 2 RAJ 449 :
(2009) 156 DLT 774 .
19. Konkan Railway Corpn. Ltd. v. Rani Construction P. Ltd.,

AIR 2002 SC 778 [
LNIND 2002 SC 84 ]:
(2002) 1 RAJ 165 :
(2002) 2 SCC 388 [
LNIND 2002 SC 84 ] ; Orissa Oil Industries Ltd. v. Tribal Co-operative Marketing
Development Fedn. of India Ltd.,
(2002) 3 RAJ 587 :
(2002) 98 DLT 659 (Del), no appeal where plea of lack of jurisdiction under S. 16 is
rejected. Narayan Prasad Lohia v. Nikunj Kumar Lohia,
AIR 2003 SC 1065 [
LNIND 2003 SC 107 ]:
(2003) 2 SCC 251 [
LNIND 2003 SC 107 ] :
(2003) 1 RAJ 162 :
(2003) 1 Arb LR 332 , all the grounds raised in appeal should be considered. Scan
Organics Ltd. v. Mukesh Babu Financial Services,
(1998) 3 RAJ 240 :
(1998) 1 Arb LR 658 (Bom); Manish Mittal v. Mahesh Chand,
(2006) 2 RAJ 454 :
(2006) 131 DLT 142 (Del), declining to hear counter-claim on the ground of lack of
jurisdiction, held to be an order under S. 16 (3), and hence appealable under S. 37.
20. I.T.I. Ltd. v. Himachal Futuristic Communications Ltd.,

(2008) 2 Arb LR 100 :
(2008) 3 RAJ 455 (Del); Triad India v. Tribal Cooperative Marketing and
Development Federation of India Ltd.,
(2007) 1 Arb LR 327 , 331- 332 :
(2007) 1 RAJ 619 :
(2007) 138 DLT 104 (Del).
21. Jain Studios Ltd. v. Maitry Exports Pvt. Ltd.,

(2008) 1 RAJ 698 :
(2007) 145 DLT 490 (Del), plea that a certain claim barred by limitation was
rejected by the arbitrator, held, appeal under S. 37(2)(a) was not possible, only option open is to challenge the award
under S. 34 after final adjudication upon the matter.
22. National Thermal Power Corporation Ltd. v. Siemens Atkiengesellschaft,

(2007) 1 Arb LR 377 , 386- 387 :
AIR 2007 SC 1491 [
LNIND 2007 SC 263 ]:
(2007) 2 RAJ 1 :
(2007) 4 SCC 451 [
LNIND 2007 SC 263 ], refusal to arbitrate on counter-claim based not on lack of
jurisdiction, but on lack of existence of dispute, held such order not appealable under S. 37.
Navneet Krishn
Page 49 of 70
23. See Commentary under S. 16 under the heading “Decision on Jurisdiction not an ‘interim award'” and
under S. 31 under the heading “Difference between ‘interim award’ and ‘decision on jurisdiction'”.
24. Roshanlal Thakur v. Kissenlal Kapoor, (1976) 2 Cut WR 545 : (1976) 42 Cut LT 687.
25. Selvarayan Samson v. S. Amlorpavandam, 55 Mad LJ 262 :

AIR 1928 Md 969 (2); Nilmoni Pal v. Dakshineswar Pal, 36 CWN 1069 :
AIR 1932 Cal 713 ; Hari Dass v. Budhu,
AIR 1956 HP 42 .
26. Abdul Rahman Khan v. Basanti Rai,

AIR 1955 All 678 [
LNIND 1955 ALL 74 ]: (1955) All LJ 504; Mathura Prasad Gupta v. Manohari Kuer,
AIR 1968 Pat 454 : LR 47 Pat 311; Sheo Charan Mahto v. Sanichar Mahto,
AIR 1948 Pat 207 : ILR 26 Pat 115; Mathulla Mathulla v. Thomas George,
AIR 1962 Ker 320 [
LNIND 1961 KER 326 ]; State of Kerala v. T.A. Thomas,
AIR 1973 Ker 262 [
LNIND 1973 KER 101 ]; Jagot Pandey v. Sarawan Pandey,
ILR (1925) 47 All 743 :
AIR 1925 All 404 ; Trailokhya Nath Banerjee v. Sukumar Bose, 44 CWN 1034 :
AIR 1941 Cal 202 ; Selvarayan Samson v. S. Amalopavandam, 55 MLJ 262 :
AIR 1928 Mad 969 [
LNIND 1928 MAD 36 ](2); Veeraswamy Chetty v. Varadiah Chetty,
AIR 1957 AP 493 : Bholanath Chatterjee v. Chandra Sekhar,
AIR 1950 Cal 53 ; Ishwar Dei v. Chhedu,
AIR 1952 All 802 [
LNIND 1952 ALL 23 ]: (1952) All LJ 403; Jay Kumar Jain v. Om Prakash,
AIR 1970 MP 119 [
LNIND 1969 MP 77 ]; Makhan Gope v. Prasad Gope,
AIR 1971 Pat 227 ; Brijendra Singh v. Buti Saha,
AIR 1962 MP 377 [
LNIND 1961 MP 33 ](FB); Amar Chand Sharma v. Muosabhai E. Peer Mohammad
AIR 1955 Hyd 213 ; Ariyur Mohd. Habeebur Rahman v. Ansuri Varamma,
AIR 1974 AP 113 [
LNIND 1973 AP 35 ]; P. Mulji & Sons v. Kerala Produce Exporting Co.,
AIR 1976 Ker 3 .
27. State of Orissa v. Govind Chowdhury,

AIR 1972 Ori 76 : 35 Cut LT 592.
28. Union of India v. B. C. Basu,

AIR 1983 Pat 25 at p. 26 :
1983 Arb LR 145 :
1982 BLJR 506 .
29. Fatehchand Murlidhar v. Juggilal Kamlapat,

AIR 1955 Cal 465 [
LNIND 1954 CAL 128 ]: 59 Cal WN 223 (DB)See also Sundaram
Finance Ltd. v. Govind Swarup Mittal,
AIR 1999 Guj 74 : (1999) 2 RAJ 346 :
(1999) 1 CLT 784 :
(1999) 1 Arb LR 460 , distinguishing appeal against an order on an application for
setting aside from a disposal of the application on merits.
Navneet Krishn
Page 50 of 70
30. Foods, Fats and Fertilisers Ltd. v. Ramkishandas Radhakishan,

AIR 1986 MP 233 [
LNIND 1985 MP 269 ]:
1985 Arb LR 541 . The court considered among other authorities Rajendra Dayal v.
Govind,
1970 MP LJ 322 where the DB held that the High Court had ample power to set
aside the decision of the lower court in exercise of its revisional jurisdiction particularly when the illegality was patent. It
was an appeal which was allowed by the High Court inspite of the fact that the lower court had held the award to be
non-existent.
31. Hindustan Construction Company Ltd. v. Tamil Nadu Electricity Board,

(2005) 1 Arb LR 41 , 52 (Mad-DB), court interfered with non-speaking award since it
was conflicting with several of the contractual provisions agreed upon by the parties.
32. Archcon v. Sewda Construction Co.,

(2005) 2 Arb LR 1956 :
AIR 2005 Gau 58 [
LNIND 2004 GAU 435 ]:
(2005) 1 RAJ 676 (Gauh).
33. Grid Corporation of Orissa Ltd. v. AES Corpn.,

(2005) 1 Arb LR 115 , 120- 123 :
(2005) 1 RAJ 163 (Ori-DB).
34. S.B.P. & Co. v. Patel Engineering Ltd.,

(2005) 3 Arb LR 285 , 323 :
AIR 2006 SC 450 [
LNIND 2005 SC 851 ]:
(2005) 3 RAJ 388 :
(2005) 8 SCC 618 [
LNIND 2005 SC 851 ].
35. Government of NCT of Delhi v. Shakuntala Gupta, 2007 (Suppl) Arb LR 55, 56 :
(2009) 1 RAJ 127 (SC).
36. Dowell Leasing & Finance Ltd. v. Radheshyam B Khandelwal,

(2008) 1 Arb LR 512 , 518 :
(2008) 4 RAJ 101 :
(2008) 1 Bom CR 768 [
LNIND 2007 BOM 950 ] (Bom-DB), writ challenging the Bombay Stock Exchange
Bye-Law 274-A as unconstitutional and ultra vires the 1996 Act, held maintainable.
37. Municipal Corporation of Greater Bombay v. Patel Engineering Co. Ltd.,

AIR 1994 Bom 80 [
LNIND 1993 BOM 657 ]:
(1994) 1 Arb LR 359 .
38. Radhey Shyam Bansal v. Indian Farmers Fertilisers Co-operative Ltd.,

(2001) 2 RAJ 475 (Del—DB); Sharma Enterprises v. National Building Construction
Corpn. Ltd.,
(1998) 1 RAJ 9 :
(1998) 71 DLT 26 (Del), existence of a dispute between the parties is not a ground
for staying invocation, because it is an independent contract. Stay is allowed only if there was a fraud or a chance of
irretrievable injustice if encashment was allowed.
Navneet Krishn
Page 51 of 70
39. Iftikar Ahmad v. Syed Meeurban Ali,

AIR 1974 SC 749 [
LNIND 1974 SC 62 ]:
(1974) 2 SCC 151 [
LNIND 1974 SC 62 ]; S.B. Madhava & Co. v. Kapilla Textile Mills Co., CA No. 1094
of 1963 decided on 9.9. 1964 (SC) Santa Singh Govind Ram v. Kahan Singh Buta Singh,
AIR 1933 Lah 530 ; R.T. Perumal v. John Deavin,
AIR 1960 Mad 43 [
LNIND 1958 MAD 298 ]: (1960) 30 Comp Cases 340; Union of India v. Mohinder
Singh & Co.,
AIR 1971 JK 10 ; Zaral Bibi v. Shamsuddin Khan,
ILR (1946) Kar 21 ;
AIR 1946 Sind 141 ; State of U.P. v. Raishma Devi,
AIR 1974 All 257 ; State of West Bengal v. Dilip Kumar Saha,
AIR 1983 Cal 213 [
LNIND 1982 CAL 102 ].
40. Annada Prasad Dutt v. Jogesh Chandra Sen,

AIR 1914 Cal 497 ; Sriram v. Dinbandh, ILR 7 Cal 790; Vaish Brothers v. Union of
India,
(2009) 2 Arb LR 530 , 535 (Del-DB).
41. George v. Vastian Souray, ILR 22 Mad 202; Zaral Bibi v. Shamsuddin Khan,
AIR 1946 Sind 141 : ILR (1946) Kar 21.
42. Subbiah v. Subramanin,

ILR (1931) Mad 479 ; Abdul Rahman v. Yar Mohammad, ILR 3 All 636; R.T.
Perumal v. John Deavin,
AIR 1960 Mad 43 [
LNIND 1958 MAD 298 ]; Bata Nand v. Ramchander,
AIR 1925 Lah 267 ; Union of India v. K.L. Bhalla,
AIR 1977 Del 82 [
(1976) 12 DLT 255 .
43. Louis Dreyfus & Co. v. Rajagopala Aiyer & Co.,

AIR 1923 Mad 222 .
44. N.D. Jaggi & Co. v. Gangaram Vishundas,

AIR 1924 Sind 13 .
45. Saya Pye v. U. Kundinnya, ILR 1 Rang 661 :

AIR 1924 Rang 47 .
46. Jayantilal Keshavlal Dave v. Surendra Gangsa Johrapurkar,

AIR 1956 Nagpur 245 .
582- 583 :
(2005) 3 RAJ 286 (Mad-DB).
48. Duryodhan Mohapatra v. Executive Engineer, Irrigation Division,

AIR 1984 Orissa 217 : 1984 Arb LR 60 (Ori).
Navneet Krishn
Page 52 of 70
588 :
(2005) 3 RAJ 286 (Mad-DB)following Ram Chandra Trading Co.
v. State of UP,
(2002) 10 SCC 506 :
(2001) 2 Arb LR 533 (SC); Iftikhar Ahmed v. Syed Meharban Ali,
AIR 1974 SC 749 [
LNIND 1974 SC 62 ]:
(1974) 2 SCC 151 [
LNIND 1974 SC 62 ] :
(1974) 3 SCR 464 [
LNIND 1974 SC 62 ] :
(1974) 6 UJ 257 and KK John v. Sate of Goa,
(2003) 3 Arb LR 325 :
(2003) 3 RAJ 324 :
(2003) 8 SCC 193 [
LNIND 2003 SC 807 ].
50. President of India v. Jadranska Slobodna Plovidba, (1992) 2 Lloyd's Rep. 274. For the
provisions of the 1996 Act see Ss. 66 to 71 under the heading “Powers of the court in relation to award”.
51. Everglade Maritime Inc. v. Schiffahrstgsellschaift Detlef Von Appen mBH, (1992) Lloyd's
Rep. 167 :
(1992) 3 All ER 851 :
(1993) 1 WLR 33 .

(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]at p. 266 para 6; (1962) All LJ I. The court held that an appeal
would lie only from orders mentioned in the section. A Division Bench of the Supreme Court in Appeal No. 43 of 1977
decided on March 11, 1982, Bhavnagar Salt and Industrial Works P. Ltd. v. Surendra Overseas Ltd., (unreported) held
that the Act applies for appeals under the section containing a list of appealable orders and a declaration that an appeal
shall lie only from the specified orders and from no others. In the case of Renusagar Power Co. v. General Electric Co.,
(1990) 1 Bom LR 561 , it was held that a right to file an appeal is a right created by
statute and it is permissible to legislate only a restricted right of appeal.
53. See in the context of S. 50 of the 1996 Act which is in pari materia to S. 37(1), the Supreme Courthas held
that appeals from an order of the CLB will be to the forum as specified under S. Section 10(1)(a)of the
Companies Act, 1956 ,Sumitomo v. CDC Financial Services (Mauritius) Ltd.,
(2008) 1 Arb LR 452 :
AIR 2008 SC 1595 : (2008) 2 RAJ 1 :
(2008) 4 SCC 91 [
LNIND 2008 SC 456 ] :
(2008) 142 Comp Cas 114 .
54. Pandey & Co. Builders Pvt. Ltd. v. State of Bihar,

(2006) 4 Arb LR 192 , 198 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ]on appeal from Pandey & Co. Builders Pvt.
(2006) 1 Arb LR 429 :
(2006) 2 RAJ 285 :
(2005) 4 Pat LJR 385 (Pat-DB).
Navneet Krishn
Page 53 of 70
55. Union of India v. Shri Vijay Chemical Works,

AIR 1976 Cal 209 [
LNIND 1976 CAL 43 ]:
(1976) 1 Cal LJ 409 [
56. Union of India v. Shri Vijay Chemical Works,

AIR 1976 Cal 209 [
(1976) 1 Cal LJ 409 [
57. Narain Das v. Co-operative Society,

AIR 1953 Punj 49 .
58. Powar and Powar v. C.B.C.I. Society for Medical Education,

AIR 1983 Kar 77 : (1982) Kant LJ 332.

(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ], approving Madhavdas Devidas v. Vithaldas
Vasudeodas,
AIR 1952 Bom 229 and R. Wright v. Governor-General-in-Council,
ILR (1948) 2 Cal 265 , overruling Mohindra Supply Co. v.
Governor-General-in-Council,
AIR 1954 Punj 211 (FB) ; Hanuman Chamber of Commerce v. Jassaram Hi ranand,
AIR 1948 Lah 64 ; Banwarilal Ramdeo v. Board of Trustees, Hindu College,
AIR 1949 EP 165 ; Mulchand Kevalchand Daga v. Kissindas, (1961) 2 Mad LJ 528
(FB) :
ILR (1661) Mad 803 (FB); Rayalseema Bank v. Tharigopala Reddy,
AIR 1961 AP 483 [
LNIND 1960 AP 205 ]; CREF Finance Ltd. v. Puri Construction Ltd.,
(2001) 4 RAJ 584 (Delhi), which order could be constituted as order passed on
appeal or in appeal, determination application before the arbitrator for impleadment of two parties, Rejectd as there
existed no arbitration agreement. First Appeal, dismissed as not maintainable by the Single Judge, Single Judge
analysed as to why he felt the appeal before him was not to be covered by Section 37(2), this was adjudication on
merits regarding maintainability, LPA preferred, preliminary objections as to maintainability, whether the order of
dismissal by Single Judge was passed in appeal or on appeal? The present appeal could be held to be a second
appeal which is not maintainable in the light of Section 37(3).
60. Fountain Head Developers v. Maria Arcangela

Sequeira,
(2007) 2 Arb LR 362 , 374 :
AIR 2007 Bom 149 [
LNIND 2007 BOM 484 ]:
(2007) 3 RAJ 582 :
(2007) 3 Bom CR 393 [
LNIND 2007 BOM 484 ] :
(2007) 3 Mah LJ 744 [
LNIND 2007 BOM 484 ] : (2007) 3 All MR 304relying on Union of
India v. Mohindra Supply Co.,
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]; Union of India v. Kuldeep Dhankar,
(2006) 4 Arb LR 81 , 86 :
(2007) 1 RAJ 91 (Raj-DB).
Navneet Krishn
Page 54 of 70
61. Hardayal Singh v. Joginder Singh,

(2009) 1 Arb LR 25 , 36 :
(2009) 2 RAJ 187 :
(2008) 156 DLT 28 (Del-DB), interpreting S. 39 of the 1940 Act, which is pari
materia to S. 37 of the 1996 Act; Rites Ltd. v. JMC Projects India Ltd.,
(2009) 2 Arb LR 64 (Del-DB), no appeal from an order possible under S. 8 even by
way of Letters Patent under S. 10 of the Delhi High Courts Act, 1966 and
S. 104 of the CPC following Canbank Financial Services Ltd. v.
Haryana Petrochemicals Ltd.,
(2008) 2 Arb LR 365 [
LNIND 2008 DEL 1105 ] :
(2008) 4 RAJ 394 (Del-DB), no appeal possible under Clause 10 of Letters Patent;
Shyam Telecom Ltd. v. ARM Ltd.,
(2008) 3 Arb LR 615 :
(2009) 2 RAJ 4 (Del-DB); Fountain Head Developers v. Maria Arcangela Sequeira,
(2007) 2 Arb LR 362 , 374 :
AIR 2007 Bom 149 [
LNIND 2007 BOM 484 ]:
(2007) 3 RAJ 582 :
(2007) 3 Bom CR 393 [
LNIND 2007 BOM 484 ] :
(2007) 3 Mah LJ 744 [
LNIND 2007 BOM 484 ] : (2007) 3 All MR 304relying on Union of
India v. Mohindra Supply Co.,
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]; P.S. Sathappan v. Andhra Bank Ltd.,
AIR 2004 SC 5152 [
LNIND 2004 SC 1053 ]:
(2004) 11 SCC 672 [
LNIND 2004 SC 1053 ] :
(2004) 8 JT 464 .
62. O.P. Malhotra, Law and Practice of Arbitration and Conciliation, 2006, 2nd edn at p. 1270.

(2006) 4 Arb LR 192 , 196 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ]on appeal from Pandey & Co. Builders Pvt.
(2006) 1 Arb LR 429 :
(2006) 2 RAJ 285 :
(2005) 4 Pat LJR 385 (Pat-DB).
64. Minalal Mundhra v. Anchi Devi,

AIR 1965 Pat 66 at pp. 71, 72; H.T. Vira Reddi v. Kistamma,
AIR 1969 Mad 235 [
LNIND 1968 MAD 7 ], Letters Patent Appeal allowed, the matter was under the
Hindu Marriage Act, 1955 . The problems caused by the requirement of converting the award into a
decree are not likely to arise under the
Arbitration and Conciliation Act, 1996 because an award is a decree in itself.
65. Deo Narain Singh v. Siabar Singh,

AIR 1952 Pat 461 .
Navneet Krishn
Page 55 of 70
66. Makhan Gope v. Prasad Gope,

AIR 1971 Pat 227 .
67. Prasad Gope v. Makhan Gope,

AIR 1969 Pat 307 .
68. Sagar Mull v. Hira Maharaj,

AIR 1925 Pat 164 at p. 165.
69. State of W.B. v. Gourangalal Chatterjee,

(1993) 3 SCC 1 [
LNIND 1993 SC 448 ] :
(1993) 2 Arb LR 95 referring to Union of India v.
Mohindra Supply Co.
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]:
(1962) 3 SCR 497 [
LNIND 1961 SC 295 ] :
(1993) 2 Arb LR 95 SC.
70. Musafir Ali v. Roysul Haq Chaudhury,

AIR 1950 Assam 114 .
71. Cref Finance Ltd. v. Port Construction Ltd.,

AIR 2001 Del 414 [
LNIND 2001 DEL 496 ]:
(2001) 60 DRJ 85 [
LNIND 2001 DEL 496 ], the appeal related to the situation encompassed by S. 16(2)
and (3). The observation of the single judge that he had considered the maintainability on merits and then passed the
order. The Court explained the concept of appeal at length.
72. J. Qumairjee & Co. v. III Addl. D.J., Dehradun,

AIR 2000 All 286 [
LNIND 2000 ALL 191 ].
73. Sundaram Finance Ltd. v. Govind Swarup Mittal,

(1999) 2 RAJ 346 :
AIR 1999 Guj 73 : (1999) 1 CLT 784 :
(1999) 1 Arb LR 460 .
74. P.T. Tirtamas Comesindo v. Delta International Ltd.,

(2001) 4 RAJ 12 (DB) :
(2001) 2 Arb LR 630 .
75. Thanikkudam Bhagwati Mills Ltd. v. Reena Ravindra Khona,

(2007) 3 Arb LR 161 , 166- 167 :
AIR 2007 (NOC) 2332 (DB) :
(2008) 1 RAJ 577 : (2007) 5 AIR Bom R 242 :
(2007) 4 Bom CR 21 [
LNIND 2007 BOM 658 ] : (2007) 4 All MR 504, dealing with re-filing of an incomplete
appeal (by virtue of non payment of court fees) directed against an order deciding upon the challenge against the
award.
Navneet Krishn
Page 56 of 70
76. Thanikkudam Bhagwati Mills Ltd. v. Reena Ravindra Khona,

(2007) 3 Arb LR 161 , 166- 167 :
AIR 2007 (NOC) 2332 (DB) :
(2008) 1 RAJ 577 : (2007) 5 AIR Bom R 242 :
(2007) 4 Bom CR 21 [
LNIND 2007 BOM 658 ] : (2007) 4 All MR 504, “judgment and the records regarding
the proceedings in the court made by the presiding officer thereof have to be preferred over the afterthought
submissions made on behalf of the party”.
77. Nirma Ltd. v. Lurgi Lentjes Energietechnik Gmbh,

(2002) 2 RAJ 627 :
AIR 2002 SC 3695 [
LNIND 2002 SC 30 ]:
(2002) 3 SCR 911 [
LNIND 2002 DEL 681 ] :
(2002) 5 SCC 520 [
LNIND 2002 SC 30 ] :
(2002) 6 JT 117 :
(2002) 5 Scale 10 [
LNIND 2002 SC 407 ] (1) :
(2002) 4 SLT 735 :
(2002) 5 Supreme 302 : (2002) 8 SRJ 227 :
(2002) 3 Arb LR 30 . The Court relied upon Shyam Sunder
Agarwal & Co. v. Union of India,
(1996) 1 Arb LR 153 :
AIR 1996 SC 1321 [
LNIND 1996 SC 60 ]:
(1996) 2 SCC 132 [
LNIND 1996 SC 60 ].
78. Shyam Sunder Agarwal & Co. v. Union of India,

(1996) 1 Arb LR 153 :
AIR 1996 SC 1321 [
LNIND 1996 SC 60 ], 1327-28 :
(1996) 2 SCC 132 [
LNIND 1996 SC 60 ], on appeal against the D.B. Judgment of the Gauhati High
Court to whom the matter was referred by the single judge, who disagreed with the earlier decision of that High Court in
Union of India v. D.S. Narula & Co.,
AIR 1992 Gau 13 [
LNIND 1990 GAU 8 ]:
(1992) 1 Arb LR 444 that no revision lies against the appellate judgment passed in
appeal under Section 39(2). The DB had held that the revision petition was maintainable.
79.
(1991) 2 SCC 548 [
LNIND 1991 SC 143 ].
80. Hari Shankar v. Rao Girdhari Lal,

AIR 1963 SC 698 [
LNIND 1961 SC 374 ]: 1962 Supp (1) SCR 933. Fresenius AG v. Dalmia Industries
Ltd., (1997) All LJ 2190 :
(1998) 1 RAJ 508 :
(1998) 1 Arb LR 6 , revision maintainable.
81. Syam Sunder Agarwal & Co. v. Union of India,

(1996) 1 Arb LR 153 :
AIR 1996 SC 1321 [
LNIND 1996 SC 60 ], 1327-28 :
(1996) 2 SCC 132 [
LNIND 1996 SC 60 ].
Navneet Krishn
Page 57 of 70
82. ITI Ltd. v. Siemens Public Communications Network Ltd.,

AIR 2002 SC 2308 [
LNIND 2002 SC 404 ]: (2002) 2 RAJ 380 :
(2002) 3 SCR 1122 [
LNIND 2002 SC 404 ] :
(2002) 5 SCC 510 [
LNIND 2002 SC 404 ] :
(2002) 2 Arb LR 246 .
83. J Qumairjee & Co. v. Third Additional DJ, Dehradun,

(2000) 1 RAJ 62 :
AIR 2000 All 286 [
LNIND 2000 ALL 191 ]: 2001 Supp Arb LR 25.
84. Bala Krisna v. Vasudeva,

(1917) 44 IA 261 : ILR 40 Mad 793 :
AIR 1917 PC 71 ; State of A.P. v. P. Lakshmu Reddy,
(1994) 1 Arb LR 402 (AP), revision allowed where the lower court failed to give
reasons for confirming the award. Shyam Sunder Agarwal & Co. v. Union of India,
AIR 1996 SC 1321 [
LNIND 1996 SC 60 ]:
(1996) 1 Arb LR 153 :
(1996) 2 SCC 132 [
LNIND 1996 SC 60 ], revisional jurisdiction not affected. The court followed
Hari Shanker v. Rao Girdhari Lal,
AIR 1963 SC 698 [
LNIND 1961 SC 374 ]: (1962) Supple (1) SCR 933; State of A.P. v. P. Lakshuma
Reddy,
(1994) 1 APLJ 89 , revision available where appeal does not lie. Also to the same
effect, Raghunatharaju Kasim Khan,
(1966) 2 An WR 481 ; Union of India v. Prahallad Moharana,
AIR 1996 Ori 19 [
LNIND 1995 ORI 30 ]: 1996 (Supp) Arb LR 267.
85. Union of India v. Mullick Harbans Lal & Co.,

(1993) 1 Arb LR 121 (Gau).
86. Shambhu Dayal v. Basdeo Sahai,

AIR 1970 All 525 : 1970 All LJ 297 (FB).
87. Ghulam Khan v. Muhammad Hassan,

ILR (1901) 29 Cal 167 (PC).
88. Mohd. Akbar Khan v. S. Attar Singh,

AIR 1945 PC 170 : 49 CWN 802.
89. Mohd. Akbar Khan v. S. Attar Singh,

AIR 1945 PC 170 : 49 CWN 802.
90. Union of India v. Mullick Harbans Lal Co.,&

AIR 1992 Gau 103 [
LNIND 1991 GAU 53 ]:
(1993) 1 Arb LR 121 (Gau—DB) which overruled a single bench decision in Union
of India v. D.S. Narula & Co.,
Navneet Krishn
Page 58 of 70
AIR 1992 Gau 13 [

LNIND 1990 GAU 8 ]: (1991) Gau LJ 400 and followed Tirath
Singh v. Isher Singh,
AIR 1948 Lah 50 ; L. Charan Das v. Gur Saran Das,
AIR 1945 All 146 and Lal Chand v. Dev Raj,
AIR 1951 Pepsu 115 .
91. Harbhans Dat v. Ladli Saran,

AIR 1933 Oudh 547 ; Hassomal Villaitrai v. Kisin Chand Chatomal,
AIR 1936 Sind 172 ; Savarala Venkata Subhiah v. Kumar Ramiah,
AIR 1935 Mad 184 [
LNIND 1934 MAD 264 ]; Lakshmamma v. Gorle Appadu,
AIR 1932 Mad 157 ; Dabiruddin v. Amina Bibi,
AIR 1935 Mad 475 .
92. Khalsa Brothers Agency v. Hariram Sriram & Co.,

AIR 1924 Sind 29 ; Lodha Ram v. Rala Ram,
AIR 1928 Lah 730 .
93. Achiram Bibi v. Babur Ali Supui,

(1944) 1 Cal 619 : 79 Cal LJ 123.
94. Puranam Venkata Lakshmamma v. T. J. Ratnam,

AIR 1968 AP 33 [
LNIND 1966 AP 146 ]; Pratap Chandra Biswas v. Union of India,
AIR 1956 Assam 85 .
95. Narain Bhawu v. Dewaji Bhawu,

AIR 1945 Nag 117 : ILR (1945) 323.
96. D.B. Das v. Dayalal & Sons,

AIR 1933 Rang 38 .
97. Velchand Chhaganlal v. Lieut Liston, ILR 38 Bom 636-638 : 16 Bom LR 517 :
AIR 1914 Bom 123 (2).
1. Anisminic Ltd. v. Foreign Compensation Commission,

(1969) 2 AC 147 , 171, 210 :
(1969) 2 WLR 163 . The court said that acting in excess of what was agreed was
an error going to the root of his jurisdiction because he asked himself the wrong question, disregarded the contract and
awarded in excess of his authority. In many respects the award flew in the face of the provisions of the contract to the
contrary. Cited by the Kerala High Court in State of Kerala v. V.P. Jolly, AIR 1992 Ker at 193 :
(1992) 1 Arb LR 313 . Also citing Mustill and Boyd's Commercial Arbitration (2nd
edn.) Halsbury's Laws of England, Vol II, 4th edn.
2. Pearlaman v. Keepers and Governors of Harrow School,

(1979) QB 56 , 70 :
(1988) 3 WLR 736 .
3. Hindustan Steel Works Construction Ltd. v. G. Sreenivasulu Reddy & Co.,

AIR 1982 Cal 301 [
LNIND 1982 CAL 36 ]. The provisions about umpire and extension of time have
Navneet Krishn
Page 59 of 70
been deleted from the

4. Re. A Company V.,

(1980) 2 WLR 241 at pp. 243- 224.
5. Hari Shankar v. Amroati,

AIR 1944 Lah 280 : 46 PLR 108.
6. Kotha Appa Rao v. M. Mohammad Haneef,

AIR 1949 Mad 256 [
LNIND 1948 MAD 186 ]; U. Ba Thein v. U. P. Mya,
AIR 1938 Rang 307 : Velu Pillay v. Appusami Pandaram, (1910) 21 Mad LJ 444 : 9
IC 197 (Mad); T. L. Rangiah Chetty v. T. Govindasami Chetty,
AIR 1922 Mad 179 : ILR 45 Mad 466 : 71 IC 266; Eusuf Rowther v. David Rowther,
AIR 1951 Mad 658 [
LNIND 1950 MAD 194 ](1) : (1951) 1 Mad LJ 93; Ghulam Mustafa v. Halima Bibi, 21
IC 298 (Lah); Sohamari Bai v. Chatta Ram,
AIR 1914 Lah 313 : 23 IC 591; Panduranga v. Amrit Rao,
AIR 1931 Nag 112 ; Udit Singh v. Ram Lakhan Singh,
AIR 1933 All 313 ; Shri Chand v. Mohan Singh,
AIR 1964 Pat 509 .
7. Veeravalli Perayya v. Sukhavasi Chenchu Subba Rao,

AIR 1961 AP 159 [
LNIND 1960 AP 117 ].
8. Parmeswar Yadav v. Misri Lal Yadav,

AIR 1974 Pat 67 .
9. Srikisin Rochumal v. Relumal Pariomal,

AIR 1916 Sind 79 .
10. Ganga Narain Ghose v. Ram Chand Ghose, 20 Suth WR 311 : 12 BLR 48.
11. Bankey Lal v. Chotey Miayan Abdul Shakur,

AIR 1931 All 453 : ILR 53 All 672.
12. Rangasami v. Muthusami, ILR 11 Mad144; Man Ram v. Ram Asrey,

AIR 1921 Oudh 148 (1); Subba Rao v. Ramalingayya,
AIR 1934 Mad 619 at p. 620; Thakur Singh v. Kandhai,
AIR 1935 All 852 : (1935) All LJ 986; Venkata Ramayya v. Papayya,
AIR 1943 Mad 718 [
LNIND 1943 MAD 76 ]: (1943) 2 Mad LJ 152; Sohan Lal v. Munna Lal,
AIR 1921 Oudh 154 (1) : 24 OC 34.
13. Jaikishen v. Ram Lal Gupta,

AIR 1944 Lah 398 : 46 PLR 232.
14. D.B. Das v. Dayalal & Sons,

AIR 1933 Rang 38 ; Betana v. Kedarnath,
Navneet Krishn
Page 60 of 70
AIR 1917 Oudh 240 : 3 Oudh LJ 583; Juggubandhu v. Chand Mohan, 22 CLJ 237 :
AIR 1916 Cal 806 .

AIR 1970 All 525 (FB) at p. 534 : 1970 All LJ 297.

AIR 1970 All 525 (FB) at pp. 534, 535 : 1970 All LJ 297. overruling
Saraswati v. Wali,
AIR 1935 All 456 .
17. Pandurang Dhondi v. Maruti Hari Jadhav, AIR,

1966 SC 153 :
(1966) 1 SCR 102 [
LNIND 1965 SC 151 ].
18. P.S. Abdulla v. Director, Forest Research Institute, (1981-82). The Arbitration Journal
193.
19. Kesho Lal Ram Dayal v. Laxman Ram,

AIR 1940 Nag 386 : ILR (1940) Nag 659.
20. Kesho Lal Ram Dayal v. Laxman Ram,

AIR 1940 Nag 386 : ILR (1940) Nag 659.
21. Hussain Baksh v. Lachhman Das Mathura Das,

AIR 1922 All 69 : 22 All LJ 125; Ganga Sahai v. Baldeo Singh,
AIR 1922 All 64 : 20 All LJ 117. There is no power under the
Arbitration and Conciliation Act, 1996 for superseding reference.
22. R.N. Rice Mills v. State of Orissa,

AIR 1959 Ori 4 [
LNIND 1958 ORI 29 ]:
ILR (1958) Cut 348 [
23. G. Martirosi v. Subramaniam Chettiar, 54 Mad LJ 49 :

AIR 1928 Mad 69 [
LNIND 1927 MAD 79 ](FB).
24. Union of India v. South India Corporation,

AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh LWR 198.
25. Mohammad Yaqub Khan v. Sirajul Haq, (1949) All LJ 288 :

AIR 1949 All 771 .
26. Bawa Gangaram v. Keshavdas Dewandas,

AIR 1937 Sind 174 : 39 Sind LR 478; Parsram Gangandas v. Topandas Dholandas,
AIR 1928 Sind 81 : 21 Sind LR 253.
Navneet Krishn
Page 61 of 70
27. Charan Das v. Gur Saran Das, (1945) All

77 LJ
:
AIR 1945 All 146 : ILR
(1945) All 102 ; See, however, State of Uttar Pradesh v. Abdul Aziz,
AIR 1955 All 673 [
28. Arjuna Padhana v. Nakula Choudhury,

AIR 1953 Ori 75 .
29. Chandra Narain Chowdhury v. Godavari,

AIR 1972 Pat 340 .
30. Takhitram v. Kishinchand,

ILR (1940) Kar 34 :
AIR 1940 Sind 190 : 190 IC 883.
31. Takhiram Tulsidas v. Kishinchand Changomal,

AIR 1940 Sind 190 : 190 IC 883.
32. Bhikaial Girdharilal v. Achratlal Lallubhai, 27 Bom LR 423 :

AIR 1925 Bom 341 ; Lakshmamma v. Gorle Appadu, 61 Mad LJ 761 :
AIR 1932 Mad 157 .
33. Krishna Behari v. Mohammad Ismail,

AIR 1933 Oudh 327 .
34. Achiran Bibi v. Babur

Ali,
ILR (1944) 1 Cal 619 :
AIR 1945 Cal 156 : 79 Cal LJ 123; Ghulam Jilani v. Mohd. Hassan, LR 29 IA 51 :
ILR 29 Cal 167; Muhammad Abbas v. Najju Khan,
AIR 1936 Oudh 150 .
35. Ghulam Khan v. Muhammad Hasan,

ILR (1901) 29 Cal 167 at p. 169 : LR 29 IA 51.
36. Union of India v. South India Corporation

AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh WR 198.
37. Manakchand v. Shiv Kishen,

AIR 1951 Ajm 23 ; Radha Krishan v. Natmal Bubna,
AIR 1963 Raj 193 [
LNIND 1962 RAJ 147 ]:
ILR (1963) Raj 264 ; Kunta Malla Reddy v. Soma Srinivas Reddy,
AIR 1978 AP 289 [
LNIND 1977 AP 136 ]: (1978) 1 Ardh WR 334: State of Punjab v. Rajinder Pal Garg,
2006 (Suppl) Arb LR 531, 532 :
(2007) 5 RAJ 6 (P&H), order dismissing objections against award held appealable,
consequently, revision cannot be directly preferred against such order without first resorting to an appeal.
Navneet Krishn
Page 62 of 70
38. Phool Chand v. Mool Chand,

AIR 1940 Oudh 405 ; Zaral Bibi v. Shamsuddin Khan,
AIR 1946 Sind 141 : ILR
(1946) Kar 21 . Proceedings under Ss. 14 to 17, 20, 21, 32- 34 of the
Arbitration Act , 1940 were not in the nature of suits for the purposes of revisional jurisdiction,Jupiter
Chit Fund P. Ltd. v. Dwarika Dhish Dayal,
AIR 1980 All 77 : (1979) 5 All LR 380.
39. Pritam v. Murti Mari Gugga Pir Mandir, AIR 1992 P&H 167 :
(1992) 2 Arb LR 213 .
40. Lakme Ltd. v. Plethic Pharl Ltd.,

(2003) 4 RAJ 649 (MP); Vishnu Kumar Gupta v. Union of India,
(2001) 1 Arb LR 34 :
(2001) 2 RAJ 171 (P&H) an application filed under S. 41 (b) (Act, 1940) read with
Order 39, Rule
s 1 and
2 ,
CPC , held, a revision was maintainable against the order dismissing the application under S. 41(b)
(1940) and not an appeal.
41. For text of Enlgish Act, 1996, see Appendix 31; For text of English Act, 1979,see
Appendix 32.
42. (1983) 2 Lloyd's Rep 419 : (1983) JBL 454.
43. For text of ICC Rules, see Appendix 54.
44. Editorial, (1983) JBL 454. Also noted at p. 152, (1984) JBL.
45. (1984) 2 Lloyd's Rep 77.
46. Egmatra AG v. Marco Trading Corpn., (1999) 1 Lloyd's Rep 862 :

1998 CLC 1552 .
47. National Westminister Bank plc v. Arthur Young Mc Clelland Moores & Co. (No. 2),
[1991] 3 All ER 21 :
[1991] 1 WLR 1256 :
(1990) 50 EG 45 .
48.
(1983) 3 All ER 428 : (1983) 133 New LJ 697 : (1983) JBL 484.
50.
(1973) 1 WLR 468 .
51. The judgment as summarised by Dr. Enid a Marshall, (1983) JBL 484.
Navneet Krishn
Page 63 of 70
52. Coppe-Lavalin SA NV v. Ken-Ren Chemicals & Fertilizers Ltd. (in

liq.),
(1994) 2 All ER 449 :
(1994) 2 LRC 526 (HL). Dictum of Kerr LJ in Bank Mellat v. Helliniki Techniki SA,
(1983) 3 All ER 428 at 438 disapproved.
53. Gladesmore Investments Ltd. v. Caradon Heating Ltd.,

(1994) EG 159 . The tribunal must, however, exercise its own judgment in the
matter and cannot delegate the making of the award to another person.
54. Parry and Hardy, Eec Law, 125 (2nd ed 1981) asserted that the arbitrator had such a power; Lipstein,
THE LAW Of EUROPEAN ECONOMIC COMMUNITY, 328 (1974), thought otherwise. This latter view was taken to be
supported by the decision of the European Court in Widow Vaassen Gobbels v. Beambtenfonds, Case 61/65
(1966) ECR 261 : (1966) C MLR 508.
55. (1983) 1 Lloyd's Rep 655, (1983) JBL 456, 482.
56. (1983) 1 Lloyd's Rep 659.
57. Bulk Oil (Zug) Ltd. v. Sun International Ltd.,

(1984) WLR 147 : (1984) JBL 251.
58. Ackner Lj at
(1984) 1 WLR 155 .
59. Punjab S.E.B. v. Amar Nath Agarwal Construction Co.,

(1988) 1 Arb LR 169 (P&H), the explanation that the delay was caused by a wrong
understanding and interpretation of law was not accepted; Cantonment Board, Gwalior v. KL Kochar & Co., 2006
(2007) 5 RAJ 333 (SC), failure of the advocate to inform about pending
proceedings, and problems in procuring certified copy of decree, are sufficient reasons for condonation of delay in filing
appeal against decree; Hardayal Singh v. Joginder Singh,
(2009) 1 Arb LR 25 , 36 :
(2009) 2 RAJ 187 :
(2008) 156 DLT 28 (Del-DB), appeal filed after delay of 35 years deserves
rejection.
60. R.C. Chaudhary v. Prestige Finance & Investment Co. P. Ltd.,

(1997) 1 Arb LR 146 (Delhi).
61. P.K. Ramachandran v. State of Kerala,

(1997) 7 SCC 556 [
LNINDORD 1997 SC 126 ] :
AIR 1998 SC 2276 [
LNIND 1997 SC 1239 ]:
(1997) 8 JT 189 .
62. Sharma G.C. v. University of Delhi,

AIR 1982 Del 227 [
LNIND 1981 DEL 254 ]:
(1982) 21 DLT 22 [
LNIND 1981 DEL 254 ]. The finding of the court that the arbitration agreement did
Navneet Krishn
Page 64 of 70
not exist had been held to be not appealable. Foods, Fats & Fertilizers Ltd. v. Ramkishandas,
(1985) Arb LR 541 (MP).
63. M.H. Tejani v. Kulsum Bai,

AIR 1967 Bom 300 [
(1996) 68 Bom LR 809 .
64. Chandra Narayan Chaudhury v. Godavari Chaudarian,

AIR 1972 Pat 340 : 1972 PL JR 502; see also Martirosi v.
Subramaniam Chettiar,
AIR 1928 Mad 69 [
LNIND 1927 MAD 79 ](FB) : 54 Mad LJ 49; Chimman v. Brij Mohan Das,
AIR 1943 Oudh 117 .
65. Devi Das Gulzari Lal v. Mitha Shah Ram Ditta Mall,
AIR 1943 Pesh 8 .
66. Uttam Singh Duggal & Co. Pvt. Ltd. v. Hindustan Steel Ltd.,
AIR 1982 MP 206 [
LNIND 1981 MP 101 ]:
1982 MPLJ 598 [
LNIND 1981 MP 101 ].
67. Union of India v. Consultants for Industries Ltd., 80 CWN 662.
68. Sharma G.C. v. University of Delhi,

AIR 1982 Del 227 [
LNIND 1981 DEL 254 ]:
(1982) 21 DLT 22 [
LNIND 1981 DEL 254 ].
69. Satya Narain Agarwal v. Baidyanath Mandal,

AIR 1972 Pat 29 .
70. Edakhavil Karimbuvalippil A. Haji v.

Kunhaammad, Thalakkal
AIR 1986 Ker 3 [
LNIND 1985 KER 96 ]. The court distinguished Martirozi v.
AIR 1928 Mad 69 [
LNIND 1927 MAD 79 ]where appeal was allowed under Letters Patent (Mad) Rules
and not under this Act; Abdulkhader Haji v. Kanhammed,
(1985) Arb LR 242 (Ker).
71. Edakhavil Karimbuvalippil A. Haji v.

Kunhaammad, Thalakkal
AIR 1986 Ker 3 [
AIR 1928 Mad 69 [
(1985) Arb LR 242 (Ker).
Navneet Krishn
Page 65 of 70
72. Edakhavil Karimbuvalippil A. Haji v. Thalakkal

Kunhaammad,
AIR 1986 Ker 3 [
AIR 1928 Mad 69 [
(1985) Arb LR 242 (Ker).
73. Edakhavil Karimbuvalippil A. Haji v. Thalakkal

Kunhaammad,
AIR 1986 Ker 3 [
AIR 1928 Mad 69 [
(1985) Arb LR 242 (Ker).
74. Pritam v. Murti Mari Ganga Pir Mandir, AIR 1992 P&H 167 :
(1992) 2 Arb LR 213 .
75. Entedee v. Union of India,

(2003) 3 RAJ 185 :
(2003) 2 Arb LR 465 (Cal—DB).
76. Loyal Textile Mills Ltd. v. Allen Bury Cotton Co.,

(1993) 1 Arb LR 518 (Mad), appeal under Clause 15, Letters Patent to Division
Bench allowed from the appellate decision of a single judge. The court conducted vast survey of authorities on the
subject.
77. Purshottamdas Ramgopal v. Ramgopal Hiralal, ILR 35 Bom 130 : 12 Bom LR 852; Union
of India v. South India Corporation (P.) Ltd.,
AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh WR 138.
78. Anant Ram Mangat Rai v. Gurdittamal Ram Pratap, ILR 7 Lah 327 :
AIR 1926 Lah 519 .
79. State of Gujarat v. Rajesh Builders,

AIR 1994 NOC 4 (Guj).
80. Rajasthan State Road & Development Corpn. Ltd. v. Skanksha Cementation India Ltd.,
AIR 2004 NOC 33 (Raj); Ram Chandra Trading Co. v. State of U.P.,
(2002) 10 SCC 306 , no appeal against remission.
81. Sukumar Chand Jain v. DDA,

(2000) 3 RAJ 173 (Del).
82. State of Gujarat v. Sheth Construction Co.,

(1990) 1 Arb LR 387 Guj; Rupam Pictures v. Dr. Brijmohan,
AIR 1977 Bom 425 [
LNIND 1976 BOM 270 ]:
1977 Mah LJ 298 [
Navneet Krishn
Page 66 of 70
LNIND 1976 BOM 270 ], the controversy involved in a revision application was in
essence an appeal under this part; it was, therefore, converted into an appeal against the order second appeal being
not allowed, treated as a revision; Union of India v. Sinam Gouri Singh,
AIR 1980 NOC 103 (Gau). Union of India v. Raj Bros.,
AIR 2000 Gau 132 [
LNIND 1999 GAU 294 ]:
(2000) 3 RAJ 344 :
(2003) 3 Arb LR 363 , an appeal against direction for filing of arbitration agreement.
Oil and Natural Gas Commission v. Essar Steel Ltd.,
(2001) 4 RAJ 174 (Guj), no substantial rights involved, appeal not allowed. State of
Karnataka v. Samarth Constructions,
(2001) 4 RAJ 63 (Kar), no objections filed within the prescribed time, decree in
terms of award granted, no error, appeal not maintainable. International Security & Intelligence Agency Ltd. v. MCD,
(2003) 1 RAJ 289 (Del—DB), an order failing to exercise jurisdiction in grant of
interest or an order declining grant of interest, not an order against which an appeal would lie.
83. Union of India v. Himco (India) Private

Ltd.
AIR 1965 Cal 404 [
LNIND 1962 CAL 136 ]; Sheo Parshad Radha Kishen v. Indore Malowa United Mills
Ltd.,
AIR 1917 Lah 261 .
84. Union of India v. M.S. Grewal & Co.,

AIR 1968 Cal 333 [
LNIND 1967 CAL 106 ]; Controller of Stores v. Kapoor Textile Agencies, AIR 1975
P&H 321 :
(1975) Punj LR 316 .
85. Fertilizer Corporation of India v. Domestic Engineering Installation,

AIR 1970 All 31 [
LNIND 1968 ALL 35 ]; Union of India v. Md. Usman,
AIR 1965 All 269 reversed on another point in Md. Usman v.
Union of India,
AIR 1969 SC 474 [
LNIND 1968 SC 292 ]:
(1969) 2 SCR 232 [
LNIND 1968 SC 292 ].
86. Nihal Chand v. Jai Ram,

AIR 1931 Lah 673 : 32 PLR 464.
87. Janki Prasad v. Bal Mukund,

AIR 1915 Oudh 172 .
88. Narain Prasad Ganesh Prasad v. Mohan Lal Sheodutt,

AIR 1951 Nag 297 .
89. Rewa Chand v. K.C. Kapoor,

AIR 1954 Ajmer 9 .
90. Indian Oil Corpn. Ltd. v. Vidyawati Construction Co. Ltd.,

(2001) 1 RAJ 267 :
AIR 2001 All 1 [
LNIND 2000 ALL 1255 ]:
(2001) 1 Arb LR 338 , the court had ordered only filing of the agreement and had not
yet passed an order of reference. Appeal not maintainable. U.P. State Electricity Board v. Ajay Ice & Cold Storage,
Navneet Krishn
Page 67 of 70
(1998) 1 RAJ 472 :

(1998) 1 Arb LR 241 (All), the court had only called upon parties to nominate their
arbitrators, no final order, no appeal.
91. Manak Chand v. Shiv Kishan,

AIR 1951 Ajm 23 ; Kunta Malla Reddy v. Soma Srinivasa Reddy,
AIR 1978 AP 289 [
LNIND 1977 AP 136 ]: (1978) 1 Ard WR 354; See also Sheo
Parshad Radha Kishen v. Indore Malwa United Mills Ltd.,
AIR 1917 Lah 261 [ Section 104 (1)
CPC 1908 ].
92. Jamia Millia Islamia v. Prithi Raj,

ILR 1956 Punj 954 :
AIR 1956 Punj 141 .
1. U.P. Co-operative Federation Ltd. v. Sundar Bros., (1966) Supp SCR 315 :
AIR 1967 SC 249 [
LNIND 1966 SC 124 ]. An appeal cannot be filed by a person who is neither a party
to the proceedings nor to the arbitration. Ashok Singh (Lt. Col.) v. Beant Singh & Sons,
(1997) 2 Arb LR 450 (J&K). Arvind Iron & Steel Co. v. SAIL,
AIR 2000 MP 247 : (2000) 3 RAJ 304 :
(2003) Arb LR 236 , an interim does not put an end to the rights of the parties. The
other party can put his claim in the main proceeding before the arbitrator.
2. Vishnu Kumar Gupta v. Union of India,

(1999) 3 RAJ 1 (J&K).
3. Ibid. ITC Ltd. v. Pradeep Anand,

(2000) 1 RAJ 59 :
(1999) 80 DLT 82 :
(1999) 2 Arb LR 568 (Del) validity of agreement not to be considered with stay
application but while considering objections. The matter came before the Division Bench in Pradeep Anand v. ITC Ltd.,
(2000) 4 RAJ 518 (Del—DB), it was said that the only thing that the court had to
see under S. 41(b) (1940 Act) at the time of granting an injunction was that such an injunction was for the purpose and
in relation to arbitration proceedings. The application was maintainable even in case of challenge to the validity of the
agreement as well as the award. The court also said in this case even in a petition under S. 33 (1940 Act) an
application under S. 41(b) (1940 Act) could be filed.
4. A Ramaswamy v. K. Ramamurthy,
(1999) 3 RAJ 80 (AP).
5. Inco Europe Ltd. v. First Choice Distribution,

(2000) 2 All ER 109 (HL). Their Lordships did not find any provision against such
appeal.

AIR 2002 Del 420 [
LNIND 2002 DEL 111 ]at 425 :
(2002) 95 DLT 42 :
(2002) 61 DRJ 495 [
LNIND 2002 DEL 111 ]a.
7. [At pp. 424-425].
Navneet Krishn
Page 68 of 70
8.
AIR 1999 Bom 118 [
LNIND 1998 BOM 1111 ]:
(2000) 1 MPLJ 33 .
9. At p. 118-119.
10.
AIR 1972 Del 108 [
(1972) 8 DLT 174 (FB).
11.
AIR 1962 SC 256 [
LNIND 1961 SC 295 ].
12. Jaisu Shipping Co. P. Ltd. v. Oilcorp Oil Marketing Corpn. Cochin,
AIR 2002 NOC 255 (Ker). The proper court fee of Rs. 10 was paid and, therefore,
nothing more could be demanded. To the same effect, Elsie Felix v. Larsen & Toubro Ltd.,
AIR 2004 Ker 184 [
LNIND 2003 KER 578 ]:
(2004) 2 RAJ 545 (Ker).
13. Modern Metal Industries v. Shanti Parolia,

(2004) 2 RAJ 690 (All).
14. Mulk Raj Chhabra v. New Kenil Worth Hotels Ltd.,

(2000) 1 Arb LR 675 :
AIR 2000 SC 1917 : (2000) 2 RAJ 209 :
(2000) 9 SCC 546 .
15. Union of India v. Goel Trading Co.,

(1999) 2 RAJ 445 :
AIR 1999 Gau 42 : (1999) 2 Arb LR 546.
16. Milkfood Ltd. v. GMC Ice Creams P. Ltd.,

(2002) 1 RAJ 482 (DB) :
(2001) 2 Arb LR 463 (Del). Hindustan Steel Works Construction Ltd. v. N.V.
Chaudary,
(2001) 4 RAJ 430 (AP—DB) :
(2001) 3 Arb LR 29 , appeal against order passed by single judge under sections 14
and 17 (1940 Act) was held to be not maintainable. Narpal Singh Baid v. Daver Credit P. Ltd.,
(2002) 4 RAJ 403 (Cal—DB), an appeal against orders under S. 18 (1940) (interim
orders) was held to be not maintainable.
17. Universal Petrochemicals Ltd. v. Rajasthan SEB,

(2001) 1 RAJ 284 :
AIR 2001 Cal 102 [
LNIND 2001 CAL 103 ]over-ruled on different point in Rajasthan
State Electricity Board v. Universal Petrochemicals Ltd.,
(2009) 1 Arb LR 114 , 124 :
(2009) 1 RAJ 646 :
(2009) 3 SCC 107 [
Navneet Krishn
Page 69 of 70
LNIND 2009 SC 41 ] : (2009) 4 Mad LJ 1175; State Bank Nagar Co-operative

Housing Society Ltd. v. Ashutosh Construction P. Ltd.,
(2002) 3 RAJ 440 (Bom), Letters Patent Appeal is also not maintainable against the
order of a single for appeal to Division Bench when no such right is conferred by the statute.
18. Indu Engg. & Textiles Ltd. v. DDA,

(2001) 2 Arb LR 486 :
AIR 2001 SC 2668 [
LNIND 2001 SC 1313 ]:
(2001) 2 RAJ 469 :
(2001) 5 SCC 691 [
LNIND 2001 SC 1313 ].
19. Laxmi Narain Sinha v. Union of India,

(1999) 3 RAJ 173 (Pat).
20. Union of India v. Manoranjan Mandal,

AIR 2000 Cal 148 [
LNIND 1999 CAL 413 ]:
(2000) 1 Arb LR 326 (DB).
21. Union of India v. RS Makhar,

(2002) 2 RAJ 339 :
(2002) 97 DLT 740 :
(2002) 2 Arb LR 143 (Del).
22. Pushpendra Motilal Singh v. Commercial Automobiles (DB),

(2000) 2 RAJ 534 :
(2000) 3 RCR (Civil) 119 (MP).
23. Anup Kumar Biswas v. Babul Kumar Biswas,

(2004) 2 RAJ 22 (Cal).
24. Y. Chandrasekhara Rao v. South Central Railway,

(2000) 2 Arb LR 1 :
(2000) RAJ 172 :
(2000) 4 JT 557 (SC); Jaysons v. Prem Nath & Co.,
(2002) 3 RAJ 451 Del, the day on which award signed to be excluded. U.P. State
Electricity Board v. Ajay Ice & Cold Storage,
(1998) 1 RAJ 472 :
(1998) 1 Arb LR 241 (All), ground of limitation not taken in the counter affidavit, plea
of limitation to be granted in the interest of justice, exclusion of time spent by the appellant in obtaining certified copies
of the formal order alongwith the judgment.

(2009) 2 Arb LR 530 , 535 (Del-DB), instead of appealing and challenging decision
of judge against award, misconceived and circuitous application filed by party under S. 16, 1940 Act (repealed) for
remission of award, held not bona fide pursuit of remedy.
26. Oil & Natural Gas Corporation Ltd. v. Jagson Intl Ltd.,
(2005) 3 Arb LR 167 , 178 :
AIR 2005 Bom 335 [
LNIND 2005 BOM 676 ]:
(2005) 3 RAJ 555 :
(2005) 5 Bom CR 58 [
Navneet Krishn
Page 70 of 70
LNIND 2005 BOM 676 ] :

(2005) 3 Mah LJ 1141 [
LNIND 2005 BOM 676 ]
(2006) 65 SCL 216 .
(2005) 3 Arb LR 167 , 177 :
AIR 2005 Bom 335 [
LNIND 2005 BOM 676 ]: (2005) 3 RAJ 555 :
(2005) 5 Bom CR 58 [
LNIND 2005 BOM 676 ] :
(2005) 3 Mah LJ 1141 [
(2006) 65 SCL 216 , per Dk Deshmukh J.
(2005) 3 Arb LR 167 , 177 :
AIR 2005 Bom 335 [
LNIND 2005 BOM 676 ]: (2005) 3 RAJ 555 :
(2005) 5 Bom CR 58 [
LNIND 2005 BOM 676 ] :
(2005) 3 Mah LJ 1141 [
(2006) 65 SCL 216 , per Dk Deshmukh J.
End of Document
Navneet Krishn
MISCELLANEOUS
PART I ARBITRATION > CHAPTER 10 MISCELLANEOUS
CHAPTER 10
MISCELLANEOUS
DEPOSITS FOR COSTS
Section 38 of the Arbitration and Conciliation Act, 1996 contains provisions as to deposits for costs.
The section is as follows:
End of Document
Navneet Krishn
(IN) Bachawat: Arbitration and Conciliation
S. 38. Deposits
(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an
advance for the costs referred to in sub-section (8) of Section 31, which it expects will be incurred in respect of
the claim submitted to it:
Provided that where, apart from the claim, a counter-claim has been submitted to the
arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.
(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:
Provided that where one party fails to pay his share of the deposit, the other party may
pay that share:
Provided further that where the other party also does not pay the aforesaid share in
respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings
in respect of such claim of counter-claim, as the case may be.
(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of
the deposits received and shall return any unexpended balance to the party or parties, as the case may be.
1. UNCITRAL Notes on Organizing Arbitral Proceedings
(a) Amount to be deposited
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In an arbitration administered by an institution, the institution often sets, on the basis of an estimate of the costs
of the proceedings, the amount to be deposited as an advance for the costs of the arbitration. In other cases it
is customary for the arbitral tribunal to make such an estimate and request a deposit. The estimate typically
includes travel and other expenses by the arbitrators, expenditures for administrative assistance required by the
arbitral tribunal, costs of any expert advice required by the arbitral tribunal, and the fees for the arbitrators.
Many arbitration rules have provisions on this matter, including on whether the deposit should be made by the
two parties (or all parties in a multi-party case) or only by the claimant [Para 28].
(b) Management of deposits
When the arbitration is administered by an institution, the institution's services may include managing and
accounting for the deposited money. Where that is not the case, it might be useful to clarify matters such as the
type and location of the account in which the money will be kept and how the deposits will be managed [Para
29].
2. Security for costs
The court will usually require a claimant, if it is a foreign company out of India or a person out of India who does
not possess sufficient immovable property in India to furnish security for all the costs incurred or likely to be
incurred by the respondent.1 If there is an express agreement not to ask for security for costs, the court will
decline to require the claimant to furnish security for costs as in view of the agreement such an order would be
unjust.2
An order for security for costs was made in arbitration proceedings between foreign parties under a contract
made and performed abroad where the contract incorporated English law and was of the type regularly
arbitrated in London and there were doubts about the claimant's ability to pay costs. The purchaser of two bulk
carriers referred to arbitration in London his dispute about the non-conformity of the vessels with the contract.
The sellers demanded security for costs. An order for security for costs was held to be appropriate.3
The arbitral tribunal may ask for deposit by way of security for costs. The deposit in advance may be
supplemented afterwards according to exigencies. A separate deposit may be fixed linking it with the claim and
counter claim. The deposit has to be paid by the parties in equal share, though one party may pay the share of
the other in case of default. Where deposit is not made by a party in respect of a particular claim or counter-
claim, the tribunal may suspend or terminate the arbitral process in respect thereof. At the end of the
proceedings, the tribunal has to give an account of the money in deposit and return the unused amount to the
parties.4
One of the effects of the provision is that the power of the court to order security for costs becomes vested in
the arbitral tribunal to the exclusion of the court. This reform has been effectuated by the (English)
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Arbitration Act, 1996 5 also. There also earlier the power was
vested in the court. The court was not precluded by Art 8(5) of the ICC rules6 from making an order for security
for costs either under S. 12(6)(a) of the 1950 Act or its inherent jurisdiction in an international arbitration
conducted in England under ICC rules but such an order should only be made in exceptional cases where the
arbitration was such that an order for security for costs would support the arbitration by preventing the
arbitrator's power to award costs being nullified. In determining whether to exercise its discretion under S.
12(6)(a) for ordering security for costs in an ICC arbitration conducted in England, the court had to look at all
the circumstances to see whether it was consistent with the nature of the arbitration agreement for an order for
security for costs to be made. Mere lack of means of a party was not, in ordinary circumstances sufficient by
itself to justify an order for security for costs since the parties were to be taken as having accepted the risks
involved in the other party, while having the means necessary to enable him to take part in the arbitration,
lacking the means, if he was unsuccessful, to meet his opponent's costs. In the present cases, not only was the
respondent insolvent but also its claim was being funded by a third party, the Kenyan Government, which stood
to gain if the respondent was successful in the arbitration but would bear no responsibility for costs if the
respondent was unsuccessful, leaving the appellants with an empty order if costs were awarded in their favour;
it was appropriate therefore that, exceptionally, the court should make an order for security for costs. The
appeals would therefore be allowed.
Order for Securing Payment
In a dispute for electricity supply dues, there was evidence of tampering of meter, the court proceeding under
S. 151 CPC read with the section ordered reference of the dispute subject to the
condition that the specified sum of money was deposited towards part payment and security for the rest.7
The [English]
Arbitration Act, 1996 8 does not specify the basis on which the
security for costs should or should not be granted. The tribunal has a broad discretion.
Derecognition of Contractor
Derecognition of a contractor is in the nature of disciplinary proceedings and, therefore, cannot be a matter for
an arbitration. The order of derecognition is an administrative order passed in exercise of administrative power.
Hence, the provisions of S. 41(b), 1940 Act (S. 9 of the 1996 Act) would not be attracted for seeking an order of
injunction. Such an injunction would not be for the purpose of and in relation to arbitration proceedings.*
1. See Order 25 rule 1 of the

Code of Civil Procedure ;See also Hudson Strumpffabrik, GmbH v. Bentley
Engineering Co. Ltd.,
(1962) 3 All ER 460 :
(1962) 2 QB 587 ; Bilcon Ltd. v. Fregmay Investments Ltd.,
(1966) 2 All ER 513 :
(1966) 2 QB 221 ; T. Sloyan & Sons (Builders) v. Brothers of Christian
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Instruction,
(1974) 3 All ER 715 : (1975) 1 Lloyd's Rep 183.
2. Mavani v. Ralli Bros Ltd.,

(1973) 1 WLR 468 :
(1973) 1 All ER 555 .
3. K/S A/S Bani And K/S Havbulk v. Korea Shipbuilding and Engg Corpn, (1987) 2 Lloyd's
Rep 445 CA : (1987) FTLR (Financial Times Law Reports) 373 (CA). The court applied the ruling in Bank Mellat v.
Hellinki Techniki S.A.,
(1983) 3 All ER 428 : (1983) CLY 144. In another foreign arbitration the court
considered it fairer to make an order in effect that each side should secure the other because it was just that neither
party if successful should be at risk in costs. Flender Werft A.G. v. Aegean Maritime Ltd., (1990) 2 Lloyd's Rep 27 QB
(Com. Ct.). For another decision on the powers of the arbitrator as to costs in the context of LMAA (London Maritime
Arbitrators’ Association). See Fal Bunkering of Sharjah v. Grecale Inc of Panama, (1990) 1 Lloyd's Rep
369 QB (Com. Ct.).
4. See Eacom's Control (India) Ltd. v. Bailey Controls Co.,

(1998) 74 DLT 2138 :
(1998) 2 Arb LR 188 (Del). The International Court of Arbitration has the authority
under International Chamber of Commerce Rules of Conciliation and Arbitration [For text of ICC Rules, see
Appendix 54-55] to fix the amount of advance on costs in a sum likely to cover costs of arbitration on the claims
referred for arbitration. The Rules also provide for payment of advance on costs of the whole amount by one party in
the event of the failure of the other party to pay his share. This being in the contemplation of the party, it cannot be said
that because one party has not paid the cost, the contract should end by frustration.
5. For text of the English Act, 1996,see Appendix 31.
6. For text of ICC Rules, see Appendix 31. For examples, see Coppee-Lavalin SA/NV v.
Ken-Ren Chemicals & Fertilisers Ltd. (in liq), : Voest-Alpine A.G. v. Ken-Ren Chemicals & Fertilizers Ltd. (in liq),
(1994) 2 LRC 526 (HL), The court disapproved the dictum of Kerr LJ in Bank
Mellat's case (supra).
7. Lamba Steel & Alloys P. Ltd. v. M.C.D., (DESU)

(1994) 1 Arb LR 420 :
AIR 1994 NOC 200 (Del); Bank Mellet v. Hellinik Technika SA,
(1983) WLR 782 .
8. For text of the English Act, 1996,See Appendix 31.
* Madhusudan Timber Industries v. Union of India,

(1991) 1 Arb LR 252 (Del); withholding of payment is also in the same nature,
H.M. Kamaluddin v. Union of India,
AIR 1984 SC 29 : (1983) 4 SCC 417; so is blacklisting. Erusian Equipment and
Chemicals Ltd. v. State of W.B.,
AIR 1975 SC 266 [
LNIND 1974 SC 357 ]:
(1983) 4 SCC 417 [
LNIND 1983 SC 464 ] :
(1975) 1 SCC 70 [
LNIND 1974 SC 357 ] ; these are matters of administrative discretion,
Commissioner of I.T. v. Mahindra & Mahindra,
(1983) 3 SCR 773 [
LNIND 1983 SC 232 ] :
Navneet Krishn
Page 5 of 5
AIR 1984 SC 1182 [

LNIND 1983 SC 232 ]:
(1983) 4 SCC 392 [
LNIND 1983 SC 232 ], citing De Smith, Judicial Review Of Administrative Action,
(4th ed.); J&K Forest Corporation v. Abdul Karim Wani,
AIR 1989 SC 1498 [
LNIND 1989 SC 201 ]para 28:
(1989) 2 SCC 701 [
LNIND 1989 SC 201 ].
End of Document
Navneet Krishn
S. 39. Lien on
arbitral award and deposits as to costs
(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement,
the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it,
the court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to
the applicant on payment into court by the applicant of the costs demanded, and shall, after such inquiry, if any,
as it thinks fit, further order that out of the money so paid into court there shall be paid to the arbitral tribunal by
way of costs such sum as the court may consider reasonable and that the balance of the money, if any, shall be
refunded to the applicant.
(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed
by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be entitled to appear
and be heard on any such application.
(4) The court may make such orders as it thinks fit respecting the costs of the arbitration where any question
arises respecting such costs and the arbitral award contains no sufficient provision concerning them.
This section substantially incorporates the subject-matter of sections 14(2) and 38 of the preceding 1940 Act.9
1. Arbitrator's fees
Section 39 of the Arbitration and Conciliation Act, 1996 restates the principles relating to
the recovery of arbitration fees and costs as they were stated ins. 14(2)and S.
Section 38 of the Arbitration Act , 1940. The first sub-section of S. 39, of the 1996 Act
declares lien on award in favour of the arbitrator for unpaid costs, if any. This is, however, subject to any
contrary agreement. Sub-s. (2) entitles the party to whom the award is being refused except on payment of
costs, to file an application to the court and the court may order that the costs demanded be deposited in the
court and on the making of such deposit the arbitral tribunal can be ordered to deliver the award. The court may
Navneet Krishn
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then make an inquiry into the matter and order reasonable amount out of the money deposited to be paid to the
arbitrator and the rest to be refunded to the applicant. Sub-s. (3) provides that the party with whom a written
agreement has been made about the amount of arbitration fee may not make an application under the section.
Any other party can, however, do so. The arbitrator shall be entitled to appear and be heard on any such
application.
Sub-s. (4) is about costs. Where the arbitral award does not contain sufficient provision concerning costs, the
court may make any suitable order as to costs as it may think fit.
The meaning of the word costs is given in S. 31(8). The Explanation to the sub-section says that “costs” mean
reasonable costs relating to the following matters:
1. fee and expenses of the arbitrators and witnesses;
2. legal fees and expenses;
3. any administration fees of the institution supervising the arbitration, and

4. any other expenses incurred in connection with the arbitral proceedings and the arbitral award.
The statutory provisions touching the arbitrator's remuneration, his fees and charges and costs of arbitration
were contained in Section 38, 1940 Act and Section 14(2) and Paragraph 8 of Schedule I. Under sub-section
(2) of Section 14 of that Act it was the duty of the arbitrators to give notice to the parties of the fees and charges
payable in respect of the arbitration and award and to file the award in court upon payment of the fees and
charges.10
Where the award was not given on proper stamp paper and no notice had been given by the arbitrator of the
filing of the award and of the fees and charges payable in respect of the arbitration and award, no stamp duty
could be realised from the parties.11 The procedure of filing awards is not applicable under the 1996 Act.
The remuneration of the arbitrator should be settled by agreement.12 In the absence of an express agreement13
there is implied promise by the parties to pay the arbitrator reasonable remuneration for his services in
mercantile and commercial arbitrations14 and it seems in other arbitrations also.15 Some early cases held that
there was no such implied promise in non-mercantile arbitration.16
It is an implied term of the submission17 that if two parties employ an arbitrator and one pays the arbitrator's
fees to enable him to take up the award, the party so paying is entitled to recover from the other a moiety of the
sum so paid as money paid to his use.18 It is immaterial that there is no provision in the award for payment of
the whole of the costs by one of the parties in the first instance.19 If the arbitrator awards that each party shall
pay a moiety of the costs of arbitration and of making the submission a rule of court and one party pays the
whole in order to get the award out of the hands of the arbitrator he may recover a moiety from the other party if
the latter refuses to pay it.20
On an application under Section 38(1), 1940 Act [now S. 39 of 1996 Act] the umpire was and the arbitrator is
Navneet Krishn
Page 3 of 8
entitled to appear and be heard on the application.21
An arbitrator who has no jurisdiction to act as arbitrator for lack of qualification and the want of jurisdiction is
known to him and, to his knowledge, not known to the party appointing him, is not entitled to any
remuneration.22 Nor is the arbitrator entitled to recover his fees from a party who had not appointed him and
who alleged that he had no jurisdiction to act as arbitrator.23 An arbitrator was not entitled to recover any
remuneration in respect of his services if he was removed by the court under Section 11, 1940 Act for failure to
use all reasonable despatch in entering on and proceeding with reference.24 The relevant provision now is in S.
Section 13 of the Arbitration and Conciliation Act, 1996 . Where a challenge is presented
to the tribunal about the independence and impartiality of the arbitrator and the challenge is not successful and
the award is made, the party challenging the arbitrator may challenge the award on that ground. If the award is
set aside, the court may decide as to whether the arbitrator who is challenged is to be entitled to any fee or not.
If the award is wholly set aside on the ground that the arbitrator has exceeded his jurisdiction, the party to
whom the arbitrator awarded the costs of the arbitration cannot recover them.25
At common law, apart from any power implied by statute, the arbitrator had no power to direct by his award
payment of his own expenses26 and fees.27 The award was bad if it directed payment of the arbitrator's own
costs out of the money he had received.28 Sections 14(2) and 38, 1940 Act [now S. 39 of
1996 Act] provide only two remedies for recovery of the arbitrator's fees.29
The voluntary mode of payment of fees to the arbitrator is an accepted mode so long as it is not objected to and
has not caused any bias in the arbitrator for or against any party.30
2. Unilateral agreement as to fee
It is not improper for a party appointing an arbitrator to make an agreement with him as to his fee beforehand.
But, once appointed, it is contrary to arbitrator's quasi-judicial status for him to bargain unilaterally for his fees.
An arbitrator is entitled to stipulate a commitment fee at the time of his appointment. But if no such commitment
was stipulated at the time of appointment, he cannot change the terms of the contract by demanding a
commitment fee unless there has been a substantial change in the commitments required of him.31
3. Lien of arbitrator on award
The arbitrator has a lien for his reasonable costs of the award32 and on papers obtained by him from experts for
his guidance33 but not on documents proved before him.34 If he refuses to deliver his award except on payment
of the fees demanded by him, the court is empowered by Section 38, 1940 Act [now S. 39 of 1996 Act] on
application made in this behalf by any party to the reference to direct the arbitrator to deliver the award to the
applicant on payment into court by the applicant of the fees demanded and to fix reasonable fees after such
enquiry as the court thinks fit and direct the refund of the balance money to the applicant. In Uttar Pradesh
where Section 38, 1940 Act [now S. 39 of 1996 Act] had been amended by Act 57 of 1956 with effect from
30.12.1976, the applicant under Section 38, 1940 Act [now S. 39 of 1996 Act] was bound to deposit in court not
the fees demanded by the arbitrator but the fees determined in accordance with the rules, if any, framed by the
High Court. The applicant was entitled to file in court the award obtained by him under an order of the court
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passed under Section 38(3), 1940 Act. The arbitrator could waive his lien on the award and file it in court
leaving the matter of enforcement of his fees and charges to be dealt with by the court under Section 38, 1940
Act.35
The arbitrator cannot be compelled to deliver up the award unless his fees and charges are either paid or
deposited in court.36
4. Disputes about arbitrator's remuneration or costs
On an application made under Section 38(1), 1940 Act [now S. 39 of 1996 Act] the court can determine the fees
payable to the arbitrator.37 The court cannot pass an order under the Section where the fees had already been
paid and the award delivered.38 Apart from Section 38, 1940 Act [now S. 39, 1996 Act] the court has no
summary power to direct the arbitrator to refund excessive fees.39
Section 38, 1940 Act was a useful provision, but it left a gap. If the party who turned out to be the successful
party had taken up the award and paid the fees, the paragraph did not apply. The other party who in fact had to
bear the burden of the fees could not apply to the court for fixation of the fees. Thus under the section as it
stood it was largely a matter of chance whether or not a party could make use of the statutory protection in
respect of fees which he claimed to be excessive.40
5. Powers of court
If a party did not pay his share of the arbitrator's fees, the court had no power to compel him to do so by an
interim order on the application of the other party who had paid his share and who wished to file the award.41
If the award contains no provision concerning the costs of arbitration, the court could make such order as it
thinks fit where any question arises respecting such costs.42
Model scale prescribed by the Government for some matters may furnish a valuable guidance to the court for
determining reasonable fee of the arbitrators.43
If the fees of the arbitrator are not ascertained and stated in the award, he will be allowed only such fees as will
be allowed by the court under the provisions.44
If the award provides for payment of the costs including the arbitrator's fees but the court omits to fix the fees
before the decree is passed, the court may fix the fees afterwards.45 Under the
Arbitration and Conciliation Act, 1996 , the court has not to pass a decree on the award.
The award is a decree in itself [S. 36].
Navneet Krishn
Page 5 of 8
Where the contractor did not succeed on most of the issues, costs were refused to him.46
9. Those two provisions were as follows:

Section 14(2).—The arbitrators or umpire shall, at the request of any party to the
arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the
fees and charges of filing the award, cause the award or a signed copy of it, together with any depositions and
documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon
give notice to the parties of the filing of the award.
Section 38. Disputes as to arbitrator's remuneration or costs.—(1) If in any case an
arbitrator or umpire refuses to deliver his award except on payment of the fees demanded by him, the Court may, on an
application in this behalf, order that the arbitrator or umpire shall deliver the award to the applicant on payment into
Court by the applicant of the fees demanded, and shall after such inquiry, if any, as it thinks fit, further order that out of
the money so paid into Court there shall be paid to the arbitrator or umpire by way of fees such sum as the Court may
consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.
(2) An application under sub-section (1) may be made by any party to the reference unless the fees
demanded have been fixed by written agreement between him and the arbitrator or umpire, and the arbitrator or umpire
shall be entitled to appear and be heard on any such application.
(3) The Court may make such orders as it thinks fit respecting the costs of an arbitration where any
question arises respecting such costs and the award contains no sufficient provision concerning them.
STATE AMENDMENT
Uttar Pradesh.—Amendment of Section 38.—In Section 38 of Act 10 of 1940 for the
words “fees demanded” where they occur for the second time, the following words shall be substituted namely :—
“fees determined in accordance with any rules framed by the High Court, and in the absence of any such
rule, or where such rules are not applicable, the fees demanded”— U. P. Act 57 of 1976, S. 21, w. e. f. 1-1-1977.
Schedule I clause (8)
The costs of the reference and award shall be in the discretion of the arbitrators or umpire who may direct
to, and by whom and in what manner, such costs or and part thereof shall be paid, and may tax or settle the amount of
costs to be paid or any part thereof and may award costs to be paid as between legal practitioner and client.
STATE AMENDMENT
UTtar Pradesh.—In the First Schedule to Act 10 of 1940—
(a) in paragraph 2, for the words “not later than one month from the latest date of their respective
appointments” the words “within one month from the latest date of their respective appointments or within such
extended time as the parties to reference agree to, and in the absence of such agreement as the court may allow” shall
be substituted ;
(b) in paragraph 3, or the words “or within such extended time as the court may allow”, the words “or
within such extended time as the parties to the reference agree to, and in the absence of such agreement, as the Court
may allow” shall be substituted ;
(c) in paragraph 5, for the words “or within such extended time as the court may allow”, the words “or
within such extended time as the parties to the reference agree to, and in the absence of such agreement, as the court
may allow” shall be substituted ;
(d) after paragraph 7, the following paragraph shall be inserted, namely:—
“7-A. Where and in so far as an award is for the payment of money, the arbitrators or the umpire may, in
the award, order interest at such rate as the arbitrators or umpire may deem reasonable to be paid on the principal sum
awarded, from the date of the commencement of the arbitration, as defined in sub-section (3) of Section 37, to the date
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of award, in addition to any interest awarded on such principal sum for any period prior to such commencement, with
further interest at such rate not exceeding six per cent per annum as the arbitrators or umpire may deem reasonable on
such principal sum from the date of the award to the date of payment or to such earlier date as the arbitrators or umpire
may think fit, but in no case beyond the date of the decree to be passed on the award”—U. P. Act 57 of 1976, S. 24,
w.e.f. 1-1-1977.
Note.—See also Ss. 37 and 38 of U.P. Act 57 of 1976 given in Part V.
10. See notes Paragraph 8, Schedule 1 of 1940 Act. The procedure of filing the award is no longer applicable
under the 1996 Act.
11. Government of Tripura v. Nani Gopal Nag,

AIR 1965 Tri 15 .
12. Jeevan Industries (P.) Ltd. v. Haji Bashiruddin Madhusudan Dayal,

AIR 1975 Del 215 [
LNIND 1974 DEL 208 ].
13. Hoggins v. Gordon,

(1842) 3 QB 466 ; 114 ER 586.
14. Brown v. Llandovery Terra Cotta Co. Ltd.,

(1909) 25 TLR 625 ; Crompton & Holt v. Ridley & Co.,
(1887) 20 QBD 48 .
15. Wills v. Wakeley Bros.,

(1891) 7 TLR 604 ; Tuckett v. Isle of Thanet, (1901) 46 Sol J 158; Swinford v. Burn,
(1818) Gow 5.
16. Viramy v. Warne, (1801) 4 Esp 47; Burroughes v. Clarks,(1831) 1 Dowl 48.
17. Powell v. Gwyer, (1840) Woll 23.
18. Marsack v. Wibber, (1860) 6 H & N 1 : 158 ER 1.
19. Powell v. Gwyer, (1840) Woll 23.
20. Hicks v. Richardson, (1797) 1 Bos & P 93 : 126 ER 796; Stokes v. Lewis,(1804) 2 Smith
KB 12; Bates v. Townley,
(1847) 1 Ex 572 .
21. Government of Ceylon v. Chandris,

(1963) 2 WLR 1097 at p. 1101:
(1963) 2 QB 327 :
(1963) 2 All ER 1 : (1963) 1 Lloyd's Rep 214.
22. Burkett, Sharp & Co. v. Eastcheap Dried Fruit Co. and Perara, (1961) 2 Lloyd's Rep 80 p.
88 : (1962) 1 Lloyd's Rep 267 (CA).
Navneet Krishn
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23. Llandrindod Wells Water Co. v. Hawksley,

(1904) 23 TLR 241 .
24. Section 11(3), of 1940 Act [now S.

Section 13 of the Arbitration and Conciliation Act, 1996 ].
25. Davis v. Witney Urban District Council,

(1899) 15 TLR 275 .
26. George v. Louseley, (1806) 8 East 13 : 103 ER 249; Robinson v. Henderson, (1817) 6
M&S 276 : 105 ER 1246.
27. Coombs & Freshfield & Fernley, Re,

(1850) 4 Ex 839 : 154 ER 1456.
28. Roberts v. Eberhardt, (1858) 3 CB (NS) 482 : 140 ER 829.
29. First National Bank Ltd. v. Beri Brothers.

AIR 1956 Punj 239 : ILR (1956) Punj 428.
30. Jeevan Industries (Pvt.) Ltd. v. Haji Bashiruddin Madhusudan Dayal,

AIR 1975 Del 215 [
LNIND 1974 DEL 208 ]; See also Union of India v. Bakshi Ram,
ILR (1957) Punj 1210 :
(1957) 59 Punj LR 572 .
31. K/s Nonjarl A/s v. Hyundai Heavy Industries Co.,

(1991) 3 All ER 211 (CA).
32. Re. Combs & Freshfiled & Fernley,

(1850) 4 Ex 839 : 154 ER 1456; R. v. South Devon Ry. Co.,
(1850) 15 QB 1043 : 117 ER 754.
33. Laing v. Todd,

(1853) 13 CB 276 : 138 ER 1204; Posford v. Swaine, (1861) 1 J&H 433 : 70 ER
816.
34. Narayan Bhawu v. Dewaji Bhawu,

ILR (1945) Nag 323 :
AIR 1945 Nag 117 .
35. Laing v. Todd,

(1853) 13 CB 276 : 138 ER 1204; Posford v. Swaine, (1861) 1 J&H 433 : 70 ER
816.
36. Daya Singh Mangharam v. Charandas Mathuradas,

AIR 1940 Sind 144 ; See also Shib Krishna Tarafdar v. Sunil
Navneet Krishn
Page 8 of 8
Kumar Tarafdar,
AIR 1949 Cal 189 .
37. Shambhu Dayal v. Basdeo Sahai, (1970) All LJ 297 :

AIR 1970 All 525 (FB).
38. Gobind Singh Pratab Singh v. Pohumal Khushiram,

(1944) Kar 354 .
39. Dossett v. Gingell, (1841) 2 Man & G 870 : 133 ER 996; See also Daya
Singh Mangharam v. Charandas Mathurdas,
AIR 1940 Sind 144 . It is not a refusal where the award was still not ready and the
party refused to appear before the arbitrator because he had demanded his fee. Section 38 was not applicable.
Municipal Corporation of Delhi v. Meer Singh,
(1991) 1 Arb LR 114 (Del).
40. Government of Ceylon v. Chandris,

(1963) 2 WLR 1097 at p. 1101:
(1963) 2 QB 237 :
(1963) 2 All ER 1 : (1963) 1 Lloyd's Rep 214.
41. Shib Krishna Tarafdar v. Sunil Kumar Tarafdar,

AIR 1949 Cal 189 .
42. Section 38 (3), 1940 Act [ S. 39 of 1996 Act].
43. Jeevan Industries (Pvt.) Ltd. v. Haji Bashiruddin Madhusudhan Dayal,

AIR 1975 Del 215 [
LNIND 1974 DEL 208 ].
44. Prebble and Robinson, V. Re,

(1892) 2 QB 602 .
45. Wilson v. Jagamandir, 17 All LJ 1053 : 52 IC 653.
46. Bhandari Builders P. Ltd. v. International Airport Authority of India ,

AIR 1980 NOC 85 (Del); Lilawati Gupta v. Union of India,
(2004) 3 RAJ 214 (Gau), proceedings before arbitrator are of civil nature and
therefore, covered by
S. 141, CPC .
End of Document
Navneet Krishn
PART I ARBITRATION > CHAPTER 10 MISCELLANEOUS > EFFECT OF DEATH OF PARTY ON
ARBITRATION PROCEEDING
S. 40.
Arbitration agreement not to be discharged by death of party thereto
(1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the
deceased or as respects any other party, but shall in such event be enforceable by or against the legal
representative of the deceased.
(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was appointed.
(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action is
extinguished by the death of a person.47
1. Death
An arbitration agreement is not discharged by the death of any party thereto and on such death it is enforceable
by or against the legal representatives of the deceased, nor is the authority of the arbitrator revoked by the
death of the party appointing him,48 subject to the operation of any law by virtue of which the death of a person
extinguishes the right of action of that person.
Section 2(1)(g) defines the term ‘legal representative’.
Earlier Law
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Under the English Common Law, the authority of the arbitrator was revocable at the will and pleasure of any
party appointing him and as a corollary of the rule the death of a party appointing the arbitrator revoked his
authority. This rule was never followed in India. Even apart from the statutory provisions, the death of a party to
the submission did not operate as a revocation of the reference.49 Section 40 codifies the
previous law. The arbitration agreement is enforceable by or against the legal representative of a deceased
party provided the right to sue in respect of the cause of action survives. A reference for partition of joint family
does not come to an end on the death of a referring party.50 But where the cause of action is based on tort and
the wrongdoer dies before the award is made, the cause of action is extinguished by the death and the award
will not bind his legal representative.
If a party dies before the hearing is concluded, the legal representatives are not bound by the award unless
notice of the reference is given to all of them. There is no valid award unless the legal representatives are
parties to the reference and this is done by giving notice to them.51 But where the hearing has been concluded
before the death of a party and nothing remains to be done by the arbitrators except delivering the award, the
principle of nunc pro tunc applies and an award made without bringing his legal representative on the record is
valid.52
Order 22 of the
Code of Civil Procedure does not apply to arbitration proceedings.53 When a party to the
award died after the award was filed in the court, the court could in the exercise of its inherent power bring his
legal representatives on the record.54 Filing of award is no longer a necessary requirement under the
Legal representative is defined in Section 2(1)(g) of the 1996 Act. The definition in
Section 2 (11) of the Code of Civil Procedure .
Award when binding on Legal Representatives
Two of the parties to a reference died while arguments were being addressed to the arbitrators. All the
evidence and the documents had been produced when the parties were alive. After the hearing of the
arguments was closed, the death of two of the parties was brought to the notice of the arbitrators who directed
the parties to file a fresh vakalatnama and to obtain direction for appointment of guardian of the minor heirs of
one of the deceased party but nothing was done. As it appeared that one Nagendra represented the members
of the second party including the two deceased, and no prejudice was caused to the minors in particular apart
from the members of the second party, the court refused to set aside the award.55 As a general principle a
person who is not a party to or who is not properly represented in any proceedings is not bound by those
proceedings.56 But proceedings before arbitrators are not intended to be carried on according to the rules of
procedure of the court.57 If there is a binding reference to arbitration all that is necessary to be seen is that there
is substantial representation of the different interests before the arbitrator. There is no rule of procedure by
which the arbitrator could substitute legal representatives or appoint a guardian ad litem for infants.58 The
reference did not abate on the death of any party. The question whether the award would be binding or not
would depend on the facts and the circumstances of the case.59 The court can be approached under
S. 9(i) of the Arbitration and Conciliation Act, 1996 for appointment of a guardian of a
minor party to arbitration proceeding.
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W, claiming to be the legal representative of X, a deceased party to an arbitration

agreement, made a reference to arbitration. The other party B appeared under protest but did not contend that
W was not the representative of X. The arbitrators made an award describing W to be the widow and sole
successor to the estate of X. B moved to set aside the award and urged that the award was invalid as X had left
a will and had left behind him not only his widow W, but also a son S. The court dismissed the application. It
was within the competence of the arbitrator to determine whether W was entitled to enforce the arbitration
agreement. The award could not be challenged on the ground that it was made on insufficient materials. The
arbitrators on the materials placed before them decided that W was the widow who succeeded to the estate of
X and was entitled to proceed with the arbitration.60
If the award is given without notice to the executor of a deceased party, the only party who could have a
grievance is the executor and no other party can challenge the award on this ground.61
Death of Partner
It has been held that, in view of the provision of Or. 30 R. 4

CPC , the arbitration proceedings did not become incompetent on the death of a partner
of the appellant who was taking all steps in the appeal in the absence of the heirs and legal representatives of
the deceased.62
Death after Award but before Decree
An award is not discharged by the death of a party after the award but before judgment is passed.63 Before
passing judgment on the award, the court will require the legal representative of the deceased party to give
adequate proof of his right to enforce the award having regard to the provisions of the Succession Act.64 The
legal representative of the deceased party may oppose the setting aside of the award and may appeal.65
INSOLVENCY
Section 41 deals with the effect of insolvency of a party to arbitration proceedings.
47. The provision is a replacement of Section 6 of the 1940 Act and is virtually the same with a slight change
of terminology in sub-s. (2).
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48. Brimco Bricks v. Sitaram Agarwal,

AIR 1998 Raj 71 : 1997 (Supp) Arb LR 281, substitution of legal representative on
death of party ordered; Rani Ramakant v. The First Additional Civil Judge, Mirzapur,
(2006) 2 Arb LR 452 , 455 :
AIR 2006 All 5 : (2006) 1 RAJ 518 : 2005 All LJ 3840 :
2006 AIHC 516 ; Ravi Prakash Goel v. Chandra Prakash Goel,
(2007) 2 Arb LR 1 , 11 :
AIR 2007 SC 1517 [
LNIND 2007 SC 366 ]:
(2007) 2 RAJ 382 :
(2008) 13 SCC 667 [
LNIND 2007 SC 366 ], arbitration clause contained in partnership deed, held can be
invoked for rendition of accounts by legal heirs of deceased partner.
49. Perumalla Satyanarayana v. Perumalla Venkata Vengayya, ILR 27 Mad 112; Manindra
Nath v. Mohananda Roy, (1912) 15 CLJ 360; Harakrishna Mitra v. Ramgopal Mitra, 14 CWN 759; Dutta v. Khedu,
(1912) ILR 33 All 645.
50. Balika Devi v. Kedar Nath Puri,

AIR 1956 All 377 [
LNIND 1955 ALL 232 ].
51. Binayakdas Acharya Chowdhury v. Shashi Bhusan Chowdhury, 26 CWN 804; Tegha v.
Ram Singh,
AIR 1924 Lah 725 ; Abdul Ghani v. Sirajuddin,
AIR 1939 Lah 154 .
52. Harakrishna Mitra v. Ramgopal Mitra, 14 CWN 759 p. 764; Beni Dutt v. Baijnath,
AIR 1938 Oudh 125 ; Manindra Nath v. Mahananda Ray, 15 CLJ 360; Rani
Ramakant v. The First Additional Civil Judge, Mirzapur,
(2006) 2 Arb LR 452 , 455 :
AIR 2006 All 5 : (2006) 1 RAJ 518 : 2005 All LJ 3840 :
2006 AIHC 516 .
53. Ramniwas Jhunjhunwala v. Benarashi Jhunjhunwala,

AIR 1968 Cal 31 ; Brimco Bricks v. Sitaram Agarwal,
(1998) 1 RAJ 29 :
AIR 1998 Raj 71 : (1997) 3 WLC 78, death of a non-applicant in arbitration
proceedings, no abatement, Order 22, Rule
s 3 &
10-A ,
CPC not applicable.

AIR 1968 Cal 31 .
55. Tirthalal Dey v. Bhuban Moyee Dasi,

AIR 1949 FC 195 : 1949 FCR 396.

AIR 1949 FC 195 : 1949 FCR 396.
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AIR 1949 FC 195 : 1949 FCR 396.

AIR 1949 FC 195 : 1949 FCR 396.

AIR 1949 FC 195 : 1949 FCR 396.
60. Binayakdas Acharya Chowdhury v. Shashi Bhusan Chowdhury, 26 CWN 804 :

AIR 1922 Cal 226 .
61. (Madepalli) Venkatachellam v. (Madepalli) Suryanarayan,

AIR 1941 Mad 129 [
LNIND 1939 MAD 213 ]at p. 146.
62. Lakshmi Ice Factory v. Union of India,

(1972) 4 SCC 171 :
1971 UJ 465 .

AIR 1968 Cal 314 [
64. Shivchandrai Jhunjhunwala v. Panno Bibi,

ILR 1943 Bom 280 :
AIR 1943 Bom 197 .
65. Bulchand Khimandas v. Thakurdas Udhavdas,

AIR 1933 Sind 300 .
End of Document
Navneet Krishn
S. 41.
Provisions in case of insolvency
(1) Where it is provided by a term in a contract to which an insolvent is a party that any dispute arising thereout
or in connection therewith shall be submitted to arbitration, the said term shall, if the receiver adopts the
contract, be enforceable by or against him so far as it relates to any such dispute.
(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency
proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is
required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the
case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the judicial
authority having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall
be submitted to arbitration in accordance with the arbitration agreement, and the judicial authority may, if it is of
opinion that, having regard to all the circumstances of the case, the matter ought to be determined by
arbitration, make an order accordingly.
(3) In this section the expression “receiver” includes an Official Assignee.66
A clause in a contract to which an insolvent is a party for reference of disputes arising out of or in connection
with it is enforceable by or against the official receiver including the official assignee if he adopts the contract.
Even when there has been no such adoption, the court having jurisdiction in the insolvency may on the
application of either the official receiver or any other party to the agreement order that the matter in dispute be
referred to arbitration if the court is satisfied that having regard to the circumstances of the case the matter
ought to be determined by arbitration.
The insolvency of a party does not operate as an automatic revocation of the submission.67 But the agreement
of reference is enforceable only in the circumstances mentioned in Section 41.
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The insolvency does not affect the validity of an award. The creditor may prove in the insolvency for the amount
awarded to him.68
If a party to the reference becomes insolvent during the pendency of the reference, the award is not binding on
the official receiver or assignee if he is not impleaded as a party to the reference.69
1. Award against dissolved company
If arbitration proceedings are held and an award is made against a company after the company has been
dissolved, the award and those proceedings are null, for they are taken against a company which is not in
existence and no subsequent validity to the award can be given by declaring the dissolution to be void under
the appropriate section of the
Companies Act .70
Where a company is a party to an arbitration agreement, the mere fact that the company applies for its winding
up does not have the effect on the company's part of abandoning the arbitration agreement.71 There was a
contract of insurance with the former Romanian State Insurance Company. The contract contained an
arbitration clause. The Romanian state company ceased to exist. The question was as to successorship and
whether the successor was bound by the arbitration clause the Court said that assets and liabilities could not
exist in a vacuum; they had to be the property or responsibility of some entity. It was not within the powers of
the Government to cancel any liabilities nor did they do so. Article 55 of Law 15 contemplated the transfer of the
entire patrimony of the State enterprise to the new institution coincident with the former's dissolution; and the
decree was made pursuant to Art. 55 and had to be interpreted so as to be consistent with it.
2. Adjudication as insolvent on non-payment of award amount
An application for adjudication as an insolvent was filed against the person who did not pay the award money.
The Court granted him 35 days time either to pay up or seek setting aside of the award. He did neither. His
adjudication as an insolvent was held to be justified.72
JURISDICTION OF COURTS
Section 42 of the Arbitration and Conciliation Act, 1996 contains a provision about
jurisdiction of courts. The section is as follows:
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66. This provision of the 1996 Act replaces those of Section 7 of the 1940 Act.
67. Hemsworth v. Brian,

(1845) CB 131 : 135 ER 486; Hobbs v. Ferrars, (1840) 8 Dowl 779; Smith Ex p.
Edwards, Re., (1886) 3 Morr 179; Andrews v. Palmer, (1821) 4 B & Ald 250 : 100 ER 929; Srook v. Hellyer, (1818) 2
Chitt 43; Taylor v. Shuttleworth, (1840) 6 Bing NC 277 : 113 ER 100.
68. Harding Ex p., (1854) 2 De Cr M&G 367 : 43 ER 912.
69. Ramaswami v. Venkateswarulu,

ILR 1954 Mad 765 .
70. Morris v. Harris,

(1927) AC 252 :
(1926) All ER Rep 15 at pp. 18, 19.
71. Corn Products Co. (India) Ltd. v. Ayaz Ghadja,

AIR 1997 Bom 331 [
LNIND 1996 BOM 952 ]:
(1997) 2 Arb LR 532 .
72. Suresh Manherlal Mehta v. ICDS Ltd.,

(2003) 4 RAJ 125 (Bom-DB):
(2002) 3 Arb LR 312 .
End of Document
Navneet Krishn
S. 42.
Jurisdiction
Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where
with respect to an arbitration agreement any application under this Part has been made in a Court, that Court
alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that
agreement and the arbitral proceedings shall be made in that Court and in no other Court.
1. Comment
The comparable provision in S. 31 of the 1940 Act73 was elaborate because it had to provide for things like filing
of awards which have been dropped by the 1996 Act.
Section 31 of the 1940 Act consisted of four sub-sections. While the first sub-section determined the jurisdiction
of the court in which the award could be filed sub-sections (2), (3) and (4) were intended to make that
jurisdiction effective in three different ways:74 (a) by vesting in one court the authority to deal with all questions
regarding the validity, effect or existence of an award or an arbitration agreement, (b) by casting on the persons
concerned the obligation to file all applications regarding the conduct of arbitration proceedings or otherwise
arising out of such proceedings in one court, and (c) by vesting exclusive jurisdiction in the court in which the
first application in the matter was made.75
The first sub-section of S. 31 of the 1940 Act has become redundant because the 1996 Act has removed the
requirement of filing an award in the court for making it a rule of the court. The rest of the provisions of the old
Act on the matter have been moulded into S. 42 of the 1996 Act.
“A conjoint reading of sections 2(e) and 42 of the Act leaves no manner of doubt that the Parliament intended to make
only one Court — the principal Civil Court of original jurisdiction or, as the case may be, the High Court in exercise of
its ordinary original jurisdiction, whichever Court is approached earlier, as the venue for all matters connected with an
arbitration agreement and award, and all arbitral proceedings. Secs. 2(e) and 42 paraphrased in simple language,
would mean that any application ‘with respect to an arbitration agreement’ will have to be filed in the principal Civil
Court of original jurisdiction in a district, or, as the case may be, in the original civil jurisdiction of the High Court, having
jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter
of a suit and that Court alone to which the application is filed shall have the jurisdiction over the entire arbitral
proceedings to the exclusion of any other Court, having jurisdiction to decide the questions forming the subject matter
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of arbitration.
“The phrase “with respect to an arbitration agreement” used in Section 42 of the Act is of wide connotation and it
embraces within its sweep an application for setting aside an arbitral award on grounds specified in Section 34 of the
Act. It may usefully be stated here that arbitral proceedings terminate by the final award or by an order of the Arbitral
Tribunal under sub-section (2) of Section 32 of the Act. But termination of the arbitral proceedings is subject to Section
33 and sub-section (4) of Section 34 as visualised by sub-section (3) of Section 32. Section 42 of the Act would,
therefore, be necessarily attracted in relation to an application under Section 34.”76
The High Court of Delhi explained the effect of statutory provisions :77
“This Court also finds that by using the words such as ‘means’, ‘includes’ and ‘does not include’ in Section 2(e) of ACA
1996, the legislature has exhaustively explained the meaning of the term ‘Court’, Therefore, from a perusal of the
definition of Court’ under Section 2(e), it is clear that it can only mean a Court having civil jurisdiction over the subject-
matter of arbitration agreement. From a further perusal of Section 2(e) it appears that in the section there is no mention
that jurisdiction would depend on the question where the parties reside, dwell or carry on business. The jurisdiction is
made to depend solely on the subject-matter of the dispute. In the instant case, the subject-matter of dispute is the
transaction between the parties relating to sale and purchase of shares. From a combined reading of Section 2(e) and
Section 42 of ACA 1996, one should not be kept in any doubt that the intention of the legislature is to clothe only one
Court. It is the principal Civil Court of original jurisdiction which may be the High Court in the exercise of its original
jurisdiction. In fact the Court which has been approached first will be the Court in all matters connected with arbitral
proceedings and award.”
If an application is made under S. 9 in a particular court, the parties, by virtue of S. 42, will be precluded from
filing any subsequent application in any other court.78 Once this is done, the jurisdiction of the Civil Court to
pronounce upon the existence or validity of the arbitration agreement becomes ousted. Jurisdiction of the
arbitrator begins. Any such dispute would have to be decided by the arbitral tribunal.79
Other than the two instances in Ss. 880 and 1181 of the 1996 Act, the operation of S. 42 is all pervasive so far as
Part I of the 1996 Act is concerned.82 The Supreme Court in Pandey & Co. 83 and a line of
authority from the High Courts following this decision, have somewhat reduced the scope of S. 42. This is
discussed later.84
Where the petitioner had already instituted a suit in the Delhi High Court regarding bank guarantees which were
also the subject matter of a proceeding before the Rajasthan High Court, subsequent applications arising out of
the arbitration agreement and arbitral proceedings would have to be made in the High Court of Delhi. No other
court would have jurisdiction to entertain an application (under S. 11(6) read with S. 8, in this case).85 There
was a dispute between a financier and the principal debtor regarding a hire-purchase agreement between
them. Proceedings were initiated before a Civil Court for interim relief by one of the parties without mentioning
any section of the
Arbitration and Conciliation Act, 1996 . The other party subsequently made an application
before the High Court in connection with the arbitration agreement and proceedings. This was held to be hit by
the provisions ofs. 42.86
The phrase “in a reference” in sub-section (4) of Section 31 (1940 Act) meant “in the matter of a reference to
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arbitration” and was comprehensive enough to cover an application first made after the arbitration was
completed and a final award was made. Therefore, the sub-section would vest exclusive jurisdiction in the court
in which an application for the filing of the award had been first made.87 Accordingly, where an application by
the respondent was made on 10-3-1949 in the Gauhati Court and the first ever move by the appellant before
the Calcutta High Court was on 17-8-1949, the Gauhati Court only had jurisdiction and the Calcutta High Court
had no jurisdiction to direct the filing of the award and to pass judgment on it.88 In this respect no distinction
could be made between an application for the filing of the award by the arbitrator or by a party with his
authority.89 Section 31 (1940 Act) did not prevent the District Judge from exercising the
power of transfer under
Section 24 of the Code of Civil Procedure or under Section 31 of the Civil Courts Act
after the award was filed.90
An award deciding a claim to title and possession of a Delhi land had to be rejected if it was filed in the Bombay
High Court having no jurisdiction over the land.91
The necessity of clothing a single court with effective and exclusive jurisdiction and to bring about the
avoidance of conflict and scramble is equally essential whether the question arises during the pendency of the
arbitration or after the arbitration is completed or before the arbitration is commenced.92 The expression used in
Section 42 of the 1996 Act is “with respect to an arbitration agreement,” which would cover the situations
mentioned here.
An application was filed for directing the sole arbitrator to file the award in the State of Meghalaya. The first
application in respect of the same award was filed in the Court of the District Judge, Shillong. The Shillong
Bench of the Gauhati High Court thus acquired jurisdiction. Further, the presidential order constituted the
permanent Bench of the Gauhati High Court at Shillong and vested in it jurisdiction in respect of cases arising in
the State of Meghalaya.93
In a case before the Calcutta High Court, the arbitration clause provided that the City Civil Court at Madras was
to be the only court to enforce the arbitration award. In a dispute between the parties, each party appointed its
own arbitrator, but the umpire was appointed by an order of the Calcutta High Court. An application was filed for
a direction to the umpire for filing his award in the Calcutta High Court. This was opposed because the clause
provided for enforcement only at Madras Section 31(4) of the 1940 Act had it that the Court which had
jurisdiction to appoint an umpire had jurisdiction subsequent thereto. Thus the Calcutta had jurisdiction in the
matter. The umpire was directed to file the award in the Calcutta High Court.94
An application not under the Act but under the

Code of Civil Procedure did not give exclusive jurisdiction to the court.95 An application
for stay of the suit under Section 34 of the 1940 Act (now S.
Section 8 of the Arbitration and Conciliation Act, 1996 ) did not confer exclusive
jurisdiction to the judicial authority to which it was made.96
An application under the Act in respect of one arbitration agreement does not confer exclusive jurisdiction with
regard to applications in respect of another arbitration agreement.1
Section 31 sub-section (4) of the 1940 Act dealt with territorial jurisdiction only.2 Under sub-section (3) of the
1940 Act all applications regarding the conduct of the reference or arising out of such proceedings including
applications for extension of time had to be made to the court in which the award had been or could be filed.3
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On an application made to the Delhi High Courtunder Section 20 of the 1940 Act (deleted by the 1996 Act) an
order of reference was made to an arbitrator. On a subsequent application, the High Court refused to remove
the arbitrator but on further appeal the Supreme Court removed the arbitrator and appointed another arbitrator
giving directions as to the manner and method of conducting the arbitration proceedings and fixing the time for
completion. It was held that as the Supreme Court retained complete control over the arbitration proceedings,
the award had to be filed in the Supreme Court and could not be filed in the Delhi High Court.4 The Supreme
Court 5 also held that the court so indicated would have exclusive jurisdiction. The
combined effect of the provisions was that an award had to be filed in the court in which the suit in respect of
the dispute involved in the award would have to be filed. The scheme disclosed by the provisions of Section 31,
1940 Act [now S.
Section 42 of the Arbitration and Conciliation Act, 1996 ] clearly indicated that to the
exclusion of all other courts, only one court had jurisdiction to deal with the proceedings incidental to the
reference and the arbitration. Sub-section (3) of S. 31, 1940 Act clearly pointed in this direction when it provided
that all applications regarding the conduct of arbitration proceedings or otherwise arising out of such
proceedings might be made to the court where the award had been or had to be filed and to no other court.6
The learned judge then considered the scope of the provision and observed:
Then comes sub-section (4) of S. 31, 1940 Act. It opens with a non-obstante clause and is comprehensive in
character. The non-obstante clause excludes anything anywhere contained in the whole Act or in any other law for the
time being in force. The provision will have an overriding effect in relation to the filing of an award if the conditions
prescribed are satisfied. The sub-section invests exclusive jurisdiction in the court to which an application has been
made in any reference and which that court is competent to entertain. All subsequent proceedings arising out of it
would have to be instituted in that court and in no other court. Thus sub-section (4) not only confers exclusive
jurisdiction on the court to which an application is made in any reference but simultaneously ousts the jurisdiction of
any other court which may as well have jurisdiction in this behalf. To illustrate the point, if an award was required to be
filed under Section 14(2), 1940 Act read with Section 31(1), 1940 Act in any particular court as being the court in which
a suit touching the subject-matter of the award would have to be filed, but if any application has been filed in some
other court which was competent to entertain that application, then to the exclusion of the first mentioned court the
latter court alone, in view of the overriding effect of Section 31(4), 1940 Act will have jurisdiction to entertain the award
and the award will have to be filed in that court and no other court will have jurisdiction to entertain the same.7
The Supreme Court relied upon its own earlier decision in State of M.P. v. Saith & Skelton P. Ltd.
8 Here the matter originated in a district court and came up to the Supreme Court over the appointment of an
arbitrator. A consensus arbitrator was appointed. The court held that the Supreme Court had become the
exclusive court for handling all subsequent proceedings in the matter including the filing of an award.
To the same effect was the decision in Punjab State Electricity Board v. Ludhiana Steels P. Ltd.
9 Here also the reference was by the Supreme Court under a specific direction that the award was to be sent to
the Registry of the Supreme Court and it was held that the award could not be filed with the trial court for
making it a rule of the court. The Supreme Court was the exclusive court for accepting or rejecting the award.
The Supreme Court has distinguished earlier cases in Bharat Coking.10 It held that there is a distinction
between situations where the court retains control of the proceedings before the arbitrator and where the court
does not retain any control, as such, over the arbitral proceedings. Thus, where the Supreme Court appointed
an arbitrator at the time of setting aside an award (under the 1940 Act), it was held that it did not thereby
acquire jurisdiction over the proceedings and the award must be filed before a court which has requisite
jurisdiction. The court had never retained control over the proceedings which had been initiated without the
involvement of the Supreme Court, and it became involved only at the stage of setting aside the award.11
Similarly, where an application was filed before the Delhi High Courtseeking declaration that appointment of the
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arbitrator was valid (under the 1940 Act), and this was later dismissed as having become infructuous upon the
death of the arbitrator, the Supreme Court followed its earlier decision in Bharat Coking and held that no
exclusive jurisdiction became vested with the Delhi High Court, and a later application for confirmation of the
arbitrator and enlargement of time before the Bombay High Court was maintainable.12
Apart from this distinction drawn by the Supreme Court in Bharat Coking which serves to limit the scope of the
above authorities, the value of the cases where exclusive jurisdiction was vested with the appointing or referring
court under the 1940 Act has been diluted through subsequent decisions relating to the 1996 Act.13 The
Supreme Court has now held that the power under S. 8 to refer parties to arbitration,14 and the power under S.
11 to appoint an arbitrator,15 is not restricted by, nor does it invite, the application of the rule under S. 42. The
above authorities16 may therefore no longer reflect good law as regards the 1996 Act.
Following earlier authorities the Madras High Court held that where under the agreement an exclusive
jurisdiction was conferred on the court of a particular place, the award could be filed only in that court and no
where else although proceedings were conducted at some other place as agreed to by the parties.17 Merely
because the venue of arbitration was at Madras (Chennai), it did not clothe the Madras Courts with jurisdiction
to entertain an application under the Act. The Court followed its own decision in Union of India v. P.
Anantharaman,18 where it was held after elaborate discussion that the situs of cause of action would alone
confer jurisdiction on court in matters of arbitration. The venue of proceedings depends upon the volition of
parties and their convenience. It is open to the parties to select a place far away from the place where the
contract was executed. Therefore, if no cause of action arose at the place where the parties decided that
proceedings should be held, the court at that place would not be competent. The Delhi High Court has also held
to the same effect. Thus where courts at Delhi did not otherwise have jurisdiction, merely because situs of
arbitration was in Delhi, it was held not to clothe the courts at Delhi with jurisdiction.19
It may be noted that there have been a few contrary cases as well. In a case under the 1940 Act before the
Punjab & Haryana High Court, the contract was accepted at Chandigarh and the work was to be executed at
Chandigarh but the arbitration proceedings were conducted at Jalandhar. It was held that the Court at
Jalandhar would also have territorial jurisdiction to entertain the application.20 There is a similar ruling by the
Andhra Pradesh High Court as well.21 The decision in these cases however are unsupported by existing
authorities and therefore require reconsideration.
Where an award could be filed in the Calcutta High Court, that High Court had exclusive jurisdiction to decide
the question mentioned in Section 13(2) of 1940 Act 22 including the question regarding existence of an
arbitration agreement. The City Civil Court had no jurisdiction to decide this question and its decision on it could
not operate as res judicata. 23
Not an “application” — Appeals, Execution Applications
The Supreme Court has noted that S. 42 contemplates exclusivity of jurisdiction in relation to “applications”
arising out of the arbitration agreement. It is inapplicable to “appeals” under S. 37(2), which may be preferred
before any relevant “court” as defined under S. 2(1)(e).24 In the facts of the case, an application had been
moved before the Patna High Court for appointment of the arbitrator. The Patna High Court admittedly did not
exercise original civil jurisdiction and therefore was not a “court” for the purposes of S. 2(1)(e). The arbitrator
accepted a challenge to his jurisdiction, which order was appealed before the Patna High Court. The High Court
rejected the appeal on jurisdictional grounds holding that it did not exercise original civil jurisdiction. This
position was not contested before the Supreme Court, however, an argument under S. 42 was sought to be
advanced to the effect that since the High Court had appointed the arbitrator, it will have exclusive jurisdiction.
The Supreme Court held that “appeals” under S. 37(2) do not fall within the ambit of “applications” under S.
42.25 To this extent the decision of the Supreme Court in Pandey & Co. over-rules
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decisions to the contrary.26 The effect of Pandey & Co. will be to allow appeals under S. 37(2) to be moved in
any of the “courts” which have territorial jurisdiction and which satisfy the definition under S. 2(1)(e). This dilutes
the safeguard under S. 42 insofar as appeals under S. 37(2) are concerned. It appears that it would perhaps
have been preferable, if the Supreme Court had just stopped at holding that the Patna High Court, which did
not exercise original civil jurisdiction, was not a “court” for the purposes of S. 42.
The above line of reasoning of the Supreme Court in Pandey & Co. has been further extended by the Delhi
High Court, which has excluded “execution applications” from the scope of applications contemplated under S.
42.27 As held by Endlaw J28 —
“The Apex Court in Pandey & Co. has further held that S. 42 only applies to applications and not to appeals under S.
37 of the Act. In my view, the said principle equally applies to execution petitions. The execution petition is not an
arbitral proceedings or an application under Part I of the
Arbitration Act . In fact, the arbitral proceedings have come to an end at the time of filing the
execution petition and the execution petition is an enforcement of the award which takes the colour of the decree under
the
CPC by virtue of the provisions of S. 36 of theact. Thus, in my view, the filing of the execution
application... in the courts at Ghaziabad would not make it incumbent for the application under S. 34 of the Act to be
filed in that court.”
It may be noted that in the context of execution applications, contrary authority exists in other High Courts.29.
This has been discussed in greater detail elsewhere.30
2. Application before judicial authority to refer parties to Arbitration
It is relevant to note that an application made under S. 8 before a judicial authority to refer the matter to
arbitration does not attract S. 42 to create an exclusive jurisdiction.31 This is despite the fact that S. 42 refers to
creation of an exclusive jurisdiction by moving of any application under Part I, which should on a literal
interpretation, also include an application under S. 8. This is because firstly, the judicial authority before which
an application under S. 8 may be made, may not necessarily be a “Court” for the purposes of
S. 2(1)(e) of the Arbitration Act or have jurisdiction at all.Secondly, this application is only
to apprise the court that the subject-matter of the action before it is covered by an arbitration agreement and is
thus only in the nature of a defence. Therefore although related to the arbitration agreement it cannot be termed
as an application “arising out of the agreement”. These arguments were recognised by the Supreme Court in P.
Anand Raju where it observed32 —
“The court to which the party shall have recourse to challenge the award would be the court as defined in clause (e) of
S. 2 of the new Act and not the court to which an application under S. 8 of the new Act is made. An application before a
court under S. 8 merely brings to the court's notice that the subject-matter of the action before it is the subject-matter of
an arbitration agreement. This would not be such an application as contemplated under S. 42 of the Act as the court
trying the action may or may not have had jurisdiction to try the suit to start with or be the competent court within the
meaning of S. 2(e) of the new Act.”
Thus where a reference to arbitration was made while a company petition was being heard and the agreement
to arbitrate was recorded before the Company Judge, it was held that exclusive jurisdiction did not thereby vest
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in the Company Judge.33
3. Application for appointment of arbitrator
An agreement under which certain equipment was leased resulted in a dispute. An application was made under
S. 11 to the Chief Justice of the High Court for appointment of an arbitrator. While this application was pending
a suit was filed before another High Court for recovery of equipment and arrears of lease money. This was held
to be not barred because when a Chief Justice of a High Court is approached for appointing an arbitrator he is
not functioning as a Court and, therefore, there is no question of that High Court acquiring exclusive
jurisdiction.34
It has even been held that where exercise of jurisdiction under some other section (in this case, S. 15) is in
continuation of the exercise of power under S. 11, it would also not attract S. 42.35
Even though the power of the Chief Justice under S. 11 has now been held to be “judicial” in nature and the
Chief Justice has to “finally” decide on the preliminary issues which arise, the Chief Justice is not acting as a
“Court” when appointing an arbitrator.36 It has now been settled by Rodemadan,37 that even subsequent to the
Supreme Court's decision in Patel Engineering, which had held the nature of the power under S. 11 as “judicial”
and “final”, neither the Chief Justice nor his designate while acting under S. 11 is acting as a “court” as
contemplated under S. 2(1)(e) and S. 42 of the 1996 Act.38 Therefore the making of an application under S. 11
before the High Court will not attract the exclusivity rule under S. 42.39
It may be noted that even the converse is true and an application under S. 11 is not restricted by the
jurisdictional bar enshrined under S. 42.40 Such a case came before the Supreme Court. It was tried to be
argued that since an application had been made under S. 9 before the Delhi High Court, even the application
for appointment must be made there. This was rejected by the Supreme Court and it was held by BN Srikrishna
J41 —
“It is contended that as recourse had been taken by the petitioner under S. 9 of the Act to obtain interim relief by
moving the Delhi High Court... by reason of S. 42 of the Act that court alone could have jurisdiction upon the arbitral
tribunal. In my view, this contention has no merit as I have held earlier, neither the Chief Justice nor his designate
under S. 11(6) is a “court” as contemplated under the Act. S. 2(1)(e) of the Act defines the expression “court”. The bar
of jurisdiction under S. 42 is only intended to apply to a “court” as defined in S. 2(1)(e). The objection, therefore, has no
merit and is rejected.”
Subsequent to these decisions of the Supreme Court, any cases to the contrary, cannot be regarded as good
law.42
4. Application for interim relief
Where separate applications were made by the partners of a firm under their arbitration agreement for interim
relief before the court of a District Judge and he, refusing to allow any relief, transferred the applications before
the Court of additional District Judge, a revision application against the order on the ground that the Court of the
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District Judge had become the exclusive Court was not allowed. The District Judge had exercised no
jurisdiction to make him as the exclusive Court for all purposes. 43
If an application is made under S. 9 before a particular court, the bar under S. 42 is attracted and all further
applications must be made only before such court.44
Application under Order 39 of

CPC
If an application for interim relief is filed before a court under Order 39 of the
CPC (and not under S. 9 of the 1996 Act), the bar under S. 42 will not be attracted. This
will not be an application “arising out of the arbitration agreement”.45
5. Power to transfer cases
A conjoint reading of Ss. 2(1)(e) and 42 seems to suggest that the very filing of an application before a
competent court under S. 2(1)(e), will render it the exclusive forum to hear all further matters which arise in
connection with the arbitration agreement. If this interpretation is taken, then the moment an application is first
filed before one of these enumerated courts, exclusivity of jurisdiction is immediately conferred upon it, and
consequently any power to transfer that such court might have, would stand negated by the operation of S. 42
of the Act.
This issue on the effect of S. 42 on the ‘power to transfer’ of the court before which an application is first filed
was addressed by the Jammu & Kashmir High Court in BV Sharma. 46 In this case, an
application under S. 9 filed before the District Judge, Jammu was transferred to the Court of the Additional
District Judge so as to provide an independent forum to the parties, one of whom was a personal acquaintance
of the District Judge. Having ruled that the Court of the Additional District Judge was also a competent court
under S. 2(1)(e), the court went on to consider the implications of S. 42 on the power to transfer cases to the
Additional District Judge. The court noted that the objectives of S. 42 were to provide a forum conveniens to the
parties and also to avoid contradictory findings. These objectives could be harmonized with a power to transfer
cases as well. It was thus held that S. 42 did not oust the power to transfer cases, as long as the court to which
these were transferred was a competent court under S. 2(1)(e).47
The Supreme Court has gone a step further. In order to avoid multiplicity of proceedings arising out of
essentially the same dispute, the Supreme Court transferred over 14 different suits instituted by the parties, to a
single court.48
6. Questioning closure of proceedings
The question whether a civil suit would lie for questioning closure of proceedings by the arbitrator was
examined by the Bombay High Court 49. The court said :
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“The arbitral proceedings were commenced and closed on the ground that the claimant had failed to communicate his
statement within a reasonable time. Such an order cannot be said to be non est. In other words, it is case where a
party after invoking the arbitration clause has his claim rejected because the statement was not filed. In view of Section
42 will a Civil Court other than the Court where the arbitral proceedings were commenced have jurisdiction. It may be
true that insofar as the competence of the Tribunal in certain cases which may be without jurisdiction or non est, a suit
may still lie for a declaration that the order or decision is nullity and for other reliefs. That, however, is no answer to a
case where Arbitral Tribunal has exercised jurisdiction and closed the proceedings under Section 25(a). The court as
envisaged under S. 42 will have jurisdiction. What will be the relief that such a Court can give and under which
provisions of the
Arbitration Act ? The entire exercise is futile because no remedy can be prima facie
discernible. Even if it be held that in a civil suit a declaration can be sought that the orders are nullities, the time taken
before the Arbitral Tribunal will not be saved by Section 43 of the Act of 1996. Even otherwise once the party takes
recourse to Arbitral proceedings in respect of a relief, the same relief in the Civil Court will not be possible. In a case
where arbitral proceedings have been closed and the order itself ex facie does not amount to a nullity, the remedy of
civil suit may not be available.
In connection with a hire-purchase agreement between the financier and the principal debtor, one of them had
already initiated proceedings under S. 9 for an interim relief, a subsequent application by the other party under
the same agreement before the High Court was held to be barred by the mandatory provisions of S. 42. The
Court explained the effect of the provisions as follows :50
“It would appear from the aforesaid section that it starts with non obstante clause and this provision is mandatory and
this operates as an ouster of jurisdiction of all other Courts. It is settled law that any provision starting with non
obstante clause and the words employed in the section “that court alone shall have jurisdiction and in no other Court”,
cannot be construed otherwise than as mandatory ones. The present application is absolutely hit by the provision of
Section 42. This Court has no jurisdiction. In other words, jurisdiction of this Court has been ousted by operation of
Section 42 of the Act in view of initiation of the proceedings under Section 9 of the said Act by the respondent No. 1.”
The phrase “no other court” contemplates a situation where two or more courts have jurisdiction in respect of
the same matter. When an application has been made to any one of such courts, then the court approached
first in the order of time acquires exclusive jurisdiction and other courts would be divested of their jurisdiction.51
7. Territorial jurisdiction
The Allahabad High Court has explained the concept of Territorial Jurisdiction in these terms52—
“In case of a dispute regarding territorial jurisdiction, nature of the dispute is required to be understood to come to a
definite conclusion. For example, a dispute with regard to immovable property has to be entertained by the court
having territorial jurisdiction over and in respect of such immovable property following the principle of ‘suit for land’.
Such jurisdiction is statutorily fixed leaving aside few exceptions which are not required to be discussed hereunder. But
in case of territorial jurisdiction regarding contractual obligations three elements are required to be seen, i.e.:
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(a) where the contract was executed;
(b) where the performance was made; and
(c) where the money is due and payable.”
The jurisdiction of a court in the matter of a contract will thus depend on the situs of the contract and the ‘cause
of action’ arising through connecting factors.53
An award made under an arbitration clause contained in a contract for construction of building works at Kanpur
and accepted on behalf of the Union of India at Lucknow could not be filed in Delhi where no part of the cause
of action arose simply because the Union of India has its office at Delhi.54 Where an application under S. 20 of
1940 Act (dropped from 1996 Act) was filed at Delhi and the previous arbitrator was also appointed with the
consent of the parties by a sub-judge at Delhi, this made it necessary that all subsequent applications must also
be filed at that place. An application under S. 33 of 1940 Act for having the effect of the agreement determined
filed at Delhi was held to be competent.55
Where the State of Punjab objected to the filing of the award at Kota where the arbitrator filed it at the request
of the petitioner, the court reminded the State of the observations made by the Supreme Court in several cases
that the Governments should not raise technical points like limitation or jurisdiction more so in arbitration
matters. It was immaterial, the court said, whether the award was made a rule of the Court at Kota or another
place.56 Where a part of the cause of action had arisen within the territory of Chandigarh, that is, payment by
cheque at Chandigarh, there was no lack of territorial jurisdiction at Chandigarh.57 Where the cause of action
arose at one place and the defendant resided at some other place, it was held that the courts at both the places
had jurisdiction to entertain the award.58 The concurrence of jurisdiction gets eliminated the moment an
application is filed first in one of the two courts and it is that court which acquires jurisdiction to the exclusion of
the other in all other subsequent matters also.
An agreement containing an arbitration clause was executed at Lucknow and the award was also made there.
An application for extension of time in a Delhi Court was not entertained.59 Courts at Pune were held to have no
jurisdiction just only because tenders were invited and accepted there when the works were to be executed
outside the State of Maharashtra.60 On the other hand, where acceptance of the tender was at Delhi and
subsequent supplementary agreement was executable only upon approval of the Delhi office of the contractor,
it was held that even though performance and formal execution of the documentation was in Jhansi, the Courts
in Delhi also had jurisdiction.61 Where the acceptance of the agreement was communicated to the party at
Chandigarh, it was held that the courts there had jurisdiction to file the award and to pass a decree in terms of
the award.62 Where the agreement was entered into at Hyderabad, the plea of lack of territorial jurisdiction on
the ground that the work was executed elsewhere was not accepted. The courts at Hyderabad had
jurisdiction.63 Similarly, where the work was executed in Noida, but the contract was accepted in New Delhi, it
was held that the Courts in Delhi had territorial jurisdiction.64 The court relied on the following observations of
the Supreme Court in A.B.C. Laminart 65
“[T]he making of the contract is part of the cause of action. A suit on a contract, therefore can be filed at the place
where it was made. The determination of the place where the contract was made is part of the law of contract. But
making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract.
Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within
whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a
suit in respect of the breach can always be filed at the place where the contract should have performed or its
performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be
filed there and nowhere else.”
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Incidental facts having no bearing with the dispute involved in the case, do not give rise to a cause of action.66
Thus, where the execution and performance of a contract was in Patiala, it was held that no cause of action
arose in Delhi because certain incidental correspondence took place there. The Delhi courts therefore had no
jurisdiction to appoint an arbitrator.67 In this case disputes arose out of an agreement, for running a bookstore.
The agreement was executed in Bangalore, and the book store was located in Bangalore. The accidental
receipt of some letters in Calcutta by a suitor was held insufficient to confer jurisdiction on the Calcutta courts.68
Similarly, courts of a place where a party chooses to perform certain ancillary acts leading to a performance of
its obligations under the agreement, does not get territorial jurisdiction to adjudicate disputes between the
parties.69 In the instant case, disputes arose between the Government of Nagaland and a contractor regarding
a lottery management agreement. The lottery was to be pan-India, and the contractor had absolute freedom to
perform its obligations under the agreement from any place, which it managed from Delhi. However, all material
obligations were performed at Kohima. It was held that Delhi courts have no jurisdiction, and the decision was
explained by Endlaw J in these words70 —
“The courts of a place where a party required to perform certain acts leading to performance of its obligations under the
agreement performs such act, do not get territorial jurisdiction to adjudicate disputes between the parties. An architect
employed at Delhi for preparation of drawings for a project at Delhi, merely if goes to Bombay and prepares the
drawings at Bombay, would not give the courts at Bombay the territorial jurisdiction over the disputes, if any. Similarly,
in the present case, from the agreement aforesaid it is clear that the material performance of the obligations was to be
at Kohima. All payments including guaranteed payments were to be made by the petitioner to the respondent by bank
draft payable at Kohima. The prize monies were to be deposited in Kohima, the draws were to be held in Kohima and
the prize monies were to be disbursed from Kohima. Merely because for the purposes of the said draws the petitioner
managed its business from Delhi or got the tickets and other publicity material printed at Delhi, as it could have got
done from anywhere else in India, would not give the courts at Delhi territorial jurisdiction.”
There is however no requirement that a ‘substantial’ part of the cause of action must arise within the jurisdiction
of the court to satisfy S. 20(c) of the Act.71
Receipt of the letter of acceptance at a place72 and furnishing of bank guarantees from banks at that place73 do
not constitute “cause of action” conferring jurisdiction on the courts at that place.74
The court where award was to be filed had to be decided with reference to the dispute which formed the
subject-matter of reference and not with reference to the relief granted by the award.75 Where a contract of a
corporation was performed at the place of its subordinate office, though its principal office was at Delhi, it was
held that the Court at the place of working had jurisdiction and this was not affected by the fact that the
arbitrator had conducted the proceedings at Delhi. This fact did not clothe the High Court of Delhi with
jurisdiction.76 Situs of arbitration specified under the arbitration clause and the territorial
jurisdiction of a Court are two different concepts. It is possible for arbitration to be conducted at one place, while
it may be possible for a different Court to have territorial jurisdiction in relation to the arbitration.77 In the instant
case, the Contract was concluded at Delhi, the Bank Guarantee was invoked in Delhi and payment under the
Bank Guarantee was in Delhi, it was held that even though the situs of arbitration was in Dehradun, the Delhi
Courts would have jurisdiction.78
Where the cause of action arose at the place where the respondent corporation had its subordinate office, it
was held that the Court at such place would have jurisdiction and not of the place where the corporation had its
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principal office.79 In respect of High Courts exercising original jurisdiction under the Letters Patent, under
Clause 12 of the Letters Patent the relevant High Court would have jurisdiction to try arbitration petitions even if
no cause of action arises within its jurisdiction, as long as the respondent has an office within its jurisdiction.80
Where pursuant to an agreement of the parties, the dispute was referred to arbitration in Singapore, an award
was passed, challenged and subsequently set aside in Singapore, it was held that in such circumstances, it is
not now open for a party to apply to an Indian Court for appointment of arbitrators.81
Where the plaintiff had already lost fifteen years and yet the defendant wanted the proceedings to be at London
or in any other foreign country when both the parties had their agents at a place in India and had engaged
lawyers at Bhuj and Ahmedabad, it was held that it would be unfair and unjust to require to plaintiff to incur
heavy expenses of attending proceedings at London. The court directed that proceedings be held at Kandula,
Bhuj or Ahmedabad.82
An agreement was entered into at Hyderabad. The plea against jurisdiction at Hyderabad was raised on the
ground that the work was executed outside Hyderabad. The court allowed proceedings at Hyderabad because
there was no dispute that a part of the cause of action had arisen within the city of Hyderabad.83
A charterparty agreement was entered into for transport of rice from Bangkok to Paradeep Port in Orissa. The
agreement was signed at Delhi where the FCI had its principal office. Arbitration proceedings were conducted
at Bombay. The arbitrators filed their award before the Bombay High Court. FCI also had one of its places of
business at Bombay. The Supreme Court said that the Bombay High Court had jurisdiction over the subject-
matter of the dispute.84 The Supreme Court has upheld this decision in the subsequent case of Jindal
Vijayanagar Steel.85 The Court ruled that the jurisdiction of the Bombay High Court is determined by Clause 12
of the Letters Patent; and
Section 20 of the CPC , being specifically excluded, has no application to determine the
jurisdiction. In the instant case, the cause of action arose at Bellary where some disputes relating to the
performance of the underlying contract had emerged. However, since the respondent had an office in Bombay
and was carrying on business there, it was held that the Bombay High Court would have jurisdiction to try the
arbitration petition, even if no cause of action had arisen within its jurisdiction. The ratio of this case is
admittedly restricted only to the Chartered High Courts which exercise original civil jurisdiction under the Letters
Patent and does not affect jurisdiction of the other Courts, which would continue to be governed by the
provisions of
Section 20 of the CPC .86
An Indian party was awarded the project of construction of houses by the Housing Corporation of Libya. He had
made subletting to another party for constructing 100 houses. As per the agreement, the Libyan laws were
applicable. Hence, the dispute between the contractor and the corporation were to be adjudicated by Libyan
courts and that between the contractor and the sub-contractor, by the courts in India because both parties were
resident here and also had their offices here. The court observed that the arbitration clause in the contract was
independent of the general terms and conditions of the contract.87
The place of execution if stated in the contract itself, provides assistance to the courts in determining issues of
jurisdiction. Where however the contract itself does not mention its place of execution, the court may draw a
presumption that the execution occurred in the State where stamp paper for the agreement was purchased.88
Where the parties had expressly stated as a term of the contract that the contract had been entered into in
Delhi, the mere formal execution of the contract in Ahmedabad was held not to confer jurisdiction upon the
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Ahmedabad Courts.89 The court was moved by the fact that the parties had proceeded to perform their
obligations even prior to the execution of the formal agreement. This case must be read in light of its facts and
cannot be relied on as an authority for a departure from the settled proposition that parties cannot confer
jurisdiction by “agreement”.
Section 31 of 1940 spoke of territorial jurisdiction and not about the courts within that jurisdiction. Hence, any
subsequent application can be made in any other court within the same jurisdiction and not necessarily in the
court in which earlier proceedings were initiated. Parties do not have the choice as to courts within the same
jurisdiction.90
Submission to Non-territorial Jurisdiction
Where the subject-matter of the contract was supply of material to Chitranjan Locomotives located in Asansol
District but the arbitrator filed his award in the High Court of Calcutta, and despite several notices by the High
Court, the appellants did not inform either the High Court or the respondents that the District Judge at Asansol
had also been moved for a direction to the arbitrator to file his award there, nor did they express any
reservations about the filing at Calcutta and on the contrary they submitted to that jurisdiction by making an
application for extension of time, it was held by the Supreme Court that the High Court was justified in
entertaining proceedings for filing of award.91
Defect of Jurisdiction not curable with Consent
A defect of jurisdiction cannot be cured even by the consent of the parties. Such defect, whether it relates to
pecuniary or territorial jurisdiction or with respect to the subject-matter of the dispute, strikes at the very root of
the authority of the court to pass any order or decree. Such a defect obviously cannot be cured by the parties
by their own agreement or consent.92 In case, however, there is no inherent lack of jurisdiction, parties can, by
consent, waive objection as to such lack of jurisdiction.93
Courts cannot confer jurisdiction on themselves, by consent of the parties and clothe themselves with
jurisdiction. A court without jurisdiction merely on account of non-objection by the parties cannot assume
jurisdiction in itself, The same is also true of Arbitral Tribunals.94
The Delhi High Court has gone further. Interpreting the scope of S. 42 in light of the non-obtante clause, the
court held that the rule that consent of the parties cannot confer jurisdiction on a court which has no jurisdiction
otherwise, does not apply to S. 42. The Court expressed itself in the following terms95 —
“The law in force today is that the parties by consent cannot vest jurisdiction in a court... However, the legislature has
made the provisions of S. 42 notwithstanding any other law for the time being in force. Thus, the law for the time being
in force that the parties by consent cannot vest jurisdiction in a court, has to be ignored as far as S. 42 is concerned...
Thus, even if the court where a second application under Part I of the 1996 Act is filed, is not the court within the
meaning of S. 2(1)(e) of the Act (and thus does not have territorial jurisdiction) the second application will still lie in that
court only, if an earlier application under Part I of the Act has been filed in that court.”
Navneet Krishn
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It is not clear on the facts of the case, whether the Delhi High Court was indeed a “Court” within S. 2(1)(e). The
ruling, as it seems to indicate, allows parties to consent to jurisdiction of a place which may have no connection
with the dispute or which is not competent to entertain the proceedings, on the strength of the non-obstante
clause in S. 42. This appears to be a departure from the settled law.96 Though S. 42 contains a non-obstante
clause, it still refers to application being made to a “Court”. Since S. 2(1)(e) defines a “Court” as the principal
civil court exercising jurisdiction over the subject matter of the dispute, a court which does not so exercise
jurisdiction, will not be a “Court” for the purposes of S. 42 (notwithstanding the non-obstante clause), even
though an application might have been made there.
The reasoning of the Delhi High Court also stands impliedly rejected by a later judgment of the Supreme Court
in Universal Petrochemicals 1 which dealt with the interpretation of S. 31(4) of the 1940
Act (pari materia to S. 42 of the 1996 Act). On facts of the case, where a party had first approached the
Calcutta High Court, which was not competent to entertain such proceedings since exclusive jurisdiction was
agreed to be at Jaipur, it was held that the non-obstante provision in S. 31(4) (similar to S. 42, 1996 Act) will not
have the effect of restricting jurisdiction to the Calcutta courts.2 Thus the non-obstante clause in S. 31(4) of the
1940 Act, and similarly, S. 42 of the 1996 Act, cannot subsequently confer jurisdiction to courts which, to start
with, are not competent to entertain the proceedings.3
Defect of Territorial Jurisdiction does not strike at the competence of the Court
The Supreme Court has made obiter observations to the effect that a defect of territorial jurisdiction, unlike a
defect relating to the subject matter of the dispute, does not strike at the competence of the Court and the
judgment will be valid and not void or non est.4 In the words of Lakshmanan J —
“[T]erritorial jurisdiction does not go to the competence of the court as in the case of a court having jurisdiction on the
subject matter of the dispute. That is why if a court has no territorial jurisdiction (but is otherwise competent to hear a
matter) should the matter be heard and not decided by such court without demur, the judgment will be valid and not
void or non est.”
Waiver of right to challenge jurisdiction
There is a well recognised difference between a “defect” of jurisdiction and an “inherent lack” of jurisdiction of a
court. While the latter cannot be waived by parties, since consent cannot clothe a court with jurisdiction that is
inherently lacking in it, it is open to the parties to waive a defect of jurisdiction of a court by consent. It has been
held that the non-obstante provision in S. 42 does not undermine the established principles of estoppel and
acquiescence which prohibit a person from challenging the jurisdiction of a court after such person has
submitted to the jurisdiction of the court.5 Thus, where parties had submitted to the jurisdiction of the Delhi
courts for a number of years without protest, it was held that they could not challenge the jurisdiction of the
Delhi courts at such a belated stage on the ground that an earlier application had been filed before the courts at
Shimla, when the Delhi courts did not inherently lack jurisdiction. This was only a “defect” of jurisdiction, which
was held waived by the conduct of the parties.6
Relevant Time for determining Jurisdiction
Navneet Krishn
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In the instant case, a party had transferred its registered office to Bombay during the course of arbitral
proceedings and filed a S. 9 petition in Bombay. Subsequently, it became necessary to determine the relevant
time for determining jurisdiction. The Supreme Court relied upon the case of Fazlehussein which had held7 —
“Even if the court had jurisdiction to entertain the suit as filed, if by reason of subsequent events the court has lost
jurisdiction to entertain or try the suit, the court will not be justified in dealing with the suit with reference to
circumstances as they existed at the date of the institution of the suit but must proceed to decide the dispute on the
footing that if the suit had been filed at the later date, the court would have been incompetent to grant the reliefs in
respect of the properties and of the persons who are not within the limits of the jurisdiction of the court. Normally, a
court must have regard to circumstances existing as at the date when the issue of jurisdiction is tried and must decide
it in the light of circumstances existing as at that date.” (emphasis original)
It was held that since at the time the application was filed before the Bombay courts, the party had already
transferred its office to Bombay, the courts at Bombay had jurisdiction over the matter.8
8. Agreement as to exclusive jurisdiction
Where a clause in an agreement provided for arbitration as well as the place of jurisdiction and the validity of
the agreement itself was questioned in some other court having jurisdiction under
CPC , the court so approached could receive evidence and deliver its judgment upon the
validity of the agreement. The exclusive jurisdiction clause would pick up force only when the underlying
agreement itself is found to be valid.9
Where a clause provided that jurisdiction in respect of all matters concerning the contract shall be Cuddalore
Courts but the clause did not exclude the jurisdiction of other courts, the filing of the award at Madras was
allowed. The party objecting to the jurisdiction had also earlier filed an application at Madras.10
Where an agreement of reference authorised the arbitrator to fix the venue of meetings at Bombay or
elsewhere, it did not have effect of selecting a forum for filing the award to the exclusion of other forums. An
agreement of partnership for hotel business in New Delhi was executed at Bombay. Differences arose. The
arbitrator held his proceedings at Bombay and also at New Delhi. Both the parties requested him to file the
award at New Delhi but he filed it in Bombay. This court returned it for filing in New Delhi.11
Territorial jurisdiction for the purposes of filing an application for appointment of an arbitrator has to be in
accordance with
S. 20, CPC . The Explanation appended to this provision of
CPC explains the position as to corporations. A corporation can be deemed to carry on
its business at a place where it has a subordinate office irrespective of the nature of the work that is actually
carried on there.12 An application for the appointment of an arbitrator was allowed at Pune because
communication of the acceptance of the tender was made to the contractor's head office at Pune.13
An application for extension of time under S. 28 of 1940 Act amounted to an application for purposes of S.
31(4) of 1940 Act (Now S. 42 of 1996 Act) so as to constitute that court an exclusive jurisdiction for purposes of
further proceedings.14 When an application for filing award under S. 14 of 1940 Act was made in a particular
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court which had jurisdiction in the matter and the opposite party filed it at the place indicated in the agreement,
the court allowed the jurisdiction to the petitioner because all other jurisdiction became excluded.15 Where a
part of the cause of action had arisen within the jurisdiction of the Calcutta High Court, an application under S. 8
of 1940 Act for the appointment of an umpire was allowed there and it was not considered necessary for this
purpose to have recourse to the
Civil Procedure Code or to clause 12 of the Letters Patent (Calcutta). The court said that
Arbitration Act , 1940 had an overriding effect as to jurisdiction to the extent to which they
applied.16 The court also observed that even assuming that leave under clause 12 was necessary, then once
the High Court granted leave it would have exclusive jurisdiction under S. 31(4) of 1940 Act and all other courts
having jurisdiction would lose the same. Even if the leave is ex parte and causes hardship to the respondent he
would have no remedy because S. 31(4) of 1940 Act did not provide that on revocation of the leave the
jurisdiction of other courts would revive. The court also felt that the legal incidents and consequences of leave
under the Letters Patent and the provisions of S. 31(4) of 1940 Act were so conflicting and contradictory to
each other that both could not be made applicable to the same case.17
In the context of a sale agreement (principles are likely to be the same) it is relevant to note the case of A.B.C.
Laminart Pvt. Ltd. v. A.P. Agencies, 18 wherein the Apex Court, while considering the
clause in the agreement which provided: “any dispute arising out of this sale shall be subject to Kaira
Jurisdiction” held as follows:19 “From the foregoing decisions it can be reasonably deduced that where such an
ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other Courts. When the
clause is clear, unambiguous and specific, the accepted notions of contract would bind the parties and, unless
the absence of ad idem, can be shown, the other Courts should avoid exercising jurisdiction. As regards
construction of the ouster clause when words like ‘alone,’ ‘only’, ‘exclusive’ and the like have been used there
may be no difficulty. Even without such words in appropriate cases the maxim ‘expressio, unius est exclusio
alterius’ expression of one is the exclusion of another may be applied. What is an appropriate case shall
depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When
certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such
cases be inferred. It has therefore to be properly construed.”20 The Supreme Court found that Kaira Courts
were having jurisdiction and this clause would not mean exclusion of other Courts where the cause of action
had accrued in part or otherwise, which Court otherwise had jurisdiction to entertain the matter. In R.N. Singh
P. Ltd. v. Cement Corporation, 21 The jurisdiction of the Court was found to be excluded because the
expression was “......that Courts at New Delhi/Delhi alone shall have jurisdiction to decide or adjudicate upon
any disputes which may arise out of or be in connection with this agreement”, and it was held that the Dehradun
Courts where the action was filed had no jurisdiction. In the case of Angile Insulations v. Davy Ashmore India
Ltd., 22 the Supreme Court found that normally that Court also would have jurisdiction
where the cause of action, wholly or in part, arises. But it will be subject to the terms of the contract between
the parties. In this case the clause in question read as under: “This work order is issued subject to the
jurisdiction of the High Court situated in Bangalore in the State of Karnataka. Any legal proceeding will,
therefore, fall within the jurisdiction of the above Court only.” This survey of the authorities was conducted by
Pradeep Kant, J. of the Allahabad High Court in U.P. Co-operative Sugar Factories Corpn. Ltd. Lucknow v. P.S.
Misra 23 In this case the work was performed at a factory located at Gorakhpur. But an
application against the award was filed at Lucknow. The relevant clause as to jurisdiction provided as follows:
“33. .... Any Court proceedings as may arise out of the dealings could be in Court having jurisdiction over the
district concerned subordinate in the High Court of Judicature at Allahabad”. The court allowed the proceeding
at Lucknow and remanded the matter for consideration on merits. Summarising the effect of the authorities, the
learned judge said:24
“The proposition of law with respect to the determination of jurisdiction can thus be concluded by observing that if there
is a specific clause in the agreement which confers jurisdiction exclusively on one Court and excludes the jurisdiction of
other Courts, though they may be having otherwise jurisdiction to entertain the matter shall be binding between the
parties and such a clause would not be hit by S. 23 or S. 28 of the Contract Act, 1872. The exclusion or ouster of
jurisdiction of one or the other Courts. If the action can be brought in various Courts, confining it to only one Court, is to
be gathered or inferred from the language used in every agreement and on the facts and circumstances of each case.
In the cases where in the agreement the expression like ‘alone'; ‘only,’ ‘exclusive’ or the like are used, it calls for no
Navneet Krishn
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mandate for determination of the jurisdiction of the Court but where such words are lacking, the sum and substance of
the agreement clause regarding jurisdiction has to be seen and interpreted so as to achieve the aims and objects of
the clause and the interpretation should be such which neither extend the jurisdiction to such an extent (normally to
such Courts) which the jurisdiction clause does not permit nor it should be read in the manner so as to exclude the
jurisdiction of other Courts, as the case may be, if otherwise such Courts are having jurisdiction and the agreement
clause does not intend to oust their jurisdiction or the agreement clause does not even by inference means ouster of
jurisdiction of other Court/Courts.
Clause 33 of the agreement, in the instant case, would mean that there should be a Court proceeding which
should arise out of the dealing (contract) and if such Court proceedings arise, they could be in a Court having
jurisdiction over the district concern subordinate to the High Court of Judicature at Allahabad. The aforesaid
clause uses the words ‘could be’ and, therefore, we have to see the meaning of the aforesaid words ‘could be’
used in the aforesaid clause. It is not disputed that the Gorakhpur Courts would have jurisdiction even
otherwise, as the work was to be performed and completed at Gorakhpur and the agreement was also entered
at Gorakhpur. The words ‘could be’ cannot be taken to mean as ‘must be’. By using the aforesaid words ‘could
be’ the intention appears to be such that a proceeding could be brought in the Courts having jurisdiction over
the district concern, namely, Gorakhpur. The aforesaid phraseology does not show that such proceeding could
not be brought in any other Court which otherwise has jurisdiction to entertain the matter. The intention of the
jurisdiction clause in the agreement has to be gathered from the words used. The plain and simple meaning of
the words ‘could be’ would mean that the aggrieved party may file an action in the Court of Gorakhpur, namely,
the district concern but it does not either by intention or by specific words or by inference exclude the
jurisdiction of other Courts which might be having jurisdiction to entertain the matter because the cause of
action or part thereof has accrued within the territorial jurisdiction of such Court/Courts.25
The Court of the place which has no jurisdiction under the

Civil Procedure Code cannot be constituted to be an exclusive court. Where jurisdiction
is available at more than one place the parties can make a choice of any one of those places.26 In this case, the
hire-purchase agreement was executed at Calcutta though wrongly stated to have been executed at Bombay.
All instalments were paid at Calcutta. Seizure of the vehicles was also effected at Calcutta. No part of the cause
of action had arisen at Bombay. So the Bombay Court could not be said to have an exclusive jurisdiction.
Although it is not possible for the parties to confer jurisdiction by agreement on a court which otherwise does
not have jurisdiction with regard to the subject matter,27 it is open for parties to submit to the exclusive
jurisdiction of certain court(s), provided these otherwise had jurisdiction with regard to the subject matter of the
contract.28 Where all the negotiations for making of the contract and for its performance took place at
Hyderabad and the contract documents were sent to Delhi for signature, it was held that Delhi courts had no
jurisdiction. A provision in the contract that only Delhi Courts would have jurisdiction was ineffective.29
A provision in an agreement declaring the court at a particular place to be an exclusive court has been held to
be not usable for asking the arbitrator also to hold his sittings at that place.30
Waiver of forum selection clause
If parties can mutually agree to a forum selection clause,31 they can also mutually waive the clause by their
conduct.32 An exclusive jurisdiction clause operates only through an ‘agreement’ of the parties. If the parties
subsequently, through conduct or otherwise, display an intention to waive or modify this agreement, then rules
of jurisdiction would operate as per the subsequent agreement of the parties.
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Parties waive their right to demand exclusive jurisdiction, if one party approaches a court, which apart from the
exclusive jurisdiction clause, would have had jurisdiction, and the other party allows that court to proceed
without raising a jurisdictional objection.33
However, where an application has been filed before the wrong court in contravention of the forum selection
clause, a party cannot be said to have waived its right under such clause merely because it entered
appearance in such proceedings and took time to file a reply.34 Further, if the court before which the application
was filed inherently lacked jurisdiction, independent of the forum selection clause, a party can be allowed to
raise the issue of jurisdiction for the first time even at later stages.35 In the instant case, the arbitral clause
restricted the jurisdiction of the Courts to Mumbai however an application relating to the arbitration was brought
in Delhi, but no arguments as to jurisdiction were raised. Even though the said petition was dismissed by the
Court, though not on the ground of lack of jurisdiction, it was deemed that the condition with regard to
exclusivity of jurisdiction of courts at Mumbai was waived. All subsequent applications under the Act, through
the operation of S. 42, would have to be filed before the Court in Delhi.36 Similarly, where the arbitration
agreement granted exclusive jurisdiction to Courts at Ghaziabad, a party which had earlier moved the courts at
Delhi for interim relief under S. 9, was not allowed to object to the jurisdiction of the Courts at Delhi.37
To constitute a waiver of a forum selection clause by way of conduct in approaching a different forum, it is
necessary that the proceedings initiated in the different forum must relate to the same ‘subject matter as under
the arbitration or reference’. Thus where a forum selection clause provided for exclusive jurisdiction at
Ghaziabad courts, the clause was held to be not waived in favour of Delhi courts, when the Delhi courts were
approached on a different cause of action and the dispute there did not relate to the subject matter of
arbitration.38
There is no waiver of the forum selection clause merely because the situs of arbitration is different from the
exclusive forum envisaged under the clause.39
Position of Government vis-a-vis Territorial Jurisdiction
The Union of India may carry on business at a place other than its seat of Government; but it would be
presumed to carry on business also at the place of its seat and that fact would confer jurisdiction on the High
Court of Delhi notwithstanding that no cause of action arose within its territorial jurisdiction.40 This position may
no longer be good law subsequent to the decision of the Supreme Court in Patel Roadways.41 Since the Union
Government can be seen to have subordinate offices all over the country, the courts at the place where the part
of the cause of action arises must exercise jurisdiction.42
A contract for construction of an ordnance factory at Muradnagar was signed at Bareilly in U.P. Filing of the
award at Delhi was not allowed.43
9. Court approached to decide as to its competency
As to this there is the following observation of the High Court of Delhi :44
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“
Section 42 of the Arbitration Act relating to the jurisdiction of the Courts puts a positive
embargo against the invoking of the jurisdiction of different Courts by laying down that notwithstanding anything
contained elsewhere in the said part of theact or in any other law for the time being in force, where with, respect to an
arbitration agreement any application under the said part has been made in a Court, that Court alone shall have
jurisdiction over the arbitral proceedings and all subsequent applications arising out of an agreement and the arbitral
proceedings shall be made in that Court and in no other Court. This section provides the Forum for entertaining the
applications under theact and is intended to ensure that all the proceedings in relation to an arbitration agreement take
place in the same Court so as to avoid conflict of decisions. It is also intended to prevent undue harassment of the
parties by putting them before the same Court inspite of competence of different Courts within the jurisdiction of which
different parts of cause of action might have arisen. The contention that Section 42 of the Act creates a bar only when
the earlier application is before a Court of competent jurisdiction is absolutely correct but the question as to whether
the Court before whom an earlier application has been filed is a Court of competent jurisdiction or not has to be
adjudicated by that Court itself. Other Courts cannot come into picture and entertain subsequent applications till the
earlier Court holds that it has no jurisdiction.”
To attract exclusivity rule — first application must be ‘maintainable’
The first application filed in relation to the arbitration proceedings must necessarily be maintainable before the
court.45 Institution of a petition before a court which has no jurisdiction would be inconsequential and will not
invoke the bar under S. 42.46 It is only when the basic ingredients for filing arbitration proceedings before a
court of competent jurisdiction are satisfied that the bar contemplated under S. 42 of the Act can be enforced
against maintainability of subsequent petitions in another court.47 Consequently subsequent applications filed
before a court must be stayed until the maintainability of the previous application has been decided upon.
Otherwise there exists a risk that decisions in subsequent applications may become infructuous on account of
the non-maintainability before the court of the previous application itself.
For instance, in this case, a party had already filed a petition for appointment of arbitrator and injunction under
Ss. 11 & 9 before the Principal District Judge, Madurai. The court at Madurai rejected the petition and held that
the appropriate forum to approach would be the High Court at Madras where powers of appointment had been
delegated. The question arose as to whether this decision of the Madurai Court would oust the jurisdiction of
the Delhi High Court, where a subsequent application was filed for appointment of arbitrator by the other party.
Applying the principles delineated above, the court held that no such ouster had occurred since the Madurai
court had inherently lacked jurisdiction to entertain the petition filed before it.48
Re-agitating issue of jurisdiction before co-ordinate forum
If the court before which the first application was made rules that it is competent to hear the same, then no
other court before which subsequent applications are filed can once again independently scrutinise the
competency of the first court. In this case, the court dealt with the analogous provision under the 1940 Act i.e.
S. 31(4). The court faced a situation where a first application was filed under S. 20 of the 1940 Act before the
Calcutta High Courtwhich accordingly referred the matter to arbitration. Subsequently an application was
moved under S. 28 of the 1940 Act for extension of time before the Delhi High Court. The applicant argued that
the bar under S. 31(4) of the 1940 Act would not apply since the Calcutta High Court which originally
entertained the first application lacked the jurisdiction to do so. The Delhi High Court refused to accept this
contention and observed as follows49 —
Navneet Krishn
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“In the opinion of the Court, in the present proceedings this Court is not called upon to once again go into the question
as to whether the Calcutta High Courtwhich made the reference to the arbitral tribunal, lacked the territorial jurisdiction
or that no part of cause of action had arisen within the jurisdiction of that Court. For the purpose of the present
application under S. 28 of the [1940] Act, suffice it would be to take note of the factual and legal position that certain
arbitral proceedings were initiated earlier in a particular Court and by virtue of the provisions of S. 31(4) of the [1940]
Act (corresponding to S. 42 of the 1996 Act), only that Court can be considered competent to entertain any or all
subsequent proceedings arising in relation to the said arbitration. In that view of the matter, this Court is clearly of the
view that the present petition under S. 28 of the Act filed by petitioner is not maintainable before this Court. The petition
ought to have been filed before the Calcutta High Court which made the reference to the tribunal.”
In case a court has decided in favour of exercising jurisdiction in the matter, it is difficult to later re-open the
issue before another co-ordinate forum. The Calcutta High Court has held on this issue50—
“[I]rrespective of whether a Court has authority to receive an action under the Act at the initial stage, upon such an
action having been received and upon the Court having found that it had authority to receive such action, the issue is
concluded as between the parties and such matter cannot be reopened. It is irrelevant in the context of S. 42 to
recognize whether the Court was right or wrong in adjudicating that it had authority to receive the application under the
1996 Act.”
It may be seen that these decisions do not mean that irrespective of the competence of the court before which
the first application was made, the jurisdiction of courts before which subsequent applications should be
considered ousted. Such a reading of the above authorities will conflict with other established authorities that
the court before which the first application was initiated must be a competent forum to entertain such
application.51 It is hence submitted that the observations above must be read as laying down the restricted
proposition that once the court before which the first application is satisfied of its competence to entertain the
matter, then courts before which subsequent applications are made should defer to the ruling of the first court.
The subsequent court must, if it is inclined to decline jurisdiction, satisfy itself about the factual matrix
surrounding the ruling of the first court.52
Jurisdiction over Vessels
A vesel colluded with a lightening vessel. The question arose whether claims made in London and in Italy were
within arbitration clause and within jurisdiction of London arbitrators and for that reason the charterers should
be restrained from proceeding in Italy. The disputes were found to be within the scope of the arbitration
agreement Proceedings in Italy were accordingly restrained. The court said :53
It was right, in this case in the Court's discretion to grant a permanent injunction preventing a party to an
English arbitration clause from pursuing foreign proceedings in breach of that clause before any challenge to
the foreign Court's jurisdiction had been resolved. If the Italian proceedings continued, the owners could suffer
real prejudice in the form of a binding judgment on the merits in Italy which would render their rights to
arbitration nugatory. The charterers had presented no evidence of any argument or interest under Italian law
why an Italian Court would not stay the Italian proceedings under the mandatory provisions of the New York
Convention, applying English law for the purpose of construing the arbitration clause; in the circumstances the
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charterers’ determination to proceed in Italy was vexatious.
The collision occurred in Italian waters and if it were not for the parties’ contract and their agreement to arbitrate
in London, the Italian Courts would be the natural and appropriate forum for the adjudication of a claim arising
out of such a collision. There was need for caution and desirability of judicial comity in this area. Nevertheless
much greater damage would be done to the interests which that caution and that comity were intended to serve
if these proceedings were adjourned to await the outcome of the challenge to the jurisdiction in Italy and then
resulted in an injunction against the charterers; nothing had happened in Italy since the issue of the Italian
summons and the Court's injunction at this stage would be of the least possible interference to the Italian
Courts; an injunction to restrain the charterers from proceeding in Italy was granted.
Further Suggested Reading (Exclusivity of Jurisdiction)
1. R.D. Mirza, “Competent Court under Section 42 of the Arbitration &

Conciliation Act, 1996 ”,
(2004) 1 Arb LR 31 .
LIMITATION ACT APPLIES TO ARBITRATION
Section 43 makes the provisions of the

Limitation Act, 1963 applicable to arbitral proceedings.
73. S. 31. Jurisdiction.—(1) Subject to the provisions of this Act, an award may be filed in
any Court having jurisdiction in the matter to which the reference relates.
(2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise
provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement
between the parties, to the agreement or persons claiming under them shall be decided by the Court in which the
award under the agreement has been, or may be, filed, and by no other Court.
(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such
proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court.
(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force
where in any reference any application under this Act has been made in a Court competent to entertain it, that Court
alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that
reference and the arbitration proceedings shall be made in that Court and in no other Court.
74. Kumbha Mawji v. Dominion of India,

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at pp. 317, 318 :
(1953) SCR 878 [
LNIND 1953 SC 50 ].
75. Lachhman Singh v. Makar Singh,

AIR 1954 Pat 27 ; State of Bihar v. Paras Nath Pandey,
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Page 22 of 47
AIR 1979 Pat 196 : 1979 BLJR 424. Where a court did not permit filing of award
because it had no jurisdiction but even so decided certain points connected with the award, it was held that the
appropriate court was not bound by decisions on those points Chandra Singh v. Executive Engineer,
AIR 1961 Assam 148 . Where two different agreements were involved and they
were made at two different places, a proceeding under one of them at one place would not constitute that court as an
exclusive jurisdiction for initiating proceedings in respect of the other agreement made at some other place, Nalanda
Ceramics & Industries Ltd. v. N.S. Choudhury & Co. P. Ltd.,
AIR 1977 SC 2142 : (1977) 4 SCC 37. Baba Construction Co. v. Punjab State,
(1997) 1 Arb LR 133 (P & H), the court which appointed the arbitrator would have
exclusive jurisdiction to deal with subsequent applications. The difference between the new and old provisions also
explained in Hukum Raj Sajjan Raj Kumbal v. E.I. Dorado Guarantee Ltd.,
(2002) 4 RAJ 616 (Cal); Milkfood Pvt. Ltd. v. C.M.C. Ice Cream (P) Ltd.,
(2008) 3 Pat LJR 555 , petition filed before Delhi High Court where parties
consented to appoint an arbitrator, subsequently award filed before the Gaya Court which was the first “in reference”
application, held Gaya Court has jurisdiction to deal with all subsequent proceedings. Satluj Jal Vidyut Nigam Ltd. v.
Continental Foundation Joint Venture,
AIR 2009 (NOC) 310 (HP-DB), difference between S. 31 of the 1940 Act and S. 42
of the 1996 Act has been noted.
76. ITI Ltd. v. Distt. Judge, Allahabad,

AIR 1998 All 313 [
LNIND 1998 ALL 445 ], 316:
(1998) 2 Arb LR 670 :
(2003) 4 RAJ 455 ; See also National Highways Authority of India
v. SPCL — IVRCL (JV),
(2008) 2 Arb LR 404 , 410:
(2008) 3 RAJ 93 (Del)relying on Kumbha Mawji v. Dominion of
India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ], the Court rejected the argument that a “challenge” to an award
under S. 34 is not “with respect to an arbitration proceeding” and hence not covered by the rule of exclusive jurisdiction
under S. 42; Punjab Land Development & Reclamation Corpn. v. Jai Shankar Transport Corpn.,
(2000) 3 RAJ 445 : (2000) 4 RCR (Civil P&H), the court which ordered reference to
arbitration acquired all the jurisdiction and not the principal civil court of original jurisdiction in the District. Anuptech
Equipments P. Ltd. v. Ganpati Co-operative Housing Society Ltd.,
(2001) 1 RAJ 336 (Bom), the section operates only in reference to arbitration
proceedings and not other civil proceedings.
77. Hukum Raj Sajjan Raj Kumbat v. E'I Dorado Guarantee Ltd.,
(2002) 4 RAJ 616 (Cal).
78. DLF Industries Ltd. v. Standard Chartered Bank,

AIR 1999 Del 11 [
LNIND 1998 DEL 620 ]:
(1999) 1 RAJ 247 :
(1998) 75 DLT 338 [
LNIND 1998 DEL 620 ] :
(1999) 97 Comp Cas 517 :
(1998) 2 Arb LR 427 , the High Court had no jurisdiction, the contract was subject to
exclusive jurisdiction of Bangalore Courts. Akla Builders P. Ltd. v. Cityscape Developers P. Ltd.,
AIR 2003 NOC 264 (Cal), a dispute developed in the matter of a joint venture
agreement between the parties for developing a market complex on a Municipal land. The builder (respondent) made
an application under S. 14 for termination of the arbitration proceedings. This was held as amounting to submission to
the jurisdiction of the court under S. 42. Withdrawal of proceedings from before the Tribunal does not affect a party's to
right to get an order under Section 9; Shree Iswar Satyanarayanji v. Amstar Investment Pvt. Ltd.,
AIR 2007 (NOC) 2670 (Cal), where one of the parties submitted to the jurisdiction
of the Calcutta High Court by filing an application under Ss. 14 and 15, it cannot later question the jurisdiction of that
Court in a S. 9 application brought by the other party; Gammon India Ltd. v. Sankaranarayana Construction (Bangalore)
Pvt. Ltd., (2009) 1 Mad LJ 740, application under S. 9 filed before Madras High Court and issue of lack of jurisdiction
not raised, all subsequent applications pertaining to the arbitration must be filed before the same Court.
Navneet Krishn
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79. Nissho Iwai Corpn. v. Veejay Impex,

AIR 2000 Cal 207 [
(2000) 4 RAJ 471 .
80. See Commentary under S. 42infra under the heading “Application before judicial
authority to refer parties to Arbitration”.
81. See Commentary under S. 42infra under the heading “Application for appointment of
arbitrator”.
82. Shree Iswar Satyanarayanji v. Amstar Investment Pvt. Ltd.,

AIR 2007 (NOC) 2670 .

(2006) 4 Arb LR 192 , 196 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ].
84. See Commentary under S. 42infra under the heading “Not an ‘application’ — Appeals,
Execution Applications”.
85. Sirojexport Co. Ltd. v. Indian Oil Corpn. Ltd.,

AIR 1997 Raj 120 : (1996) Supp Arb LR 370, rejection of application under S. 11(6)
read with Section 8 by the District Judge, no material defect in the lower court's procedure, no material irregularity in
exercise of its territorial jurisdiction, impugned order allowed to stand.
86. Shiv Carriers v. Royal Projects Ltd.,

AIR 2000 Cal 138 [
87. Kumbha Mawji & Co. v. Dominion of India,

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 318 para 15 :
(1953) SCR 878 [
LNIND 1953 SC 50 ].
88. Kumbha Mawji & Co. v. Dominion of

India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 318 para 15 :
(1953) SCR 878 [
LNIND 1953 SC 50 ]; Bhagwandas Bhargava v. Durga Prasad Rastogi,
AIR 1973 Raj 69 .
89. Ferro Alloys Corporation Ltd. v. A.K. Ghosh,

AIR 1960 Cal 421 ; Kumbha Mawji & Co. v. Union of India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ]:
(1953) SCR 878 [
LNIND 1953 SC 50 ].
Navneet Krishn
Page 24 of 47
90. Nand Kishore v. Mool Chandra,

AIR 1966 All 613 ; Union of India v. Rup Kishore,
AIR 1967 All 504 : (1967) All LJ 24; Ram Rattan Bhartia v. F.C.I.,
AIR 1978 Del 183 [
1978 RLR 177 , application of
CPC to matters of jurisdiction; N.D. Sud v. Union of India ILR, (1973) 2 Del 503; Union of India v.
Bakhtawar Singh,
(1985) Arb LR 67 (Del); where the contract was made wholly at one place, an
application in a court at some other place not entertained, Joginder Pal Gupta v. Dwarka Dash & Co. P. Ltd.,
(1985) Arb LR 306 (P&H).
91. Shib Nath Banerjee & Sons (Pvt.) Ltd. v. Tehmi P. Sidhwa, CA No. 74 of 1964 decided
on 13-2-1964 (SC). An award was not allowed to be filed in a court which had no jurisdiction; only because the
agreement so provided would not confer jurisdiction, Union of India v. P. Anantharam,
(1991) 2 Arb LR 293 (Mad). Where an objection as to jurisdiction was not raised
before the lower court. it was not allowed to be pleaded for the first time in revision, Housing Board Haryana v. National
Construction Co.,
(1991) 2 Arb LR 191 (P&H).

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 317 para 13 :
(1953) SCR 878 [
LNIND 1953 SC 50 ] . A private award on a matter which was within the exclusive
jurisdiction of revenue courts could not be filed there because a revenue court is not a civil court within the meaning of
the Act, nor it could be filed in a civil court because there was no such jurisdiction with it, Jai Singh v. Mangtoo,
AIR 1962 HP 10 ; an award of composite nature could be enforced by getting it filed
in civil court having pecuniary and territorial jurisdiction and not in revenue court, Lalchand v. Mahabir Pd.,
AIR 1970 Raj 236 ; An award could have been filed in a revenue court only if the
reference was made by the court, Balumal v. J.P. Chandani,
AIR 1973 Raj 153 .
93. M. Banerjee & Sons v. M.N. Bhagabati,

AIR 2003 Gau 13 .
94. GMB Ceramics Ltd. v. Neycer India Ltd.,

(2003) 4 RAJ 598 (Cal) : 2000 Supp Arb LR 613.
95. Fateh Chand v. Moti Ram,

AIR 1953 Punj 105 ; Alakananda Hydro Power Co. Ltd. v. Shring Construction Co.
Pvt. Ltd.,
AIR 2009 (NOC) 1730 : (2009) 3 Andh LT 485, application under Or 39
CPC does not attract bar under S. 42, these would not be applications “arising out of the arbitration
agreement”.
96. Union of India v. Surjeet Singh Atwal,

AIR 1970 SC 189 [
LNIND 1969 SC 180 ]:
(1969) 2 SCC 211 [
LNIND 1969 SC 180 ] : Choteylal Shamlal v. Cooch Behar Oil Mills,
ILR (1954) 1 Cal 418 ; Basanti Cotton Mills Ltd v. Dhingra Bros.,
(1954) 1 Cal 546 ; Harbans Singh v. Union of India,
AIR 1961 Cal 659 [
LNIND 1961 CAL 32 ]: 65 CWN 913. See however Petine Shipping
Inc of Monrovia v. Minerals and Metals Trading Corpn. of India Ltd.,
Navneet Krishn
Page 25 of 47
(2009) 3 Arb LR 20 , 24:

(2009) 2 RAJ 572 : (2009) 8 JT 157 : (2009) 5 UJ (SC) 2418, where the Supreme
Court, by way of obiter, seems to have doubted the proposition in Surjeet Singh Atwal. It was held per Dattu J
“applications under Ss. 33 and 34 (of the 1940 Act) both are fundamentally in the matter of the arbitration proceedings
and fall within the purview of S.
Section 31(4)of the Arbitration Act , though the former is intended to make an arbitration agreement
ineffective and the latter effective and neither leads to a reference”relying on Balmokand Vohra, “
Arbitration Act , 1940:Sections 31 and 34” (1971) 1 SCC (Jour) 70.
1. Kapur & Sons v. Raj Khanna,

AIR 1955 Punj 235 : 57 PLR 340.
2. Kapur & Sons v. Raj Khanna,

AIR 1955 Punj 235 : 57 PLR 340.
3. Champalal v. Samrathbai,
AIR 1960 SC 629 [
(1960) 2 SCR 810 [
LNIND 1960 SC 16 ].
4. Guru Nanak Foundation v. Rattan Singh & Sons,

AIR 1981 SC 2075 [
LNIND 1981 SC 402 ]:
(1981) 4 SCC 634 [
LNIND 1981 SC 402 ]; State of Madhya Pradesh v. Saith & Skelton (P.) Ltd.,
AIR 1972 SC 1507 [
LNIND 1972 SC 726 ]:
(1972) 3 SCR 233 [
LNIND 1972 SC 726 ]. Followed in Oriental Insurance Co. Ltd. v.
Balindra Nath Sharma,
(1989) 1 Arb LR 398 (Guj), arbitrators appointed by High Court who made a new
award and it was held that the award had to be filed in the High Court and not in the court below from whose decision
the matter had come before High Court under appeal; Om Metals and Minerals P. Ltd. v. State of A.P.,
(1988) 1 Arb LR 238 (AP), where the Supreme Court directed the appointment of
an independent arbitrator, the court which appointed the arbitrator became the exclusive court.

(1981) 4 SCC 634 [
LNIND 1981 SC 402 ], 640 :
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ].

(1981) 4 SCC 634 [
LNIND 1981 SC 402 ], 640 :
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ], at p. 640. Followed in Balaji Laminating
Works v. Malik,
(1988) 1 Arb LR 125 (Del), one party filed award at Dhanbad where the court had
jurisdiction and the other at Delhi, the latter court became barred; Ramkripal Sharma v. Union of India,
(1983) Arb LR 109 (Cal), first application filed at Calcutta, award was not allowed to
be filed in Gauhati.
7. At. p. 641.
Navneet Krishn
Page 26 of 47
8.
(1972) 2 SCR 233 :
(1972) 1 SCC 702 [
LNIND 1972 SC 726 ] :
AIR 1972 SC 1507 [
LNIND 1972 SC 726 ]. The court refused the contention that the decision of the
Supreme Court in Kumbha Mawji v. Union of India,
1953 SCR 878 [
LNIND 1953 SC 50 ] :
AIR 1953 SC 313 [
LNIND 1953 SC 50 ]had the effect that the very first court in which an application
was filed would become the exclusive court.
9.
(1993) 1 Arb LR 287 :
AIR 1993 SC 1355 : (1993) 1 SCC 205. It is necessary that both the courts had
jurisdiction. Where an application for extension of time for submission of award was filed at Chandigarh, where
jurisdiction existed, a subsequent application by the party for revocation of arbitrator's authority filed elsewhere in a
competent court was not allowed, Nanu Ram Goya v. State of Haryana,
(1989) 1 Arb LR 438 (P&H). Darshan Singh v. Forward India Finance Ltd.,
(1985) Arb LR 79 (Del), initial reference by the revisional court and subsequent
arbitrator also appointed by the same court, award had to be filed in that court; Mamman v. Premier Morarji Chemicals
Co. Ltd.,
(1985) Arb LR 84 (Ker), company matter, application for winding up in High Court,
jurisdiction over all matters in that arbitration would be in the same High Court, Globe Paper Mills Ltd. v. Printpak
Machinery Ltd.,
AIR 1985 Cal. 52 [
(1985) Arb LR 106 ;
(1985) Arb LR 140 , an application first in a Calcutta court and then in Delhi, the
earlier in time became the competent court.
10. Bharat Coking Coal Ltd. v. Annapurna Construction,

(2008) 1 Arb LR 545 , 550 :
AIR 2008 SC 2028 [
LNIND 2008 SC 597 ]:
(2008) 2 RAJ 545 :
(2008) 6 SCC 732 [
LNIND 2008 SC 597 ] :
(2008) 4 Scale 316 [
LNIND 2008 SC 597 ]distinguishing State of M.P. v. Saith &
Skelton P. Ltd.,
AIR 1972 SC 1507 [
LNIND 1972 SC 726 ]:
(1972) 1 SCC 702 [
LNIND 1972 SC 726 ]; Guru Nanak Foundation v. Rattan Singh,
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ]:
(1981) 4 SCC 634 [
LNIND 1981 SC 402 ].

(2008) 1 Arb LR 545 , 552 :
AIR 2008 SC 2028 [
LNIND 2008 SC 597 ]: (2008) 2 RAJ 545 :
(2008) 6 SCC 732 [
LNIND 2008 SC 597 ] :
(2008) 4 Scale 316 [
LNIND 2008 SC 597 ] . See also Kerala State Electricity Board v.
Western India Cottons Ltd.,
(2006) 2 Arb LR 47 , 51- 52:
(2006) 1 RAJ 600 :
(2005) 3 Ker LT 294 (Ker-DB), court substituted a new arbitrator on consent of the
Navneet Krishn
Page 27 of 47
parties, in place of the earlier party appointed arbitrators, held court does not retain jurisdiction, application under S. 17
1940 Act (repealed) rejected; Bharat Coking Coal Ltd. v. H.P. Biswas & Co., 2007 (Suppl) Arb LR 6,
(2008) 3 RAJ 542 :
(2008) 6 SCC 740 (SC), if a court passes an order appointing an arbitrator in
substitution of the order of the lower court, the correct court for the filing of the award is the lower court.
12. Petine Shipping Inc of Monrovia v. Minerals and Metals Trading Corpn. of India Ltd.,
(2009) 3 Arb LR 20 :
(2009) 2 RAJ 572 : (2009) 8 JT 157 : (2009) 5 UJ (SC) 2418over-ruling
Petine Shipping Inc of Monrovia v. Minerals and Metals Trading Corpn. of India Ltd.,
(2008) 2 Arb LR 334 :
AIR 2008 (NOC) 1677 (DB):
(2008) 3 Bom CR 210 [
LNIND 2008 BOM 1 ] :
(2008) 3 Mah LJ 512 :
(2008) 4 RAJ 607 . See also Sadhu Singh & Co. v. NPCC Ltd.,
(2007) 2 Arb LR 11 , 15:
(2007) 4 RAJ 304 (Del), where court hinted that where an application is dismissed
as infructuous it might not attract the exclusivity rule, though, on facts of this case, the decision turned on the issue of
waiver of right to object upheld on appeal in NPCC Ltd. v. Sadhu Singh & Co.,
(2007) 2 Arb LR 377 :
(2007) 3 RAJ 424 (Del-DB) and settled by way of a consent order in NPCC Ltd. v.
Sadhu Singh & Co.,
(2009) 1 Arb LR 49 :
(2008) 3 RAJ 651 :
(2008) 7 SCC 778 [
LNIND 2008 SC 1501 ] :
(2008) 10 Scale 382 [
LNIND 2008 SC 1501 ].
13. See also Nimet Resources Inc v. Essar Steels Ltd., 2007 (Suppl) Arb LR
7, 12:
(2007) 3 RAJ 674 :
(2007) 8 Scale 671 , per S.B. Sinha J, “this court [i.e. the Supreme Court] in passing
its order... did not and could not retain any jurisdiction in itself as could be done in suitable cases under the 1940 Act”
(emphasis added); Mahesh Kumar Gupta v. Suresh Chander Gupta,
(2009) 1 Arb LR 37 , 39 (Del-DB), relevant court under S. 42 is where proceedings
originally commenced and not appellate court which may have referred parties to arbitration.
14. P. Anand Gajapathi Raju v. P.V.G. Raju,

(2002) 2 Arb LR 204 :
AIR 2000 SC 1886 [
LNIND 2000 SC 530 ]:
(2002) 2 RAJ 213 :
(2000) 4 SCC 539 [
LNIND 2000 SC 530 ]followed in Mahesh Agarwal v. Indian Oil
Corpn. Limited,
(2008) 3 Arb LR 173 , 178:
(2009) 2 RAJ 10 : (2008) 2 Cal HN 696 (Cal).
15. Rodemadan India Ltd. v. International Trade Expo Centre Ltd.,

(2006) 2 Arb LR 83 , 92 :
AIR 2006 SC 3456 [
LNIND 2006 SC 276 ]:
(2006) 2 RAJ 26 :
(2006) 11 SCC 651 [
LNIND 2006 SC 276 ] ; Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency,
2007 (Suppl) Arb LR 1, 5:
(2008) 3 RAJ 609 (SC):
(2008) 6 SCC 741 ; Nimet Resources Inc v. Essar Steels Ltd., 2007 (Suppl) Arb LR
7, 12:
Navneet Krishn
Page 28 of 47
(2007) 3 RAJ 674 :

(2007) 8 Scale 671 . See also Shree Iswar Satyanarayanji v.
Amstar Investment Pvt. Ltd.,
AIR 2007 (NOC) 2670 (Cal), application under S. 11, lying before the Chief Justice
or his designate is not before a “Court” and therefore does not attract the exclusivity rule under S. 42.
16. State of M.P. v. Saith & Skelton P. Ltd.,

AIR 1972 SC 1507 [
LNIND 1972 SC 726 ]:
(1972) 1 SCC 702 [
LNIND 1972 SC 726 ]; Guru Nanak Foundation v. Rattan Singh,
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ]:
(1981) 4 SCC 634 [
LNIND 1981 SC 402 ].
17. Sabson (India) P. Ltd. v. Neyveli,

AIR 1992 Mad 282 [
LNIND 1991 MAD 317 ]:
(1992) 2 Arb LR 508 .
18. (1991) 1 Mad LJ 286 : 1991 TNLJ 69:

(1991) 2 Arb LR 293 . Revocation or termination of a contract constitutes a part of
cause of action and the place where it takes place can vest jurisdiction in the courts of that place, Span Consultants P.
Ltd. v. Rashtraiya Chemicals and Fertilisers Ltd.,
AIR 1982 Del 157 [
LNIND 1981 DEL 294 ].
19. Mikuni Corporation v. Ucal Fuel Systems Ltd.,

(2008) 1 Arb LR 503 , 510:
(2008) 3 RAJ 193 (Del). See also Inox Air Products v. Rathi Ispat
Ltd.,
(2006) 4 Arb LR 40 , 51:
(2007) 3 RAJ 492 :
(2007) 136 DLT 101 [
LNIND 2006 DEL 1217 ] (Del); GE Countrywide Consumer Financial Services Ltd.
v. S. S. Bhatia,
(2006) 2 Arb LR 170 , 175:
(2006) 2 RAJ 236 :
(2006) 129 DLT 393 (Del); Apparel Export Promotion Council v. Prabhati Patni,
(2005) 3 Arb LR 518 (Del):
(2005) 4 RAJ 195 : 125
(2005) DLT 511 ; Globe Cogeneration Power Ltd. v. Sri Hiranyakeshi Sahakari
Sakkare Karkhane Niyamit, Sankeshewar, Karnataka,
(2005) 1 Arb LR 502 , 517 (Kar); Incomm Tele Ltd. v. Bharat Sanchar Nigam Ltd.,
(2006) 1 Arb LR 530 , 541:
(2005) 4 RAJ 308 :
(2005) 6 Andh LT 642 (AP-DB), seat of arbitration is not an essential condition for
jurisdiction, [seat] is rather flexible and depends upon the discretion and convenience of the arbitrator; Jatinder Nath v.
Chopra Land Developers Pvt. Ltd.,
(2007) 1 Arb LR 490 , 499- 500 :
AIR 2007 SC 1401 [
LNIND 2007 SC 278 ]:
(2007) 2 RAJ 258 , per Kapadia J “merely because the arbitrator chooses to hold
the proceedings in a place where no suit could be instituted and chooses to make an award at that place, it would not
give the court of that place territorial jurisdiction to decide the matter”.
20. Union of India v. Mohan Industries,

(2008) 2 Arb LR 454 :
(2009) 1 RAJ 118 (P&H).
Navneet Krishn
Page 29 of 47
21. Paramita Constructions Pvt. Ltd. v. UE Development India Pvt. Ltd.,

(2008) 3 Arb LR 522 :
(2009) 1 RAJ 677 :
(2009) 2 RAJ 168 (AP).
22. Statement of case for the opinion of court. No longer applicable under the
23. Indrajit Sinha v. B.L. Rathi, 88 CWN 823 :

AIR 1984 Cal 281 [
1985 Arb LR 89 .
24. Pandey & Co. Builders Pvt. Ltd. v. State

Bihar, of
(2006) 4 Arb LR 192 , 198 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ] on appeal from Pandey & Co. Builders Pvt. Ltd. v. State of
Bihar,
(2006) 1 Arb LR 429 :
(2006) 2 RAJ 285 :
(2005) 4 Pat LJR 385 (Pat-DB).

(2006) 4 Arb LR 192 , 198 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ]appeal from Pandey & Co. Builders Pvt.
(2006) 1 Arb LR 429 , 431:
(2006) 2 RAJ 285 :
(2005) 4 Pat LJR 385 (Pat).

AIR 2007 (NOC) 2670 (Cal), other than the two instances in Ss. 8 and 11 of the
1996 Act, the operation of S. 42 is all pervasive so far as Part I of the 1996 Act is concerned.

(2008) 3 Arb LR 272 , 274:
(2008) 152 DLT 239 (Del)relying upon Pandey & Co. Builders Pvt.
(2006) 4 Arb LR 192 , 198 :
AIR 2007 SC 465 [
LNIND 2006 SC 816 ]:
(2007) 1 RAJ 83 :
(2007) 1 SCC 467 [
LNIND 2008 SC 1573 ] ; followed in International Breweries Pvt.
Ltd. v. Mohan Meakins Ltd.,
(2008) 3 Arb LR 581 , 586:
(2008) 153 DLT 399 (Del); Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd.,
(2009) 3 Arb LR 524 :
2009 (159) DLT 579 , the place of filing of the execution application need not be the
place of the filing of the application under S. 34, since bar of S. 42 does not apply.
Navneet Krishn
Page 30 of 47
28. International Breweries Pvt. Ltd. v. Mohan Meakins Ltd.,

(2008) 3 Arb LR 581 , 586:
(2008) 153 DLT 399 (Del).
29. Computer Sciences Corpn. India (P) Ltd. v. Harishchandra Lodwal, 2005 (Suppl) Arb LR
121 :
AIR 2006 MP 34 [
LNIND 2005 MP 405 ]:
(2006) 1 RAJ 698 :
(2005) 4 MPLJ 164 :
(2006) 1 Civ LJ 914 , an award was passed at Indore, held that unless the court at
Indore transfers the decree to the court at Delhi, it cannot be executed in Delhi; ICDS Ltd. v. Mangala Builders P Ltd.,
AIR 2001 Kant 364 [
LNIND 2001 KANT 145 ]; Oil and Natural Gas Corpn. v. Hotel Paradise,
(2008) 4 Gau LR (NOC) 8 , 12, in case a S. 34 application has been filed before a
particular Court, execution under S. 36 must be sought from the same Court.
30. See Commentary under S. 36 under the heading “Jurisdiction”.
31. Manish Mittal v. Mahesh Chand,

(2006) 2 RAJ 454 :
(2006) 131 DLT 142 (Del), application to a court under S. 42 does not contemplate
an application under S. 8 since the judicial authority trying the action may or may not have the jurisdiction to start with
or be a competent court within the meaning of S. 2(e); Shree Iswar Satyanarayanji v. Amstar Investment Pvt. Ltd.,
AIR 2007 (NOC) 2670 (Cal), in making an application under S. 8 party does not
submit to the jurisdiction of such judicial authority nor does it attract the rule under S. 42; National Thermal Power
Corporation v. Lt. Col. A.P. Singh (Retd.),
(2009) 2 RAJ 461 :
(2009) 156 DLT 572 , merely making an application under S. 8 does not amount to a
submission to the territorial jurisdiction of the Court especially where the plea was that the court did not have jurisdiction
to try the suit.
32. P. Anand Gajapathi Raju v. P.V.G.

Raju,
(2000) 2 Arb LR 204 [
LNIND 2000 SC 530 ] :
AIR 2000 SC 1886 [
LNIND 2000 SC 530 ]:
(2000) 2 RAJ 213 :
(2000) 4 SCC 539 [
LNIND 2000 SC 530 ] : followed in Mahesh Agarwal v. Indian Oil
Corpn. Limited,
(2008) 3 Arb LR 173 , 178:
(2009) 2 RAJ 10 : (2008) 2 Cal HN 696 (Cal); East West Rescue Pvt. Ltd. v. Dr.
Narender Singh,
(2008) 3 Arb LR 623 , 629 :
AIR 2009 (NOC) 35 : (2008) 5 RAJ 522 :
(2008) 153 DLT 195 .
33. Bhandari Builders v. New India Mosaic & Marble Co. (P) Ltd.,
(2009) 2 Arb LR 232 , 237 (Del-DB).
34. Garden Finance Ltd. v. Prakash Inds. Ltd.,

AIR 2002 Bom 8 [
LNIND 2001 BOM 311 ]at 11:
(2002) 1 RAJ 204 :
(2002) 1 Arb LR 122 .
Navneet Krishn
Page 31 of 47

(2008) 3 Arb LR 272 , 274:
(2008) 152 DLT 239 (Del). See also Nimet Resources Inc v. Essar
Steels Ltd., 2007 (Suppl) Arb LR 7, 12:
(2007) 3 RAJ 674 (SC), when the court appoints an arbitrator under the 1996 Act, it
does not retain any further jurisdiction with it and becomes functus officio as regards the arbitral proceedings, all further
applications, including applications under S. 14 are to be filed only before the appropriate court under S. 2(1)(e).

(2006) 2 Arb LR 83 , 92:
(2006) 2 RAJ 26 relying upon S.B.P. & Co. v.
Patel Engineering Ltd.,
(2005) 3 Arb LR 285 :
AIR 2006 SC 450 [
LNIND 2005 SC 851 ]:
(2005) 3 RAJ 388 :
(2005) 8 SCC 618 [
LNIND 2005 SC 851 ].

(2006) 2 Arb LR 83 , 92:
(2006) 2 RAJ 26 .
38. Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, 2007 (Suppl) Arb LR 1, 5:
(2008) 3 RAJ 609 (SC); Incomm Tele Ltd. v. Bharat Sanchar Nigam Ltd.,
(2006) 1 Arb LR 530 , 543:
(2005) 4 RAJ 308 :
(2005) 6 Andh LT 642 (AP-DB); Union of India v. S.R. Construction Co.,
(2007) 4 Arb LR 141 , 144 (Del) :
AIR 2008 (NOC) 35 : (2007) 4 RAJ 701 (Del):
(2007) 144 DLT 580 ; Shree Iswar Satyanarayanji v. Amstar Investment Pvt. Ltd.,
AIR 2007 (NOC) 2670 (Cal), application under S. 11, lying before the Chief Justice
or his designate is not before a “Court” and therefore does not attract the exclusivity rule under S. 42; S.K. Brothers v.
Delhi Development Authority,
(2008) 3 Arb LR 272 , 274:
(2008) 152 DLT 239 (Del); Vijay Gupta v. Renu Malhotra,
AIR 2008 Del 83 [
LNIND 2008 DEL 425 ]:
(2008) 4 RAJ 589 .
39. Apeejay Oxford Bookstores Private Ltd. v. Hotel Leela Venture Limited, 2007 (Suppl) Arb
LR 96, 108- 109 :
AIR 2007 (NOC) 1692 : (2008) 5 RAJ 418, per Sanjib Bannerjee J explaining the
rationale for holding why an application under S. 11 will not attract the bar under S. 42.

(2006) 2 Arb LR 83 , 92 :
AIR 2006 SC 3456 [
LNIND 2006 SC 276 ]:
(2006) 2 RAJ 26 :
(2006) 11 SCC 611 .

(2006) 2 Arb LR 83 , 92 :
AIR 2006 SC 3456 [
LNIND 2006 SC 276 ]:
Navneet Krishn
Page 32 of 47
(2006) 2 RAJ 26 :
(2006) 11 SCC 611 .
42. See for instance Viswa Bharati v. Sarkara Sakar,

AIR 2008 (NOC) 1934 : (2008) 3 Cal LT 1 : (2008) 3 Cal HN 1013, when an order
was passed by the Calcutta High Court under S. 11, it was held that the S. 34 application must also lie before the same
High Court.
43. Macrotech India v. Uma Roy,

(2003) 4 RAJ 19 (Cal):
(2003) 3 Arb LR 52 .
44. DLF Industries Ltd. v. Standard Chartered Bank,

AIR 1999 Del 11 [
LNIND 1998 DEL 620 ]:
(1999) 1 RAJ 247 :
(1998) 2 Arb LR 427 .
45. Alakananda Hydro Power Company Ltd. v. Shring Construction Company Private Ltd.,
(2009) 3 ALT 485 , it may be noted that on facts, the application under Or 39 did not
relate to issues arising out of the arbitration agreement.
46. BV Sharma v. Skuast, 2006 (Suppl) Arb LR 439, 447:

(2007) 5 RAJ 403 (J&K).
47. BV Sharma v. Skuast, 2006 (Suppl) Arb LR 439, 447:

(2007) 5 RAJ 403 (J&K).
48. Shree Baidyanath Ayurved Bhawan Pvt. Ltd. v. Praveen Bhatia,

(2009) 4 Arb LR 219 :
(2009) 8 SCC 779 [
LNIND 2009 SC 1627 ] :
(2009) 4 Comp LJ 329 , both parties relied on different documents as being the
agreement between the, both obtained separate awards in their favour which were sought to be set aside by the other,
held, all cases transferred to the Court at Jhansi based on exclusive jurisdiction clause.
49. Anuptech Equipments P. Ltd. v. Ganpati Co-operative Housing Society Ltd.,

(2000) 1 RAJ 336 :
(1999) 2 BLR 539 (Bom).
50. Shiva Carriers v. Royal Projects Ltd.,

(2003) 3 RAJ 411 (Cal); Sarkar Enterprises v. Garden Beach Shipbuilders & Engrs.
Ltd.,
(2002) 2 RAJ 252 :
AIR 2002 Cal 63 : 2002 Supp Arb LR 288.
51. Deepak Mitra v. D.J. Allahabad,

(2002) 2 RAJ 112 :
AIR 2000 All 9 [
LNIND 1999 ALL 904 ]: 1999 Supp Arb LR 329.
Navneet Krishn
Page 33 of 47
52. Magnum Builders & Developers v. Ircon International Ltd.,

(2008) 4 Arb LR 235 , 242:
(2009) 2 RAJ 357 : (2008) 5 All LJ 362 (All-DB). See also Jaisu
Shipping Co. Pvt. Ltd. v. Iranian Offshore Engineering and Construction Co.,
(2005) 4 RAJ 140 :
(2008) 147 DLT 364 (Del), execution of contract and part payment in Delhi, mere
inviting or making of an offer at another place does not confer jurisdiction on courts at such place; Escorts Limited v.
G.K. Automobile,
(2006) 1 Arb LR 346 , 358:
(2006) 1 RAJ 423 (Del), execution, performance and alleged breach of contract all
at Faridabad, held courts in Delhi have no jurisdiction.
53. A.B.C. Laminart Pvt. Ltd. v. AP Agencies, Salem,

(1989) 2 Arb LR 340 :
AIR 1989 SC 1239 [
LNIND 1989 SC 150 ]:
(1989) 2 SCC 163 [
LNIND 1989 SC 150 ], per Saikia J. The court goes on to define the contours of the
term ‘cause of action’ in these words — “[a] cause of action means every fact, which, if traversed, it would be necessary
for the plaintiff to prove in order to support his right to a judgment of court. In other words, it is a bundle of facts which
taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act
done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to
the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not
comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to
obtain a decree. Every thing which if not proved would give the defendant a right to immediate judgment must be part of
the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it
depend upon the character of the relief prayed for by the plaintiff”.
54. Sushil Ansal v. Union of India,

AIR 1980 Del 43 [
LNIND 1979 DEL 188 ].
55. Union of India v. Jai Kishan Paruthi,

(1993) 1 Arb LR 441 (Del); Hira Associates v. Union of India,
(1989) 2 Arb LR 251 (P&H), before the award, an application at Chandigarh for
removal of arbitrator, held all subsequent proceedings to be there.
56. Om Metal & Mineral P. Ltd. v. State of Punjab,

(1993) 1 Arb LR 542 (Raj), there was no provision in the agreement excluding Kota
Courts. Supplies were effected from there and the bulk of the payment was also received there.
57. Harbans Singh Tuli & Sons Builders P. Ltd. v. Union ofIndia,
(1992) 2 Arb LR 93 :
AIR 1992 SC 1124 [
LNIND 1992 SC 146 ]:
(1992) 2 SCC 225 [
LNIND 1992 SC 146 ] relying upon A.B.C. Laminart P. Ltd. v. A.P.
Agencies, Salem,
(1989) 2 Arb LR 340 :
AIR 1989 SC 1239 [
LNIND 1989 SC 150 ]at 1243, para 15:
(1989) 2 SCC 163 [
LNIND 1989 SC 150 ] ; State of Punjab v. Sadhu Ram,
(2006) 2 Arb LR 355 (P&H), part of the cause of action i.e. imposition of penalty, at
Amritsar, held courts at Amritsar have jurisdiction.
58. Bijoy Das v. Union of India, (1993) 1 Arb 142 (Gau).
Navneet Krishn
Page 34 of 47
59. Narmade Industries v. U.P.S.E.B.,

(1993) 1 Arb LR 410 (Del).
60. Union of India v. Ajit Mehta,

(1990) 1 Arb LR 166 [
LNIND 1989 BOM 285 ] :
AIR 1990 Bom 45 [
LNIND 1989 BOM 285 ]; Punj Lloyd Ltd. v. Valentine Maritime (Mauritus) Ltd.,
(2008) 2 RAJ 422 (Del) subject matter was sub-contract work being carried out in
Gujarat, held Delhi High Court did not have jurisdiction.
61. Magnum Builders & Developers v. Ircon International Ltd.,

(2008) 4 Arb LR 235 , 243:
(2009) 2 RAJ 357 : (2008) 5 All LJ 362 (All-DB).
62. Union of India v. Shibboo Mal & Sons,

(1989) 1 Arb LR 372 (P&H); dispute relating to bills referred at one place, a later bill
referred at another place, not prevented if there is jurisdiction, See to the same effect Telephone
Cables Ltd. v. Chief General Manager (Telecom), Haryana Telecom Circle, 2005 (Suppl) Arb LR 572, 573:
(2006) 3 RAJ 368 (SC), formal acceptance of and payment under the contract was
in Chandigarh, rejection of an application for want of territorial jurisdiction by the Chandigarh court held erroneous;
Chief Engineer v. Bimal Chandra Mohanty,
AIR 1982 NOC 23 (Ori): (1981) 52 Cut LT 345. The procedure of filing awards for
making them a rule of the court is no longer applicable under the
63. APSRTC v. Reddy & Co.,

(1998) 3 RAJ 397 (AP) :
(1998) 2 Arb LR 152 .
64. Veena Enterprises Ltd. v. Greater Noida Industrial Development Authority, 2005 (Suppl)
Arb LR 281, 284:
(2006) 1 RAJ 117 (Del).
65. A.B.C. Laminart Pvt. Ltd. v. AP Agencies, Salem,

AIR 1989 SC 1239 [
LNIND 1989 SC 150 ]:
(1989) 2 Arb LR 340 :
(1989) 2 SCC 163 [
LNIND 1989 SC 150 ].
66. Union of India v. Adani Exports Ltd.,

AIR 2002 SC 126 [
LNIND 2001 SC 2467 ]; IK Merchants v. Sirpur Paper Mills, 2005 (Suppl) Arb LR
124, 128 :
AIR 2006 Cal 84 [
LNIND 2005 CAL 180 ]:
(2006) 2 RAJ 407 : 2005 Cal WN 481: (2005) 3 Cat LT 308 : 2006 AIJC 1276,
merely having a trading office in Calcutta which is otherwise unconnected with dispute does not give jurisdiction;
Golconda Engineering Enterprises Ltd. v. Assistant Director General, Bharat Sanchar Nigam Ltd.,
(2006) 1 Arb LR 368 , 373:
(2005) 3 RAJ 99 :
(2005) 4 Andh LT 247 (AP), manufacturing and inspection of goods at Hyderabad,
but disputes related to short-closure of contract and extension of time, for which cause of action arose at Ahmedabad
(place of office of department) held Andhra Pradesh High Court has no jurisdiction; Rattan Singh Associates (P) Ltd. v.
Gill Power Generation Company Pvt. Limited,
(2007) 1 Arb LR 206 , 217- 219:
Navneet Krishn
Page 35 of 47
(2007) 3 RAJ 284 :

(2007) 136 DLT 629 (Del), agreement was made, signed and executed in Punjab,
mere deposit of TDS at Delhi is not part of cause of action, held not sufficient to confer territorial jurisdiction on Delhi
courts.
67. Capital Fire Engineers v. State Bank of Patiala, [2005 (Suppl) Arb LR 287, 296:
(2006) 1 RAJ 102 (Del).
68. Apeejay Oxford Bookstores Pvt. Ltd. v. Hotel Leela Venture Ltd., 2007 (Suppl) Arb LR
96, 113 :
AIR 2007 (NOC) 1692 : (2008) 5 RAJ 418 (Cal).
69. Jasmine & Co. v. State of Nagaland,

(2009) 1 Arb LR 398 , 404:
(2009) 157 DLT 509 (Del).
70. Jasmine & Co. v. State of Nagaland, (2009) 1 Arb LR 398, 404:
(2009) 157 DLT 509 (Del).
71. Ansal Buildwell Ltd. v. North Eastern Indira Gandhi Institute of Health & Medical Science,
(2005) 1 Arb LR 431 , 436- 437 (Del), courts in Delhi have jurisdiction to entertain
injunction against invocation of bank guarantee where prima facie evidence that main contract, supplementary
agreement and bank guarantees executed in Delhi, and letters of invocation received at Delhi following
Kusum Ingots & Alloys v. Union of India,
(2004) 6 SCC 254 [
LNIND 2004 SC 573 ] ; Incomm Tele Ltd. v. Bharat Sanchar Nigam Ltd.,
(2006) 1 Arb LR 530 , 541:
(2005) 4 RAJ 308 :
(2005) 6 Andh LT 642 (AP-DB), even ‘fraction’ of cause of action is enough and
sufficient to decide territorial jurisdiction of a court, bank guarantee drawn in Hyderabad, manufacturing and supply of
material from Hyderabad, held Hyderabad Courts have jurisdiction per contra Indian Iron and Steel
Co. Ltd. v. Tiwari Road Lines,
(2007) 2 Arb LR 270 , 279 :
AIR 2007 SC 2064 [
LNIND 2007 SC 611 ]:
(2007) 3 RAJ 1 :
(2007) 5 SCC 703 [
LNIND 2007 SC 611 ], furnishing or encashment of bank guarantees at Hyderabad
may not be sufficient for deciding jurisdiction, though on facts no final opinion was expressed by the court on this point.
72. State of Rajasthan v. Swaika Properties,

AIR 1985 SC 1289 [
LNIND 1985 SC 114 ]:
(1985) 3 SCC 217 [
LNIND 1985 SC 114 ], service of notice at head office of company at Calcutta would
not give rise to any “cause of action” at Calcutta.
73. South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd.
(1996) 3 SCC 433 , contract executed and performed in Bombay, merely because
bank guarantee executed at Delhi and transmitted for performance to Bombay, does not constitute “cause of action”
giving jurisdiction upon Delhi courts.
74. V.K. Engg Constructions v. Managing Director, IRCON International Ltd.,

AIR 2008 (NOC) 1445 : (2008) 4 Andh LT 397, receipt of letter of acceptance at
Hyderabad and bank guarantees from Hyderabad banks, no cause of action arose at Hyderabad.
Navneet Krishn
Page 36 of 47
75. Kalooram v. Gangadass,

ILR (1963) 12 Raj 1090 .
76. B.S. Virdi Electric Works v. Union of India,

AIR 2002 Del 318 [
LNIND 2002 DEL 107 ], a case under Ss. 30 and 31 of the 1940 Act.
77. Mikuni Corporation v. Ucal Fuel Systems Ltd.,

(2008) 1 Arb LR 503 , 510:
(2008) 3 RAJ 193 (Del), merely because situs of arbitration proceedings were in
Delhi does not clothe Delhi courts with jurisdiction. See also Inox Air Products v. Rathi Ispat Ltd.,
(2006) 4 Arb LR 40 , 51:
(2007) 3 RAJ 492 :
(2007) 136 DLT 101 [
LNIND 2006 DEL 1217 ] (Del); GE Countrywide Consumer Financial Services Ltd.
v. S.S. Bhatia,
(2006) 2 Arb LR 170 , 175:
(2006) 2 RAJ 236 :
(2006) 129 DLT 393 (Del); Apparel Export Promotion Council v. Prabhati Patni,
(2005) 3 Arb LR 518 (Del):
(2005) 4 RAJ 195 : 125
(2005) DLT 511 , to determine jurisdiction the situs of the arbitration need not be
looked at since it is wholly irrelevant; Incomm Tele Ltd. v. Bharat Sanchar Nigam Ltd.,
(2006) 1 Arb LR 530 , 541:
(2005) 4 RAJ 308 :
(2005) 6 Andh LT 642 (AP-DB), seat of arbitration is not an essential condition for
jurisdiction, [seat] is rather flexible and depends upon the discretion and convenience of the arbitrator; Jatinder Nath v.
Chopra Land Developers Pvt. Ltd.,
(2007) 1 Arb LR 490 , 499- 500 :
AIR 2007 SC 1401 [
LNIND 2007 SC 278 ]:
(2007) 2 RAJ 258 , per Kapadia J “merely because the arbitrator chooses to hold
the proceedings in a place where no suit could be instituted and chooses to make an award at that place, it would not
give the court of that place territorial jurisdiction to decide the matter”.
78. Triveni Oil Field Service Ltd. v. Oil & Natural Gas Commission,
(2006) 1 Arb LR 360 :
AIR 2006 Del 331 [
(2006) 1 RAJ 412 :
(2006) 128 DLT 541 [
LNIND 2006 DEL 49 ] (Del)per contra Paramita Constructions Pvt.
Ltd. v. UE Development India Pvt. Ltd.,
(2008) 3 Arb LR 522 :
(2009) 1 RAJ 677 :
(2009) 2 RAJ 168 (AP), agreement on venue of arbitration is an “implied
agreement” to principal civil court at that place as the “court” for the purpose of S. 2(1)(e) of the 1996 Act; Union of
India v. Mohan Industries,
(2008) 2 Arb LR 454 :
(2009) 1 RAJ 118 (P&H).
79. Famous Construction v. National Projects Construction Corpn.,

AIR 2000 Del 404 [
LNIND 2000 DEL 222 ]. See further Commentary under S. 2(1)(e) under the
heading “Place of Business of Respondent” analysing Patel Roadways Limited v. Prasad Trading
Company,
AIR 1992 SC 1514 [
LNIND 1991 SC 347 ]:
(1991) 4 SCC 270 [
Navneet Krishn
Page 37 of 47
LNIND 1991 SC 347 ] :

(1991) 3 JT 337 .
80. Jindal Vijayanagar Steel (JSW Steel Ltd.) v. Jindal Praxair Oxygen Co. Ltd.,
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
LNIND 2006 SC 671 ]following Food Corpn. of India v. Evdomen
Corpn.,
AIR 1999 SC 2352 [
LNIND 1999 SC 166 ]distinguishing Patel Roadways Limited v.
Prasad Trading Company,
(1991) 4 SCC 270 [
LNIND 1991 SC 347 ] . See Mikuni Corporation v. Ucal Fuel
Systems Ltd.,
(2008) 1 Arb LR 503 , 510:
(2008) 3 RAJ 193 (Del), there is no specific rule conferring jurisdiction on Delhi
High Court similar to Clause 12 of the Letters Patent which confers original jurisdiction to the Bombay High Court.
81. Shivnath Rai Harnarain (India) Ltd. v. Abdul Ghaffar Abdul Rehman,
(2008) 2 Arb LR 121 :
AIR 2008 SC 1906 [
LNIND 2008 SC 628 ]:
(2008) 2 RAJ 269 :
(2008) 142 Comp Cas 855 :
(2008) 5 SCC 135 [
LNIND 2008 SC 628 ].
82. Societe Commercial Coreales & Financial v. State Trading Corpn. of India,
(1998) 1 RAJ 156 : (1998) 1 GCD 451 (Guj).
83. Andhra Pradesh State Road Transport Corpn. v. Reddy & Co.,
(1998) 3 RAJ 397 (AP—DB).
84. Food Corpn. of India v. Evdomen Corpn.,

AIR 1999 SC 2352 [
LNIND 1999 SC 166 ]:
(1999) 2 SCC 446 [
LNIND 1999 SC 166 ] :
(1999) 2 RAJ 108 :
(1999) 2 Arb LR 220 . Gwalior Dugdha Sangh Sahakari Ltd. v. G.M. Govt. Milk
Scheme, Nagpur,(2003) 3 RPJ 413:
(2003) 7 SCC 529 [
LNIND 2003 SC 693 ], the MP
Co-operative Societies Act , 1960 was applicable only to the State of M.P., and not outside the
state.Toepfer International Asia P. Ltd. v. Thapar Ispat Ltd.,
(2000) 2 RAJ 311 :
AIR 1999 Bom 417 [
LNIND 1999 BOM 363 ]:
(2000) 1 Arb LR 256 (Bom), terms negotiated and finalised at Bombay, the final and
formal contract document was engrossed and sent to Ludhiana for signature, the respondent's director signed and
returned it to Bombay. The Bombay courts were held to have territorial jurisdiction.
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
LNIND 2006 SC 671 ]distinguishing Patel Roadways Limited v.
Prasad Trading Company,
Navneet Krishn
Page 38 of 47
AIR 1992 SC 1514 [

LNIND 1991 SC 347 ]:
(1991) 4 SCC 270 [
LNIND 1991 SC 347 ] :
(1991) 3 JT 337 .
86. See Mikuni Corporation v. Ucal Fuel Systems Ltd.,

(2008) 1 Arb LR 503 , 510:
(2008) 3 RAJ 193 (Del), there is no specific rule conferring jurisdiction on Delhi
High Court similar to Clause 12 of the Letters Patent which confers original jurisdiction to the Bombay High Court
distinguishing Jindal Vijayanagar Steel (JSW Steel Ltd.) v. Jindal Praxair Oxygen Co. Ltd.,
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
LNIND 2006 SC 671 ].
87. NBCC v. AM Bansal Constn. & Engg. Services P. Ltd.,

(2002) 2 RAJ 259 :
(2002) 97 DLT 498 :
(2002) 2 Arb LR 183 (Del).
88. Ansal Buildwell Ltd. v. North Eastern Indira Gandhi Institute of Health & Medical Science,
(2005) 1 Arb LR 431 , 438 (Del).
89. Hamburg Bulk Carriers Gmbh v. Vishal Export Overseas Ltd.,

(2005) 2 Arb LR 402 , 403:
(2005) 2 RAJ 645 : (2005) 2 Guj LR 954 (Guj).
90. Punjab Small Industries and Export Corporation Ltd. v. Vilkhu & Sons.,
(1989) 2 Arb LR 256 P&H : (1987) 2 (90) PLR 311.
91. Union of India v. Aradhana Trading Co.,

(2002) 1 Arb LR 691 :
AIR 2002 SC 1626 [
LNIND 2002 SC 248 ]:
(2002) 4 SCC 447 [
LNIND 2002 SC 248 ] :
(2002) 2 RAJ 1 ; Gupta Textiles v. Union of India,
(2004) 1 RAJ 567 (Del), submission to territorial jurisdiction, 1940 Act.
92. Anuptech Equipments P. Ltd. v. Ganpati Co-operative Housing Society Ltd.,

(2000) 1 RAJ 336 :
(1999) 2 Bom LR 559 [
LNIND 1999 BOM 86 ] (Bom).
93. Sadhu Singh & Co. v. NPCC Ltd.,

(2007) 2 Arb LR 11 , 15:
(2007) 4 RAJ 304 (Del), objection as to lack of jurisdiction of Delhi High Court on
the ground that application had earlier been made before High Court of Himachal Pradesh, raised for first time at
hearing after 9 years, right to object held waived, upheld on appeal in NPCC Ltd. v. Sadhu Singh & Co.,
(2007) 2 Arb LR 377 :
(2007) 3 RAJ 424 (Del-DB) and settled by way of a consent order in NPCC Ltd.
v. Sadhu Singh & Co.,
(2008) 10 Scale 382 [
LNIND 2008 SC 1501 ] :
(2008) 7 SCC 778 [
Navneet Krishn
Page 39 of 47
LNIND 2008 SC 1501 ] :

(2009) 1 Arb LR 49 :
(2008) 3 RAJ 651 .
94. Atul R. Shah v. Vrijlal Lalloobhai & Co.,

(2000) 2 RAJ 14 :
AIR 1999 Bom 67 [
LNIND 1998 BOM 957 ]:
(1999) 2 Arb LR 54 (Bom) [F.I. Rebello, J.].

(2008) 3 Arb LR 581 , 586:
(2008) 153 DLT 399 (Del).

(2008) 1 Arb LR 545 , 552 :
AIR 2008 SC 2028 [
LNIND 2008 SC 597 ]:
(2008) 2 RAJ 545 :
(2008) 6 SCC 732 [
LNIND 2008 SC 597 ] :
(2008) 4 Scale 316 [
LNIND 2008 SC 597 ], jurisdiction in relation to arbitration petitions cannot be
acquired by the Supreme Court upon consent of parties; Harshad Chiman Lal Modi v. DLF Universal Ltd.,
AIR 2005 SC 4446 [
LNIND 2005 SC 730 ]:
(2005) 7 SCC 791 [
LNIND 2005 SC 730 ] :
(2005) 7 SLT 240 , where court has no territorial jurisdiction, such jurisdiction cannot
be vested by consent, acquiescence or waiver followed in Jasmine & Co. v. State of Nagaland,
(2009) 1 Arb LR 398 , 404:
(2009) 157 DLT 509 (Del).
1. Rajasthan State Electricity Board v. Universal Petrochemicals Ltd.,

(2009) 1 Arb LR 114 :
(2009) 1 RAJ 646 :
(2009) 3 SCC 107 [
LNIND 2009 SC 41 ] : (2009) 4 Mad LJ 1175, application under S. 20 (1940 Act)
should be filed in a court competent to entertain such proceedings and having jurisdiction to decide the subject matter
of reference.
2. Rajasthan State Electricity Board v. Universal Petrochemicals Ltd.,

(2009) 1 Arb LR 114 , 124: (2009) 1 RAJ 646 :
(2009) 3 SCC 107 [
LNIND 2009 SC 41 ] : (2009) 4 Mad LJ 1175.
3. Vijay Gupta v. Renu Malhotra,

AIR 2008 Del 83 [
LNIND 2008 DEL 425 ]:
(2008) 4 RAJ 589 , application under Ss. 27, 37 entertained by High Court, value of
dispute less than 20 lakhs, held High Court cannot be conferred with pecuniary jurisdiction by conduct of party where it
inherently lacks jurisdiction in view of pecuniary limits.
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
Navneet Krishn
Page 40 of 47
LNIND 2006 SC 671 ]following Fazlehussein v. Yusufally,

AIR 1955 Bom 55 [
LNIND 1950 BOM 47 ]; per contra Shree Subhalaxmi Fabrics Pvt.
Ltd. v. Chand Mal Baradia,
(2005) 1 Arb LR 623 , 633 :
AIR 2005 SC 2116 : (2005) 1 RAJ 535 :
(2005) 10 SCC 704 [
LNIND 2005 SC 305 ], per G.P. Mathur J “territorial jurisdiction goes to the root of
the matter”.
5. NPCC Ltd. v. Sadhu Singh & Co.,

(2007) 2 Arb LR 377 , 384:
(2007) 3 RAJ 424 (Del-DB), a case decided in the context of the pari materia
provision in the 1940 Act (S. 31(4)), where it was held that “ S. 31(4) [of the 1940 Act, corresponding to S. 42 of the
1996 Act] does not state when and in what circumstances a party can or cannot challenge jurisdiction of the court”
settled by way of a consent order in NPCC Ltd. v. Sadhu Singh & Co.,
(2008) 10 Scale 382 [
LNIND 2008 SC 1501 ] :
(2008) 7 SCC 778 [
LNIND 2008 SC 1501 ] :
(2009) 1 Arb LR 49 :
(2008) 3 RAJ 651 :
(2008) 7 SCC 778 [
LNIND 2008 SC 1501 ] ; Om Sakthi Renergies Ltd. v. Megatech Control Ltd.,
(2006) 2 Arb LR 186 , 191- 193:
(2006) 2 RAJ 364 : (2006) 1 Mad LJ 657 (Mad-DB), principle enshrined in
S. 21 of the CPC is applicable to proceedings arising out of arbitration, consequently, objection to
territorial jurisdiction of the court cannot be taken for the first time in appellate proceedings and must be properly
pressed at the earliest possible opportunity. See also
S. 21 of the Code of Civil Procedure, 1908 .
6. Sadhu Singh & Co. v. NPCC Ltd.,

(2007) 2 Arb LR 11 :
(2007) 4 RAJ 304 upheld on appeal in NPCC Ltd.
v. Sadhu Singh & Co.,
(2007) 2 Arb LR 377 , 384:
(2007) 3 RAJ 424 (Del-DB)settled by way of a consent order in NPCC Ltd. v.
Sadhu Singh & Co.,
(2008) 10 Scale 382 [
LNIND 2008 SC 1501 ] :
(2008) 7 SCC 778 [
LNIND 2008 SC 1501 ] :
(2009) 1 Arb LR 49 :
(2008) 3 RAJ 651 :
(2008) 7 SCC 778 [
LNIND 2008 SC 1501 ].
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
LNIND 2006 SC 671 ]following Fazlehussein v. Yusufally,
AIR 1955 Bom 55 [
(2006) 3 Arb LR 340 :
(2006) 3 RAJ 312 :
(2006) 11 SCC 521 [
LNIND 2006 SC 671 ].
Navneet Krishn
Page 41 of 47
9. Loyal Textile Mills Ltd. v. Allenberg Cotton Co.,

(1993) 2 Arb LR 6 (Mad). Subject to this, however, the exclusive jurisdiction
provided in the contract prevails, Amar Nath Charanji Lal & Co. v. Ferro Alloys Corpn. Ltd.,
(1991) 2 Arb LR 276 (Del), application at Delhi disallowed. The court said that the
words “in any reference” in S. 31(4) of 1940 Act did not refer only to applications after a reference to arbitration had
been made but also include an application under S. 20 of 1940 Act (deleted, 1996 Act) seeking a reference; Ganpatrai
Agarwall v. Fertiliser Corpn. of India,
AIR 1984 Cal 35 [
LNIND 1983 CAL 146 ]:
1983 Arb LR 247 , it is the duty of the competent court to see that all lawful
agreements between the parties are enforced and to refrain from exercising jurisdiction in any other manner than to
compel the parties to abide by their own agreement. But the courts of the place which have no jurisdiction otherwise
cannot become competent only because the agreement so provides, Punjab Rice Mills v. Punjab State Civil Supplies
Corpn. Ltd.,
(1991) 2 Arb LR 291 (P&H); Punjab Spinning & Wvg Mills Ltd. v. Bhiwani Trading
Co.,
(1987) 1 Punj LR 355 ; Hakum Singh v. Gammon India Ltd.,
AIR 1971 SC 740 [
LNIND 1971 SC 21 ]:
(1971) 1 SCC 286 [
LNIND 1971 SC 21 ]. Filing of award not allowed at a place where the courts had no
jurisdiction. Request for transfer of award filed in Bombay High Court to the Court at Jagatsinghpur rejected by the
latter on grounds of lack of its jurisdiction, Bombay High Court held it had jurisdiction to take award on file as the
appellant had one of its places of business at Bombay, affirmed by Supreme Court in Food Corporation of India v.
Evdomen Corp.,
(1999) 2 SLT 119 :
(1999) 2 SCC 446 [
LNIND 1999 SC 166 ], Section 31(4) of 1940 Act not raised either before the High
Court or the Supreme Court; Parties cannot confer jurisdiction under agreement, Union of India v. P. Anantharam,
(1991) 2 Arb LR 293 (Mad); Andhra Pradesh S.E.B. v. Sarathu Engg. Corpn.,
(1989) 1 Arb LR 95 :
AIR 1988 AP 371 [
LNIND 1987 AP 189 ], agreement to file award either at Hyderabad or
Secunderabad, held valid and binding. Maharashtra State Road Development Cornp. v. Larsen and Toubro Ltd.,
(2004) 3 RAJ 169 (Bom), contract for building a segment of the express highway
between Mumbai and Pune, Pune courts had jurisdiction, ouster clause in the agreement was of vague and uncertain
nature, it could not be effective to rule out territorial jurisdiction under the
CPC . Jaswant Lal Chug & Bros. v. NCERT,
(2004) 1 RAJ 132 (Del), on jurisdiction.
10. Neyveli Lignite Corpn. v. Vinay Engg.,

(1993) Arb LR 242 (Mad).
11. Raman Lamba v. D.M. Harish,

(1991) 2 Arb LR 196 (Bom); a similar view was taken in Sree Saraswathi Mills Ltd.
v. Govindji Jevat & Co.,
(1984) 1 Bom CR 34 [
LNIND 1983 BOM 103 ] ; Filmistan Distributors India P. Ltd. v. Pooja Movies,
(1985) Arb LR 227 (Del), agreement provided for exclusive Bombay jurisdiction,
application at Delhi not entertained; Ganpat Rai Agarwal v. Fertilizer Corpn. of India,
(1983) Arb LR 247 (Cal), parties can agree to confine to any one of the available
jurisdictions; Sarup Lal Singh v. National Fertilizers Ltd.,
AIR 1994 NOC 337 : (1993) 2 Arb LR 344 (Del), agreement for exclusive
jurisdiction at one place, case filed in court where cause of action arose, the time so lost was allowed to be excluded in
working out period of limitation.
12. Fertiliser Corporation of India v. Ranjit Kumar Mishra,

AIR 1980 Ori 52 : (1980) 43 Cut LT 547.
13. State of Maharashtra v. Ranjeet Constn.,

AIR 1986 Bom 76 [
Navneet Krishn
Page 42 of 47
LNIND 1985 BOM 207 ]:

(1986) 1 Arb LR 436 , a part of the cause of action arose there.
14. Union of India v. Sinam Gouri Shankar,

AIR 1980 NOC 103 (Gau).
15. Ramkripal Sharma v. Union of India,

AIR 1986 Cal 80 [
LNIND 1985 CAL 154 ]: (1986) 1 Cal CC 20.
16. Hindustan Steel Works Construction Ltd. v. N.V. Chowdhury,

AIR 1986 Cal 338 [
LNIND 1985 CAL 294 ].
17. Hindustan Steel Works Construction Ltd. v. N.V. Chowdhury,

AIR 1986 Cal 338 [
LNIND 1985 CAL 294 ]. The court further said that the jurisdiction of the agreed
court would also be lost. Om Metals & Minerals P. Ltd. v. Union of India,
(1986) 2 Arb LR 69 (Del), contract signed and executed at one place, jurisdiction at
some other place could not be claimed.
18.
(1989) 2 Arb LR 340 :
AIR 1989 SC 1239 [
LNIND 1989 SC 150 ]:
(1989) 2 SCC 163 [
LNIND 1989 SC 150 ], followed in Rajasthan State Electricity
Board v. Universal Petrochemicals Ltd.,
(2009) 1 Arb LR 114 , 124:
(2009) 1 RAJ 646 :
(2009) 3 SCC 107 [
LNIND 2009 SC 41 ] : (2009) 4 Mad LJ 1175, clause restricting jurisdiction to courts
at Jaipur “alone”, Calcutta courts will not have any jurisdiction even though an application had been made in Calcutta;
East West Rescue Pvt. Ltd. v. Dr. Narender Singh,
(2008) 3 Arb LR 623 , 629 :
AIR 2009 (NOC) 35 : (2008) 5 RAJ 522 :
(2008) 153 DLT 195 , cause of action arose in both Himachal Pradesh and Delhi,
clause to the effect that jurisdiction to be at Delhi “only”, held courts at Delhi had exclusive jurisdiction.
19. Para 21 of AIR.
20. See Jasmine & Co. v. State of Nagaland,

(2009) 1 Arb LR 398 , 404:
(2009) 157 DLT 509 (Del), even where clear words such as “alone”, “only” or
“exclusive” not used in the clause specifying jurisdiction, the maxim “expressio unius est exclusio alterious”, i.e.
expression of one is exclusion of another, may be utilized; Belliss India Ltd. v. Uttar Pradesh State Sugar Corporation
Ltd.,
(2009) 159 DLT 595 , if an intention to agree for an exclusive jurisdiction is evident,
though the wording in the contract may not be satisfactory, court will uphold the exclusion of forum See however the
following cases to the contrary Bhaskar Bhatt (M.D.) Tital Industries Ltd. Golden Enclave v.
Crescent Art Times Pvt. Ltd.,
AIR 2006 Ori 55 : (2006) 2 RAJ 458 (Ori) : (2006) 101 Cut. LT 373:
(2006) 4 Civ LJ 280 :
(2006) 1 Ori LR 40 , clause provided for agreement to be “subject to the jurisdiction
of the Courts in Bangalore”, held no exclusion of jurisdiction of all other Courts since phrases like ‘alone’, ‘only’ or
‘exclusive’ not used; Apeejay Oxford Bookstores Private Ltd. v. Hotel Leela Venture Ltd., 2007 (Suppl) Arb LR 96, 112 :
AIR 2007 (NOC) 1692 : (2008) 5 RAJ 418, clause providing courts at Bangalore
Navneet Krishn
Page 43 of 47
would have jurisdiction, exclusionary words like ‘only’ not used, held clause does not confer sole jurisdiction on
Bangalore courts; Vijai Electricals Ltd. v. Mohan Exports, 2007 (Suppl) Arb LR 399, 406 :
AIR 2007 (NOC) 1157 : (2006) 3 And hLD 583 (AP), forum selection clause failed
to provide exclusive jurisdiction to Delhi courts since exclusionary words like ‘only’, ‘alone’; etc. not used.
21. (1995) 13 LCD 55, Relied upon in South East Shipping Co. Ltd. v. Nav Bharat
Enterprises P. Ltd.,
(1996) 3 SCC 443 [
LNINDORD 1996 SC 223 ] :
(1996) 2 UJ 129 :
(1996) 3 JT 656 , wherein the Supreme Court found that merely because bank
guarantee was executed at Delhi and transmitted for performance to Bombay, it does not constitute a cause of action to
give rise to the respondent to lay the suit on the original side of the Delhi High Court. In this case the contract was
executed in Bombay but the Bank guarantee was executed by the respondent in Delhi which was transmitted for
performance to Bombay.
22.
(1995) 4 SCC 153 [
LNIND 1995 SC 524 ] :
AIR 1995 SC 1766 [
LNIND 1995 SC 524 ]:
(1995) 2 BC 372 :
(1995) 5 JT 179 .
23.
(2003) 2 Arb LR 102 :
AIR 2003 All 123 [
LNIND 2002 ALL 1179 ]:
(2003) 3 AWC 1763 (Lucknow Bench) (All).
24. At p. 126. Pasupati Fabrics Ltd. v. Savant Financial Ltd.,

(2001) 2 RAJ 167 (Del), the agreement was executed at Bombay, respondent had
office there, money was also payable there, provision for reference to the Arbitration Committee of the Regional Stock
Exchange in which equity shares were to be listed, this was Delhi Stock Exchange. Territorial jurisdiction was held to be
at that place. Cotton Corpn. of India Ltd. v. Mahalakshmi Fibres and Industries Ltd.,
AIR 2004 NOC 356 (Cal), arbitration clause provided for exclusive jurisdiction of the
courts at Greater Bombay to decide any dispute between the parties. A dispute was raised before the Calcutta High
Court. The objection as to jurisdiction raised at the earliest point of time. Participation in S. 34 proceedings was not
taken by the court as waiver of the right to object.
25. The Court considered the decision under

S. 319 of Crpc in Shashikant Singh v. Takeshwar Singh,
(2002) 5 SCC 738 [
LNIND 2002 SC 320 ] :
AIR 2002 SC 2031 [
LNIND 2002 SC 320 ]:
(2002) 4 JT 386 on the meaning of the words “could be”.
26. Tata Finance Ltd. v. Pragati Paribahan,

AIR 2000 Cal 241 [
LNIND 2000 CAL 118 ].
27. SPS Overseas Private Ltd. v. Phulchand Exports Ltd.,

AIR 2008 (NOC) 30 (Cal), clause vesting exclusive jurisdiction at Delhi which
otherwise had no jurisdiction, clause held invalid, courts at Calcutta having jurisdiction can entertain applications arising
out of contract; Wipro Finance Ltd. v. Sandplast (India) Ltd.,
(2006) 3 RAJ 524 :
Navneet Krishn
Page 44 of 47
(2006) 129 DLT 608 (Del) where jurisdiction conferred on Bangalore, but cause of
action arose in Delhi, territorial jurisdiction held to be vested with the Delhi courts; Pacific Greens Infracon Pvt. Ltd. v.
Senior Builders Ltd.,
(2009) 2 Arb LR 214 , 217- 218:
(2009) 159 DLT 130 (Del), per Dhingra J “ parties cannot by mutual consent confer
jurisdiction on a court which otherwise does not have jurisdiction”.
28. Apparel Export Promotion Council v. Prabhati Patni,

(2005) 3 Arb LR 518 :
(2005) 4 RAJ 195 (Del), courts at Delhi and Jaipur had jurisdiction, agreement
provided that only Jaipur courts could exercise jurisdiction, proceedings before Delhi Court for setting aside award not
permitted following A.B.C Laminart Pvt. Limited v. A.P. Agencies,
(1989) 2 Arb LR 340 :
AIR 1989 SC 1239 [
LNIND 1989 SC 150 ]:
(1989) 2 SCC 163 [
LNIND 1989 SC 150 ]. See to the same effect Progressive Career
Academy Pvt. Ltd. v. FIITJEE Ltd., 2005 (Suppl) Arb LR 421, 427:
(2006) 1 MPLJ 347 (MP), courts at Jabalpur and New Delhi had jurisdiction to
decide question forming subject matter of arbitration, clause confining jurisdiction to courts in New Delhi was a valid
ouster; Alakananda Hydro Power Company Ltd. v. Shring Construction Company Pvt. Ltd.,
(2009) 3 ALT 485 forum selection clause assigning jurisdiction to courts in Andhra
Pradesh held valid as part of cause of action had also arisen there; TPR Marketing Pvt. Ltd., Hyd. v. Kingsbury
Personal Care Pvt. Ltd.,
AIR 2009 (NOC) 1967 : (2009) 4 ALT 16 forum selected was Bombay, application
for appointment before Andhra Pradesh High Court not maintainable.
29. Cement Corpn. of India v. S. Sultan,

(2004) 3 RAJ 57 (Del).
30. Ranjul Baruah v. Numaligarh Refinery Ltd.,

(2001) 4 RAJ 595 :
AIR 2002 Gau 85 : (2001) 3 Arb LR 617 (Gau).
31. Nila Construction Company v. Sanghi Industries,

(2006) 2 Arb LR 490 , 496:
(2005) 4 RAJ 371 :
(2005) 6 Andh LT 806 (AP), Gujarat High Court approached for appointment of
arbitrator but party relied on exclusive jurisdiction clause for Hyderabad Courts, held that such party cannot
subsequently deny agreement, principle of estoppel by conduct applicable; Kone Elevatar India Pvt. Ltd. v. Indo Pacific
Software & Entertainment Ltd., Nagpur,
(2008) 7 MLJ 1249 (Mad), courts at both Nagpur and Madras had jurisdiction,
parties agreed for exclusive jurisdiction of the Madras Courts, arbitration application held maintainable before Madras
High Court; Deepak Chemical and Line Industries v. Ashok Leyland Finance Ltd.,
AIR 2008 (NOC) 594 (Mad), agreement conferring jurisdiction only to Courts where
address of registered owner of vehicle was situated, since the address was in Gujarat, held courts in Chennai do not
have jurisdiction; NKC Projects Ltd. v. Utility Energytech & Engineers Ltd.,
(2009) 2 Arb LR 634 , 637 :
AIR 2009 (NOC) 1966 : (2009) 4 All LJ 18 where contract provided that arbitration
would be subject to courts at Mumbai only, District court at Jhansi was held to be without jurisdiction.
32. Steel Authority of India Ltd. v. Jaiguru Construction Co, 2006 (Suppl) Arb LR 136, 143:
(2007) 5 RAJ 459 (Cal); Satluj Jal Vidyut Nigam Ltd. v. Continental Foundation
Joint Venture,
AIR 2009 (NOC) 310 (HP-DB), since choice of exclusive jurisdiction is based on
agreement of parties, they may also waive its application.
33. Steel Authority of India Ltd. v. Jaiguru Construction Co, 2006 (Suppl) Arb LR 136, 143:
(2007) 5 RAJ 459 (Cal), forum selection clause designated Rourkela courts to have
Navneet Krishn
Page 45 of 47
jurisdiction, parties waived their rights by approaching Calcutta court repeatedly; Satluj Jal Vidyut Nigam Ltd. v.
Continental Foundation Joint Venture,
AIR 2009 (NOC) 310 (HP-DB), parties agreed to the exclusive jurisdiction of Delhi
Courts, however proceedings started in Himachal Pradesh High Court no objection taken, exclusive jurisdiction clause
deemed to be waived, held Himachal Pradesh High Court would have jurisdiction to hear all subsequent applications by
virtue of S. 42.

(2005) 3 Arb LR 518 , 532- 533:
(2005) 4 RAJ 195 (Del), court noted that waiver under S. 4 is also not applicable
since it has reference to a situation ‘prior’ to the making of an award, as is clear from the expression “and yet proceeds
with arbitration without stating his objection”. It needs to be noted however, contractual waiver may still be effective,
even though it does not fall within the ambit of S. 4 of the 1996 Act.
35. Om Sakthi Renergies Ltd. v. Megatech Control Ltd.,

(2006) 2 Arb LR 186 , 192:
(2006) 2 RAJ 364 : (2006) 1 Mad. LJ 657 (Mad-DB).
36. SK Contractor & Engineers v. Hindustan Petroleum Corporation Ltd.,

(2008) 2 Arb LR 263 :
(2008) 4 RAJ 186 :
(2008) 150 DLT 584 .

(2008) 3 Arb LR 581 , 586:
(2008) 153 DLT 399 (Del).
38. Larsen & Toubro Ltd. v. KS Baidwan, 2006 (Suppl) Arb LR 25, 28:
(2005) 3 RAJ 103 (Del), arbitration agreement relating to construction of building,
Delhi courts approached for injunction against forcible possession.

(2005) 3 Arb LR 518 , 532 - 533:
(2005) 4 RAJ 195 (Del), situs of arbitration does not ipso facto clothe the courts
with jurisdiction. See further Commentary under S. 2 under the heading “Territorial Jurisdiction”.
40. Bakhtawar Singh Balkrishna v. Union of India,

AIR 1983 Del 201 [
LNIND 1982 DEL 112 ]:
1983 Arb LR 361 . See also Kuldeep Singh v. Union of India,
AIR 1986 Del 56 [
LNIND 1985 DEL 223 ]:
(1987) 1 Arb LR 359 :
(1986) 1 Arb LR 430 Northern Ry HQ at Delhi and, therefore, action at Delhi
allowed though contract made in Lucknow, but for contract made in Bombay action in Delhi not allowed because
Western Ry is not head quartered there Gupta Sanitary Stores v. Union of India,
(1987) 1 Arb LR 296 Del, where a Govt. contract was executed within the State of
UP and the Govt. body was headquartered at Pithoragarh with head office at Bareilly, it was held that the courts at
Delhi had no jurisdiction. The Govt. is not supposed to carry on its business at Delhi; Hindustan Metal Works v. Union
of India,
(1987) 1 Arb LR 6 (Del).
41. Patel Roadways Ltd. v. Prasad Trading Company,

AIR 1992 SC 1514 [
LNIND 1991 SC 347 ]:
(1991) 4 SCC 270 [
Navneet Krishn
Page 46 of 47
LNIND 1991 SC 347 ] :

[1991] 3 SCR 391 [
LNIND 1991 SC 347 ].
42. Shri Ganesh Research Institute v. Union of India,

(2005) 1 Arb LR 221 , 226 (Del), no cause of action arose in Delhi, held courts at
Delhi do not have jurisdiction merely because Union of India is party to the dispute and has its centre at Delhi. See
further Commentary under S. 2 (1)(e) under the heading “Place of Business of Respondent”.
43. Bakhtawar Singh Balkishan v. Union of India,

AIR 1988 SC 1003 : (1988) 2 Arb LR 155 :
(1988) 2 SCC 293 . The provisions of the 1940 Act relating to filing are no longer
applicable under the
44. Sasken Communication Technologies Ltd. v. Prime Telesystems Ltd.,

(2003) 1 RAJ 317 :
(2002) 99 DLT 640 [
LNIND 2002 DEL 1072 ] :
(2002) 3 Arb LR 388 ; Star Shipping AS v. China National Foreign Trade
Transportation Corpon., (1993) 2 Lloyd's Rep 445, on the question of proper law, the relevant clause in the charter was
to be referred to arbitration in Beijing or London at the defendant's option.
45. Pandey & Co. Builders Pvt. Ltd. v. State of Bihar, 2005 (Suppl) Arb LR 114, 118:
(2006) 2 RAJ 285 :
(2005) 4 Pat LJR 385 (Pat-DB); on appeal from Pandey & Co.
Builders Pvt. Ltd. v. State of Bihar,
(2006) 1 Arb LR 601 , 605:
(2006) 2 RAJ 171 :
(2005) 4 Pat LJR 131 (Pat).

(2005) 3 Arb LR 518 , 531:
(2005) 4 RAJ 195 (Del), condition precedent for S. 42 is that first application must
be before a competent ‘court’ as per S. 2 (1)(e), on facts, exclusive jurisdiction vested with Jaipur courts, merely
because application filed first before Delhi High Court bar under S. 42 will not automatically be invoked; Rajasthan
State Electricity Board v. Universal Petrochemicals Ltd.,
(2009) 1 Arb LR 114 , 124:
(2009) 1 RAJ 646 :
(2009) 3 SCC 107 [
LNIND 2009 SC 41 ] : (2009) 4 Mad LJ 1175, exclusive jurisdiction agreed to be
with courts at Jaipur, held Calcutta courts could not exercise jurisdiction as per non-obstante clause in S. 31(4) of 1940
Act (S. 42 of 1996 Act), just because an application had been filed; Vijay Gupta v. Renu Malhotra,
AIR 2008 Del 83 [
LNIND 2008 DEL 425 ]:
(2008) 4 RAJ 589 , application under Ss. 27, 37 entertained by High Court, value of
dispute less than 20 lakhs, held High Court cannot be conferred with pecuniary jurisdiction by conduct where it
inherently lacks jurisdiction in view of pecuniary limits; HBM Print Ltd. v. Scantrans India Pvt. Ltd., 2007 (Suppl) Arb LR
13, 16:
(2007) 3 RAJ 513 (SC), application filed before the wrong forum which had no
jurisdiction to entertain that application will not activate the bar under S. 42 so as to preclude subsequent applications
before the correct forum.
47. Sarovar Plaza Hotels v. World Park Hotels, 2005 (Suppl) Arb LR 231, 235- 236:
(2006) 1 RAJ 112 (Del); Oil & Natural Gas Corporation Ltd. v. Jagson Intl Ltd.,
(2005) 3 Arb LR 167 , 179 :
AIR 2005 Bom 335 [
LNIND 2005 BOM 676 ]:
(2005) 3 RAJ 555 :
Navneet Krishn
Page 47 of 47
(2005) 5 Bom CR 58 [
LNIND 2005 BOM 676 ] : (2005) 3 Mahlj 1141
(2006) 65 SCL 216 , in order to invoke the bar under S. 42 the first application which
is made must be a “competent” application; Satluj Jal Vidyut Nigam Ltd. v. Continental Foundation Joint Venture,
AIR 2009 (NOC) 310 (HP-DB), the exclusivity rule under S. 42 applies only if the
first application is filed in a Court of competent jurisdiction.
48. Sarovar Plaza Hotels v. World Park Hotels, 2005 (Suppl) Arb LR 231, 235- 236:
(2006) 1 RAJ 112 (Del).
49. Union of India v. Supreme Paper Mills Ltd.,

(2005) 1 Arb LR 123 , 125:
(2005) 1 RAJ 85 (Del).

AIR 2007 (NOC) 2670 (Cal).
51. See Commentary under S. 42supra under the heading “To attract exclusivity rule - first application must
be ‘maintainable'”.
52. Prem Chand Garg v. Haryana State Industrial Development Corporation Ltd., 2006
(Suppl) Arb LR 152, 158:
(2007) 5 RAJ 308 (P&H) this judgment was given in the context of S. 31(4) of the
old Act which was substantially similar to S. 42 of the 1996 Act.
53. Aggiliki Charis Compania Maritima SA v. Pagran Spa, (1994) 1 Lloyd's Rep 168 (QBD,
Com Court).
End of Document
Navneet Krishn
S. 43.
Limitations
(1) The
Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings
in court.
(2) For the purposes of this section and the

Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on
the date referred in Section 21.
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the
agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time
fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in
the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so
fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such
period as it thinks proper.
(4) 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.
1. Applicability of
Limitation Act
The provision under the 1940 Act was in S. 37.1
The provision in the 1940 Act carried five sub-sections. The provision in the 1996 Act drops one sub-section.
The other sub-sections are the same with minor changes.
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Subject to the provisions of the

Limitation Act, 1963 , every arbitration must be commenced within the prescribed period.
Article 137 of the Limitation Act, 1963 applies and, therefore, a suit can be filed within
three years from the date on which one party terminated or rescinded the contract.2 An assurance from the final
authority cannot put in abeyance the period prescribed by the law.3 In a contract for sale of newsprint, the first
consignment was seized by customs and the order for the balance was cancelled. The time began to run from
the date on which the buyer came to know of the seizure. Arbitration should have been demanded within three
years from that moment. That having not been done, the right became time-barred.4
Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years
from the date when the cause of action accrues, so in the case of arbitration the claim is not to be put forward
after the expiration of a specified number of years from the date when the claim accrues.5 For the purposes of
Section 37(1) of the 1940 Act the terms “action” and “cause of action” in the
Limitation Act were construed as “arbitration” and “cause of arbitration”. The cause of
arbitration arises when the claimant becomes entitled to raise the question, that is, when the claimant acquires
the right to require arbitration.6
The Supreme Court cited the above passage from this book in its decision in Panchu Gopal Bose v. Board of
Trustees for Port of Calcutta 7 and applied it to the facts of a case where the claim was
held to be hopelessly barred because the party had been sleeping over his rights for over ten years. The party
was accordingly prevented from resorting to arbitration. In this case it was held that the provisions of the
Limitation Act would apply to arbitrations and, notwithstanding any term in the contract to
the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party in
respect of any such matter at the time when it should have accrued but for the contract. Cause of arbitration
shall be deemed to have commenced when one party serves the notice on the other party requiring the
appointment of an arbitrator. The question is when the cause of arbitration arises in the absence of issuance of
a notice or omission to issue notice for long time after the contract was executed? Arbitration implies to charter
out timeouts commencement of arbitration availing the arbitral agreement, as soon as difference or dispute has
arisen. Delay defeats justice and equity aids promptitude and resultant consequences. Defaulting party should
bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of
arbitration was allowed to be barred. It was further held that where the arbitration agreement does not really
exist or ceases to exist or where the dispute applied outside the scope of arbitration agreement, allowing the
claim after considerable lapse of time would be a harassment to the opposite party. It was accordingly held in
that case that since the petitioner slept over his rights for more than 10 years, by his conduct he allowed the
arbitration to be barred by limitation and the Court would be justified in relieving the party from arbitration
agreement undersections 5 and 12(2)(b) of the
Limitation Act . This case was referred to in State of Orissa v. Damodar Das,
8 wherein, on the facts and circumstances of the case, the court left the question of limitation to be decided by
the arbitrator.
Where objections to the validity of an award were not filed within the time delimited under the section, nor any
application was moved for condonation of delay under S.
section 5 of the Limitation Act, 1963 , the objections were held to be time-barred.9
An application under Section 20, 1940 Act(filing of arbitration agreement in court) (dropped from 1996 Act) is
governed by
Article 137 of the Limitation Act, 1963 and had to be made within three years of the date
when the right to apply first accrued. There was no right to apply until there was a clear and unequivocal denial
of that right by the respondent.10
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2. Provision for Time in Arbitration Agreement
Commercial contracts usually contain express “time-bar clauses” which seek to incorporate time-limits within
the uncertainties of dispute resolution. These normally require some formalities to be performed within a stated
time period, in default of which either the claim or the right to assert the claim in arbitration will be barred. These
clauses are routinely used in modern contracts, and under common law they are accepted as intrinsically
valid.11 The effect of such a clause is a matter of construction.
In India, such time-bar clauses need to be judged on the touchstone of S. 28 of the Contract Act, 1872, which
makes agreements in restraint of legal proceedings void. The jurisprudence developed around S. 28 has
traditionally recognised a distinction between ‘a clause cutting short the period of limitation’ and ‘a clause
providing for extinguishment of rights after a specified period’.12 A clause limiting time which barred the
availability of remedy would be void, but a complete forfeiture or surrender of rights did not fall foul of S. 28.
Thus, under Indian law, unlike the law in UK, there existed a difference between time-bar clauses which
extinguished the claim, and those which barred the right to arbitration. The former were valid and enforceable,
but the latter were void.
This distinction between “time-bar” clauses barring the claim and clauses barring the remedy to arbitration, was
noted to be highly technical and gave rise to many difficulties.13 Due to the conceptual unattractiveness of this
distinction, S. 28 was amended in 1997, and the legislature plugged the exception for clauses extinguishing
rights, by adding a new S. 28 (b) to the Contract Act.14 The amendment does away with the earlier distinction,
and now, both, clauses limiting time, and, clauses extinguishing rights, are equally void under Indian law. This
change in the legal landscape has been noticed by the Delhi High Court.15 The cases decided on the basis of
the earlier law or on common law principles,16 it appears, do not reflect the correct position post-amendment to
S. 28 of the Contract Act.
It may be noted that the effect of the law post-amendment is to restrict the freedom of parties to contract into
enforceable time limits. To the extent that contractual time limits are a positively beneficial feature of
commercial contracts,17 the autonomy of parties to avail such benefits is now restricted.
Cases on the law subsequent to the amendment to S. 28
An agreement stipulated that the invocation for arbitration would have to be within 90 days from the date of
intimation that the final bill was ready for payment. The provision was held to be void by reason of S. 28 of the
Contract Act. It deprived the petitioner of a very valuable right of claiming the amount within the ordinary period
of limitation after receiving the notice.18 It has been noted that subsequent to the amendment to S.
section 28 of the Indian Contract Act, 1872 the distinction between curtailing the
limitation period and extinguishing of an actionable right no longer exists, and any clause in an arbitration which
restricts the right of a party beyond a particular period is void.19 In another case where also the time for
commencement of proceedings was linked with the preparation of the final bill which could not be prepared for
long and, therefore an ad hoc payment was made to the contractor, this was held as amounting to an
acknowledgement and, therefore, the period of limitation accordingly because extended.20
The manner in which such limiting clauses have to be construed was explained thus:21 “It is true to state that
where claims are raised after a passage of several months and years, the opposite party is automatically
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Page 4 of 47
disadvantaged in defending the case. In this case, as well as in all such cases, in interpreting exclusion clauses
in standard forms contracts, the courts around the globe have considered it wise for giving an interpretation
most favourable to the party which has not drafted the exclusion clauses.
Cases on the law prior to the amendment to S. 28
In the instant case, parties agreed to raise their claims during the subsistence of the contract. The appointment
of the arbitrator was rejected where claims were made subsequent to the contract.22 Similarly, where claims
were to be raised within 90 days, disputes raised after 10 months were held not arbitrable.23
Where the agreement provided that the contractor should prefer his appeal in respect of the final bill within 90
days of receiving the information from the engineer in-charge, and the arbitrator overlooked this fact, his award
was set aside.24
An agreement for construction work between the contractor and the Electricity Board provided limitation of 90
days for preferring claims before the arbitrator from the date of dispute. The Chief Engineer rejected the claim
of the contractor. A claim filed before expiry of 90 days from the date of rejection was held to be within time.25 In
a similar case, where no intimation was given by the department that the Bill was ready for payment, an
argument based on limitation was not entertained.26
In case of time-bar clauses that require arbitration within a specified time from the date the dispute arises, in the
absence of any material to the contrary, it may be legitimately presumed that the dispute first arose when the
claims that were made were rejected by the other party.27
3. Commencement of arbitration [ Section 43 (2)]
An arbitration was deemed by Section 37(3), 1940 Act to commence when the claimant served on the other
parties a notice requiring the appointment of an arbitrator or if the arbitrator was named or designated in the
arbitration agreement requiring that the difference be submitted to him. The provision as to commencement in
the 1996 Act, is in Section 21. Section 43(2)says that for the purposes of the section and the
Limitation Act, 1963 arbitration is to be deemed to commence as provided in S. 21 of the
Act. This section provides that, subject to the parties’ agreement, the arbitral proceedings in respect of a
particular dispute commence on the date on which a request for that dispute to be referred to arbitration is
received by the other party. Limitation thus has reference only to the “commencement of arbitration” and not
“commencement of proceedings before the arbitrator”.28
The notice may be served personally or by post in accordance with Section 3 of the 1996 Act. The requisite
notice stops time from running. The notice was not wiped out by a subsequent demand for arbitration.29
Section 37(3), 1940 Act being a deeming provision, did not exclude other direct means of establishing the
commencement of arbitration.30 Its provisions were not exhaustive. An arbitration was commenced when the
claimant applied for arbitration to the Bengal Chamber of Commerce31 or some other Association,32 in
accordance with the Rules of the Association applicable to the arbitration.33 Time stops running when the
application for reference is made and not when the arbitration court is constituted.34 However, even though the
arbitrators enter upon reference beyond the three year period, it does not make the arbitration time barred,
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Page 5 of 47
when the requisite notice for arbitration is within time.35 Arbitration was taken to be commenced under the 1940
Act on the date of the service of a notice of appointment of the claimant's arbitrator and requesting the other
party to make an appointment or agree to the arbitrator already appointed as sole arbitrator.36
The giving of the notice is a matter inter parties and is a procedural and not a decisive step. Its form and terms
do not call for an excessive scrutiny. If, in substance, a party communicates an intention to resort to arbitration
and a requirement that the other party should do something on his part in that regard, this will in general suffice
to define the commencement of arbitration.37 The commencement of the arbitration would coincide with the
service of the notice upon the other party.38 A letter stating “please advise your proposals to settle the matter or
name your arbitrator. Expecting a reply” was held to be sufficient to mark the commencement of the arbitration
and time stopped running under the time bar clause.39 The letter should be construed as a request for the
difference to be submitted to arbitration with a saving that the request will be withdrawn if a settlement can be
reached.40 In commercial arbitration, a letter requesting arbitration should not be construed too strictly.41
Arbitration is not commenced unless the notice requires the other party to take some step in connection with
the arbitration or to do something on his part in the matter of arbitration.42 A letter of the shipowner's agent to
the charterers’ agent stating that in view of the attitude taken by the charterers “owners will be putting the
matter to arbitration and will be advising you concerning details of the arbitrator appointed in due course” did
not commence arbitration. The letter neither contained nor implied a requirement that the charterers were to do
anything. It merely referred to an arbitration in future and contained no present requirement of any kind. A
notice commencing arbitration must be clear and unambiguous.43
The courts have been reluctant to require too much technicality in a notice of arbitration. If the notice simply
says that a party requires the dispute to be submitted to arbitration that may be sufficient to commence the
arbitration because it is by implication a request to the other to agree to the appointment of an arbitrator or to
appoint his arbitrator.44 It is preferable however that the notice should make clear what is required of the other
party.
Where the contractor gave notice in 1979 demanding damages, it was held that the cause of action arose from
the date of the notice. He filed an application for appointment of an arbitrator in 1985. This was held to be time-
barred. The fact that he entered into a supplementary agreement for completion of work within the stipulated
time at a higher rate, did not stop the running of time and also did not operate as a waiver of his right under the
notice.45
The question whether a particular claim is time-barred can be referred to arbitration. Such a question cannot be
permitted to be raised under
S. 115, CPC .46
Where the final bill was submitted after six years of the completion of the works and handing over and it was
resisted on the ground of limitation, the court found that the final bill could not be submitted for all that period
because it required measurements which the contractor alone could not do and, therefore, it could not be said
that there was no material to go before the arbitrator for adjudicating upon the question of time-bar.47
Where a matter was raised four and a half years after completion of works and the arbitrator gave his finding
that the claim was not time-barred, the court refused to interfere because in between there were negotiations
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Page 6 of 47
about increase in rates of work.48
Section 37(3), 1940 Act enacted that even if the arbitration clause provided that no cause of action accrued in
respect of any matter required by the agreement to be referred until an award was made under the agreement,
time would run from the date when the cause of action would have accrued but for the agreement. This
provision has been dropped from the 1996 Act.
An agreement was supposed to have been made on the furnishing of the security deposit, but that was not
done and, therefore, there was a breach. Three years’ time was available from that day. No reference was
made within that period in respect of one contract. Appointment was refused. But an arbitrator was appointed in
respect of another contract because the application was within time and subsequently by a corrigendum, the
earlier contract was also added to the reference. A time-barred claim was tagged to a still available claim. The
arbitrator did not consider this aspect. The award was held to be vitiated.49
4. Counterclaim
The time for filing a counterclaim has been held to be three years from the date of the claim, i.e. from the date
of the request for submission of the dispute to arbitration.50
5. Exclusion of time taken in infructuous arbitration proceedings
Section 37(5), 1940 Act[ S. 43(4) of 1996 Act] provided that if the award was set aside or if after the
commencement of arbitration the court ordered that the arbitration agreement will cease to have effect with
respect to the dispute referred, the period between the date of the commencement of the arbitration and the
date of the order of the court shall be excluded in computing the period of limitation prescribed by the
Limitation Act with respect to the dispute. That part of the provision which talks of
superseding the arbitration has been dropped from the
Arbitration and Conciliation Act, 1996 . The rest of the sub-section remains the same as
before. If a party to a reference of disputes in a pending suit died after the reference and the suit abated, the
period of time between the death of the party and the date of the order superseding the reference had to be
excluded under Section 37(3), 1940 Act in computing the period of limitation prescribed for an application to set
aside the abatement.51 The provision for reference in a pending suit has been deleted from the 1996 Act.
If the named sole arbitrator refused to act as arbitrator and on an application under Section 8, 1940 Act [ S. 11
of 1996 Act] the court ordered that it had no power to appoint another arbitrator, the effect of the order was that
by implication the agreement ceased to have effect and the time spent in the infructuous arbitration
proceedings would be excluded under Section 37(5), 1940 Act.52
In an appropriate case leave should be given to revoke the authority of the arbitrator and the time spent in
infructuous proceedings should be excluded.53 A situation of this kind is not likely to arise under the
Arbitration and Conciliation Act, 1996 because there is no need for obtaining leave of the
court. But the principle of the decision would be applicable to situations unders. 14(1)(a) in which the approval
of the court is requisite.
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Before the enactment of Section 37, 1940 Act it was held that a submission to arbitration did not per se exclude
the right of either party to raise the defence of the Statute of Limitation and if it was intended to exclude such a
defence an express term to that effect had to be inserted into the agreement.54 This was the principle
underlying the provision of Section 37(1), 1940 Act [now S. 43 of 1996 Act].55 An ordinary submission without
special stipulation limiting or conditioning the functions of the arbitrator carried with it the implication that the
arbitrator should give effect to all legal defences such as that of limitation. Accordingly the arbitrator was
entitled and bound to apply the law of limitation.56 Section
section 3 of the Limitation Act , 1980 [English] applied by way of analogy to arbitration
proceedings, and like interpretation was given to Section
section 14 of the Limitation Act , 1908. The expression “civil proceedings in court” in
Section 14 of that Act would include proceedings before the arbitrator whom the parties had substituted for the
courts of law to be the judge,57 and it was an implied term of the contract that all defences available at law or in
equity were available in arbitration. It was accordingly held that proceedings before the arbitrator were
proceedings before the court within the meaning of Section
section 14 of the Limitation Act , 1908.58
After the
Arbitration Act , 1940, came into force it was held that the “court” in Section
section 14 of the Limitation Act , 1908 included arbitration tribunals. The time spent in
infructuous arbitration proceedings should be excluded in computing the period of limitation,59 if the arbitration
tribunal was unable to entertain the claim due to initial defect of jurisdiction or due to a defect arising
subsequently, e.g., when one of the arbitrators refused to act and the remaining arbitrators were not competent
to go on with the arbitration.60 But the opposite view also prevailed and it had been held that arbitration tribunals
were not courts within the meaning of Section
section 14 of the Limitation Act and that in a case where Section 37(5), 1940 Act did not
apply, the time spent in infructuous proceedings could not be excluded in computing the period of limitation.61 If
the arbitration had not commenced, the plaintiff was not entitled to any exclusion of time under Section 37(5),
1940 Act.62 Section 37 (5) should be liberally construed and the words “shall cease to
have effect” apply when the court holds that the arbitration clause was void in law or that it did not apply at all to
the dispute referred.63
The expression “court” in Section 37(5), 1940 Act included the appellate and revisionals courts. The plaintiff
was entitled to exclusion of the time spent in appeal or revision against an order of court setting aside the
award.64
Section 46, 1940 Act excluded the operation of Section 37, 1940 Act relating to statutory arbitration.65 A
statutory arbitrator may entertain a claim which if made in court would be barred by limitation. Failure by the
statutory arbitrator to apply the law of limitation is not misconduct.66
6. Cause of action to enforce award
The
Limitation Act , 1980 [English] carries the following provision on this point :
“An action to enforce an award, where the submission is not by an instrument under seal, shall not be brought after the
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expiration of six years from the date on which the cause of action accrued.”
It has been held in Agromet Motoimport v. Maulden Engineering Co. (Beds) Ltd. 67 that “
the date on which the cause of action accrued” is the date on which the party against whom the award has
been made fails to honour the award ; it is not the date of the breach of the contract by virtue of which
arbitration had arisen. The court approved the approach adopted in Mustill and Boyd's Commercial
ARBITRATION.68 The learned authors state :
“We submit that time begins to run from the date on which the implied promise to perform the award is broken, not from
the date of the arbitration agreement nor from the date of the award.”
Where the time for filing award was lost because of prolonged litigation and there was also some delay in filing
objections, the court condoned the delay under S.
section 5 of the Limitation Act, 1963 .69 The requirement of filing the award is no longer
applicable under S.
section 36 of the Arbitration and Conciliation Act, 1996 . The award under the new Act is
decree by itself.
A clause in the contract provided that when the final bill would be prepared, the engineer would give 15 days’
notice to the contractor to countersign it. The bill was, however, not finalised. The plea that limitation would start
from the date of the final bill was not accepted by the court because there was a part payment in the meantime
which had the effect of extending time.70
7. Statutory tribunal
It has been held of the Madhya Pradesh Arbitration Tribunal that it is not a court and, therefore, the
Limitation Act, 1963 is not applicable to the proceedings before it.71 Consequently, it
would have no power of condoning the delay.
In the context of an arbitration pertaining to transactions under the bye-laws of the National Stock Exchange, it
was held that S.
section 3 of the Limitation Act was not attracted so as to enable the court to take suo
motu notice of plea of limitation. The specific statutory provision in S. 2(4) excludes the application of S. 43in
certain cases. An arbitration under the National Stock Exchange Rules is under another enactment to which the
Limitation Act is not to apply.72
8. Clause requiring arbitration within specified time [ S. 43(3)]
Section 43(3) empowers the court to extend the time fixed by the agreement for reference of future disputes to
arbitration on the ground of ‘undue hardship’. S. 43(3) thus ‘presumes’ the validity of time-bar clauses which
operate to extinguish the claims. At the time the provision was drafted, this was very well true, but the position
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has now changed.
There has been an amendment to S.

section 28 of the Indian Contract Act, 1872 in 1997 and it appears that subsequent to the
amendment, there can be no conceivable time-bar clause which will escape the rigour of the expandeds. 28.73
All time-bar clauses, whether they bar the claim or the remedy to arbitrate, are now void as they must
necessarily be judged on the touchstone of the new S. 28 of the Contract Act. It is difficult to argue that the
scope of Exception 1 to S. 28 covers arbitration clauses that include a limitation period, for the object of
Exception 1 is that an agreement restraining legal proceedings is legal provided there is an effective substitute
arising out of the consent of the parties. Moreover, it is difficult to suppose that the legislature could have
intended to allow to arbitration agreements what it denies to agreements about courts — a limitation clause.
Therefore, even though S.
section 43(3)of the Arbitration Act continues in the statute book and empowers the courts
to temper the hardship caused by time-bar clauses, it is not possible to conceive of a case where a time bar
clause will not be held void unders. 28 - in other words, the question of having recourse to courts to extend time
under S. 43(3) will not arise. Though courts continue to have the statutory power to extend time upon
satisfaction of the various conditions laid down in S. 43(3), this power has become redundant since there does
not appear to be any situation where the exercise of such a power may be required.
The following commentary on this provision is being retained for reference purposes.
Commentary (for reference purpose)
Parties may lawfully provide in the arbitration agreement that the claims to which the agreement applies will be
barred unless notice to appoint the arbitrator or some other step is taken within a stated time.74 The words
“notice to appoint the arbitrator is given or an arbitrator is appointed” in Section 37(4) of the 1940 Act have been
dropped from the provision in the 1996 Act. This has not made any difference in the effect of the provision.
Such a clause is not open to the objection that it ousts the jurisdiction of the courts or is otherwise opposed to
public policy.75 A clause in a charterparty may provide that the claim will be barred unless it is made in writing
and the claimant's arbitrator is appointed within three months of the final discharge.76 A time bar clause in a
contract for sale of goods barred a claim to reject the goods and to recover the money paid on the ground of
late shipment though a claim to recover the money and to reject the goods on the ground that they were not of
the contract description was made within time and the arbitration was still pending.77 The claim is not barred if
the claim for arbitration is made within time, but the arbitrator makes an award stating that he had no jurisdiction
to decide the claim.78 It was held that the arbitrator's decision was not an award. It did not have the effect of
barring the claim.
The clause does not bar a claim which is admitted and in respect of which there is no dispute.79
An award of the arbitrator wrongly holding that the claim is barred under a time bar clause is final and binding if
no step to set aside the award is taken by the claimant.80
Time under a time bar clause which required commencement of arbitration within 12 months of the final
discharge did not start running when the cargo was lost during the voyage.81 A clause barring a claim unless
the claim is made in writing and the claimant's arbitrator is appointed within a specified time does not bar a suit
founded on a breach of fundamental term, such as implied warranty of seaworthiness.82 A shortage of goods
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and a serious percentage of undergrade goods unloaded is not a breach of a fundamental term.83 Even in the
case of a breach of a fundamental term the claim cannot be referred to arbitration if the time for arbitration has
expired.84 Where the contract provided that any action to get the matter referred to arbitration should be taken
by the contractor within 90 days of the intimation of the final bill, it was held that a prayer for appointing an
arbitrator beyond that period was not sustainable.85
It has been held that a clause barring the claim unless notice of arbitration is given and the claimant's arbitrator
appointed within a specified time would bar the claim though the cause of action did not arise or come to the
claimant's knowledge until after the expiry of the time86 but it is difficult to see how in such a case the clause
could apply.87 In reference to the above-cited Himmerland case, there is the following observation in Russel on
Arbitration:88
“That construction of the clause was not unreasonable since the clause was mutual in its effect, working equally
against claims by shipowners or charterers, and might well be accepted by businessmen because of the advantages it
afforded in (a) providing some limit to the uncertainties and expense of arbitration and litigation and (b) facilitating the
obtaining of material evidence.”
It is also observed that cases of hardship can be dealt with under the power of the court to relieve the party of
the burden of the clause in hard cases.
A time bar clause may bar the arbitration but not the claim.89 A clause in a contract of sale of goods requiring
that the reference shall be demanded within 14 days of final loading of goods,90 or requiring that any claim shall
be made within 14 days of the final discharge of the goods before they are removed, bars the claim altogether if
the requisite step is not taken within the specified time;91 for, the reference to arbitration within the stated time is
the remedy provided for settling ‘the dispute’.
A time bar clause ought to be construed strictly. A contract for the sale of rubber containing an arbitration
clause provided that notice in writing of any objection on the ground of quality must be given by the buyer to his
broker in London not later than 50 days after discharge of goods at the destination declared under the contract.
The rubber when discharged from the vessel was of good quality but the hessian used in packing it contained
oil which damaged the outer layer of the rubber. It was held that the time limit applied to complaints in respect
of quality of the goods at the time of discharge, but not to damage caused at a later stage.92
The time bar clause may apply to one party only and not the other party.93
The clause will not apply to a claim under a new contract. A charterparty containing an arbitration clause in
centrocon form provided that any claim must be made in writing and claimant's arbitrator appointed within 12
months of final discharge and if the provision was not complied with, the claim should be deemed to be waived
and absolutely barred. The shipowner claimed general average contribution from the charterers but they did not
appoint their arbitrator within 12 months of the final discharge. The claim was a dispute arising out of the
contract and if made under the contract would have been barred. But the claim was made under a new contract
between the parties whereby in return for the owners’ promise to forego their lien on the cargo, the charterers
had undertaken to pay the cargo's proportion of general average contribution which might be “legally due”. The
time-bar clause did not apply to the obligation to pay under this new contract.94
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In the context of a time bar clause, “appointed” means “effectively appointed”. Communication by one side of
the nomination of the arbitrator to the other side is not an effective appointment. There is no effective
appointment of the arbitrator until the arbitrator accepts the appointment. Until he has done so, arbitration does
not start for purposes of the time bar clause.95
An arbitration is taken to be held as required by a clause that arbitration should be held within a specified time if
the arbitrators meet within that time and then adjourn the meeting to enable the production of evidence.96
9. Who will decide question of limitation under time bar clause
Whether the claim is barred by limitation under a time bar clause is for the arbitrator and not for the court to
decide.97 However, there is authority for the opposite view also.98
10. Bar of time has to be pleaded
In order to take advantage of expiry of limitation, the party before the arbitrator must plead the bar of limitation.
In the absence of any such plea it would be presumed that the bar of limitation was condoned and the party not
pleading the same did not want to take the benefit of it.1 The court is justified in dismissing an appeal against
the decree in terms of the award where the foundation of the bar of limitation was not laid in the course of
proceedings before arbitrators either in the pleadings or in evidence.2
11. Condonation of delay must be specifically pleaded
It has been observed that a specific pleading must be made for condonation of delay on the ground that
operation of the time bar clause will cause undue hardship.3
12. Time for raising plea of extension
The application under S. 43(3) for condonation of delay must be filed before the commencement of arbitral
proceedings itself and cannot be filed thereafter. Thus where arbitral proceedings were initiated and the
arbitrator passed an award rejecting the claims on the ground of limitation, an application for condonation of
delay after the award was passed, was denied by the Court.4 The Madras High Court held5—
“The very reading of the above provision [S. 43(3)] would clearly indicate that the application for extension could be
filed only before the commencement of the arbitral proceedings and not subsequently which would be very clear from
the employment of the words ‘unless some step to commence arbitral proceedings is taken within a time fixed by the
agreement'... [N]o question of consideration of undue hardship would arise when an application was made after the
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commencement of the arbitral proceedings, and that too, in a case where the award has actually been passed.”
In such instances, it may be noted that though the party is unable to challenge the award or press for
arbitration, the remedy of a civil proceeding is always available.
13. Power of court to extend time [ Section 43(3)]
Where the terms of an arbitration agreement to refer future disputes to arbitration provide that any claim to
which the agreement applies shall be barred unless some step to commence arbitration proceedings is taken
within the time fixed by the agreement and a difference arises to which the agreement applies, the court is
empowered by Section 37(4), 1940 Act[now S. 43(3) of 1996 Act] corresponding to Section section 27 of the
English
Arbitration Act , 19506 [now S. 12 of 1996 Act]7 to extend the time so fixed,
notwithstanding that it has expired if “undue hardship” would otherwise be caused because of such terms, as it
thinks fit. “Undue” simply means “excessive”.8 Even though the claimant is at fault, it is an undue hardship on
him if the consequences are out of proportion to his fault.9 The guidelines for exercising the discretion have
been summarised thus :
(1) The words “undue hardship” should not be construed narrowly; (2) undue hardship means excessive hardship.
Where the hardship is due to the fault of the claimant it means hardship the consequences of which are out of
proportion to such a fault; (3) in deciding whether to extend time or not, the court should look at all relevant
circumstances; (4) in particular the following matters should be considered ; (a) length of the delay (b) the amount at
stake ; (c) whether the delay was due to the fault of the claimant, or to circumstances outside his control ; (d) if it was
due to the fault of the claimant, the degree of such fault ; (e) whether the claimant was misled by the other party ; (f)
whether the other party has been prejudiced by the delay and if so, the degree of such prejudice.10
Since such decision of the court will affect the substantive rights of parties, it must give notice before deciding
on the condonation of delay.11
The court's power to permit an extension or time for commencing arbitration proceedings under the [English]
Arbitration Act 1996 [ S.12] is more restricted than under the
Arbitration Act , 1950 [S.27], its predecessor. Sinces. 12(3) lays down a condition
requiring the court to be satisfied that circumstances are such as to be “outside the reasonable contemplation
of the parties” at the time of the agreement, the court is not entitled to extend time on the basis that, on
balance, it is just to do so. Further, S. 12(3) has to be interpreted as requiring the court to consider not only
what the parties had in mind but also what they reasonably would have had in mind, necessitating a
consideration of usual practice relating to that particular type of transaction.12
The court would be entitled to have regard to the whole of the circumstances in which the application for an
extension arises. Accordingly, where it was not clear in September 1995 that the plaintiff's letter would be
insufficient to commence arbitration proceedings, and the defendants knew that the plaintiffs clearly intended to
commence arbitration proceedings, and in view of the substantial nature of the plaintiffs’ claim, it was just to
grant an extension of time.13
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The weight to be given to the various factors would depend upon the facts of individual cases and no hard and
fast rule can be laid down.14 The principle to be adopted for extension of time should be on the same lines as
under Section
section 5 of the Limitation Act which means that all the relevant facts which are the
cause of the delay should be taken into account.15
The court extended the time where there was (a) few days delay for which a claim of £ 33,000 would have been
barred,16 (b) delay in appointing an arbitrator under the bona fide but mistaken belief of the shipowner that an
arbitrator whom they had appointed to deal with the charterer's claim could deal with their own claim,17 (c) delay
in taking samples due to adverse conditions in port and a large amount at stake,18 (d) a few days delay due to
misunderstanding caused or contributed by the other party,19 (e) a few days excusable delay for which a claim
of thousands of pounds would be barred,20 (f) delay due to talks of settlement of claim, the parties reserving
their right to arbitration if no settlement was reached and the other party suffering no prejudice,21 (g) two
months delay, no prejudice to other party and question of construction of the agreement involved,22 (h) delay,
but amount substantial and no prejudice to the other party,23 (i) delay and the other party was equally
responsible for the delay,24 (j) two and a half years delay and no prejudice to the other party.25
Some decisions construed the words “undue hardship” too narrowly, but they are not likely to be followed in
India after the decision of the Supreme Court in the Planters Airway s case.26 If the delay is so oppressive, so
burdensome as to be altogether out of all proportion to the amount claimed it may be right that the claimant
should suffer for the delay.27
In the earlier cases the section was restrictively construed. But ever since Liberian Shipping Corporation's
case,28 the section has been construed more liberally and attempts to restrict its application have failed. In the
undernoted case,29 it was held that the section did not apply to the time limit imposed by the Hague Rules but
the decision has been overruled and it has been held that it does.30 The court rejected the contention that the
section did not apply to cases where the right was barred and held that the section applies whether the right or
the remedy was barred.31 Speaking generally of the power of extension, the Court of Appeal said in a case :32
Section 12 (3)(a) (UK Act) was concerned with party autonomy; its aim seemed to be to allow the Court to
consider an extension in relation to circumstances where the parties would not reasonably have contemplated
them as being ones where the time bar would apply; the section was concerned not to allow a Court to interfere
with a contractual bargain unless the circumstances were such that if they had been drawn to the attention of
the parties when they agreed the provision, the parties would at the very least have contemplated that the time
bar might not apply; and it would then be for the Court finally to rule as to whether justice required an extension
of time to be granted.
The Court may extend the time where the clause provided that the claim should be deemed to be discharged,
waived and absolutely barred unless the claim is made in writing and the claimant's arbitrator appointed within
the named time.33
The word “claim” in the section should be given a liberal interpretation and it applies to the owner's claim to
arbitration to fix the amount of the salvage award and so to recover part of the security which they had
provided. It is not limited to claims made by persons seeking some payment such as the claim made by the
salvor who has successfully rendered salvage services.34
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Where the time to make the claim expired through no fault of the shipowners but because of an oversight of
clerk at Lloyd's and the salvors suffered no prejudice in any way because of the lapse of the time, it was held
that undue hardship would be caused if the time was not extended unconditionally.35
The mere fact that the claim would be barred is not undue hardship.36 It may be proper that hardship caused to
a party due to his own default should be borne by him.37 Extension of time under Section 37(4), 1940 Act [now
S. 43(3) of 1996 Act] was refused where the delay was solely due to the fault of the applicant,38 for example, a
delay of six days because the applicant did not know that the bill of lading incorporated the arbitration clause in
the charterparty,39 and even a delay of two days when the delay was due to the applicant's own confusion,40
and an unexplained delay of about three months after negotiations with a view to arbitration had broken down.41
Ignorance of the legal position is not a mitigating factor.42
Where the provision was that the charterers would be released from liability in respect of claims by the owners
of the ship unless a claim was presented to the charterers within 90 days from the discharge of the cargo, the
court held that the power of the court to extend time would not apply to such a time-bar clause. The case before
the Court of Appeal was Babanaft International Community SA v. Avant Petroleum Inc (The Oltenia).43 The
Centrocon clause means : “Any claim must be made in writing and claimants arbitrator appointed within three
months of final discharge and where this provisions is not complied with the claim shall be deemed to be
waived and absolutely barred.” In this case, the time was stipulated to be of 12 months.44 Making of a written
claim within time would be a step to commence arbitration proceedings. It would be a question of fact in each
case whether the requirement of the clause was satisfied or not. Explaining this in one of the cases LLOYD J
said :45
“Nothing in The Oltenia decides that a claim in writing cannot be a step in the commencement of an arbitration if the
parties so agree. In The Oltenia the arbitration clause, and the clause requiring claims to be made within 90 days, were
separate and distinct clauses. . . . By contrast in the Centrocon arbitration clause, the appointment of the arbitrator and
the making of the claim in writing go hand in hand ; both provisions are so inextricably bound together that they should
. . . . .be regarded as part of the same process of commencing arbitration, and therefore both are a step to commence
arbitration proceedings within the meaning of Section 27, 1950 [now S. 12 of 1996 Act (English)] .”46
Where the clause is so worded that the appointment of the arbitrator and the making of the claim are required
to go hand-in-hand, both provisions being so inextricably bound together that they have to be regarded as a
part of the same process of commencing arbitration proceedings, both the steps would be necessary and not
merely the making of a claim.47
A voyage charterparty contained a 2 month arbitration clause providing that all disputes would be referred and
arbitrator appointed within 12 months. The shipowners appointed their arbitrator six weeks out of time and
applied for an extension of time. The court compared the disadvantage to the shipowner if an extension was not
granted and the prejudice to the charterer by the extension and found that the hardship to the owners would far
outweigh the prejudice to the charterer and, therefore, granted the extension. The charterer's application for
stay of freight claim was granted because there were circumstances showing a real dispute about the
entitlement to the freight.48
There can be no rule that delay within the limitation period is relevant or irrelevant and where a plaintiff has
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intended to launch his proceedings just within time, but due to inadvertence was a month late in doing so, he
was, when the question of excessive hardship was being considered, in a different position from a plaintiff who
had given prompt notice of the claim and was inadvertently late by the same period.49
A limited range guideline is to be seen in the following propositions :50
(1) the plaintiffs knew of the time limit but knowingly disregarded it since they took the view that there was
no point in taking steps to commence arbitration proceedings until the shipowners had formulated their
claim ; and although the delay until February, 1980, was an error of judgment and from then until June,
1980, was more akin to negligence, the delay as a whole would be categorized as fairly serious;
(2) if the extension was not granted the plaintiffs would be unable to pursue any arbitration and, therefore,
any remedy against the defendants if they were held liable to the owners;
(3) taking into account all the circumstances of the case and in the absence of any evidence that the
defendants had suffered any prejudice as a result of the delay, the hardship suffered by the plaintiffs if
time were not to be extended would be undue and the court would exercise its discretion and grant the
extension of time.
Where on the facts, a delay of 2#fr1/4< years, although not trivial, depended on what effect if any it had upon
the other party, in that contract it was regarded as a relatively short period of delay. The claim involved a large
sum of money and for a party to lose the opportunity of prosecuting such a claim would involve a great degree
of hardship although the mistake of not appointing an arbitrator was an important mistake, the party was not in
grave fault, nor any prejudice to the opposite party was caused. The court ordered extension of time.51
The importance of the balancing process has been emphasised again and again. In one of the cases the court
said that S. section 27 (English Act, 1950) [now S. 12 of the 1996 Act] is a provision designed to override the
contract of the parties, and any construction which enabled the parties to contract out of that section is to be
avoided. The intention of Parliament was that the High Court should have jurisdiction to grant an extension and
that the discretion is to be exercisable in cases of undue hardship. The contracts provided that “any claims. . . .
. shall be barred” unless the time limit was observed and the court had jurisdiction to extend the time
notwithstanding the discretion vested by the rules in the arbitration tribunal. The learned Judge's decision was
open to review in that he did not have regard to the real cause of delay he paid no apparent regard to the
sellers’ contention that the issue of the summons was premature rather than too late and there was no express
consideration of the balancing exercise and whether it would be undue hardship for the buyers to lose the claim
having regard to the length of delay, the degree of fault to be attributed to them and the absence of substantive
prejudice to the sellers. The court found on the evidence there would be undue hardship if an extension of time
were refused.52
An application under Section 37(4), 1940 Act [now S.

section 43(3)of the Arbitration and Conciliation Act, 1996 ] may be made after expiry of
time but it must be made promptly,53 as soon as the applicant comes to know that he is out of time or knows
that it is alleged that he is out of time.54
The extension may be made on terms as to costs of the application,55 and of previous proceedings.56
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Article III Rule 6 of the Hague Rules57 provides that the carrier and the ship shall be discharged from liability
unless suit is brought within one year after delivery or the date when the goods should be delivered. A clause in
a bill of lading containing an arbitration clause gave paramount effect to the Hague Rules. It was held that
Article III Rule 6 of the Hague Rules was not repugnant to the arbitration clause and the words “suit is brought”
include commencement of arbitration where there is a reference to arbitration58. The power conferred by
Section section 27 of the English
Arbitration Act corresponding to
Section 37(4)of the Arbitration Act applies not only to an agreement which contains an
express provision as to the time within which arbitration proceedings are to be commenced but also to the time
limit for commencing arbitration imposed by incorporation of Article III Rule 6 of the Hague Rules.59 The section
is attracted where the true effect of the clause is expressly or impliedly to bar any claim or claims to which the
agreement applies60 whether the claim is extinguished or the remedy only is barred,61 if the requisite notice is
not given within the time allowed by the agreement.
At the stage of the application under Section 28, 1940 Act (Court's power to extend time for making awards)
(deleted from 1996 Act) the applicant maintained that the claim was within time. Section 37 (4), 1940 Act (now
S. 43(3) of 1996 Act) was not attracted.62
14. Inaction of opposite party
Where there was no compliance with the provisions of the contract, one of the items of non-compliance being
not giving written notice of rejection of the recommendations of the Disputes Redressal Board, another being
not issuing written notice of the intention to refer the matter to arbitration within the period prescribed in the
contract, it was held that undue hardship was likely to be caused to the applicant and no serious prejudice was
likely to be caused to the opposite party if the delay was condoned.63
ARBITRATOR COMPETENT WITNESS
Under the
Arbitration and Conciliation Act, 1996 an arbitrator may be called by the Court as a
witness in respect of the following matters :
(a) application to decide on the termination of his mandate on the grounds of Section 14 (1)(a) [ Section 14
(2)];
(b) application for setting aside the award under Section 34(1) and (2);
(c) application for ‘remission’ to the arbitrator under Section 34(4) for eliminating the grounds for setting
aside the award;
(d) appeal from the order of the arbitrator—
(i) accepting the plea of lack of jurisdiction or authority under Section 16(2) and (3) [ Section 37
(2)(a)];
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(ii) granting or refusing to grant interim measures under Section 17 [ Section 37 (2)(b)].
Summons to the arbitrator should be issued cautiously and sparingly, and after careful consideration and not in
a routine and mechanical manner. In no case can he be summoned merely to show how he arrived at the
conclusion he did.64 The Supreme Court has made this addition to these observations that it is obvious that
when the court is required to call the arbitrator for examination as a witness it must be shown that there is some
cogent ground for his examination within the permissible limits.65
An arbitrator ought to be examined as to every matter of fact with reference to the making of the award, what
claims were made and what admitted so as to put the court in possession of the entire history of the litigation up
to the time of his proceeding to make the award and whether in his estimate of compensation he took into
consideration any matter not included in the reference and, therefore, not within his jurisdiction. But the parties
have no right to go further and question him as to the elements he took into consideration in determining the
question of compensation or to scrutinize the exercise by the arbitrator of his discretionary power to award
compensation.66 But greater latitude is allowed in cross-examination.67
The arbitrator is under a general obligation to give evidence.68 He is a competent witness.69 Being a competent
witness he may be questioned as to what took place before him, so as to show over what subject-matter he
exercised jurisdiction, whether he entertained or rejected a claim, to enable the court to judge if he was acting
within his jurisdiction.70 He may be asked what happened before him and what admissions were made by the
parties in the course of the proceedings.71 He may be called to prove facts which came within his knowledge
during the reference. He may be asked what the matters in difference were with a view to find out in a
subsequent action whether the award can be pleaded as a defence.72 He may prove that a certain matter was
not included in the matters referred to him. He may be asked by the court whether he was or was not required
to find specifically on certain claims and he may be compelled to answer the question, but he will not be
compelled to answer whether a particular matter of complaint was submitted to his consideration and whether
he has jurisdiction with regard to a certain matter.73 The arbitrator cannot impeach his own award by showing
error on matters within his jurisdiction.74 The evidence of the arbitrator is relevant on all charges of misconduct,
dishonesty, corruption or bribery and the court will reject no evidence of the arbitrator which can be of
assistance in informing the court whether such charges are established.75 On a charge of fraud the arbitrator
cannot, by denying the fraud generally, protect himself from answering the interrogatories as to specific facts
which are alleged to show the fraud.76 It is necessary to take care that the evidence admitted as relevant on a
charge of dishonesty is not used for a different purpose, namely to scrutinise the decision of the arbitrator or
matters within his jurisdiction and on which his decision is final.77 On charges of misconduct he can file
affidavits explaining his conduct. But he is not bound to do so78 his affidavit in the proceedings to set aside the
award may show that he was biased.79
Where a party proceeded against his arbitrator claiming damages for loss caused by his refusal to state a
special case [not applicable under the 1996 Act] as required by the party, it was held that the defendant
remained an arbitrator throughout the proceedings down to the time of the award and that his conduct did not
give rise to any cause of action. DODSON J Said : “I think that, while the authorities relied upon by the plaintiffs
undoubtedly decide that an arbitrator in a commercial arbitration has considerable liberty of action before the
validity of an award becomes endangered, they do not justify this court in saying that an arbitrator, once
appointed as such, ceases to be an arbitrator and becomes a mere agent of his appointer, with no discretion for
himself as soon as an umpire in the arbitration is nominated.” The court observed obiter, on the assumption that
defendant was a mere agent for the plaintiffs, that it was his duty to carry out their instructions and that he was
negligent in failing to do so, but that in the circumstances, on the evidence given at the arbitration, the plaintiffs
would only be entitled to nominal damages.80
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Where the parties are at variance as to what took place before the arbitrator, the proper course is to take the
statement of the arbitrator as to the facts as prima facie evidence of those facts unless there is strong reason to
doubt its accuracy.81
The arbitrator may be summoned to find out the date with reference to which the rate of exchange was fixed for
the purpose of the award.82
Refusal to summon the arbitrator for examining him on the question whether some of the claims were outside
his jurisdiction is not justified.83
When an arbitrator was called as a witness in proceedings to set aside an award on charges of misconduct, the
court allowed him to be examined and cross-examined upon the course of proceedings he followed and the
materials he used in arriving at his decision. He was not allowed to be cross examined as to the reason for his
award or the calculations of which it was based.84 Arbitrators are not bound to file any affidavits or deny
allegations against them. It is for the petitioners to make out a ground for setting aside.85
No question can be put to the arbitrator as to what passed in his mind when exercising his discretionary powers
on matters submitted to him.86
In a commercial arbitration, an arbitrator who inspected the state of the meat in dispute before he was
appointed an arbitrator may give evidence before the umpire about the state of the meat when he inspected it.87
The Orissa High Court did not permit the summoning of the chairman of the arbitral tribunal as a witness. The
application was made under
Articles 226 and
227 of the
Constitution for direction to the Civil Judge to issue summons. The award in the case
was submitted by the Tribunal. It was a fully reasoned award in rejecting the claim. The allegation that he had
considered certain documents behind back of the party, even if established, would enable the applicant to get a
setting aside. That could hardly constitute a ground for summoning the arbitrator as a witness.88
INHERENT POWER OF COURT TO SUPERVISE ARBITRATION PROCEEDINGS
The jurisdiction of the court to supervise the conduct of arbitration proceedings is confined to the statutory
powers conferred by the
Arbitration Act . The court has no jurisdiction to dismiss a claim in an arbitration for want
of prosecution or to grant an injunction restraining a claimant from proceeding with the arbitration on the ground
that he has been guilty of inordinate and inexcusable delay89 as fair trial of the claims might be impossible. The
excessive delay is capable of frustrating the contract.
The duty of the parties not to be dilatory is a mutual contractual obligation. If a party is dilatory, the other party
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is under an obligation to apply to the arbitrator for directions and it is not open to him to sit back while the
claimants do nothing.90 Since the respondents did not apply to the arbitrator for directions and was content to
allow the claimants to prepare the points of claim voluntarily, they were as much in breach of the contractual
obligation as were the claimants dilatory in delivering the points of claim. In the circumstances the respondents
seeking the injunction to restrain the claimants from proceeding with arbitration had no legal or equitable right
which required protection.91
The arbitrator has power to fix a date of hearing and make an ex parte award in favour of the respondent if the
claimant fails to appear or to debar the claimant from raising a claim of which he has failed to give adequate
notice to the respondents in breach of the arbitrator's directions.92 In the absence of disobedience to any order
by the arbitrator, the arbitrator has no power to dismiss the claim for want of prosecution.93 The High Court's
power to grant an injunction is confined to injunctions granted for the enforcement or protection of some legal or
equitable right.
The court may grant an injunction restraining a claimant from proceeding with an arbitration where the
arbitration has come to an end by mutual abandonment.94 The proper inference to be drawn from a long period
of total inactivity and other conduct of the parties is that the agreement to submit the disputes to arbitration had
been abandoned or rescinded by the parties.95 The conduct of the parties coupled with and unexplained delay
of six years amounts to a cancellation of the agreement and the agreement cannot then be filed in court under
Section 20, 1940 Act (repealed).96[Now under S.
section 8 of the Arbitration and Conciliation Act, 1996 ].
A reference to arbitration creates a bilateral contractual relationship which is capable of being discharged by the
consent of the parties leaving the arbitration agreement in tact. Such discharge may be inferred from the
inactivity when each of the parties so conducted himself as to evince to the other an intention to treat the
reference as ended, or as a result of one party's conduct, the other reasonably believed that the party so
conducting himself intended to treat the reference as ended and acted in reliance of that belief.
Though abandonment of the reference did not necessarily result in the abandonment of the underlying cause of
action, a claim might be abandoned either by estoppel or by accord and satisfaction. In the latter case cession
of respondent's right under the agreement to refer provided the necessary consideration for the claimant's
agreement to the abandonment of the totality of the rights and remedies in respect of the cause of action and
the parties’ offer and acceptance of the abandonment completed the accord and satisfaction. In the case of a
six-year limitation period when the claimant commenced the arbitration after one year and did nothing more
until shortly before the expiry of the period of limitation, the court was entitled to interpret his conduct as an
effort to abandon the claim and the reference as a classic representation. Neither the claim nor the reference
would be pursued, and to interpret the respondents’ inactivity as an acceptance of such an offer. On the facts
such abandonment of the claim and the reference by the charterers had been established and the court refused
to grant injunction restraining the charterers from taking further steps in the arbitration.1
The arbitration may also come to an end by frustration where the delay is so great that the evidence of one
party is not available because of the delay and a fair trial has become impossible though the delay is due to the
mutual default of both parties.2
15. Frustration or abandonment of agreement
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The decision of the House of Lords in Paal Wilson & Co. A/S v. Partenreederei Hannab Blumenthal
3 is important to the law of arbitration and also to the applicability of the doctrine of frustration. The facts
involved the sale of a ship by a Norwegian company to a West German concern. The contract included a
London arbitration clause under which disputes, if any, were to be settled by a single arbitrator or, if the parties
failed to concur on a single arbitrator, by three arbitrators, one appointed by each party and the third by the
Baltic and International Maritime Conference in Copenhagen. In 1972 the buyers informed the sellers that they
had a claim in respect of the speed of the ship. The sellers rejected the claim. The parties were unable to agree
upon a single arbitrator and by 1973 they appointed their respective arbitrators but no steps were taken by both
of them to procure the appointment of a third arbitrator as provided for in the contract of sale. Up to 1974 the
solicitors of both parties exchanged communications resulting in the services of the points of claim and the
sellers’ points of defence. This was followed by a lengthy delay in the process of discovery of documents,
serving their lists of respective documents by 1978. By 1979 the buyers’ solicitors obtained expert opinion on
the basis of the documents produced and finding the opinion to be heavily in their favour asked the sellers to
agree to a date of hearing. The sellers applied for a stay saying that the long delay had ended the agreement of
arbitration either by frustration or by abandonment. The Court of Appeal agreed with this contention saying that
there had been such inordinate delay by the buyers and the sellers in their preparation for the arbitration and
bringing of it to a hearing that a fair trial of the dispute was no longer possible. The House of Lords also agreed
with the view to this extent but by substituting the word “satisfactory”, namely, that a satisfactory trial would be
impossible. On the question of frustration the Court of Appeal by a majority held that the inordinate delay
frustrated the arbitration agreement and, therefore, the claimants should be restrained by injunction from
proceeding with it further. The courts had to face the majority decision of the House of Lords in Bremur Vulkan
Schiffban and Maschinenfabrik v. South India Shipping Corpn. Ltd. 4 in which reversing
the unanimous decision of the Court of Appeal, their Lordships held that the court has no jurisdiction to prohibit
further proceedings in an arbitration analogous to its jurisdiction to dismiss an action for want of prosecution.
Lord Diplock laid particular emphasis upon the mutual obligation of the parties to one another to join in applying
to the arbitrator for appropriate directions to put an end to such delay as involved a substantial risk that justice
could not be done.
The House of Lords allowed the buyers’ appeal with the result that arbitration must be allowed to proceed. The
delay concerned had resulted from breaches on the part of both the claimant and the respondent of their mutual
obligations owed to one another, neither could rely on the other's conduct as amounting to repudiation. Lord
BRANDON said that an arbitration agreement can in theory, like any other contract, be discharged by
frustration, but the usual requirements of frustration must be there. There has to be some outside event or
extraneous change of situation, not foreseen or provided for by the parties which either made it impossible for
the contracts be performed at all, or at least rendered its performance something radically different from what
the parties contemplated when they entered into the contract and the happening was without the fault or default
of either party. These conditions were not there in the present case. There was no outside event or change and
the delay was due to the conduct of both the parties. “Both the parties had failed to comply with what the House
of Lords in Bremer Vulkan decided was their mutual contractual obligation, namely (after taking the necessary
steps to have a third arbitrator appointed) to apply to the full arbitral tribunal for directions to prevent the very
delay relied on by the sellers as having frustrated the agreement”.5 There was no abandonment also as the
parties remained engaged in answering each other's communications over the subject-matter of the dispute.
The Court of Appeal in its decision in Allied Marine Transport Ltd. v. Yale do Rio Doce Navegacro SA (The
Lesnidas D) 6 applied the decision of the House of Lords in The Hannab Blumenthal
7 and allowed the charterers’ appeal from the judgment of Mustill, J. in which it was held that a reference to
arbitration had been mutually abandoned and that the owners of the ship could have invoked the principle of
equitable estoppel. The case arose out of a time charter of a ship in the New York Produce Exchange form. It
contained a London arbitration clause. Two successive disputes arose as to the fitness of the ship's holds to
receive grain cargo. The charterers claimed for cleaning costs and loss of time. In order to maintain the
charterparty, the parties agreed that the owners would provide an irrevocable letter of credit for a part of the
claim and that it would become void if the charterers failed to nominate an arbitrator by a certain date. Two
arbitrators were appointed one by each party within time. The owners, therefore, duly provided the letter of
credit. The credit document could be revoked either on settlement between the parties or on owners obtaining a
favorable award. One of the possibilities which could not be taken into account then was that if the charterers
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did not prosecute their claim the owners would remain locked into the credit. More than five years after the
appointment of the arbitrators, the owners’ solicitors received a letter from the charterers’ solicitors giving notice
of their intention to proceed with the arbitration. The owners applied for a declaration that the arbitration
agreement was at an end having been mutually abandoned or rescinded by the parties. They also claimed an
injunction to restrain the charterers from going further with the arbitration. The trial judge held that there was a
tacit representation by the charterers that they did not intend to pursue their claim and an acceptance of it by
the owners by their complete blank of conduct. The matter came before the Court of Appeal. Among the very
few authorities on the subject one was The Splendid Sun. 8 Here after a period of
inactivity by the parties, the parties were taken to have impliedly agreed to put an end to their reference. That
decision was to be read in the light of the subsequent decision of the House of Lords in The Hannab
Blumenthal 9 in which there was the following pertinent statement :
“to entitle one party (A) to rely on abandonment, he must show that the other party (O) so conducted himself as to
entitle A to assume and that A did assume, that the contract was agreed to be abandoned sub silentio.”
Of this remark a learned commentator says :10
“It was not enough that O should appear to have given up pursuing his claim in the reference, and that A assumed that
he had given up the pursuit of his claim, because there could be a number of reasons why O should not be pursuing it
(e.g., forgetfulness or culpable delay by his solicitors). What had to be shown was that O appeared to be offering to
agree that the reference should be abandoned and that A, having so understood O's offer, by his conduct accepted O's
offer.”
The Court of Appeal was unable to agree with the judge that there had been an agreement to abandon the
reference. There was nothing else on record than this that the charterers did nothing at all for over five years. It
could not be said that the total blank from the side of the owners was the result of a reliance upon any
representation made to them by the charterers that nothing was to be done in the matter beyond perpetuation
of the status quo.11
Where there was no evidence of mutually agreed abandonment, the surprise or inconvenience that might be
caused to one party is not a ground for staying arbitration. In one such case the court said that the shipowners
decided, within a few months of the appointment of the arbitrators, to do nothing at all unless and until the
charterers showed some sign of pursuing a claim which they, the shipowners, believed to have little substance;
if the preparation of the owners’ case was now difficult that followed from that early decision and not from any
conduct or absence of conduct on the part of the charterers.12
16. Delay in prosecuting claim
Delay in prosecuting the claim is not in itself an evidence of the intention to abandon recourse to arbitration.
There has to be some clear statement showing that the arbitration agreement is at an end. In Food Corporation
of India v. Anticlizo Shipping Corpn.,13 the charterers of a ship applied for a declaration that the arbitration
agreement between them and the owners of the ship stood abandoned by mutual consent. There was no
communication between the parties for eight years. No such declaration was granted. An agreement to
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abandon could not be inferred in the absence of an unequivocal statement by the owners treating the arbitration
to be at an end. The court observed per curiam that the problem of arbitrations that have been allowed to go to
sleep for years ought to be taken up by the legislature.14
No inference of abandonment of the agreement was made from failure of either party to take action to refer a
dispute to arbitration.15
If one party is guilty of prolonged delay in applying to the arbitrator, it is a breach which goes to the root of the
contract and the other party may elect to accept it by himself not applying to the arbitrator and thus treating
himself as discharged from further performance.16
It has also been held that delay even if inordinate and inexcusable could not normally be described as an abuse
of process especially if it had to be regarded as consensual. The changes introduced by S. 13A[1950 English
Act ] could not properly be described as purely procedural because they were capable of striking at a claimant's
rights; and to deprive a claimant in a pending arbitration of the opportunity to proceed any further with his
appeal.17
When parties agree to refer difference to arbitration it is an implied term of the contract that each has a right to
a fair arbitration. There are mutual obligations to be implied in the agreement not to obstruct or frustrate. Where
the arbitrator while making his interim award imposed a condition as to security and an application was made to
the court for an injunction against it, the court said that the High Court had an inherent jurisdiction to supervise
the conduct of arbitrators and the learned Judge was right in holding that he had jurisdiction to the conduct of
arbitrators and to grant the declaration sought if he was satisfied that the arbitrators were guilty of misconduct.
In S.
section 14 of the Arbitration Act , 1950, [now replaced by the (UK)] Arbitrationact, 1996
(S. 27 Indian Act, 1940 [replaced by the
Arbitration and Conciliation Act, 1996 ) the words “if he thinks fit” enabled the arbitrators
to impose any proper condition which they thought fit in the making of an interim award and it was within the
jurisdiction of the arbitrators to impose a condition.
In making an interim award the arbitrators could and should look at all the circumstances of the case ; here the
claims and cross-claims under each charter were so closely connected that it would be a case for equitable set-
off to be allowed if it was a claim in a Court of Law ; and the arbitrators imposed quite reasonable conditions for
the provision of the security before they made their interim award.
The imposition of the condition showed no want of discretion, no want of jurisdiction and no misconduct
whatsoever on their part ; and in exercising their discretion the arbitrators were not exceeding their powers and
that discretion should not be interfered with by the Courts of Law.18 The purpose of the agreement i.e., a fair
arbitration to be conducted in accordance with the terms of the agreement.19 The parties have an equitable right
not to be harassed by arbitration proceedings which cannot result in a fair trial.20
The court can find that an arbitration has come to an end by abandonment or by frustration by mutual default or
by repudiatory breach.21
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1. Section 37. Limitations.—(1) All the provisions of the Indian

Limitation Act , 1908 (9 of 1908) shall apply to arbitrations as they apply to proceedings in Court.
(2) Notwithstanding any term in an arbitration agreement to the effect that no cause of action shall accrue
in respect of any matter required by the agreement to be referred until an award is made under the agreement, a cause
of action shall, for the purpose of limitation, be deemed to have accrued in respect of any such matter at the time when
it would have accrued but for that term in the agreement.
(3) For the purposes of this section and of the Indian
Limitation Act , 1908 (9 of 1908), an arbitration shall be deemed to be commenced when one party to
the arbitration agreement serves on the other parties thereto a notice requiring the appointment of an arbitrator, or
where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement
requiring that the difference be submitted to the person so named or designated.
(4) Where the terms of an agreement to refer future differences, to arbitration provide that any claims to
which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed
or some other step to commence arbitration proceedings is taken within a time fixed by the agreement, and a difference
arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship
would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the
justice of the case may require, extend the time for such period as it thinks proper.
(5) Where the Court orders that an award be set aside or orders, after the commencement of an
arbitration, that the arbitration agreement shall cease to have effect with respect to the difference referred, the period
between commencement of the arbitration and the date of the order of the Court shall be excluded in computing the
time prescribed by the Indian
Limitation Act , 1908 (9 of 1908), for the commencement of the proceedings (including arbitration) with
respect to the difference referred.
Section 37(1)provides that “All the provisions of the Indian
Limitation Act , 1908 shall apply to proceedings in arbitration as they apply to proceedings in court”.
In Uttar Pradesh Section 37 has been amended by substituting “the

Limitation Act, 1963 (Act 36 of 1963)” for “The Indian
Limitation Act ” by U. P. Act 57 of 1956 with effect from 30. 12. 1976.
2. Union of India v. Prahalad Moharana,(1996) Supp Arb LR 267 (Ori). The question of
limitation is for the decision of the arbitrator and not the court, A.C. Parija v. Secy in Charge, PWD(1970) 36 Cut LT
1089. The period is reckoned from the date of service of legal notice, a petition beyond three years beyond that date is
time-barred; Mohta Alloy & Steel Works v. Mohta Finance & Leasing Co.,(1996) Supp Arb LR 312 (Del).
3. H.K. Gulati & Co. v. M.P. Housing Board,

(1995) 2 Arb LR 205 (MP— Arbitration Tribunal). See also
Secretary to Govt. of Karnataka v. V. Harishbabu,
AIR 1996 SC 3421 [
LNIND 1996 SC 1024 ]: (1996) Supp Arb LR 495, case remanded for fixing the date
of commencement of period of limitation. Delhi Development Authority v. Harbans Lal Narang,(1996) Supp Arb LR 503
(Del), application for condonation of delay rejected. Corn Products Co. (India) Ltd. v. Ajaz Ghadiya,
AIR 1997 Bom 331 [
LNIND 1996 BOM 952 ],
Article 137 of the Limitation Act, 1963 applies.Jagmohan Singh Gujral v. Satish Kumar Sabnis,
(2004) 2 RAJ 67 (Bom) law of limitation is grounded on public policy. Claims which
are barred by limitation before the courts cannot also be entertained for arbitration. Claims for transactions on the
National Stock Exchange would be governed by the limitation provided in the Rules. Cause of action does not become
by a mere demand for payment.
4. State Trading Corpn of India v. Universal Paper Export Co Ltd.,(1996) Supp Arb LR 545
(Del). Anas Abdul Khader v. Abdul Nasar,
(2001) 2 RAJ 124 (Ker), applicability of the
Limitation Act .Rajeev Sharda v. Executive Engineer, H.P., P.W.D., Theog,
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(2003) 4 RAJ 25 (HP), applicability of S. 43(1) cannot override the bar created by S.
43(3). Delhi Cantonment Board v. Daulat Rai & Sons,
(2001) 4 RAJ 104 (Del), it cannot be said that extending the application of the
Limitation Act, 1963 to arbitrations makes it applicable to objections which an applicant has to make
within the time prescribed unders. 34(3).
5. Pegler v. Railway Executive,

(1948) 1 All ER 559 at p. 562 (HL) :
(1948) AC 332 affirming Pegler V. G.W. Rly.
Co.,
(1947) 1 All ER 355 .
6. Pegler v. G.W. Rly. Co., (1947) I All ER 355.See also Krishna Gopal
Gupta v. State of M.P.,
(1996) 1 Arb LR 42 (MP—Arb Tribunal),
Limitation Act applies, proceedings found to be within time.Indian Drugs & Pharmaceuticals Ltd. v.
Indo Swiss Synthetics Gem Mfg. Co. Ltd.,
AIR 1996 SC 543 [
LNIND 1995 SC 1119 ]:
(1996) 1 Arb LR 78 :
(1996) 1 SCC 54 [
LNIND 1995 SC 1119 ] plea of limitation not allowed, arbitrator allowed to proceed.
7.
(1994) 1 Arb LR 476 :
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]at 1620:
(1993) 4 SCC 338 [
LNIND 1993 SC 391 ] . The court cited West Riding of Yorkshire
County Council v. Herdders Field Corpn.,
(1957) 1 All ER 669 (QBD) where it was observed that the
Limitation Act applies to arbitrations as it applies to civil cases and therefore the statute of limitation
can be pleaded in a reference. Reliance was also put upon the decision of the House of Lords in Pegler v. Railway
Executive,
(1948) AC 332 at 338 (AIR 1994 SC at 1619) to the effect that the claim is not to
be put forward for arbitration after the expiration of the specified number of years from the date when the cause of
arbitration arises treating it as a cause of action as it would be treated if the proceedings were in a court of law. The
court also cited a passage from Naamlooze Vennootachap Handels En-Transport v. Ludwing,
(1938) 2 All ER 152 (ibid) to the effect that in the absence of an agreement to
exclude any defence under any statute of limitation, the arbitrator was right in admitting the defence under the law of
limitation. H. Chandanmull & Co. v. Mohambal M. Mehta,
AIR 1953 Mad 561 [
LNIND 1952 MAD 254 ], an application to set aside an award was not a proceeding
before an arbitrator within the meaning of S. 37(1), 1940 Act and consequently, therefore, S.
section 5 of the Limitation Act, 1963 did not apply, and there is no power in the court to extend the
time prescribed by
Art. 158 of the Limitation Act . The law was the same before the 1940 Act as is shown by Suryanarain
v. Banwarijha, 18 Cal LJ 35 and Devi Ditta v. Baburam,
AIR 1927 Lah 273 . Application filed under Section 11 for appointment of arbitrator
by the court after 3 years from the date when the right to apply accrued was held to be barred by limitation. Marshall
Corpn. Ltd. v. Union of India,
(1998) 1 RAJ 69 , 78 (AP) :
(1998) 2 Arb LR 175 [
LNIND 1997 AP 924 ] ; Balram Sehgal v. Vinod Kumar Sehgal,
(2009) 1 Arb LR 10 :
(2009) 2 RAJ 501 :
(2009) 156 DLT 538 (Del), application for appointment filed after 14 years, held to
be time barred and delay not condoned under S. 43(3).
8.
(1996) 1 Arb LR 221 :
Navneet Krishn
Page 25 of 47
AIR 1996 SC 942 [

LNIND 1995 SC 1426 ]:
(1996) 2 SCC 216 [
LNIND 1995 SC 1426 ].
9. Shiv Lal v. Food Corpn. of India,

AIR 1997 Raj 93 . The case was under the repealed 1940 Act and was decided
under Sections 14, 30 and 33 of that Act.
10. Gujarat State Fertilisers Co. v. Deepak Nitrite Ltd..,

AIR 1979 Guj 83 [
LNIND 1978 GUJ 5 ]: (1979) 20 Guj LR 306. Nyaneshwar Bhiku Dhargalkar v.
Executive Engineer, PWD,
AIR 2000 Bom 254 [
LNIND 1999 GOA 17 ], cause of action arose on the date of service of notice on the
other party calling upon him to refer the matter to arbitration. Application for appointment of arbitrator was made within
3 years from that date, within time. Union of India v. Satna Stone & Lime Co. Ltd.,
AIR 2000 MP 101 , siding allotted to the contractor, notice of recovery of amount
due at a higher rate, notice to refer to arbitration sent by railways after 3 years. Held, time-barred. Prakash Wadhwani
v. Govt. of M.P.,
(2003) 4 RAJ 325 MPAT : 1998 Supp Arb LR 238, application had to be filed under
M.P. Madhyastham Adhikaran Adhiniyam 1983 within one year from the date of refusal of the claim and it was so filed
and, therefore, not time-barred. State of Haryana v. Sohan Lal Kalra,
(2000) 1 RAJ 426 : (2001) Supp Arb LR 219 (P&H), (1940 Act) parties appeared
before the arbitrator on 19-12-1980 and the arbitrator conducted only one proceeding. On 14-1-1981 he made his
award. The plea that the matter was of an earlier period was not proved. The court said that the time for making the
award had to be taken from 19-12-1980.
11. Mustill And Boyd, Law and Practice of Commercial Arbitration, 2nd edn, 1989 at pp 200-215, See Atlantic
Shipping and Trading Co. Ltd. v. Loius Dreyfus & Co.,
[1922] 2 AC 250 .
12. Vulcan Insurance Co. v. Maharaj Singh,

(1976) 1 SCC 943 [
LNIND 1975 SC 380 ] ; National Insurance Co. v. Sujir Ganesh Nayak & Co.,
AIR 1997 SC 2049 [
LNIND 1997 SC 528 ]:
(1997) 4 SCC 366 [
LNIND 1997 SC 528 ]; P. Manohar Reddy & Bros v. Maharashtra Krishna Valley
Development Corpn.,
(2009) 1 Arb LR 125 , 133 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398.
13. See Baroda Spinning & Weaving Co. Ltd. v. Satyanarain Marine & Fire Ins Co., (1914) 38 Bom 344; New
Asiatic Insurance Co. v. B.S. Cooperative Bank,
AIR 1966 Pat 69 .
14. S. 28 Agreements in restraint of legal proceedings void. Every agreement,—

(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any
contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus
enforce his rights; or
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(b) which extinguishes the rights of any party thereto, or discharges any party thereto from any liability,
under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his
rights, is void to that extent...
15. Pandit Construction Company v. Delhi Development Authority,

(2007) 3 Arb LR 205 , 211- 212:
(2007) 5 RAJ 424 :
(2007) 143 DLT 270 [
LNIND 2007 DEL 407 ] (Del), considering the effect of amendment to S. 28 and
analyzing the impact of S. 28(b) of the Contract Act, 1872 relying on Explore Computers Pvt. Ltd. v.
Cal Ltd.,
(2006) DLT 477 , distinguishing Wild Life Institute of India,
Dehradun v. Vijay Kumar Garg,
(1997) 10 SCC 528 and National Insurance Co. Ltd. v. Sujir Nayak & Co.,
AIR 1997 SC 2049 [
LNIND 1997 SC 528 ]. See also Hindustan Construction Corpn. v.
DDA,
(1999) 1 RAJ 575 :
(1999) 77 DLT 165 :
(1999) 1 Arb LR 272 ; J.K. Anand v. Delhi Development Authority,
(2001) 2 Arb LR 663 (Del), stipulation of 90 day period for raising a claim, is
contrary to law and does not bind parties; Union of India v. Simplex Concrete Piles India Pvt. Ltd.,
(2003) 3 Arb LR 536 (Del), period of limitation provided in contract held void in view
of S. 28(b) of Contract Act, 1872 and
Art 137 of Limitation Act, 1963 ;D.C. Kapoor v. Delhi Development Authority,
(2007) 1 Arb LR 486 :
(2006) 3 RAJ 702 :
(2006) 130 DLT 94 (Del), such a stipulation is contrary to the general period of
limitation and barred by S. 28 of the Contract Act; Avinash Sharma v. Municipal Corporation of Delhi,
(2007) 4 Arb LR 147 , 153:
(2007) 4 RAJ 380 (Del), condition to the effect that if the claim is not raised within
90 days of receiving intimation that bill is ready for payment, held void and not binding on the parties; Prem Power
Construction Ltd. v. National Hydro Power Corporation Ltd., 160
(2009) DLT 610 , clause requiring claims to be raised within 180 days of the ‘take-
over’ certificate or else they will be absolutely barred, held void under S. 28 of the Contract Act.
16. Wild Life Institute of India, Dehradun v. Vijay Kumar Garg,

(1997) 10 SCC 528 ; National Insurance Co. v. Sujir Ganesh Nayak & Co.,
AIR 1997 SC 2049 [
LNIND 1997 SC 528 ]:
(1997) 4 SCC 366 [
LNIND 1997 SC 528 ]; P. Manohar Reddy & Bros v. Maharashtra Krishna Valley
Development Corpn.,
(2009) 1 Arb LR 125 , 133 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398; Mahesh Chand v. Union of India,
(2005) 1 Arb LR 153 (Raj).
17. Agro Company of Canada v. Richmond Shipping Ltd, The Simonburn, [1973] 1 Lloyd's
Rep 392, 394, per Lord Denning Mr the objects of such a clause are to (i) provide some limit to the uncertainities and
expense of arbitration and litigation; (ii) to facilitate the obtaining of material evidence; and (iii) to facilitate the settling of
accounts for each transaction as and when they fall due relying on The Himmerland, [1965] 2 Lloyd's
Rep 353.
18. Hindustan Construction Corpn. v. DDA,

(1999) 1 RAJ 575 :
(1999) 77 DLT 165 :
(1999) 1 Arb LR 272 ; Unity Engineers v. ITPO,
(2001) 3 RAJ 304 :
Navneet Krishn
Page 27 of 47
(2001) 91 DLT 350 :

(2001) 2 Arb LR 211 (Del), time was to run from the date of signing of the final bill
and intimation, signature of the contractor on the measurement book could not equated with that; J.K. Anand v. Delhi
Development Authority,
(2001) 2 Arb LR 663 (Del), stipulation of 90 day period for raising a claim, is
contrary to law and does not bind parties; Union of India v. Simplex Concrete Piles India Pvt. Ltd.,
(2003) 3 Arb LR 536 (Del), period of limitation provided in contract held void in view
of S. 28(b) of Contract Act, 1872 and
Art 137 of Limitation Act, 1963 ;D.C. Kapoor v. Delhi Development Authority,
(2007) 1 Arb LR 486 :
(2006) 3 RAJ 702 :
(2006) 130 DLT 94 (Del), such a stipulation is contrary to the general period of
limitation and barred by S. 28 of the Contract Act; Avinash Sharma v. Municipal Corporation of Delhi,
(2007) 4 Arb LR 147 , 153:
(2007) 4 RAJ 380 (Del), condition to the effect that if the claim is not raised within
90 days of receiving intimation that bill is ready for payment, held void and not binding on the parties; Pandit
Construction Co. v. Delhi Development Authority,
(2007) 3 Arb LR 205 , 212- 213:
(2007) 5 RAJ 424 :
(2007) 143 DLT 270 [
LNIND 2007 DEL 407 ] (Del), considering the effect of amendment to S. 28 and
analysing the impact of S. 28 (b) of the Contract Act, 1872; Prem Power Construction Ltd. v. National Hydro Power
Corporation Ltd., 160
(2009) DLT 610 , clause requiring claims to be raised within 180 days of the ‘take-
over’ certificate or else they will be absolutely barred, held void under S. 28 of the Contract Act.
19. Pandit Construction Company v. Delhi Development Authority,

(2007) 3 Arb LR 205 , 211- 212:
(2007) 5 RAJ 424 :
(2007) 143 DLT 270 [
LNIND 2007 DEL 407 ] (Del); relying on Explore Computers Pvt.
Ltd. v. Cal Ltd. and Anr.,
(2006) DLT 477 , distinguishing Wild Life Institute of India,
Dehradun v. Vijay Kumar Garg,
(1997) 10 SCC 528 and National Insurance Co. Ltd. v. Sujir Nayak & Co.,
AIR 1997 SC 2049 [
LNIND 1997 SC 528 ]:
(1997) 4 SCC 366 [
LNIND 1997 SC 528 ] :
(1997) 4 JT 179 .
20. Continental Construction Ltd. v. Food Corpn. of India,

(2002) 4 RAJ 309 (Del).
21. Uttam Singh Duggal & Sons v. Union of India,

AIR 2002 Del 471 [
LNIND 2002 DEL 403 ](DB); Haryana & EB v. Sunil Engg Works, AIR 1998 P&H
296:
(1999) 1 RAJ 499 : (1998) Supp. Arb LR 339, an objection was raised the
contractor had not filed claim as required under the agreement, but this point was not raised before the arbitrator or
even in the objection petition, the objection was held to be not tenable. SAL Roche v. Govt. of Goa,
(1999) 4 RAJ 136 :
(1998) 1 Bom LR 78 (Bom), delayed objections entertained because they were filed
in pursuance of extension of time granted by the court. SC Sood & Co. v. DDA,
(1999) 1 RAJ 330 :
(1998) 75 DLT 691 :
(1999) 1 Arb LR 220 (Del), objections had to be filed under the 1940 Act within 30
days of the service of notice of filing of award. In this case there was delay of 12 days, no reasons or explanation was
offered, no condonation. Punjab Tourism Corpn. Ltd. v. Prakash Chand Goyal,
(2003) 4 RAJ 307 : (2000) Supp Arb LR 293 (P&H), delay of two days in filing
objections, no explanation offered, no condonation. Bharat Coking Coal Ltd. v. L.K. Ahuja & Co.,
(2001) 1 Arb LR 656 :
AIR 2001 SC 1179 [
Navneet Krishn
Page 28 of 47
LNIND 2001 SC 496 ]:

(2001) 1 RAJ 259 :
(2001) 4 SCC 86 [
LNIND 2001 SC 496 ], party desiring under the 1940 Act to avoid the effect of the
agreement or award had strictly to comply with provisions of law and the time for filing objections could not be
extended. Section
section 5 of the Limitation Act, 1963 was applicable to applications under S. 30 of the 1940 Act.State
Trading Corpn. of India Ltd. v. Marpro Ltd. UK.,
(2000) 2 RAJ 456 (Del), court holidays excluded. Vaish Bros. & Co. v. Union of
India,
AIR 1999 Del 105 [
LNIND 1998 DEL 701 ], objections as to arbitrator's jurisdiction not raised before
him, not allowed to be raised subsequently. V.H. Patel & Co. v. Hirubhav, Himabhai Patel,
(2002) 3 RAJ 364 :
(2002) 3 Bom LR 221 :
(2002) 2 Arb LR 591 (Bom), under the 1940 Act, challenge had to be filed not when
the award was published, but when filed and the court issued notice of filing to the parties. Union of India v. Jain &
Associates,
AIR 2001 SC 809 [
LNIND 2001 SC 330 ]:
(2001) 1 RAJ 194 :
(2001) 1 SCR 889 [
LNIND 2001 SC 330 ] :
(2001) 3 SCC 277 [
LNIND 2001 SC 330 ] :
(2001) 1 Arb LR 494 , on discretion of the court to condone delay in filing objections.
Himalaya Construction Co. v. Executive Engineer,
(1999) 3 RAJ 51 :
(1999) 1 Arb LR 515 , the matter to be decided according to the law of limitation
under the
Arbitration Act , though it may not be applicable to statutory arbitrations.State of Bihar v. Rameshwar
Pd.,
(1999) 1 RAJ 169 :
(1998) 2 Arb LR 357 , in a non-speaking award, the court could not consider
whether the question of limitation was considered by the arbitrator or not though it was specifically referred to him.
State of A.P. v. I Chandrashekhara Reddy,
AIR 1998 SC 3311 [
LNIND 1998 SC 914 ], a lot of public money involved, delay condoned, but other
circumstances may prevent condonation even on the ground of public interest. Genuine Paints and Chemicals Co. v.
Union of India,
(1998) 2 RAJ 206 :
(1998) 73 DLT 296 :
(1998) 2 Arb LR 28 (Del), each day's delay has to be explained, delay on the part of
the estate, special consideration should be given to the show-motion functioning of Government institutions because of
delay making process at various levels. Bihar Plastic Industries v. New India Assurance Co. Ltd.,
(1998) 2 RAJ 19 :
(1998) 1 BLJR 281 , filing of award under S. 17 of the 1940 Act was found to be
delayed. E.N. Veeka Construction Co. v. DDA,
(1999) 2 RAJ 80 :
(1999) 77 DLT 153 :
(1999) 1 Arb LR 298 (Del), failure to raise the claim before the arbitrator, no right to
raise objections at the subsequent stage after the award. Aggarwal & Co. v. State of H.P.,
(2000) 2 RAJ 379 :
AIR 2000 HP 1 [
LNIND 1999 HP 43 ]:
(2000) 1 Arb LR 462 , participation without protest in proceedings out of time, award
not allowed to be challenged on the ground that it was made out of time.
22. P. Manohar Reddy & Bros v. Maharashtra Krishna Valley Development Corpn.,
(2009) 1 Arb LR 125 , 135 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398.
Navneet Krishn
Page 29 of 47
23. Wild Life Institute of India v. Vijaykumar Garg,

(1997) 10 SCC 528 . See also M.V.V. Satyanarayana v. Union of
India,
AIR 2007 (NOC) 15 : (2007) 1 RAJ 308 :
(2006) 5 Andh LT 656 : (2006) 6 Andh LD 284, reference to arbitration to be made
within 180 days of making claims, request for arbitration after one year, held not allowed.
24. Shri Ram Singh v. DDA,

(1996) 1 Arb LR 163 (Del).
25. Hydel Construction Ltd. v. H.P. State Electricity Board,

AIR 2000 HP 19 [
LNIND 1999 HP 40 ].
26. Avinash Sharma v. Municipal Corporation of Delhi,

(2007) 4 Arb LR 147 , 153:
(2007) 4 RAJ 380 (Del), time period of 90 days does not start where, as per the
contract, intimation regarding final bills is not given; Pandit Construction Company v. Delhi Development Authority,
(2007) 3 Arb LR 205 , 209:
(2007) 5 RAJ 424 :
(2007) 143 DLT 270 [
LNIND 2007 DEL 407 ] (Del), intimation of preparation of final bill was necessary for
commencement of period of limitation, time period only starts subsequent to such date relying on E.N.
Veeka Construction Co. v. Delhi Development Authority
(1999) 1 Arb LR 298 (Del).
27. Continental Construction Ltd. v. HP State Electricity Board, 2006 (Suppl) Arb LR 174,
183 :
AIR 2007 (NOC) 239 : (2007) 5 RAJ 222 : (2006) 2 Shim LC 453.
28. Milkfood v. GMC Ice Cream Pvt. Ltd.,

(2004) 7 SCC 288 [
LNIND 2004 SC 439 ] :
(2004) 1 RAJ 684 followed in Power Grid Corpn.
of India v. Bhanu Construction Co. Ltd.,
(2006) 4 RAJ 682 , 688 (Del), and Union of India v. Upper India Couper Paper Mills
Co. Ltd.,
(2007) 3 Arb LR 29 :
(2007) 2 RAJ 427 :
(2007) 138 DLT 732 (Del).
29. Agios Lazaros, (1976) 2 Lloyd's Rep 47 at p. 58.
30. Motilal Chamaria v. Lalchand,

AIR 1960 Cal 6 [
LNIND 1959 CAL 161 ]: 65 CWN 65.
31. Motilal Chamaria v. Lalchand,

AIR 1960 Cal 6 [
LNIND 1959 CAL 161 ]: 65 CWN 65.
32. Penukonda Rathakrisnamurthy v. Balasubramania & Co.,

AIR 1949 Mad 559 .
Navneet Krishn
Page 30 of 47
33. Offshore International S.A. v. Banco Central S. A.,

(1976) 3 All ER 749 :
(1977) 1 WLR 399 .
34. Khemraj Lakshmichand v. State of Orissa, (1971) 2 Cut WR 927; Mury Exportation v. D.
Khaitan & Sons,
AIR 1956 Cal 644 [
LNIND 1956 CAL 109 ].
35. Vishakhapatnam Port Trust v. Continental Construction Co.,

(2009) 1 Arb LR 508 , 515:
(2009) 2 RAJ 150 :
(2009) 4 SCC 546 [
LNIND 2009 SC 408 ] : (2009) 3 UJ (SC) 1442.
36. Maharaj Singh v. Vulcan Insurance Co.,

AIR 1972 Del 182 [
LNIND 1971 DEL 257 ]reversed on another point in Vulcan Insurance Co. v.
Maharaj Singh,
AIR 1976 SC 287 [
LNIND 1975 SC 380 ]:
(1976) 1 SCC 943 [
LNIND 1975 SC 380 ].
37. Agios Lazaros, (1976) 2 Lloyd's Rep. 47 at pp. 49, 51, 52, 58. See also
Petredec v. Tokumaru Kaiun Co. Sargasso, Re, (1994) 1 Lloyd's Rep 162 where the court observed that in order to
stop time running under a contractual or statutory provision, arbitration proceedings must have been started by the
service of an appropriate notice by one or other party and no special formality is required. Applying this to the facts of
the case the court said that when one party, in accordance with the agreement, purported to appoint his arbitrator and
called upon the other party also to do so, it was an appropriate notice and the suit brought within one-year period was
within limitation. The court followed Nea Arger SA v. Baltic Shipping Co., (1976) CLY 2534 : (1976) 2
Lloyd's Rep 47:
(1976) 1 QB 933 :
(1976) 2 All ER 843 .
Lloyd's Rep 47:
(1976) 1 QB 933 :
(1976) 2 All ER 843 .
Lloyd's Rep 47:
(1976) 1 QB 933 :
(1976) 2 All ER 843 .
Navneet Krishn
Page 31 of 47
Lloyd's Rep 47:
(1976) 1 QB 933 :
(1976) 2 All ER 843 .
Lloyd's Rep 47:
(1976) 1 QB 933 :
(1976) 2 All ER 843 .
42. Surrendra Overseas Ltd. v. Government of Sri Lanka, (1977) 1 Lloyd's Rep 653:
(1977) 2 All ER 481 .
43. Days Shankar v. Sheo Ram, (1956) All LJ 40.
44. Per Lord Denning M.R. in Nea Agrex SA v. Baltic Shipping Co. Ltd.
(1976) 1 QB 933 at 944- 945 : (1976) 2 Lloyd's Rep 47 : 1976 CLY 2534:
(1976) 2 All ER 842 , although Shaw L.J. (at 954) envisaged that the notice would
require the other party to do something in order for it to be sufficient. Goff L.J.(at 950) agreed that the necessary
request may be implied. See also Surrendra Overseas Ltd. v. Government of Sri Lanka (1977) 1
Lloyd's Rep. 653; Petredec Ltd. v. Tokumaru Kaiun Co. Ltd. (“The Sargasso“) (1994) 1 Lloyd's Rep. 162. For a recent
case where the request was held not to be implied See Vosnoc Ltd. v. Transglobal Projects Ltd.,
(1998) 2 All ER 990 .
45. Steel Authority of India v. J.C. Budharaja, Government and Mining Contractor,
AIR 1999 SC 3275 [
LNIND 1999 SC 770 ]:
(1999) 3 RAJ 263 :
(1999) 8 SCC 122 [
LNIND 1999 SC 770 ] :
(1999) 3 Arb LR 335 . Mohan Singh v. Union of India,
(2001) 1 RAJ 333 (J&K) initiation of a claim after 11 years, held, time-barred.
46. Haryana State Electricity Board v. Sunil Engg. Works,

(1999) 1 RAJ 499 : AIR 1999 P&H 296 : (1998) Supp Arb LR 339.
47. Municipal Corpn. of Greater Bombay v. Kulkarni & Co.,

(2002) 4 RAJ 353 : (1998) Supp Arb LR 325 (Bom).
48. Joginder Kumar Gandhi v. DDA,

(2000) 1 RAJ 312 :
(1999) 80 DLT 217 :
(1999) 2 Arb LR 600 (Del).
Navneet Krishn
Page 32 of 47
49. Bodh Raj Daulat Ram v. Food Corpn. of India,

(2003) 4 RAJ 685 :
(2003) 2 Arb LR 677 (P&H).
50. Oil & Natural Gas Corpon. Ltd. v. Amtek Geophysical P. Ltd.,
(2004) 3 RAJ 581 (Del). In this case the counterclaim was filed five years after that
the court held that the counterclaim was rightly rejected as timebarred.
51. Milwaram Popatram v. Tolaram Ayaram,

(1946) Kar 320 . Jupiter Chit Fund P. Ltd. v. Shiv Narain Mehta,
(2000) 2 RAJ 205 :
AIR 2000 SC 1295 : (2000) 1 SCR 767 :
(2000) 3 SCC 364 , commencement of arbitration proceedings without notice,
setting aside of award, period from commencement to setting aside to be excluded but not the notice period.
52. Jugal Kishore v. State of Madhya Pradesh,

AIR 1979 MP 89 : 1979 MPLJ 161.
53. Stockport Metropolitan Borough Council v. O’ Reilly, (1983) 1 Lloyd's Rep 80 : (1983) 2
Lloyd's Rep 70 : Rep 595.
54. Astley and Tyldesley Coal Co., Re,

(1899) 68 LJQB 252 ; Board of Trade v. Cayzer, lrvine & Co.,
(1927) AC 610 .
55. Wazir Chand Mahajan v. Union of India,

AIR 1967 SC 990 [
LNIND 1966 SC 178 ]:
(1967) 1 SCR 303 [
LNIND 1966 SC 178 ].
56. N.V. Vulcan v. Mowinckels Rederi,

(1938) 2 All ER 152 .
57. Ramdutt Ramkissendas v. E.D. Sassoon & Co. (1979) 2 Lloyd's Rep 267, LR 56 IA 128 :
AIR 1929 PC 103 : ILR 56 Cal 1048 : 33 CWN 485; 31 Bom LR 741 : 56 Mad LJ
614. Followed by the Supreme Court in Panchu Gopal Bose v. Board of Trustees of Port of Calcutta,
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]at 1618:
(1993) 4 SCC 338 [
LNIND 1993 SC 391 ] :
(1993) 2 Arb LR 97 :
(1994) 1 Arb LR 476 .
58. Abdur Kahim Ousman v. Oujamshee Purshottamdas & Co. (1979) 2 Lloyd's Rep 267,
ILR 56 Cal 639 :
AIR 1930 Cal 5 at P. 8.
59. Chaman Lal v. State of U.P.,

AIR 1980 All 308 .
Navneet Krishn
Page 33 of 47
60. Beharilal Baijnath Prasad v. Punjab Sugar Mills

Ltd., Co.
1943 All 467 ; Fatehchand Ganeshram v. Wasudeo Shrawan Dalal,
ILR (1946) Nag 477 :
AIR 1943 Nag 234 .
61. Purshottamdas Hassaram Sabnani v. Impex (India)

Ltd.,
AIR 1954 Bom 309 [
LNIND 1953 BOM 125 ]: 56 Bom LR 214 :
ILR (1954) Bom 602 [
LNIND 1953 BOM 125 ] ; Jugalkishore Ashati v. State of Madhya Pradesh,
AIR 1979 MP 89 .
62. Daya Shankar v. Sheo Ram, (1956) All LJ 40.
63. State of U.P. v. Singhalal & Co.,

AIR 1981 All 362 .
64. Babu Lal v. Ram Swaraup,

AIR 1960 Raj 240 [
LNIND 1960 RAJ 184 ].
65. Ashalata S. Lahoti v. Hiralal

Liladhar,
(1999) 1 Mah LJ 352 :
(1999) 3 Arb LR 462 , arbitration between a member and non-member (under the
bye-laws of
Securities Contracts (Regulation) Act in respect of transactions on Stock Exchange. The Court
followed its earlier decision in Vinay Bubna v. Yogesh Mehta,
(1998) 5 Mah LJ 613 .
66. Savitra Khandu Beradi v. Nagar Agricultural Sale and Purchase Co-operative Society,
AIR 1957 Bom 178 [
LNIND 1957 BOM 20 ]; Thilacan v. M.C.V. Co-operative Society,
AIR 1975 Ker 14 [
LNIND 1974 KER 56 ]:
1974 Ker LT 657 [
LNIND 1974 KER 56 ]. Provisions of the section are not applicable to awards under
the Defence of India Act, 1962, Union of India v. First Addl D.M.,
AIR 1983 All 258 .
67. The Times, April 17, 1984 : (1984) JBR 417.
68. At p. 369.
69. J.P. Stores v. Food Corporation of India,

AIR 1996 Ori 132 : (1996) 2 Arb LR 208.
70. Continental Construction Ltd. v. Food Corpn. of India,

AIR 2003 Del 32 [
LNIND 2002 DEL 11 ]. Good Challenger Navegantle SA v. Metal export import SA,
(2003) Lloyd's Rep 471, ex parte order to enforce award served eight years after it was made. Romanian law permitted
six years. There was part in between six years had not expired from the date of part payment, plea of limitation failed.
Navneet Krishn
Page 34 of 47
71. D-Ionic India Pvt. Ltd. v. Municipal Corp., Gwalior,

(1995) 2 Arb LR 229 (MP—Arbitration Tribunal, Bhopal).
72. Bharat M. Nagori v. Satish Kumar Sabnis,

(2003) 4 RAJ 47 (Bom):
(2003) 3 Arb LR 427 :
(2003) 4 Bom LR 287 . Ashalata S. Lahoti v. Hiralal L. Toladhar,
(1999) 2 RAJ 384 :
(1999) 1 Bom LR 241 (Bom), transaction between member and non-member of
Bombay Stock Exchange,
Limitation Act not applicable,R.C. Goenka v. Chase Trading Co.,
(2002) 4 RAJ 477 (Bom), an amended provision of the Bye-laws of the Bombay
Exchange Act was held to apply only to subsequent transactions and not to those which took place before the
amendment; Pravin Ratilal Share and Stock Brokers Ltd. v. Sagar Drugs and Pharmaceuticals Ltd.,
(2007) 3 Arb LR 373 :
(2008) 3 RAJ 204 (Bom), Bye-Law 3 of National Stock Exchange provides for a
period of limitation of 6 months, limitation period of 3 years not applicable.
73. See Commentary under S. 43supra under the heading “Provision for time in agreement”.
74. Atlantic Shipping and Trading Co. v. Louis Dreyfus,

(1922) 2 AC 250 ; Vulcan Insurance Co. v. Maharaj Singh,
AIR 1976 SC 287 [
(1976) 1 SCC 943 [
LNIND 1975 SC 380 ] :
(1976) 46 Com Cases 110 approving Dawood Tar
Mahomed Bros v. Queensland Insurance Co. Ltd.,
AIR 1949 Cal 399 ; Baroda Spinning Weaving Co. Ltd. v. Satyanarain Marine & Fire
Insurance Co. Ltd. (1979) 2 Lloyd's Rep 267, ILR 38 Bom 344 : 15 Bom LR 948; See also Girdharilal
Hanumanbux v. Eagle Star & British Dominions Insurance Co. Ltd., 27 CWN 955 :
Air 1924 Cal 186 ; Ramlal Jagannath v. State of Punjab,
AIR 1966 Punj 436 (FB). See Cotton Corporation of India v. Oriental Fire & General
Ins Co.,
AIR 1984 Cal 355 [
LNIND 1984 CAL 236 ]:
1984 Arb LR 79 , where time was extended because of the delays caused by the
conduct of the opposite party; P. Manohar Reddy & Bros v. Maharashtra Krishna Valley Development Corpn.,
(2009) 1 Arb LR 125 , 134 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 1 RAJ 615 :
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398, per S.B. Sinha J ‘it is well settled that
a clause providing for limitation so as to enable a party to lodge his claim with the other side is not invalid.’; Ed. It may
be noted that all these cases are based on the position of law prior to the 1997 amendment to S. 28 of the Contract Act,
1872. Although in the UK, the House Of Lords in Atlantic Shipping has upheld the validity of such clauses; in India,
subsequent to the addition of S. 28(b) to the statute book, all such time-bar clauses will necessarily be void. See
Commentary under S. 43(3)supra under the heading “Provision for time in arbitration agreement”.
75. Altantic Shipping and Trading Co. v. Louis Dreyfus & Co.,
(1922) 2 AC 250 ; Agro Co. of Canada Ltd. v. Richmond Shipping Ltd.,
Simonburn, (1973) 1 Lloyd's Rep 392 affirming (1972) 2 Lloyd's Rep 355.
76. Altantic Shipping and Trading Co. v. Louis Dreyfus & Co.,
(1922) 2 AC 250 ; Agro Co. of Canada Ltd. v. Richmond Shipping Ltd.,
Simonburn, (1973) 1 Lloyd's Rep 392 affirming (1972) 2 Lloyd's Rep 355. In this connection the following principle was
stated in Wesfal Larsen & Co. A/S v. Ikerigi Compania Naviera SA, (1983) 1 Lloyd's Rep 424 : The
Navneet Krishn
Page 35 of 47
charterers’ telex with its assertion that cargo damage was the owners’ liability and its flat rejection of any responsibility
did give rise to a dispute between the parties; the time for electing arbitration ran from the time when notice was
received that a dispute had arisen and although such notice need not comply with any technical form and it need not be
expressed to be a notice for purposes of the clause. It had to be such a notice as would convey clearly that a litigious or
potentially litigious situation had arisen and that any party not wishing such litigation to proceed should exercise the
election to arbitrate. The charterers made timely election and the charterers were entitled to the order sought, for
appointment of arbitrator; Another case where time was extended under S. section 27, English Act of 1950, [now the
(English)
Arbitration Act, 1996 ] is Casillo Granni v. Napier Shipping Co., (1984) 2 Lloyd's Rep 481 QB (Com
Ct.).P.C. Anand v. Regional Engineering College Society,
(1999) 3 RAJ 220 (HP), S. 43(3) is pari materia to S.
section 37(4)of the Arbitration Act , 1940, which is pari materia to S. section 16(6)of the English
Arbitration Act , 1934, which is practically the same as S. section 27 of the English
Arbitration Act , 1950.
77. Panchaud Freres S. A. v. Establishments General Grain Company, (1969) 2 Lloyd's Rep
109.
78. Pinnock Bros. v. Lewis & Peat Ltd.,

(1923) 1 KB 690 : 39 TLR 212.
79. Bede Steam Shipping Co. Ltd. v. Bungey Born Ltd. S.A.,
(1927) 43 TLR 374 . Thus a claim for money due has been distinguished from
damages for failure on the part of the seller to deliver goods. This being a claim for damages becomes affected by the
time-bar process, European Grain and Shipping Ltd. v. R & H Hall, (1990) 2 Lloyd's Rep 139 QB (Com Ct.).
80. Ayscough v. Sheed Thompson & Co.,

(1924) 93 LJKB 924 :
(1924) All ER Rep Ext 875 : (1924) 19 Lloyd's 104.
81. Denny, Mott & Dickson Ltd. v. Lynn Shipping Co. Ltd., (1963) 1 Lloyd's Rep 339.
82. Atlantic Shipping and Trading Co. v. Louis Dreyfus & Co. Ltd.,
(1922) 2 AC 250 .
83. Smeaton Hanscomb & Co. Ltd. v. Setty (Sassoon 1.) Son & Co. (No. 1),
(1953) 2 All ER 1588 : (1953) 2 Lloyd's Rep. 580:
(1953) 1 WLR 1481 .
84. Ford (H.) & Co. v. Cie Furness (France),

(1922) 2 KB 797 .
85. State of Kerala v. V.K. Natesan,

(1997) 2 Arb LR 675 (Ker).
86. Himmerland, (1965) 2 Lloyd's Rep 353.
87. Hardwick Game Farm v. Suffolk Agricultural Poultry Producers’ Association Ltd., (1964) 2
Lloyd's Rep 227.
Navneet Krishn
Page 36 of 47
88. 68 (20th edn, 1982) by Walton And Vitoria.
89. A/B Legis v. Berg & Sons Ltd., (1964) 1 Lloyd's Rep 203 at pp. 212, 213; P. Manohar
Reddy & Bros v. Maharashtra Krishna Valley Development Corpn.,
(2009) 1 Arb LR 125 , 138 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 1 RAJ 615 :
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398.
90. Pompe v. Fuchs,

(1876) 34 LT 800 :
(1874-80) All ER Rep Ext 1838 .
91. Smeaton Hanscomb & Co. Ltd. v. Setty (Sassoon 1.); Sons & Co. (No.
1),
(1953) 2 All ER 1471 .
92. Minister of Materials v. Steel Brothers & Co. Ltd.,

(1952) 1 All ER 522 :
(1952) 1 TLR 499 : (1952) 1 Lloyd's Rep 87.
93. W.J. Alan & Co. Ltd. v. El Nasr Export and Import Co., (1971) 1 Lloyd's Rep 401.
94. Union of India v. Aaby (E.B.)’s, Rederi A/S.,

(1974) 2 All ER 874 :
(1975) AC 797 :
(1974) 3 WLR 269 .
95. Tradax Export S.A. v. Volkswagenwerik A.G.,

(1969) 2 QB 599 :
(1969) 2 All ER 144 ; Toepfar v. Cremer, (1975) 2 Lloyd's Rep 118.
96. Varipati and Olympis Oil and Cake Co., Re,

(1914) WN 208 .
97. Punam Chand Jain v. General Assurance Society

Ltd.,
AIR 1974 Cal 335 [
LNIND 1974 CAL 95 ]; V.G. Ghawda Ltd. v. Union of India,
AIR 1978 Cal 271 [
LNIND 1978 CAL 142 ].
98. P. Manohar Reddy & Bros v. Maharashtra Krishna Valley Development Corpn.,
(2009) 1 Arb LR 125 :
AIR 2009 SC 1776 [
LNIND 2008 SC 2472 ]:
(2009) 1 RAJ 615 :
(2009) 2 SCC 494 [
LNIND 2008 SC 2472 ] : (2009) 3 Mad LJ 398; Ram Nath Mehra & Sons v. Union of
India,
AIR 1982 Del 164 [
LNIND 1981 DEL 324 ]dissenting from Vilayantam Mital v. Union
Navneet Krishn
Page 37 of 47
of India, 1980 Rajdhani LR 312; Jai Chand Bhasin v. Union of India,

AIR 1983 Del 588 : 1983 Arb LR 191.
1. National Buildings Construction Corporation v. RC Bhatia,

(2006) 4 Arb LR 52 , 54:
(2006) 3 RAJ 596 :
(2006) 133 DLT 120 (Del), ‘it is trite that a party may waive the defence of
limitation'; DK Enterprises v. The Employees State Insurance Corporation,
(2009) 2 Arb LR 112 (Del-DB), objection that claim barred by limitation raised only
belatedly and not taken before the arbitrator, held cannot later adopt a contrary position.
2. S.S. Jetly v. DDA,

(2000) 1 RAJ 145 :
(1999) 81 DLT 681 :
(1999) 3 Arb LR 389 . Socy, Irrigation and Power Deptt, Govt. of Orissa v. Niranjan
Swain,
(1998) 8 SCC 65 :
(1999) 1 Arb LR 618 , the question whether the claim was time-barred was not
raised before the arbitrator, held, the arbitrator was not required to go into the question.
3. National Highways Authority of India v. PNC Constructions Ltd.,

(2005) 2 Arb LR 631 , 635– (Del) 636, dispute settlement clause required invocation
of arbitration within 28 days of decision of Dispute Review Expert, court condoned delay when application was made
only after 56 days, strictures were however issued for the lack of a specific pleading of undue hardship being made.
4. Dr. E Muralidharan v. Venkataraman &

Company,
(2009) 2 Arb LR 130 , 136- 137 :
AIR 2009 Mad. 40 [
LNIND 2008 MAD 3221 ](DB) : (2009) 2 Mad. LJ 1009on appeal from
Dr. E. Muralidharan v. Venkataraman & Company,
(2006) 3 Arb LR 477 , 480:
(2007) 1 RAJ 375 : (2006) 3 Mad. LJ 354 (Mad).
5. Dr. E Muralidharan v. Venkataraman &

Company,
(2009) 2 Arb LR 130 , 136- 137 :
AIR 2009 Mad 40 [
LNIND 2008 MAD 3221 ](DB) : (2009) 2 Mad. LJ 1009on appeal from
Dr. E. Muralidharan v. Venkataraman & Company,
(2006) 3 Arb LR 477 , 480:
(2007) 1 RAJ 375 : (2006) 3 Mad LJ 354 (Mad).
6. For text of English Act, 1950, See Appendix 34.
7. For text of English Act, 1996, See Appendix 31.
8. Liberian Shipping Corporation “Pegasus” v. A. King & Sons Ltd.,

(1967) 2 QB 86 at pp. 95, 102:
(1967) 1 All ER 934 . For further explanation about the exercise of this power See
Richmond Shipping Ltd. v. Agro Company of Canadaltd., (1973) 2 Lloyd's Rep 145, here time was not extended
because refusal was not causing any hardship to the applicant and the defendant was going to be prejudiced if an
extension were granted.
9. Sterling General Insurance Co. Ltd. v. Planters Airways (P.) Ltd.,

AIR 1975 SC 415 [
LNIND 1974 SC 420 ]:
Navneet Krishn
Page 38 of 47
(1975) 1 SCC 603 [

LNIND 1974 SC 420 ] :
(1975) 2 SCR 136 . See also R.S. Avtar Singh Co. v.
Vishakhapatnam Steel Plant,
AIR 2008 (NOC) 865 (DB):
(2008) 6 Andh LT 4 , the expression ‘undue hardship’ has a wider connotation
‘sufficient cause’ used in S.
section 5 of Limitation Act .
10. Jocelyn, The (1977) 2 Lloyd's Rep 121 at p. 129.
11. Dr. E. Muralidharan v. Venkataraman & Company,

(2006) 3 Arb LR 477 , 480:
(2007) 1 RAJ 375 : (2006) 3 Mad LJ 354 (Mad).
12. Cathiship SA v. Allanasons Ltd. (The Catherine Helen),

(1998) 3 All ER 714 , QBD (Comm Ct). For text of English Act, 1996, See Appendix
16 and for text of English Act, 1950, See Appendix 34.
13. Vosnoc Ltd. v. Transglobal Projects Ltd.,

(1998) 1 WLR 101 : (1998) 1 Lloyd's LR 711 (QB) (Coml. Ct.).
14. Japan Line v. Australian Wheat Board, Cunard Carrier, (1977) 2 Lloyd's Rep 261; RSB
Projects Ltd. v. RUIDP,
AIR 2009 (NOC) 44 (Raj), delay in challenging engineer's report and commencing
arbitration within agreed time, plea for condonation rejected based on the amount at stake, length of delay, and
possibility of party being prejudiced by such delay.
(1975) 1 SCC 603 [
LNIND 1974 SC 420 ] :
AIR 1975 SC 415 [
LNIND 1974 SC 420 ]affirming Planters Airways (P.)
Ltd. v. Sterling General Insurance Co. Ltd.,
AIR 1974 Cal 193 [
LNIND 1974 CAL 12 ]; P.C. Anand v. Regional Engineering College Society,
(1999) 3 RAJ 220 : 1999 Supp Arb LR 304 (HP), petitioner was himself responsible
for delay causing hardship which the court found to be well deserved, no extension was allowed even though the
amount of the claim was substantial. The court also held that the plea of limitation can be resorted to also by
Government Authorities.
16. Liberian Shipping Corporation “Pegasus” v. A. King & Sons Ltd.,

(1967) 2 QB 86 :
(1967) 1 All ER 934 .
17. Bulgaris v. La Plata Cereal Co. S.A., (1947) 80 Lloyd's Rep 455.
18. Nestle Co. Ltd. v. E. Biggins & Co. Ltd., (1958) 1 Lloyd's Rep 398.
19. Steamship Co. of 1912 and Steamship Co., Svenborg v. Anglo-American Grain Co.,
Leise Maersk, (1958) 2 Lloyd's Rep 341.
Navneet Krishn
Page 39 of 47
20. Simoburn (No. 2), (1973) 2 Lloyd's Rep 145.
21. International Tank and Pipe S.A.K. v. Kuwait Aviation Fuelling Co. K.S.C., (1975) 1
Lloyd's Rep 8 :
(1975) QB 224 :
(1975) 1 All ER 242 ; Consolidated Investment & Contracting v. Saponaria Shipping
Co. Ltd., (The Vergo),
(1978) 1 WLR 986 :
(1978) 3 All ER 988 : (1978) 2 Lloyd's Rep 167.
22. Intermare Transport Gmbh v. Naves Transoceanica's Armadora S.A., The Aristokratis,
(1976) 1 Lloyd's Rep 552.
23. The Bratislava, (1977) 2 Lloyd's Rep 269; Ram Nath Mehra & Son's v. Union of India,
AIR 1982 Del 164 [
LNIND 1981 DEL 324 ].
24. Orissa Co-operative Insurance Society v. Chandulal Agarwala, (1973) 1 Cut WR 949.
25. Nebra Shipping and Trading Corporation Ltd. v. Northern Sales Ltd., (1980) 3 Lloyd's
Rep 273.
AIR 1975 SC 415 [
LNIND 1974 SC 420 ]:
(1975) 1 SCC 603 [
LNIND 1974 SC 420 ] :
(1975) 2 SCR 136 ; R.S. Avtar Singh Co. v. Vishakhapatnam Steel Plant,
AIR 2008 (NOC) 865 (DB):
(2008) 6 Andh LT 4 , “though this provision has been interpreted in a [stricter]
approach earlier, the recent trend of the Courts has drastically mellowed down the rigour”.
AIR 1975 SC 415 [
LNIND 1974 SC 420 ]:
(1975) 1 SCC 603 [
LNIND 1974 SC 420 ] :
(1975) 2 SCR 136 .
28. Liberian Shipping Corporation “Pagasus” v. Ring (A) & Sons Ltd.,
(1967) 2 QB 86 :
(1967) 1 ALL ER 934 :
(1967) 2 WLR 856 : (1967) 1 Lloyd's Rep 303.
29. (Ch. E. ) Rolimpex Ltd. v. Avra Shipping Co. Ltd., (1973)

2 Lloyd's Rep 226.
30. Nea Agrex S. A. v. Baltic Shipping Co. Ltd.,

(1976) QB 933 .
Navneet Krishn
Page 40 of 47
31. Consolidated Investment & Constructing Co. v. Saponaria Shipping Co. Ltd.,(The Vergo),
(1978) 1 WLR 986 : (1978) 2 Lloyd's Rep 167:
(1978) 3 WLR 988 .
32. Harbour & General Works Ltd. v. Environment Agency, (2000) 1 Lloyd's Rep 65:
(2000) 1 WLR 950 :
(2000) 1 All ER 50 (CA).
33. Jadaanjls Slovaskia v. Nokenglag SA, Tika Bath (1984) 2 Lloyd's Rep 145.
34. Sioux Inc. v. China Salvage Co., Kwangchow Branch,

(1980) 1 WLR 996 .
35. Sioux Inc. v. China Salvage Co., Kwangchow Branch,

(1980) 1 WLR 996 .
36. F.E. Hookway & Co. Ltd. v. H.W. Hoope & Co.,
(1950) 2 All ER 842 : 84 Lloyd's Rep 443.
37. Watney Combe Reid & Co. Ltd. v. E.M. Dower & Co. Ltd., (1956) 2 Lloyd's Rep 325
affirming (1956) 2 Lloyd's Rep 129.
38. F.E. Hookway & Co. v. H.W. Hooper & Co.,

(1950) 2 All ER 842 : 84 Lloyd's Rep 443.
39. Jajasan Urusan Bahan Makanan v. Cia de Nav Geamar S.R.L., (1953) 1 Lloyd's Rep 499
at p. 511 (CA).
40. G. Sigwalas & Sons v. Man Mohan Singh & Co., (1958) 2 Lloyd's Rep 298.
41. Raymond and Reid v. Granger,

(1952) 2 All ER 152 :
(1952) 1 TLR 1632 ; The Himmerland, (1965) 2 Lloyd's Rep 353 at p. 361.
42. Japan Line v. Australian Wheat Board, Cunard Carrier, (1977) 2 Lloyd's Rep 261 at p.
264.
43.
(1982) 1 WLR 871 : (1982) JBL 303.
44. In Tradax Export SA v. Italcarbo Societa Di Navigazione S.P.A. (The Sandalion), (1983) 1 Lloyd's Rep
514, where the appointment of arbitrator and the claim were found on facts to have been made within twelve months.
45. In Tradax Export SA v. Italcarbo Societa Di Navigazione S.P.A. (The Sandalion), (1983) 1 Lloyd's Rep
514, where the appointment of arbitrator and the claim were found on facts to have been made within twelve months.
Navneet Krishn
Page 41 of 47
46. Thus, the appointment of an arbitrator would not be necessary unless a claim which has been made within
time becomes identifiable in precise terms to enable the other party to know what claim it was that had to be met. As to
the meaning of the expression “final discharge” the court distinguished Denny, Mott
Dickens Ltd. v. Lynn Shipping Co. Ltd., (1963) 1 Lloyd's Rep 339 because in this case it was a voyage charter so that
there was to be only one discharge, whereas in a time charter there may be a repeated and final discharge at
successive stages.
47. Plovidha v. Oleagine S.A. (Luke Botic), The Times, Oct 7, 1983 : (1984) J BL 45.
48. First Steamship Co. v. C.T.S. Commodity Transport Shipping Schiffahrts etc. (Ever
Splendor), (1988) 1 Lloyd's Rep 245.
49. Mediterranea Raffineria Siciliana Petroli S.P.A. v. Kuwait Oil Tanker Co., (Al Faiha),
(1981) 2 Lloyd's Rep 99 : (1981) Com LR 81.
50. As formulated by Webster J in Federal Commerce & Navigation Ltd., Xcan Grain (Europe) Ltd (The Ratna
Vandana), (1982) 1 Lloyd's Rep 499. Another similar extension of time was granted in Jadranska Slobodhna Plovidha
v. Oleagine SA (The Luka Botic), (1984) 1 Lloyd's Rep 145:
(1984) 1 WLR 300 :
(1984) 3 All ER 602 . Under a clause of the centrocon arbitration which permitted
twelve months’ time for commencing arbitration from the date of the final discharge, the court extended time on a
balance of convenience, no serious prejudice was caused to the shipowners and the charterers would have suffered
undue hardship, Tradax Export S.A. v. Italcarbo Societa etc, (1983) 1 Lloyd's Rep 514 QB (Com Ct.).
51. Libra Shipping and Trading Corpn v. Northern Sales Ltd., (1981) Lloyd's Rep 273 (CA).
The court applied the ruling in The Pegasus, (1977) 1 Lloyd's Rep 303 and The Jocelyn, (1977) 2 Lloyd's Rep 121.
Another case in which time was extended by the use of the balancing process of undue hardship to one and prejudice
to the other, Salendrederierna S.A. v. Blre Star Line Ltd., (The New York Star), (1982) 1 Lloyd's Rep 78 QB (Com. Ct.)
where there was a delay of only two months but as compared with the agreed limit of 28 days it was substantial, but
even so time was extended because of huge amount involved and there was no prejudice to the opposite party,
Graham H. Davies (UK) Ltd. v. Marc Rich & Co., (1985) 2 Lloyd's Rep 421 (CA). Seven month's delay
against 28 days allowed by the contract was held to be relatively long and not excused also because the court was not
satisfied that the refusal to extend time would cause undue hardship to the party seeking extension, European Grain &
Shipping Ltd. v. Dansk Land Brugs etc., (1986) 1 Lloyd's Rep 163. Another ruling on the same point, Transpetrol Ltd. v.
Ekali Shipping Co. Ltd., (1989) 1 Lloyd's Rep QB (Com Ct.).
52. Comdel Commodities Ltd. v. Siporex Trade SA, (1989) 2 Lloyd's Rep 13 (CA); upheld,
Comdel Commodities Ltd. v. Siporex Trade SA, (No. 2) (1990) 2 Lloyd's Rep 207 (HL). Where the period of delay was
short and the charterers’ solicitors had acted promptly when the possibility of a time bar defence was recognized, a
substantial sum was at stake and it would be a major hardship to the charterers if they were left exposed to claim
without being able to claim in their turn against the owners whose vessel was responsible for the delay, it was held that
no prejudice would be caused to the owners if the time was extended. Navigazione Alta Italia S.P.A. v. Concordia
Maritime Chartering A.B. (The “Stena Pacifica”), QB (Com. Ct.) (1990) 2 Lloyd's Rep. 234.
53. Raymond and Reid v. Granger,

(1952) 2 All ER 152 :
(1952) 1 TLR 1632 .
54. The Simonburn (No. 2), (1973) 2 Lloyd's Rep 145.
55. Nestle Co. Ltd. v. E. Biggins & Co. Ltd., (1958) 1 Lloyd's Rep 398 ; R.S. Avtar Singh Co.
v. Vishakhapatnam Steel Plant,
AIR 2008 (NOC) 865 (DB):
(2008) 6 Andh LT 4 , delay of 22 months for allegedly medical reasons condoned on
terms of payment of costs.
Navneet Krishn
Page 42 of 47
56. The Simonburn (No. 2), (1973) 2 Lloyd's Rep 145 at p. 151.
57. For text of Article See the Hague Rules.
58. The Mirak, (1965) P 223 : (1965) 1 All ER. 230.
59. Nea Agrex S.A. v. Baltic Shipping Co. Ltd.,

(1976) QB 933 :
(1976) 2 All ER 842 : (1976) 2 Lloyd's Rep 47 doubting Ch. E.
Rolimpex Ltd. v. Avra Shipping Co. Ltd., (1973) 2 Lloyd's Rep. 226; The Angeliki, (1973) 2 Lloyd's Rep. 226.
60. Nea Agrex S.A. v. Baltic Shipping Co. Ltd.,

(1976) QB 933 :
(1976) 2 All ER 842 : (1976) 2 Lloyd's Rep 47 doubting Ch. E.
Rolimpex Ltd. v. Avra Shipping Co. Ltd., (1973) 2 Lloyd's Rep. 226; The Angeliki, (1973) 2 Lloyd's Rep. 226.
61. Consolidated Investment & Contracting Co. v. Saponaria Shipping Co. Ltd.,(The Vergo),
(1978) 1 WLR 986 .
62. Jai Chand Bhasin v. Union of India,

AIR 1983 Del 588 : 1983 Arb LR 191. For attracting the provisions of the section
the dispute must be within the scope of the agreement and the matter in question must be time-barred, Uttam Singh
Dugal & Co. P. Ltd. v. I.O.C. Ltd.,
(1987) 1 Arb LR 281 (Del), the court considered the decisions in Jedranska
Slobodna v. Oleagine SA,
(1983) 3 All ER 602 ; Babanafi International v. Avan Petroleum,
(1982) 3 All ER 244 .
63. Board of Trustees, Chennai Port Trust v. Hindustan Construction Co. Ltd.,
AIR 2003 NOC 162 (Mad), costs of Rs. 10,000 were imposed to be recovered from
officers responsible for infraction.
64. Union of India v. Orient Engg. & Commercial Co. Ltd.,

AIR 1977 SC 2445 [
LNIND 1977 SC 286 ]:
(1978) 1 SCC 10 [
LNIND 1977 SC 286 ] :
1977 UJ 695 ; State of Orissa v. D.C. Routray,
AIR 1983 Ori 163 : (1983) 56 CLT 7.
65. State of Orissa v. Niranjan Swain,

(1990) 1 Arb LR 306 :
AIR 1990 SC 685 [
LNIND 1989 SC 391 ]:
(1989) 4 SCC 269 [
LNIND 1989 SC 391 ], the court found that nothing had been shown in the case to
indicate that it was at all necessary to call the arbitrator as a witness to depose on any matter which could legitimately
be examined by the court in the proceedings.
66. Buccleuch (Duke) v. Metropolitan Board of Works,

(1872) LR 5 HL 418; Amir Begum v. Badruddin Ahmed, ILR 36 All 336 :
Navneet Krishn
Page 43 of 47
AIR 1914 PC 105 at p. 108; O’ Rourke v. Railway Commissioners,

(1890) 15 AC 371 ; Khub v. Bishambhar Sahai,
AIR 1925 All 103 ; Union of India v. Orient Engg. & Commercial Co.,
(1978) 1 SCC 10 [
LNIND 1977 SC 286 ] :
AIR 1977 SC 2445 [
LNIND 1977 SC 286 ]:
1977 UJ 695 ; State of Orissa v. D.C. Routray,
AIR 1983 Ori 163 : (1983) 56 CLT 7.
67. Recher & Co. v. North British and Mercantile Insurance Co.,
(1915) 3 KB 277 ; Leiserach v. Schalit,
(1934) 2 KB 353 : 103 LJKB 608.

(1872) LR 5 HL 418; Amir Begum v. Badruddin Ahmed, ILR 36 All 336 :
AIR 1914 PC 105 at p. 108.
69. Westlake v. Collard, (1789) Bullnp 236b, 7th ed.

(1872) LR 5 HL 418.
71. Ravee v. Farmer, (1719) 4 Term Rep 146 : 100 ER 942.
72. Wilson v. Hinckley,

(1868) 18 LT 695 .
73. Dutton Massey & Co. v. Jamnadas Harprasad,

AIR 1924 Sind 51 .
74. Flynn v. Robertson,

(1869) LR 4 CP 324 (omission to take into account an admitted item); Hutchinson v.
Shepperton,
(1849) 13 QB 955 : 116 ER 1528 (Do); Holgate v. Killick, 31 LJ Ex 7 : 158 ER
536; Allen v. Greenslade,
(1875) 33 LT 567 ; Greenwood & Co. v. Brownhill & Co.,
(1881) 44 LT 47 ; Baxter and the Midland Ry., Re
(1906) 95 LT 20 ; Buccleuch (Duke) v. Metropolitan Board of Works,
(1872) LR 5 HL 418 at p. 469.
75. Amir Begum v. Badruddin Ahmed, ILR 36 All 336 :

AIR 1914 PC 105 ; Attorney General for Manitoba v. Kelly,
(1922) 1 AC 268 .
76. Padley v. Lincoln Waterworks Co., (1850) 2 Mac & G 68 : 47 ER 1695.
77. Amir Begum v. Badruddin Ahmed, ILR 36 All 336 :

AIR 1914 PC 105 .
Navneet Krishn
Page 44 of 47
78. Batokristo Roy Co. Pvt. Ltd. v. H. Polesy & Co. (Importers); Pvt. Ltd.,
AIR 1975 Cal 467 [
LNIND 1975 CAL 115 ].
79. Enoch and Zaretzky, Bock & Co., Re

(1910) 1 KB 327 .
80. Vigers Bros. v. Allen (1979) 2 Lloyd's Rep 267, 53 Lloyd's Rep. 187.
81. In the matter of the

Arbitration Act ,
AIR 1924 Mad 274 .

AIR 1924 Sind 51 .
83. State of Orissa v. D. C. Routray,

AIR 1983 Ori 163 , 166: (1983) 56 Cut LT 7.
84. Aboobakar Latif v. Congress Reception Committee, 39 Bom LR 476 :

AIR 1937 Bom 410 at p. 412. Tashkant Stone Crushers v. H.P.S.E.B.,
(1994) 2 Arb LR 200 (HP), examination of arbitrator in case of unreasoned award is
irrelevant, permission to examine not allowed.
85. Batokuisto Roy Co. P. Ltd. v. H. Polsey & Co.,

AIR 1975 Cal 467 [
LNIND 1975 CAL 115 ].
86. Ti Ti Ma v. Mohammed Eusuf,

AIR 1940 Rang 203 , 207.
87. Bourgeois v. Weddell,

(1924) 1 KB 539 .
88. Orient Paper Mills v. Civil Judge,

(2003) 4 RAJ 479 (Ori) : 2000 Supp Arb LR 499.
89. Bremer Vulkan Schiffbau Und Masckinenabrik v. South Indiashipping Corporation Ltd.,
(1981) 2 WLR 141 reversing
(1980) 2 WLR 905 .
(1980) 2 WLR 905 .
(1980) 2 WLR 905 .
Navneet Krishn
Page 45 of 47
92. Crawford v. E.A. Prowling Ltd.,

(1973) QB 1 :
(1972) 1 All ER 1999 :
(1972) 2 WLR 749 .
93. Bremer Vulkan Schiffbau Und Masckinenabrik v. South India Shipping Corporation Ltd.,
(1981) 2 WLR 141 .
94. Andre et Compagnie S.A.Marine v.Transocean Ltd.,

(1981) 3 WLR 43 affirming, (1980) 1 Lloyd's Rep 333 :
Distinguishing Bremer Vulkan Schiffbau Und Masckinenfabrik v. South India Shipping Corporation
Ltd.,
(1981) 2 WLR 141 ; Pearl Mill Ltd. v. Ivy Tannery Co. Ltd.,
(1919) 1 KB 76 ; See, however, Paul Wilson & Co. A/S v. Partenrederei Hannab
Blumenthal,
(1982) 3 WLR 49 .
95. Andre et Compagnie S.A.Marine v.Transocean Ltd.,

(1981) 3 WLR 43 affirming, (1980) 1 Lloyd's Rep 333 :
Distinguishing Bremer Vulkan Schiffbau Und Masckinenfabrik v. South India Shipping Corporation
Ltd.,
(1981) 2 WLR 141 ; Pearl Mill Ltd. v. Ivy Tannery Co. Ltd.,
(1919) 1 KB 76 ; See, however, Paul Wilson & Co. A/S v. Partenrederei Hannab
Blumenthal,
(1982) 3 WLR 49 .
96. Madhoo Kashinath v. Sambashiva, 54 IC 126 :

AIR 1920 Nag 29 at p. 30.
1. Allied Marine Transport Ltd. v. Vale Do Rio Doce Navegacao SA, “Leonidasda”,
(1984)1 WLR 1 .
2. Andre et Compagnie S.A. v. Marine Transocean Ltd.,

(1981) 3 WLR 43 at p. 50; Paul Wilson & Co. A/S v. Partenrenredrei Hannab
Blumenthal,
(1982) 3 WLR 49 CA:
(1981) 3 WLR 823 CC ;
(1982) 3 WLR 1149 (HL).
3. Supra:
(1982) 3 WLR 1149 HL : (1983) 1 Lloyd's Rep 103; Excomm Ltd. v. Gaun, Gaun
Shipping Ltd., (1987) 1 Lloyd's Rep 330, evidence of abandonment by agreement.
4.
(1981) AC 909 : (1981) 1 Lloyd's Rep 253. Followed in Black
Clawson International Ltd. v. Papier Werke Waldhoi Aschaffenburg, (1981) 2 Lloyd's Rep 446 where it was held that an
arbitration contract does represent a severable contract capable of premature termination by repudiation or frustration.
Thai-Europe Tapioca Service Ltd. v. Seine Navigation Co. Inc., (1989) 2 Lloyd's Rep 506 QB (Com. Ct.), where the
arbitration agreement imposed no express obligation on the claimant to pursue the reference with dispatch and where
the claimant was not in breach of any order of the arbitrator and the respondent himself had done nothing to accelerate
the procedure, there was no implied term available whereby the respondent might treat delay or inactivity on the part of
the claimant as a repudiatory breach of the agreement. In order to demonstrate consensual abandonment of an
Navneet Krishn
Page 46 of 47
arbitration by silence and inactivity it has to be shown that the clear inference to be drawn from the claimant's inactivity
was that the claimant did not wish or intend to proceed with the arbitration provided that the respondent consented to its
abandonment. That the clear inference to be drawn from the inactivity of the respondent was that he had consented to
such abandonment and that these inferences represented or at least did not conflict with the respondent's
understanding of the position. Although the silence of two years and three months after the arbitration commenced was
to be considered against the backdrop of almost six years delay before it started, the court was unable to hold that such
silence was long enough or of such a character as to amount to an unequivocal offer of abandonment. It was apparent
on any reasonable reading of the exchanges immediately following the fire that the incident was a serious one. The
court applied the principle in Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation,
(1981) 1 Lloyd's Rep. 253 and The Hannab Blumenthal, (1983) 1 Lloyd's Rep. 103.
5. Enid A Marshall, (1983) JBL 234 at 237.
6. (1985) 2 Lloyd's Rep 18.
7. Paal Wilson & Co. A/S v. Parten re cderei Hannab Blumenthal (The Hannab
Bluementhal), (1983) 1 AC 854 : (1983) JBL 234.
8. Andre & Co. S.A. v. Marine Transocean Ltd., (The Splendid Sun)
(1981) QB 694 CA : (1981) JBL 171, 288 : (1981) 2 Lloyd's Rep 29.
9.
(1983) 1 AC 854 .
10. (1985) JBL 466, Enid A Marshall. The principle of the Splendid Sun was applied in
Tracomin S.A. v. Anton C. Nielsen, (1984) 2 Lloyd's Rep 195 QB (Com. Ct.) where the defendants failed to pursue their
claim for 5 1/2 years and this was held to amount to abandonment.
11. The Hannab Blumenthal ruling was applied in Gebr Van Weelde Schepvaartkantor v.
Compania Naviera Sea Orient SA, (The “Agrabele”) (1985) 2 Lloyd's Rep 496, here also after reference, nothing was
done by the parties for three years. The court said the facts necessary to constitute an assumed agreement to abandon
reference to arbitration were established here. It was not exclusively sub silentio because during the period of silence in
the arbitration itself there were communications between the parties which, in the result, tended strongly to confirm an
agreement to abandon which would not necessarily have been inferred from silence alone. If the evidence established
facts which entitled the respondents in an arbitration to assume that the reference was agreed to be abandoned, and
that the respondents did believe that the situation was accepted by both parties, there seemed to be no justification for
holding that a respondent who knew the legal requirements of a contract in terms of offer and acceptance and who
thought consciously in those terms, was in a better position than one who merely believed that the arbitration was dead.
The plaintiffs were therefore entitled to succeed on the basis of the agreement to abandon the reference which they
alleged and which they proved. Estia compagnia Navigacion S.A. v. Deutsche Genusmiter GMBH, (1981) 1 Lloyd's Rep
541, some part of the delay of over five years was excusable and the inexcusable part was long enough to qualify as
inordinate there being not even painfully slow progress, evidence of abandonment.
12. Allied Marine Transport Ltd. v. Vade Do Rao Doce Nowegacao S.A. (The “Leonidas”),
(1985) 2 Lloyd's Rep 18:
(1985) 1 WLR 925 :
(1985) 2 All ER 796 . Eighteen months’ delay was held to be no “inordinate” so as to
create a presumption of abandonment.
13.
(1988) 1 WLR 603 HL : (1988) 2 Lloyd's Rep. 93.
Navneet Krishn
Page 47 of 47
14. Similar circumstances were involved in Cie Francaise D’ Importation et de Distribution SA v. Dentsche
conti etc., (1985) 2 Lloyd's Rep 592 QB (Com. Ct.), the court said that in the circumstances the party could not
establish that there was a consensual abandonment of these references and could not rely on estoppel. There was no
clear and unequivocal representation by conduct just as there was no conduct capable of being construed as a clear
and unequivocal offer and there was no reliance just as there was no conduct capable of being construed as an
acceptance just as an ordinary contract might be dissolved by mutual abandonment so also might a contract to
arbitrate. With the result that if by their words and deeds the parties had shown that they regarded the reference as
obsolete, the court would have recognized the position and would, if necessary, have inhibited the parties and the
arbitrators from proceeding with it. Explaining the circumstances in which long delay may lead to frustration, MUSTILL J
said“Can it be said that a hearing so long after the events in question would have been so vulnerable to unfairness that
performance of the contract would have been fundamentally different from what must be taken to have been
contemplated when the parties entered into their agreement to arbitrate ? When making this assessment it must, of
course, be borne in mind that (a) any contract to refer future disputes to arbitration contemplated that the arbitration
may not even begin until close to the expiry of the relevant time limit, and (b) any reference to arbitration must
accommodate the possibility that some degree of unfairness may arise adventitiously even if the reference is pushed
forward with reasonable dispatch. Japan Lines Ltd. v. Himoff Maritime Enterprises Ltd., (The “kehrea”), (1983) 1 Lloyd's
Rep. 29. Tankerederei Ahrenkeil v. Frahuil, (1988) 2 Lloyd's Rep. 486 where the evidence did not show that delay
rendered a fair trial of the issues impossible. Where there was eight years delay in prosecution, the court held that the
arbitration frustrated.” “In the circumstances frustration was established because the arbitration that would now be held
would be a thing radically different from that which the parties had undertaken by their arbitration contract.” Neptune
Maritime Co. v. Koninklijke Bunge Bv, (The Argonaut), (1982) 2 Lloyd's Rep 214 (CA).
15. Jeorakhum Loll v. Muttra Pershad, (1893) 1 NW 252.

(1981) 3 WLR 43 at p. 50.
17. L’ Office Cherifien Des Phosphates v. Yamashita Shinnihon Steamship Co. Ltd.,
(1993) 3 WLR 266 :
(1993) 2 All ER 626 : (1993) 2 Lloyd's Rep 149, such a provision could not be given
retrospective effect.
18. Japan Line Ltd. v. Aggeliki Charis Compania Maritima S.A. and David and Potter (The
Angelic Grace) (CA), (1980) 1 Lloyd's Rep 288. The court considered Antoc Shipping Co. Ltd. v.
Seabridge Shipping Ltd., (1979) 2 Lloyd's Rep 267.
19. Davis Contractors Ltd. v. Fareham Urban District Council,

(1965) 2 All ER 145 (HL) at pp. 166, 167.
20. Davis Contractors Ltd. v. Fareham Urban District Council,

(1965) 2 All ER 145 (HL) at pp. 162, 166, 167.

(1981) 3 WLR 43 at pp. 50, 51 : (1980) 1 Lloyd's Rep, 333.
End of Document
Navneet Krishn
ENFORCEMENT OF CERTAIN FOREIGN AWARDS
PART II ENFORCEMENT OF CERTAIN FOREIGN AWARDS
PART II ENFORCEMENT OF
CERTAIN FOREIGN AWARDS
#1
INTRODUCTION
“International Commercial Arbitration is a necessary adjunct of international commerce, an

indispensable catalyst for promoting world trade.... and means different things in different parts of the world”
1
—F.S. Nariman
Relevance of international arbitration in the globalized world
The need for arbitration generally, and for international commercial arbitration (“ICA”) in particular was felt post
liberalization, to provide an alternative to the prolonged and time consuming mode of justice dispensation that
prevails in courts. For instance, in a sector like the construction sector, where a transaction typically involves
multiple parties, it is often the case that parties commence legal proceedings for a variety of purposes, all of which
would have a cascading effect. The ultimate effect is the suspension of the project until the dispute is resolved. It is
estimated that an average of 8-10 years is likely to be consumed if the litigation machinery is set in motion – a result
that is clearly inconsonant with the needs of business.2
One of the consequences was that this became a disincentive for foreign trade and investment. The introduction of
the
Arbitration and Conciliation Act, 1996 , in significant part, was a response to this concern. Specifically,
Part II of the Act was introduced in order to implement India's international commitments by virtue of being a
signatory to the New York Convention and Parliament consciously decided to adopt a pro-arbitration and pro-
enforcement of arbitral awards stand.
International Commercial Arbitration and Foreign Awards—Distinction
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International Commercial Arbitration (ICA) has been defined in S. 2(1)(f) of the 1996 Act to resolve disputes
between parties where one of the parties is either:—
(1) a national of another country.
(2) a resident of another country,
(3) a body corporate incorporated in another country,

(4) Government of a foreign country.
A foreign award on the other hand is defined in S. 44 of the 1996 Act. This has been disccused later [See
Commentary under S. 44 under the heading “Meaning of Foreign Award”.]
Enforcement of foreign awards is a concept different from an ICA. Awards rendered in an ICA can be classified into
two types namely ICA awards that are passed in India and awards passed outside India. Similarly, two domestic
parties may arbitrate at a venue outside India whereby the award would be treated to be a foreign award. Hence all
foreign awards need not arise out of ICA and every ICA award does not have to be a foreign award. A further
understanding of the various categories into which arbitration is divided becomes clear by a perusal of the chart
below.
Further Suggested reading (international Commercial Arbitration)
1. Lakshmi Jambholkar, “International Commercial Arbitration - Recent Developments in Indian Law”, Vol. 19(6) J.
INTL. ARBN. 601-608 (2002).
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2. Devashish Krishan, “International Arbitration in India: Some Problems”, Vol (34) Indian Advocate 43 (2006).
3. Marc Goldstein, “International Commercial Arbitration”, Vol 34(2) International Lawyer 519-532 (2000).
4. Naimark and Keer, “International Private Commercial Arbitration- Expectations and Perceptions of Attorneys and
Business People”, (May 2002) International business lawyer 203-208.
5. HK Bockstiegel, “Perspectives of Future Development in International Arbitration”, The Leading Arbitrator's Guide
to International Arbitration (Juris Publishing, 2004) 505.
6. Paulson, “Delocalisation of International Commercial Arbitration: When and Why it Matters”, (1983) 32 ICLQ 53.
7. Bowden, “Transnational Rules in International Commercial Arbitration”, (1993) ARBN. INTL ICC Publication No.
480/4 at 127.
8. Michael Kerr, “Concord and Conflict in International Arbitration”, 13(2) ARBN. INTL 121 (1997).
9. Paulson, “Arbitration Unbound: Award Detached from the Law of its Country of Origin”, 30 ICLQ 358 (1981).
10. Hascher “Consolidation of Arbitration by American Courts: Fostering or Hampering International Commercial
Arbitration”, 1 J INTL. ARBN. 127 (1984).
11. Marriott, “Pros and Cons of More Detailed Arbitration Laws and Rules”, ICCA Congress Series No. 7 (Kluwer,
1996).
12. B Pozanski, “The Nature and Extent of an Arbitrator's Powers in International Commercial Arbitration”, 4(3) J.
INTL. ARBN. 71 (1987).
13. A Jayagovind, “International Commercial Arbitration under the

Arbitration and Conciliation Act, 1996 ”, IND. JL. OF INTL. LAW 658 (1997).
14. KS SETH, “International Commercial Arbitration”, Vol. 3(2) AMITY L. REV. 54 (2002-2003).
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15. Krishna Sarma, “Transnational Commercial Arbitration in India”,

(2000) 4 COMP LJ 9 .
16. Gaurav Dani and Avimukt Dar, “Conflict of laws in ADR: A Sting in the Tail?”, 53(6) Chartered Accountant 761
(2004).
17. Sabyasachi Chatterjee, “Laws Applicable to International Commercial Arbitration”, 4 JSLC 109 (2004).
18. G.K.N. Thigle, “International Commercial Arbitration and Role of Court at Crossroads in Arbitration and
Conciliation Bill, 2001”, Vol 30(4) Indian Bar Review 617 (2003).
19. Suharsh Sinha, “Issues of Arbitrality in International Commercial Arbitration: The Present Position”,
2007 (4) ARB LR 9 .
20. Rodney D. Ryder, “Contracts, the Choice of Law and International Commercial Arbitration”,
1999 (2) COMP LJ 9 .
21. J.S. Verma, “International Arbitration”, in P.C. Rao & William Sheffield (ed.), “Alternate Dispute Resolution –
What it is and how it works”, 1st ed., p. 13 (2008 reprint).
Scheme of Part II of this book
Since Part II is based on the New York Convention (“NYC”), apart from decisions of the Indian Courts, there are a
number of foreign decisions interpreting the NYC that contribute to the jurisprudence of Part II. These are especially
relevant for areas where there exists no Indian decision outlining the same proposition. These foreign cases have
been dealt with exhaustively.
Where there are multiple judgments elucidating the same proposition, the proposition is first stated, with all the
cases elucidating the proposition stated in the form of illustrations.
Moreover, a large number of Indian cases on Part I of the Act would be useful to interpret provisions of Part II.
Where appropriate, reference has been made to other Sections in this book where these cases have been dealt
with exhaustively.
#2
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PRINCIPLES OF PRIVATE INTERNATIONAL LAW THAT ARE APPLICABLE IN INTERNATIONAL

COMMERCIAL ARBITRATION
Any legal conundrum that involves parties from different countries, causes of actions arising in multiple jurisdictions
and the intermingling of various regulatory regimes, would inevitably create private international/ conflict of law
issues that need to be addressed.
Two conflict of laws issues arise in the context of international commercial arbitration:
1. What is the law governing the arbitration, which includes:
(a) construction and validity of the arbitration agreement

(b) the procedure of arbitration
2. What is the law governing the substance of the dispute between the parties?
Russell1 explicates these issues by explaining the context in which they arise:
“An issue which frequently arises for determination by the tribunal at a preliminary stage is the question of the law
or rules to be applied to the merits of the dispute. This is however just one aspect of a broader issue and the
following three categories of applicable law or rules need to be considered:
(1) The law of a particular country or some other considerations agreed between the parties may govern the
rights and obligations arising out of the parties’ substantive agreement. If a national law is selected this is
referred to as the governing or proper law of contract.
(2) A different law may apply to the rights and obligations arising out of agreement to arbitrate. This is known
as the law of the arbitration agreement.2
(3) A law other than the law of the arbitration agreement may govern the procedures to be adopted in an
arbitration3. This is known as the procedural law or the curial law of the arbitration.”
While certainty in the law and availability of well established precedents are major factors in deciding on the
substantive law governing the dispute and the law governing construction and validity of the arbitration agreement,
geographic expediency plays a role in deciding the “seat” of the arbitration and consequently influences the
procedure of arbitration (as has been elucidated later in this Chapter). While there may be cases where all the
above are governed by the same law, such instances are becoming rare in the globalized era.
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Mustill and Boyd4 illustrate the interplay between the three systems of laws referred to above in the following words:
“An agreed reference to arbitration involves two groups of obligations. The first concerns the mutual obligations of the
parties to submit further disputes, or an existing dispute to arbitration, and to abide by the award of a tribunal constituted in
accordance with the agreement. It is now firmly established5 that the arbitration agreement which creates these obligations
is a separate contract, distinct from the substantive agreement in which it is usually embedded, capable of surviving the
termination of the substantive agreement and susceptible of premature termination by express or implied consent, or by
repudiation or frustration, in much the same manner as in more ordinary forms of contract. Since this agreement has a
distinct life of its own, it may in principle be governed by a proper law of its own, which need not be the same as the law
governing the substantive contract.
The second group of obligations, consisting of what is generally referred to as the ‘curial law’ of the arbitration, concerns the
manner in which the parties and the arbitrator are required to conduct the reference of a particular dispute. According to the
English theory of arbitration, these rules are to be ascertained by reference to the express or implied terms of the
agreement to arbitrate. This being so, it will be found in the great majority of cases that the curial law, i.e. the law governing
the conduct of reference, is the same as the law governing the obligation to arbitrate. It is, however, open to the parties to
submit, expressly or by implication, the conduct of the reference to a different law from the one governing the underlying
arbitration agreement. In such a case, the court looks first at the arbitration agreement to see whether the dispute is one
which should be arbitrated, and which has validly been made the subject of the reference; it then looks to the curial law to
see how that reference should be conducted; and then returns to the first law and order to give effect to the resulting
award.”
Law governing the arbitration
Steyn J succinctly explains the import and relevance of the law governing the arbitration, in the following words: 6
“What then is the law governing the arbitration? It is ...a body of rules which sets a standard external to the arbitration
agreement, and the wishes of the parties, for the conduct of the arbitration. The law governing the arbitration comprises the
rules governing interim measures (eg Court orders for the preservation or storage of goods), the rules empowering the
exercise by the Court of supportive measures to assist an arbitration which has run into difficulties (eg filling a vacancy in
the composition of the arbitral tribunal if there is no other mechanism) and the rules providing for the exercise by the Court
if its supervisory jurisdiction over arbitrations (eg removing an arbitrator for misconduct).”
The law governing the arbitration has multiple uses:
(a) It determines the validity, effect and interpretation of the arbitration agreement7
(b) This law is relied upon by the arbitrator to determine the scope of his powers.
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(c) The procedure to be followed by the arbitral panel is decided based on this law (unless it follows the
procedure of an arbitral institution)
Law governing the arbitration agreement
The arbitration is governed by the theory of proper law of contract8.
The proper law is determined in accordance with the general principles of the conflict of laws, namely the law
chosen by the parties or, in the absence of such choice, the law of the country with which the agreement is most
closely connected. 9
When the parties specify an applicable law for the arbitration agreement, that law governs the arbitration
agreement.10
When the parties do not specify a law governing the arbitration agreement, the prevailing view was that the proper
law of the arbitration agreement will be the same as the proper law of the substantive contract of which it forms
part.11
However, recent English decisions suggest that the seat of the arbitration has a larger role to play than the proper
law of contract, in determining the proper law of arbitration agreement.12 The concept of the “Seat’ of arbitration has
been disscused later. [See Commentary infra under the heading “Seat of Arbitration”].
The NYC provides a hint as to the applicable law to the arbitration agreement when it states that enforcement of an
arbitral award may be refused by a court when “the said agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law of the country where the award was made.”13 The
default law to which the arbitration agreement is subject is therefore the “law of the country where the award was
made”, i.e. the law of the “seat” of the arbitration.
The determination of the applicable law for the arbitration agreement is in two stages:
The first question to ask is whether the parties have, expressly subjected the arbitration agreement to any
governing law.
The parties may have expressly stated the law of a particular country to be applicable or this may be inferred from
the intention of the parties. When the parties have expressly stated the law applicable to the arbitration agreement,
this law shall be applied by the court.14
1. The parties had stated that English law would govern the arbitration agreement and Indian law would govern the main
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contract. It was argued that since Indian law governed the substance of the dispute and according to Indian law such a
dispute should be resolved by a statutory body, the dispute was not arbitrable. The Queen's Bench Division (Commercial
Court), in Tamil Nadu Electricity Board v. St-CMS Electric Co. Private Ltd.15 held that by stating that English law governed
the arbitration agreement, the parties had intended that English law should prevail over Indian law in determining the ambit
or scope of the arbitration agreement. The dispute was thus referred to arbitration.
In the absence of an express statement about the governing law, the inferred intention of the parties determines
that law.16 A judge determines the intention of the parties by asking himself “how a just and reasonable person
would have regarded the problem”.17
While deciding whether the parties have intended to subject the arbitration agreement to a specific governing law,
the law governing the contract as a whole is an important factor.18 One commentator observes that “there is a very
strong presumption in favour of the law governing the substantive agreement which contains the arbitration clause
also governing the arbitration agreement. This principle has been followed in many cases. This could even be
implied as an agreement of the parties as to the law applicable to the arbitration clause.” 19
1. The law governing the contract was English law. In such a case it was held that English law would also govern the
arbitration agreement and an argument that the arbitration agreement was void as per Chinese law was of no relevance.20
The law governing the contract had earlier been considered a more important factor than the seat of the arbitration,
and it was been held that if there is an express choice of law to govern the contract as a whole, the arbitration
agreement will also be governed by that law, irrespective of the seat of the arbitration.21 However, this position has
changed as evidenced by the following observation by Cooke J of the Queen's Bench Division:
“The defendant contends that the law of the agreement to arbitrate is Indian law, essentially because the proper law of the
shareholders agreement is Indian law. As appears from the decided authorities however, although there have been dicta to
this effect, recent decisions, where the focus has been on the seat of the arbitration and the agreement to arbitrate,
establish that it is much more likely that the law of the arbitration agreement will coincide with the curial law. This does not
therefore much assist the defendant and the argument that the nature of the shareholders agreement points to Indian law
as the curial law is in reality no more than an argument that its nature points to Indian law as the substantive law of the
shareholders agreement, which is in any event expressly provided... it is rare for the law of the arbitration agreement to be
different from the law of the seat of the arbitration.”22
Thus where Indian law was the proper law of contract and London was the seat of the arbitration, the arbitration
was held to be governed by English law.23 The basis for this ruling was the decisions in C v. D 24 and A
v. B 25. In the former, where England was the seat of the arbitration and there was a reference to the
English
Arbitration Act in the agreement itself, it was held that even though New York law was the proper law
of the main contract, it was English law that would govern the arbitration agreement and it was the English Courts
that would have exclusive jurisdiction to set aside the award rendered by a tribunal in England. LONGMORE LJ of
the Court of Appeal observed:26
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“The question then arises whether, if there is no express law of the arbitration agreement, the law with which that
agreement has its closest and most real connection is the law of the underlying contract or the law of the seat of arbitration.
It seems to me that ...the answer is more likely to be the law of the seat of arbitration than the law of the underlying
contract.”
In A v. B 27, the Queen's Bench Division (Commercial Court) held that since Geneva was specified to
be the seat of the arbitration, Swiss courts would have exclusive supervisory jurisdiction to deal with any issue
relating to “the existence or scope of the arbitrator's jurisdiction or as to the validity of an existing interim or final
award” on the basis that specifying the seat of the arbitration is analogous to having an exclusive jurisdiction clause.
Following the dicta in the above stated cases, there now exists a presumption that the law of the seat governs the
arbitration agreement.
The above presumption has also been recognized in other jurisdictions.28
As a matter of international arbitration law, the seat of the arbitration is not the sole determining factor of the law
governing the arbitration agreement.29 Other surrounding factors need to be taken into account while pronouncing
the intention of the parties. The wording of the arbitration clause normally provides a pointer towards the intention of
the parties. The conduct of the parties may act as a pointer as well.
1. The choice of the seat of arbitration was London and there was an express reference to the
Arbitration Act of England. This meant that English law would govern the arbitration agreement, even though
the whole contract was subject to the law of New York,XL Insurance Ltd. v. Owens Corning. 30
2. The underlying contract was to be construed according to German law and the arbitration clause contained in the
contract was couched in the widest terms providing that any “ dispute or difference shall be referred to arbitration in London
within the meaning of the English
Arbitration Act 1950, and the rules, regulations, etc., of the said Act shall solely apply.”
The specific reference to the English legislation meant that the original contract is governed by German law while
the arbitration is to be governed by English Law.31
3. An arbitration contract read
“If any dispute should arise in connection with. . .this contract. . . same shall be decided by arbitration in the city of
.....[footnote 3].
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If the parties cannot agree upon the appointment of a single Arbitrator, the dispute shall be settled by three arbitrators},
each party appointing one arbitrator, the third being appointed by . . .[footnote 4].
This contract shall be subject to the law of the country agreed as place of arbitration.
Footnotes 3 and 4 provided:
(3) The place of arbitration to be inserted. If this line is not filled in it is understood that arbitration will take place in
London in accordance with English law.
(4) If this line is not filled in it is understood that the third Arbitrator shall be appointed by the London Maritime
Arbitrators’ Association in London.”
It was held that in an absence of the gaps left for city of arbitration and mode of appointment of third arbitrator being
filled up, the default as specified in the footnotes would apply, and London being the place of arbitration the
arbitration clause would be governed by English law.32
4. The conduct of the parties after appointment of an arbitrator indicated the application of Scottish law to be the law
governing the arbitration. This was held by a majority of 5 judges in a 9 judge bench to be indicative of the fact that
the arbitral proceedings were to be governed by Scottish law.33 Four judges, however, dissented and took the view
that it was not legitimate to use the conduct of the parties after the contract was entered into as an aid in the
construction of the contract.
5. The words of a contract are an indicator of the intention of the parties; however the use of the phrase
“submission to arbitration within the meaning of the
Arbitration Act , 1950,” by itself does not imply consent to an arbitration under the English
Arbitration Act , 1950.34
6. While the parties did not agree on any law to govern the arbitration agreement, there were hints that they
intended this law to be either English law or Swiss law. 35 The Court observed that—
“The arbitration agreement was made between parties either located, or described as located, in England. One of the two
documents is headed ‘In the matter of the
Arbitration Act 1996 '...
On the other hand the arbitration agreement was signed in Zurich: and the arbitration was to be, and for the most part was,
held in Zurich where the arbitrator Rabbi Schmerler was based. The seat of the arbitration is a pointer to the law of the
arbitration agreement. The seat of the arbitration is not necessarily the same as the place where the arbitrators or the
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parties choose that the arbitration shall be held. They may choose to meet in a country (such as a neutral country or the
country in which the relevant events occurred) whose laws no one would suppose would govern the conduct of the
arbitration. But, in the absence of a clear pointer to the contrary, there is a strong presumption that the place where the
arbitration takes place is to constitute its ‘seat’.36 In the present case it was at the time of the hearing common ground that
the seat of the Tribunal was Zurich ....”
The Court held that it was not necessary to decide whether the law of the arbitration agreement was English or Swiss as
there was no material difference that had been identified between the two.
7. When :
(1) the parties subjected the substantive part of the underlying agreement to German law;
(2) the performance of the contract was in Germany;
(3) the language of the contract was German;
(4) the terms of the contract were specified by the “German Standard Terms for Construction” (VoB) and the German
Civil Code: and
(5) the price was expressed in German currency.
it could be implied that the parties intended that the place of arbitration should be Germany.37
8. The question at hand was whether English Courts had the jurisdiction to grant a stay of proceedings in the light of an
arbitration agreement which did not specify the seat of arbitration or whether only the Courts of Saudi Arabia would have
such jurisdiction as that was the place where the defendant was incorporated. In the case of John Downing (UK) v. Al
Tameer Establishment 38, the Court held that English courts would have jurisdiction based on the following
factors:
“the contract was in English and is likely to be held to be governed by English law. In addition, testing of the claimant's
product was carried out in England and in Saudi Arabia by a company which was based in England; thus ... the witnesses
on the key issue as to the results of the tests and the adequacy of the product would also be based in England. We would
add that the claimant was English and the product was subject to an English patent.”
9. While in many cases the seat of the arbitration would also be the place whose laws govern the whole contract, it need
not be the case always. But when the parties chose Swiss law to govern the whole contract and Switzerland as the seat of
the arbitration, it would be Swiss law that they implicitly chose to govern the arbitration agreement as well.39
Various other factors have emerged as being useful in inferring the intention of the parties including:
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(a) “sound ideas of business, convenience and sense to the language of the contract itself”.40
(b) selection of courts of a particular country as having jurisdiction in matters arising under the contract.41
Where the intention of the parties cannot be inferred due to the absence of proof of the seat of the arbitration and
the proper law of contract, the legal system with which the transaction has its closest and most real connection
would govern the arbitration agreement.42
Law governing the procedure of arbitration (lea arbitri or curial law)
Parties may choose to opt for either institutional arbitration under the auspices of institutions like the International
Chamber of Commerce (“ICC”), London Court of International Arbitration (“LCIA”), International Centre for Dispute
Resolution of the American Arbitration Association (“AAA”) etc., following the procedural rules of these institutions,
or may opt for ad-hoc arbitration.
The key role played by an arbitral institution are well stated in Russel on Arbitration:
“Arbitration institutions can play an important role in arbitration agreements. They and their rules are often specified in the
arbitration agreement, although the parties may agree to take advantage of the services offered by an institution after a
dispute has arisen. An arbitral institution may adopt a number of different roles in relation to the arbitration proceedings
depending upon what the parties have agreed their role should be. In particular the institution may:
(a) provide arbitration rules pursuant to which the arbitration will be conducted;
(b) act as the appointing authority which, in the absence of agreement between the parties, appoints the tribunal to
hear the dispute and may also deal with any challenges to or replacement of arbitrators;
(c) act as an account holder for fees and deposits and administer the funds necessary to pay for the tribunal's fees
and expenses;
supervise the conduct of the arbitration by acting as an administrator for the proceedings.”43
Where the parties choose that the arbitration be conducted according to the ICC Rules, incongruous provisions of the
UNCITRAL Model law would not take precedence over the ICC Rules.44 In the case of ad-hoc arbitrations, parties may
decide to draft procedural rules or to adopt commonly followed procedural rules like the UNCITRAL Arbitration rules or
adopt the procedural rules followed by an institution.
The benefits of an ad hoc arbitration are that it helps parties customize procedures and timetables based on the dispute on
hand. Conversely, this requires that in order to establish such a procedure, there must be co-operation on both sides and
intractability of either of the parties would result in delays.45
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Whether the parties adopt ad-hoc or institutional arbitration it is of paramount importance for the procedural rules of the
arbitration to be attached to the national laws of a country. The adherence to a national legal system as regards the
procedural rules of arbitration is required, for instance, to determine to what extent national courts would interfere in helping
to collect evidence, what is the standard of review etc.46
These rules perform three functions:
(1) Provide a source of arbitration rules to the extent to which the parties have not specified it.
(2) Prescribe certain mandatory rules which the parties will be bound by.
(3) Play a supportive role by way of court intervention, in helping out in ways outside the arbitrators jurisdiction like
collecting evidence, passing certain kinds of interim reliefs etc. This is especially relevant to protect the interest of parties
that are not privy to the arbitration agreement.47
English Courts observed that the curial law or law governing the procedure of arbitration governs:
(1) how the proceedings in the arbitration are to be conducted by the arbitrators, and
(2) the extent to which the courts will supervise the conduct of the arbitration including setting aside or varying the award.48
The procedural law applicable to the arbitration governs whether the arbitrator must hear oral evidence, whether the
evidence of one party should be recorded necessarily in the presence of the other party, whether there is a right of cross-
examination of witnesses, the special requirements of notice, the remedies available to a party in respect of security for
costs or for discovery etc.49
Where an agreement specifies the procedural law that is applicable, that is the law that governs the arbitration.50
The procedural law governing the arbitration though likely to be the same as the law governing the arbitration agreement,
may be different based on where the hearings are conducted. The dichotomy between the law governing the arbitration
agreement and the procedure governing the arbitration is expressed as follows by Redfern and Hunter:
“All that needs to be understood at this point is that there is a great difference between the general provisions of the law
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governing the arbitration (the lex arbitri) and the detailed procedural rules that will need to be adopted, or adapted, for the
fair and efficient conduct of the proceedings. The rules of the arbitral institutions, such as the ICC and the LCIA, provide an
overall framework within which to operate, as do the UNCITRAL Arbitration Rules. However, it is important to note that
even these rules will need to be supplemented by more detailed provisions.”51
In the absence of any express choice of law, the procedural law governing the arbitration will be the law of the seat of the
arbitration. This has been recognised by arbitral institutions as well.52
Seat of arbitration
Section 3 of the English

Arbitration Act 1996 defines the seat as follows:
“”[T]he seat of the arbitration” means the juridical seat of the arbitration designated—(a) by the parties to the arbitration
agreement, or (b) by any arbitral or other institution or person vested by the parties with powers in that regard, or (c) by the
arbitral tribunal if so authorised by the parties, or determined in the absence of any such designation, having regard to the
parties’ agreement and all the relevant circumstances.”
The seat of the arbitration is normally the venue of the arbitration unless another place is expressly stipulated as the
seat or there exists clear and unmistakeable proof of evidence to the contrary. 53
1. London was stated to be the venue of the arbitration, and there existed neither any alternative provision for
specifying the seat of the arbitration nor other significant contrary indicia. There was no evidence to suggest that the
parties had provided for the location of hearings to be in London for the sake of convenience and that in fact
London was the most convenient location. The Queens Bench Division reached the conclusion that London was the
seat of arbitration.54
The seat of the arbitration, however, need not necessarily be the geographical place where the arbitration is
conducted.55 The reasons for conduct of certain parts of arbitration proceedings in a place other than the seat of
arbitration are provided by Redfern and Hunter:
“They give flexibility to the tribunal and to the parties in selecting a convenient location for procedural meetings, hearings
and deliberations. It may be for example, that although the seat of the arbitration is Vancouver, the arbitral tribunal will find
it convenient to meet from time to time in a European city, in order to discuss procedural matters or to review the case so
far. In international construction disputes it is often necessary for an arbitral tribunal sitting in one country to visit the site of
the project in another country to carry out an inspection. Equally, it may be more convenient for an arbitral tribunal sitting in
one country to conduct a hearing in another country – for instance, for the purpose of taking evidence.” 56
Thus the seat of the arbitration does not imply that all meetings or hearings of the arbitral tribunal need be held in
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that country.57 According to SAVILLE J :
“Although the choice of a ‘seat’ also indicates the geographical place for the arbitration, this does not mean that the parties
have limited themselves to that place. As is pointed out in a passage approved by the Court of Appeal in Naviera Amazonia
Peruana SA v. Compania Internacional de Seguros del Peru 58, it may often be convenient to
hold meetings or hearings in other countries. This does not mean that the ‘seat’ of the arbitration changes with each change
of country. The legal place of arbitration remains the same even if the physical place changes from time to time, unless of
course the parties agree to change it.”59
1. When London is the seat of the arbitration, hearings may be conducted in Lima if that is deemed more
appropriate and suitable by the tribunal.60
The seat of the arbitration determines where the award is rendered — this becomes important when each of the
arbitrators signs the award in a different place.61 Thus where the award is signed is not a determinant of where the
award is rendered when the seat of arbitration is specified and undisputed.
1. A party sought the annulment of an award before the French Courts. An award can be challenged only before the
Courts at the place where the award was rendered (this is not the position in India). The seat of the arbitration was
Netherlands. However, the party sought annulment of the award in France on the ground that since the award had
been signed in Versailles in France by its arbitrator (who was the last to sign), it was a French award and could be
challenged in France. The Court, however rejected this argument on the basis that the place of signature of the
award is irrelevant. What is relevant is—
(i) There is a presumption that the place of the award is the seat of the arbitration (Netherlands).
(ii) Hearing was held in Netherlands.

(iii) Award was deposited with the Registry of the court of first instance where the hearing of first instance was
held, Netherlands.62
However, where the parties claimed that the seat of arbitration had changed based on mutual agreement, the place
where the award is signed provides an indication of whether the parties intended such a change.
1. Paris was specified as the seat of the arbitration. One of the parties claimed that this had been changed to Italy.
In the absence of any proof of such an intent of the parties, the Court held that a change of seat cannot be inferred
especially when the award was signed in Paris, which was originally specified to be the seat of arbitration.63
The concept of “seat of arbitration” has been recognised by the Indian Supreme Court in National Thermal Power
Corpn. v. Singer Co. 64, where the Court also laid down the principles involved
in determining the procedural law applicable to the arbitration. In the words of the Court:
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“[I]f the parties have specifically chosen the law governing the conduct and procedure of arbitration, the arbitration
proceedings will be conducted in accordance with that law so long as it is not contrary to the public policy or the mandatory
requirements of the law of the country in which the arbitration is held. If no such choice has been made by the parties,
expressly or by necessary implication, the procedural aspect of the conduct of arbitration (as distinguished from the
substantive agreement to arbitrate) will be determined by the law of the place or seat of arbitration. Where, however, the
parties have, as in the instant case, stipulated that the arbitration between them will be conducted in accordance with the
ICC Rules, those rules, being in many respects self-contained or self-regulating and constituting a contractual code of
procedure, will govern the conduct of the arbitration, except insofar as they conflict with the mandatory requirements of the
proper law of arbitration, or of the procedural law of the seat of arbitration... To such an extent the appropriate courts of the
seat of arbitration, which in the present case are the competent English courts, will have jurisdiction in respect of procedural
matters concerning the conduct of arbitration. But the overriding principle is that the courts of the country whose substantive
laws govern the arbitration agreement are the competent courts in respect of all matters arising under the arbitration
agreement, and the jurisdiction exercised by the courts of the seat of arbitration is merely concurrent and not exclusive and
strictly limited to matters of procedure.”65
Can the law governing the procedure be different from the law of the seat of the arbitration?
It is theoretically possible for the law of the seat of arbitration to be different from the law determining the procedure
for arbitration,66 but there would be no benefit accruing to the parties by making such a specification.
Redfern and Hunter take this further and argue that it is not possible to have such a difference. The crux of their
argument is that a party does not choose the procedural law, but that the procedural law automatically attaches by
virtue of being the binding rules in the place of arbitration. They give the example of a single arbitration being
conducted in various jurisdictions and how for every hearing in a different jurisdiction, the binding procedural norms
of that jurisdiction must be adhered to. In the words of Redfern and Hunter
“The key point is that of dualism. An international arbitration is governed not only by the rules adopted (or adapted) by the
parties and the arbitral tribunal, but also by the lex arbitri. It may well be that the lex arbitri will govern with a very free rein,
but it will govern nonetheless.
...
An arbitral tribunal which visits another country must, of course, respect the law of that country. For example, if the purpose
of the visit is to take evidence from witnesses, the arbitral tribunal should respect any provisions of the local law that govern
that taking of evidence. However, each move of the arbitral tribunal does not itself mean that the seat of the arbitration
changes. The seat of the arbitration remains the place initially agreed by or on behalf of the parties.
...
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It is also sometimes said that parties have selected the procedural law that will govern their arbitration, by providing for
arbitration in a particular country. This is too elliptical. What the parties have done is to choose a place of arbitration in a
particular country. That choice brings with it submission to the laws of that country, including any mandatory provisions of
its law on arbitration. To say that the parties have “chosen” that particular law to govern the arbitration is rather like saying
that an English woman who takes her car to France has “chosen” French traffic law, which will oblige her to drive on the
right-hand side of the road, to give priority to vehicles approaching from the right and generally to obey traffic laws to which
she may not be accustomed. But it would be an odd use of language to say that this national motorist had opted for “French
traffic law”. What she has done is to choose to go to France. The applicability of French law then follows automatically. It is
not a matter of choice.
...
Parties may well choose a particular place of arbitration precisely because its lex arbitri is one which they find attractive.
Nevertheless, once a place of arbitration has been chosen, it brings with its own law. If that law contains provisions that are
mandatory so far as arbitrations are concerned those provisions must be obeyed. It is not a matter of choice, any more than
the national motorist is free to choose which local traffic laws to obey and which to disregard.” 67
Redfern and Hunter go on to argue that while it may be theoretically possible to specify a procedure other than the
procedure followed in the seat of the arbitration, this would not make much logical sense as the rules of the place
where the hearing is held would automatically apply and by prescribing the rules of another country to govern the
procedure, the parties would unnecessarily get themselves bound by an extra set of rules. Such a situation would
also raise more questions as to which courts would have jurisdiction. Redfern and Hunter thus conclude:
“It is tempting to suggest that if the procedural law of a particular country is either so attractive or so familiar to the parties
that they wish to adopt it, they would do better to locate their arbitration in that country. It is only necessary to look at the
difficulties that a party would face in obtaining a subpoena against a reluctant witness to realize the problems inherent in a
choice of foreign procedural law.”68
This appears to be a logical approach. Every jurisdiction has certain mandatory procedural rules that parties cannot
contractually opt out of.
While Courts have not gone into the above analysis by Redfern and Hunter, they have often emphasized on the
applicability of the procedural laws of the seat of arbitration. When the question was whether Jewish law could
govern an arbitration agreement, the Court emphasized on the importance of the arbitration being attached to a
national law and in this regard explained the concept of seat of arbitration as follows:
“The juridical ‘seat’ is a concept that pre-dates the Act. In English law every arbitration must have a legal home, i.e. a
system of municipal law to which it is subject: Bank Mellat v. Helliniki Techniki 69 ‘Despite suggestions to the
contrary by some learned writers under others systems of jurisprudence does not recognize the concept of arbitral
procedures floating in the transnational firmament unconnected with any municipal system of law.’ For this reason Jewish
law is not a realistic candidate as the law of the arbitration. In addition Jewish law lacks any supervisory or appellate
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jurisdiction over arbitrations. That does not mean that the arbitration could not be conducted in accordance with Jewish law,
since in English law, subject to certain mandatory provisions, the parties are free to agree that Jewish law and procedure
will apply. There is no indication that Swiss law is different.
...
In the absence of agreement to the contrary, the law of the ‘seat’ of the arbitration will govern its conduct. In Naviera
Maritima Peruana 70 the Court of Appeal overruled a first instance decision that an arbitration was to be
conducted in Lima as the agreed forum (and therefore seat), but with English law as the lex fori. KERR, L.J., referred to the
complexities and inconveniences which such an agreement would cause, including the impossibility or at best difficulty of
the English Court exercising jurisdiction over an arbitration proceeding in Peru.”71
However, the curial law/ procedural law applicable to the arbitration need not necessarily be the law of the seat, if a
contrary intention is clear.
1. An arbitration agreement provided that Glasgow was the seat of the arbitration. The contract was governed by English
law and conferred exclusive jurisdiction on the English courts subject to arbitration in accordance with the Construction
Industry Model Arbitration Rules. There was also a provision which stated that any reference to arbitration was deemed to
be a reference to arbitration within the meaning of the
Arbitration Act 1996 . In this factual scenario, the Queen's Bench Division had to decide on whether the
English Courts were empowered to hear an appeal from the arbitral award under Section 69 of the English legislation.
It was held that even though the seat of the arbitration was in Scotland the English court did have jurisdiction to entertain an
application under Section 69 of the English Act . This was because of the fact that the English courts had “exclusive
jurisdiction” to settle disputes. Although that was “subject to” arbitration, it could not mean that such jurisdiction referred
only to the enforcement of the award. The use of the word “jurisdiction” suggested some form of control.
Moreover, since the agreement provided that the reference being deemed to be a reference to arbitration within the
meaning of the English Act, it was clear that the parties intended that the procedural/ curial law of England should apply to
the arbitration.72
When neither the choice of procedural law nor the seat of the arbitration is specified, the Courts will determine the
seat of arbitration by looking at the agreement and all other relevant circumstances.73
1. The arbitrator appeared to treat the seat of the arbitration as being England and it did not appear that any law other than
English law was applicable whether as the procedural law or the substantive law. The English Courts would have
supervisory power over the arbitration.74
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2. The issue of which procedural law governs an international commercial arbitration arose in the case of Contractor v.
Client 75. The relevant clauses of the contract provided that:
(i) best efforts be made to settle the dispute through negotiations, failing which
(ii) the dispute be resolved by arbitration based on ICC rules,
(iii) the arbitration be conducted in the capital of country X,
(iv) the underlying contract be governed by the laws of country X. The central issue before the arbitral tribunal was
whether the arbitration agreement would be governed by the law of the seat of arbitration or whether the
arbitrators were free to adopt such procedural rules as they may deem fit and not be bound by the municipal law
of the seat of the arbitration.
The ICC tribunal, while analyzing which procedural law applied to the arbitration, laid down the following relevant factors:
“In the present case, we note that the country X law was specifically chosen as the proper law of the Contract. Besides the
chosen place of hearing is the capital city of country X, the place where the works were to have been executed is country X,
country X is domicile of the respondent, and it is country X where the Contract was signed.”
The tribunal thus concluded that it was the procedural laws of country X that would apply.
3. The contract was concluded in Italy, the defendant resided in Italy and Geneva based arbitration was prescribed.
In such a factual scenario, the English Courts would not have supervisory jurisdiction.76
4. An arbitration clause which provided for Greece as a backup in case the English Courts refused to enforce the
arbitration clause, does not imply that England was not the seat of the arbitration. The London Courts would have
jurisdiction in this situation.77
5. Even when Ukranian law governs the contract, the procedural law of the seat of the arbitration applies as held in
the case of State Property Fund of Ukraine v. TMR Energy Limited.78
Law governing the substance of the dispute between the parties
This refers to the law the panel will have to use while dealing with the law relating to the cause of action (lex
causae). When the dispute is governed purely by law of contracts, then the proper law of contract theory would
apply. The proper law of contract is the law specified by the parties (lex contractus).79 Article 3 of the
Rome Convention also states that a contract is governed by the domestic system of law chosen by the parties.
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The private international law principles used to determine the proper law of the contract is summarized by Dicey
and Morris80 in the following words:
“...when the parties had expressed their intention as to the law governing the contract, their expressed intention, in general,
determined the proper law of the contract, at any rate if the application of foreign law was not contrary to public policy and
the choice was ‘bona fide and legal’. When there was no express selection of the governing law, an intention with regard to
the law to govern the contract could be inferred from the terms and nature of the contract and from the general
circumstances of the case. When the intention of the parties to a contract with regard to the law governing it was not
expressed and could not be inferred from the circumstances, the contract was governed by the system of law with which
the transaction had its closest and most real connection.”
In certain circumstances a choice of law is deemed to be made; such circumstances include:
(1) a contract on a standard form (such as a Lloyd's policy of marine insurance);
(a) When a contract was in the standard form provided by the Royal British Institute of Architects the
intention was that the contract should be governed by English law and hence English law was declared
to be the proper law of contract.81
(2) a contract where there is a previous course of dealing between the parties; and
(3) the choice of a particular forum.
It has also been held that where the courts of a particular country are conferred jurisdiction to decide disputes, it
also leads to an inference that the law of that country is the proper law of contract.82
It is open to the parties to agree, and open to a court to hold, that separate parts of a single contract are governed
by different applicable laws.83
When the parties specify a system of law to bind the contract, that law governs the contract. 84 Parties may choose
between a number of options namely:
• National law;
• Public international law;
• Transnational law
• Religious law; and
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• Equity and good conscience
Where international law principles are said to be applicable to a contract, an arbitral award based on these
principles cannot be set aside on the grounds that the arbitrator had exceeded his authority.
1. It was provided that a contract of guarantee including an arbitration clause would be governed by
international law. It was held that this implicitly referred to international trade usages and to the general
legal principles of international trade (lex mercatoria). Hence an arbitrator who relied on lex mercatoria
could not be said to have exceeded his authority.85
While principles of a religious law can govern certain aspects of a dispute, a contract cannot remain unconnected
with any national law.86
1. Shia law cannot be prescribed as the law to govern a contract.87 This was the position even under common
law prior to the enactment of the Contract (Applicable Law) Act, 1990 of England, which contained an
express requirement for a contract to be governed by the law of a country.88
2. A dying father executed a deed in favour of his daughter, which contained an arbitration agreement which
stated that the differences between the parties were to be determined ‘according to the principle of
halachah (Jewish law) and/or the general principles of equity customarily employed in arbitration before the
Beth Din’. Inspite of such a clause, it was held that the agreement could not be governed by Jewish law.89
The Court observed that Article 3(1) of the Convention on the Law Applicable to Contractual Obligations
(Rome 1980) which states that ‘A contract shall be governed by the law chosen by the parties’ combined
with a reference to “foreign law” in Article 3(3) meant that the Convention as a whole only contemplates the
application of the law of a country, and not any non-national system of law. While no national law was
specified, the merits of the case were most closely connected with English law.
The Court held that if English law was applicable, then, by Sect. 46(1)(a) and (b) of the
Arbitration Act , the arbitral tribunal would be bound to decide the dispute in accordance with the law
chosen by the parties. The parties could then choose that their dispute be governed by a non-national law such as
Jewish law. However it was necessary for the agreement to arbitrate to be enforceable under a national system of
law.
Position of law in India—Singer and thereafter
While a number of propositions established in English law have been adopted by the Indian Supreme Court, the
development of Indian jurisprudence in the case of NTPC v. Singer 90 and its application subsequently
have resulted in certain differences surfacing between Indian and English private international law prin-ciples
relating to the various laws governing an arbitration. Moreover, the app-licability of the ratio of NTPC v. Singer
91 has been watered down by later Supreme Court rulings. This section addresses the final position of law as
prevailing in India.
Principles of private international law laid down in NTPC v. Singer
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The short issue in National Thermal Power Corporation v. Singer Company 92 was whether the Delhi
High Court would have jurisdiction to set aside an arbitral award rendered in England pursuant to ICC Rules, where
the proper law of the contract was Indian law. The finding of the Supreme Court was that the proper law of the
arbitration agreement would be the same as the proper law of contract, i.e. Indian law. Therefore pursuant to
Section 9(b) of the Foreign Awards Act, 1961 which stated that where Indian law governs the arbitration agreement,
the award rendered would be deemed to be a domestic award irrespective of the place of arbitration, the resulting
award would be a domestic award liable to be set aside in India. While Section 9(b) has hence been repealed and
is no longer of any consequence, the first part of the ratio, i.e. that the proper law of the arbitration agreement would
be the same as the proper law of the contract unless there is an “unmistakable intention” to the contrary has been
the subject matter of discussion subsequently. In addition to this proposition which constitutes the ratio of the case,
the Supreme Court laid down a number of propositions, which though obitur dicta, determine the state
of the law in India subject to subsequent Supreme Court decisions discussed in this Chapter. All these propositions
laid down by the Supreme Court are enunciated in the table below which states the proposition in one column and
the relevant extracts from the judgment in the other.
These propositions have been divided into four categories:
(1) Propositions regarding proper law of contract
(2) Propositions regarding proper law of arbitration agreement
(3) Propositions regarding procedure of arbitration

(4) Propositions regarding jurisdiction of Courts
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Applicability of Singer in the light of later jurisprudence
While most propositions elucidated above seem to still hold good, two presumptions in NTPC v. Singer
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1 seem to have no application in the light of later Supreme Court case law. These presumptions are:
(1) in most cases the proper law of arbitration agreement shall be the same as the proper law of contract
(“Presumption A”).
The Supreme Court, in Citation Infowares Limited v. Equinox Corporation 2, recognized Presumption A
and did not dispute it when it held:
“The Court undoubtedly further goes on to say (in Singer) that where the proper law of contract is expressly chosen by the
parties such a law must, in the absence of unmistakable intention to the contrary, govern the arbitration agreement which,
though collateral or ancillary to the contract, is nevertheless a part of the contract.”
However, in Indtel Technical Services Pvt. Ltd. v. W.S. Atkins Rail Ltd. 3 it was pointed out by the
Supreme Court that Presumption A may not be applicable in certain cases falling within the ambit of Bhatia
International 4, when the seat of arbitration was India even though foreign law governed the arbitration
agreement. In such a scenario, following the ratio of Bhatia International 5, irrespective of the law
governing the contract, where the seat of the arbitration was in India, Part I of the 1996 Act would automatically
apply. This ratio of Bhatia International 6 can be interpreted in two ways:
(a) that Presumption A is no longer applicable only in cases where the seat of arbitration is in India
(b) that the very basis of Presumption A does not hold good and Presumption A does not operate under any
circumstances.
The Delhi High Court in Sara International Ltd. v. Arab Shipping Co. (P) Ltd. 7, expressly recognized
the former approach and held:
“...the 1996 Act and the declaration of law in Bhatia International as applied in subsequent decisions, has altered that
understanding; it is no longer possible for Courts to, in such cases8, infer that the proper law of the arbitration agreement is
also the proper law of the contract.” (emphasis added)
However, it seems that the Supreme Court has impliedly adopted the latter approach in Indtel 9 and Citation
10. If Presumption A remained operative post- Bhatia, the single judge benches of Supreme Court in Indtel 11
and Citation 12 would have been bound by Presumption A which was part of the ratio of a Division Bench of
the Supreme Court in NTPC v. Singer 13 . In Indtel 14 and Citation

15, where the law governing the contract was foreign and the seat of arbitration was not specified, an application of
Presumption A would have implied that foreign law would have governed the arbitration agreement and not the Indian Act16.
However, Part I of the 1996 Act was held to be applicable in these cases. This implies that the Supreme Court treated
Presumption A to be not binding on it thereby suggesting that the ruling in Bhatia International 17 has
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rendered Presumption A largely academic and effectively redundant.18
(2) the proper law of the contract and the proper law of arbitration shall be presumed to be that of the law of the seat of
arbitration, if the parties have merely chosen a seat of arbitration and failed to designate the proper law of contract and
proper law of the arbitration agreement (“Presumption B”, which along with Presumption A are referred to as the “Singer
presumptions”).
Presumption B, was recognized by the decisions of the Supreme Court in Indtel 19 and Citation
20, where it was observed that this presumption operated only when the parties have designated a seat of arbitration abroad
and not chosen the proper law of contract. The reasoning behind Presumption B appears to be that if a party merely
chooses a seat of arbitration and does no more, it is a reasonable inference that he intends the contract to be governed by
the laws of that country. On the other hand, if he chooses the seat of arbitration and designates another country's law as
the proper law of contract, the basis for the inference disappears.
The following observations were made in Citation 21:
“The Court further expressed about the presumption arising that the law of the country where arbitration is agreed to be
held is the proper law of arbitration. This presumption was heavily relied on by Shri K.K. Venugopal. In my opinion the
scope of the expressions in paragraph 23 must be held to be limited. There may be presumption where the parties have
agreed to hold arbitration in a particular country. In that circumstance, the presumption would arise that the law of the
country where the arbitration is agreed to be held would apply as a law of contract. Where there has been no specific
expression about the law of contract, the situation is otherwise. In this way the law of contract is agreed upon as the
Californian law... Here the substantive law of contract governing the contract is specifically agreed upon. However, the
place where arbitration would be held is not to be found in the language of Clause 10.1. Therefore, the situation in National
Thermal Power Corporation's case (cited supra) was not applicable to the present case.”
This decision means that the Supreme Court has taken the view that the “presumption” that the law of the country of the
seat of arbitration applies is limited to cases where the parties have failed to designate a substantive as well as procedural
law. In other words, the Court has held that if the parties specify that the seat of arbitration is London but designate
American law as the proper law of the contract, there is no room for the presumption that the English
Arbitration Act applies as the law of the seat of arbitration but if the two parties merely specify that disputes
are to be referred to arbitration in, for example, London, the proper law of the contract will be English law and the proper
law of arbitration will be the English
Arbitration Act .
This view seems to contradict the finding in Bhatia International. 22 . In the latter case where
Paris was specified as the seat of the arbitration and the law governing the contract was not specified, applying
Presumption B would lead to the inference that French law would govern the arbitration agreement and this would amount
to an implied exclusion of Part I. However, the Supreme Court held that there was no implied exclusion of Part I. It logically
follows that Bhatia International 23 impliedly limits the scope of Presumption B and Presumption B would
have no operation within the sphere occupied by the dicta in Bhatia International 24. Bhatia International
25 is a judgment of a larger bench (3 judges) than Indtel 26 and Citation 27 (both single judge
benches) as well as NTPC v. Singer 28 (division bench). Presumption B and the views expressed in Indtel
29 and Citation 30 do not prevail over the inferences drawn from the ratio of Bhatia International v. Bulk
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Trading S.A. 31
It may be argued that since all the cases discussed above dealt with issues relating to whether there was an implied
exclusion of Part I, the Singer Presumptions still hold good and that the only deduction from the ratio of Bhatia
International 32 , Indtel 33 and Citation 34 is that the Singer
Presumptions are irrelevant to determine whether there exists an implied exclusion of Part I. However, it is difficult
to contemplate any other situation where the Singer Presumptions would apply independent of the subsequent
rulings of the Supreme Court.
Operating premise behind above analysis
The above analysis is based on the fundamental premise that as a norm the substantive arbitration law of only one
country shall govern the arbitration.
If this premise were not true it may be possible to argue that Bhatia International 35 merely states that in
a case where Paris is the seat of the arbitration and the proper law of the arbitration agreement and proper law of
contract are not specified, Indian law of arbitration shall be applicable and that Bhatia International 36
does not state that French law is not applicable. In such a scenario, the Singer presumptions would also apply and
the arbitration would be governed by both the substantive laws of France (based on NTPC v. Singer 37
) and India (based on Bhatia International 38 ).
However if this was to be the case, a problem would arise in case of a contradiction between the two substantive
laws applicable. Moreover, a person would be able to set aside the award on the basis of two different substantive
laws of arbitration and this would go against the pro-enforcement stand adopted by the New York Convention.39
This operating premise also gains force from the observations in Max India Ltd. v. General Binding Corporation
40 where it was observed:
“Once it is accepted that laws for interpretation of contract as well as arbitration proceedings which are to be applied are
Singapore laws which means provisions of Singapore
Arbitration Act , 2001 are applicable, can there be a situation where Indian
Arbitration and Conciliation Act, 1996 shall also apply at the same time (even to a limited extent of Section 9
thereof) as is sought to be contended. Answer has to be in the negative.”
The only anomalous situation, however, where this operating premise does not hold good is in case the parties
specify the seat of the arbitration to be India and a foreign law to govern the arbitration agreement. In such a case,
in addition to the foreign law, pursuant to the observations in Bhatia International v. Bulk Trading S.A.
41, Part I of the 1996 Act would also be applicable. This single anomalous situation, however, cannot be used to
defeat the premise that as a norm an arbitration is to be governed by the substantive law of only country.
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Further Suggested Reading (Principles of Private International Law)
1. Lord Cooke, “The Party Autonomy”, Handbook on Arbitration, Mediation and other ADR Techniques- A Collection
of Keynote Addresses, Articles and Cases, (TK Viswanathan ed., 1st ed., 2008) at p.187.
2. M Blessing, “The Law Applicable to the Arbitration Clause ”, ICCA Congress series No. 9 (Paris/1999), 168-88.
3. P Mayer, “Mandatory Rules of Law in International Arbitration”, 2 (4) Arbn Intl 274 (1986).
4. Stewart Boyd, “Arbitrator not to be bound by the Law Clauses” 6(2) Arbn Intl 122 (1990).
5. B Wortmann, “Choice of Law by Arbitrators: The Applicable Conflict of Laws System” 14 (2) ARBN. INTL. 97
(1998).
6. Afm Maniruzzaman, “Choice of Law in International Contracts-Some Fundamental Conflict of Law Issues” 16 (4)
J INTL ARBN 141 (1999).
7. C Croft, “The Applicable Law in International Commercial Arbitration: Is it still a Conflict of Laws Problem?”
INTERN LAWYER 613 (1982).
8. R Goode, “The Role of the Lex Loci Arbitri in International Commercial Arbitration’ 17 (1) ARBN INTL 19 (2001).
9. Mann, “The Proper Law in the Conflicts of Law” (1987) 36 ICLQ 437.
10. Molineaux, “Applicable Law in Arbitration – The Coming Convergence of Civil and Anglo-Saxon Law via Unidroit
and Lex Mercatoria”, Vol (1) JL OF WORLD INVEST. 130 (2000).
11. Zekos, “Problems of Applicable Law in Commercial and Maritime Arbitration”, 16(4) J INTL. ARBN. 173 (1999).
12. B Cheng, General Principles of Law as applied by International Courts and Tribunals (1987).
13. O Lando, “The Lex Mercatoria in International Commercial Arbitration” 34 ICLQ 747 (1985).
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14. E Gaillard, “Transnational Law: A Legal System or a Method of Decision Making” 17 (1) Arbn Intl 59 (2001).
15. L Yves Fortier, “The New, New Lex Mercatoria, or, Back to the Future” 17 (2) Arbn Intl 121 (2001).
#3
APPLICABILITY OF PART I TO ARBITRATIONS CONDUCTED OUTSIDE INDIA
Bhatia International and its implications
The decision in Bhatia International v. Bulk Trading S.A. 1 lays down propositions regarding the
applicability of Part I to arbitrations conducted outside India, that have far reaching effects.
Though this was a case primarily dealing with the issue of whether an Indian Court could provide interim relief
under Section 9 with regard to an arbitration held in Paris, this decision has binding precedential value for the more
general question of whether provisions of Part I of the Indian
Arbitration and Conciliation Act, 1996 can govern an arbitration conducted abroad.
This case involved a contract between the parties which provided for an arbitration in Paris, following the rules of
the International Chamber of Commerce. Neither the proper law of the contract nor the proper law of the arbitration
agreement was specified. Disputes arose between the parties and pending arbitration, the Respondent sought to
file an application under Section 9 before the Courts at Madhya Pradesh seeking an injunction order restraining the
Petitioner from alienating / transferring its property. The issue thus was whether a Section 9 application would lie
with respect to an arbitration conducted outside India. The arguments were however directed towards whether or
not Part I would apply to such arbitrations. If it could be proved that Part I applies to arbitrations conducted outside
India, then it would follow that the Section 9 application could be filed. If not, the application under S. 9 was not
maintainable.
The primary arguments in furtherance of non-applicability of Part I to foreign arbitrations are:
(a) Section 2(2) provides that Part I shall apply where the place of arbitration is in India; this implies that Part 1 does
not apply if the place of arbitration is not India.
(b) Article 9 of the UNCITRAL Model law permits courts to grant interim relief even if the arbitration was not in the
territory of the state. This provi-sion has been deliberately left out by the Indian Parliament while drafting the 1996
Act.
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(c) Section 5 states that a judicial authority should not interfere except as provided in the Act and this clearly
indicates a policy of minimal court interference.
Four primary grounds of reasoning
The view taken by the Supreme Court was that the language of Section 2(2) that Part I would apply where the place
of arbitration was in India, did not mean that Part 1 would “only” apply when the place of arbitration was in India.
This finding was reached on the basis of four reasons:
“Whilst the submissions of Mr. Sen are attractive one has to keep in mind the consequence which would follow if they are
accepted. The result would:—
(a) amount to holding that the Legislature has left a lacunae in the said Act. There would be a lacunae as neither Part I or II
would apply to arbitrations held in a country which is not a signatory to the New York Convention or the Geneva Convention
(hereinafter called a non- convention country). It would mean that there is no law, in India, governing such arbitrations.
(b) lead to an anomalous situation, inasmuch Part I would apply to Jammu and Kashmir in all international commercial
arbitrations but Part I would not apply to the rest of India if the arbitration takes place out of India.
(c) lead to a conflict between sub-section (2) of Section 2 on one hand and sub-sections (4) and (5) of Section 2[4] on the
other. Further sub- section (2) of Section 2 would also be in conflict with Section 1 which provides that the Act extends to
the whole of India.
(d) leave a party remediless inasmuch as in international commercial arbitrations which take place out of India the party
would not be able to apply for interim relief in India even though the properties and assets are in India. Thus a party may
not be able to get any interim relief at all.”2
Critique of primary grounds of reasoning
It is submitted that some of these reasons may require reconsideration.
It is of paramount importance to note that it is not tenable to argue that Part 1 can never apply to an arbitration
conducted outside India. If the parties consent to Part 1 governing an arbitration agreement, courts would pay heed
to that intention of the parties.
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Section 2(2) also makes it very clear that applicability of Part 1 is mandatory only for domestic arbitrations.
The issue at hand thus is whether Part 1 applies automatically to any foreign arbitration if it has not been expressly
excluded. In other words does a non-exclusion of Part 1 amount to an implied inclusion of it?
Lacuna in the law
Ground (a) described above is based on the rationale that there would be no provision under Indian law governing
enforcement of an award made in a non-convention country if Part 1 does not apply to arbitrations conducted
outside India.
It is submitted that this is not a lacuna in the law and has been tackled often by foreign Courts. Two different
approaches have been adopted.
(a) In some cases the non-convention award is treated like a contract between the parties and specific performance
is granted by the Courts.
(b) In other cases the non-convention award is treated like a foreign judgment which is then enforced by the Courts.
These two approaches have been exhaustively dealt with under the heading “Enforceability of non-convention
awards”, where the conclusion reached is that approach (a) is preferable.
There is thus no lacuna in the law pointed out by the Court. In the hypothetical scenario that such a lacuna does
exist, the approach of the Apex Court does not fill it. The lacuna would continue to exist in a scenario where
(i) the award is a non-Convention award; and
(ii) Part 1 has been expressly excluded; and

(iii) no other substantive law has been specified to govern the contract.
In such a scenario the same question regarding enforcement of such an award would arise. Thus even assuming
that the lacuna pointed out by the Court existed, the Court's interpretation does not help fill the lacuna.
Application to arbitrations conducted in J&K
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Ground b) is based on an interpretation of Section 1(2) which states :
“It extends to the whole of India:
Provided that Parts I, III and IV shall extend to the State of Jammu and Kashmir only in so far as they relate
to international commercial arbitration or, as the case may be, international commercial conciliation.”
The reasoning of the Court seems to be that all international commercial arbitrations conducted in Jammu and
Kashmir shall be governed by Part I and hence international commercial arbitrations conducted in the rest of India
should also be governed by Part I. The operating premise therefore is that all “international commercial arbitrations”
relating to which disputes are raised in the Courts of Jammu and Kashmir are governed by Part I, which is not the
import of Section 1(2).
All this provision states is that Part I shall apply to Jammu and Kashmir only so far as international commercial
arbitrations are concerned. It does not state that all international commercial arbitrations conducted in Jammu and
Kashmir shall be governed by Part I. The concepts of “international commercial arbitration” and “foreign award” are
different. The primary determining factor for whether an arbitration is an “international commercial arbitration” is that
atleast one of the parties should be foreign. An “international commercial arbitration” may be conducted in India or
outside.
The import of Section 1(2) is only that
(i) Part I shall be applicable to international commercial arbitrations in Jammu and Kashmir in the same way
as Part I is applicable to international commercial arbitrations in other parts of India.
(ii) Part I shall not apply to arbitrations not falling within the ambit of the definition of “international commercial
arbitration”.
(iii) Part II shall not apply to Jammu and Kashmir.

(iv) Parts III and IV shall be applicable the same way as Part I.
Section 1(2) is therefore not really of assistance to reach the conclusion that the Supreme Court in Bhatia
International v. Bulk Trading S.A. 3 reached.
The Court is perhaps on surer footing with respect to its reasoning on grounds (c) and (d).
Other supporting reasons/ observations of the Court
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The Supreme Court finds four other reasons to support its view. First, it was observed that since Article 1(2) of the
UNCITRAL model law provided that “the provisions of this Law, except articles 8, 9, 35 and 36, apply only if the
place of arbitration is in the territory of this State.” and that the word “only” had been left out by the legislature the
provisions of Part 1 were intended to apply to foreign arbitrations as well.
Secondly, the fact that Section 28 starts with the words “where the place of arbitration is situate in
India”, means that the Parliament intended that Part 1 apply even in cases where the place of arbitration was not
India.
Thirdly, the opening words of Sections 45 and 54 read “notwithstanding anything contained in Part I”.
Such a non-obstante clause was required only because provisions of Part I apply to foreign arbitrations.
Finally, the Court held that since Section 5 and Section 8 used the term “judicial authority” instead of
“court”, it meant that the term “judicial authority” included something more than just “court”. The Court inferred that
the Legislature had intended that a matter may be taken before a judicial authority outside India.
It is submitted that this inference does not follow. The expression “judicial authority” includes tribunals, and the term
cannot be taken to imply that foreign courts are included. Moreover, this has been specifically rejected in the
context of
s. 41(b) of the Specific Relief Act, 1963 , albeit in the context of anti-suit injunctions.4
Conclusions reached in Bhatia International
The Court concluded as follows:
“The said Act is one consolidated and integrated Act. General provisions applicable to all arbitrations will not be repeated in
all chapters or parts....the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where
such arbitration is held in India the provisions of Part I would compulsory apply and parties are free to deviate only to the
extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India
provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In
that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by
that law or rules will not apply.”
The conclusions from Bhatia International 5 may thus be summed up in the following three principles:
(1) Part 1 mandatorily applies when arbitration is held in India. (Principle 1)
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While the Court has not explained the term “held in India” it seems logical to assume that this refers to a situation
where the seat of arbitration is in India. It is to be noted that arbitral hearings may be conducted, based on the
convenience of the parties, in venues other than the seat. This has been discussed elsewhere.6
(2) Part I applies to arbitrations conducted outside India unless applicability of Part I is impliedly or expressly
excluded. (Principle 2)
(3) There is no express or implied exclusion of Part 1 when the seat of the arbitration was Paris and the proper law
of the contract and proper law of arbitration agreement are not specified. (Principle 3)
Despite these academic criticisms, Bhatia International 7 is the law of the land and decisions of various
High Courts to the contrary8 must be regarded as overruled.
Subsequent clarifications/judicial observations on Bhatia International
1. It has subsequently been clarified that exclusion either expressly or impliedly of Part I is the only way to rule out
applicability of Part I; the mere fact that there exists a special provision in Part II dealing with a similar issue as dealt
with by a provision in Part 1 does not lead to the non-applicability of that provision in Part 1.9 This observation,
however may lead to incongruous results and will have to be restrictively applied.10
2. The Madras High Court in Videocon Power 11 interpreted Bhatia 12 as follows:
“While holding that Part I also can be made applicable in respect of foreign awards one of the test would be such
international commercial arbitration may be held in non convention country. In the event, such arbitration is held in a
convention country, like the one on hand, Part-II of the Act would alone apply to the arbitration.”
It is submitted that these observations do not constitute good law as the very facts of Bhatia International
13 suggests that Part I would govern international commercial arbitrations conducted in Convention countries (for
instance, even in Bhatia International 14, Part I was applicable despite the arbitration being held in
Paris, France which is a Convention Country).
3. It is to be noted that one Supreme Court decision that was subsequent to Bhatia International 15 but
taking a diametrically opposite stand was Shreejee Traco (I) Pvt. Ltd. v. Paperline International Inc. 16.
A single judge of the Supreme Court held that Section 2(2) was “clear and unambiguous. Saying that this Part
would apply where the place of the arbitration is in India is tantamount to saying that it will not apply where the
place of arbitration is not in India.” While some may argue that this is indeed the correct interpretation, the single
judge was bound by the 3 judge bench in Bhatia International 17 and since the judgment does not even
refer to Bhatia International 18 it may be taken as being per incurium and having no precedential value.
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Application of principles laid down in Bhatia International
Part 1 mandatorily applies when arbitration is held in India. (Principle 1)
This principle has subsequently been applied by the Delhi High Court in Sara International Ltd. v. Arab Shipping Co.
(P) Ltd. 19 The seat of the arbitration in the present case was Mumbai and following the ratio of Bhatia
International 20 , it was held that whenever an arbitration is held in India, Part I applies
automatically.
Part I applies to arbitrations conducted outside India unless applicability of Part I is impliedly or
expressly excluded. (Principle 2)
Expanding on the ratio of Bhatia International 21, the Supreme Court in Venture Global Engineering v.
Satyam Computer Services Ltd. 22 has held Section 34 of Part I to be applicable to an arbitration
conducted by the London Court of International Arbitration (seat of the arbitration is not mentioned in the judgment)
where the applicable law to the contract was the law of the State of Michigan, United States. There was also a
provision which stated
“Notwithstanding anything to the contrary in this agreement, the Shareholders shall at all times act in accordance with the
Companies Act and other applicable Acts/Rules being in force, in India at any time.”
The Supreme Court held that the implied exclusion condition was not satisfied, on the basis of this clause and the
other surrounding circumstances set out below.
“(a) the company was situated in India; (b) the transfer of the “ownership interests” shall be made in India under the laws of
India as set out above; (c) all the steps necessary have to be taken in India before the ownership interests stood
transferred.”
While in Venture Global 23 the Supreme Court elucidated why the Indian Act applied, in Indtel
24, where the laws of England and Wales were stated to govern the contract and the seat of arbitration was not
specified, the Court, while deciding on the applicability of Section 11 to the said arbitration, did not go into the
question as to whether there was an implied exclusion of Part I. Justice Altamas Kabir interpreted Bhatia
International 25 to lay down the proposition that:
“notwithstanding the provisions of

Section 2(2)of the Arbitration and Conciliation Act, 1996 indicating that Part I of the saidact would apply
where the place of arbitration is in India, even in respect of international commercial agreements, which are to be governed
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by the laws of another country, the parties would be entitled to invoke the provisions of Part I of the aforesaid Act and
consequently the application made under Section 11 thereof would be maintainable... it lays down that the provisions of
Part I of the
Arbitration and Conciliation Act, 1996 , would be equally applicable to international commercial arbitrations
held outside India, unless any of the said provisions are excluded by agreement between the parties expressly or by
implication...”
The learned judge recognised that “it is fairly well settled that when an arbitration agreement is silent as to the law
and procedure to be followed in implementing the arbitration agreement, the law governing the said agreement
would ordinarily be the same as the law governing the contract itself”, however he did not explain how this
presumption was rebutted in the present case. In light of Bhatia International 26 he read down the
above presumption as not being applicable in certain cases. This has been elucidated in further detail later.27
The decision in Indtel 28 has been followed in Citation 29, which involved an almost
identical fact scenario, except for the fact that governing law was the law of California as against UK law in the
previous case. The Court held that, the principles laid in NTPC v. Singer 30
must be read in light of Bhatia International. 31 Even though he deemed the decision in NTPC
v. Singer 32 to be irrelevant, the learned Judge went on to interpret the decision in NTPC
v. Singer 33. The Court interpreted in Citation 34 NTPC

v. Singer 35 to lay down the propositions that
“the proper law of arbitration is normally the same as the proper law of contract and it is only in exceptional cases that it is
not so, even where the proper law of contract is expressly chosen by the parties. The Court further expressed about the
presumption arising that the law of the country where arbitration is agreed to be held is the proper law of arbitration... In my
opinion the scope of the expressions (above) ... must be held to be limited.”
Observing that the presumption laid down in NTPC v. Singer 36 would be
applicable only to cases where the proper law of contract was not specified, the Court observed as follows:
“There may be presumption where the parties have agreed to hold arbitration in a particular country. In that circumstance,
the presumption would arise that the law of the country where the arbitration is agreed to be held would apply as a law of
contract. Where there has been no specific expression about the law of contract, the situation is otherwise...There is, in
absence of any contrary intention, a presumption that the parties have intended that the proper law of contract as well as
the law governing arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held.
Here again the stress is ...about the country where the arbitration is agreed to be held and precisely this situation is absent
in the present case. Here the substantive law of contract governing the contract is specifically agreed upon. However, the
place where arbitration would be held is not to be found...”
Following the ruling in Indtel,37 it was held in Citation 38 that where the proper law of the contract alone
was specified to be a foreign law, an implied exclusion of Part 1 could not be presumed. It was thus reiterated that
“when the law governing the contract was Californian law” and the seat was not specified, “it is not possible to
read... an implied exclusion”.
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Principle 2 has been reiterated subsequently.39 The principles that are derived from these subsequent cases have
been discussed under Principle 3.
Mode of determination of implied exclusion and its further expansion (Principle 3)
Paragraph 32 of Bhatia International v. Bulk Trading S.A. 40 observes that Part I may be excluded
either expressly or impliedly. An express exclusion poses no difficulty. A particular source of controversy has,
however, been cases where parties designate a seat of arbitration outside India and/ or also the proper law of
contract as another system of law — is it possible to infer from such choice of either the seat or the proper law that
the Indian Act has been “impliedly” excluded for the purposes of Part I of Bhatia International 41?
Where the seat is abroad and the proper law of contract and proper law of arbitration agreement are not specified,
following the decision in Bhatia International 42 no implied exclusion of Part I can be presumed.
Bhatia International 43, however did not clarify whether there would be an implied
exclusion in cases where the proper law of contract was foreign law and the seat was not specified. The issue
arose in Indtel 44, where the proper law was English law, and in Citation 45, where the
proper law was American law, and before several High Courts. These cases have largely relied on an interpretation
of certain observations in NTPC v. Singer. 46 It is therefore apposite to begin
by considering whether the presumptions in Singer have a role in determining whether there is an implied exclusion.
The relevant presumptions laid down in NTPC v. Singer 47 in this regard are:
1) in most cases the proper law of arbitration agreement shall be the same as the proper law of contract
(“Presumption A”), and 2) the proper law of the contract and the proper law of arbitration shall be presumed to be
that of the law of the seat of arbitration, if the parties have merely chosen a seat of arbitration and failed to
designate even the proper law of contract(“Presumption B”, together with Presumption A, referred to as “Singer
Presumptions”).
The Supreme Court, in Citation 48 and Indtel 49 recognized these Presumptions and made
observations to this effect. However, in the light of Bhatia International v. Bulk Trading S.A. 50, the
Supreme Court did not apply Presumption A. Therefore, when only the proper law of contract was stated to be a
foreign law and the seat as well as the proper law of the arbitration agreement was not specified, there was no
reason to presume that Part I would be excluded.
Presumption B as well appears to be irrelevant following the dicta in Bhatia International. 51
It thus follows that an implied exclusion cannot be inferred from either of the Singer presumptions; it should be
inferred from a clear statement of the intention of the parties.
In this context, it is useful to notice the decision of the Delhi High Court in Max India Ltd. v. General Binding
Corporation. 52 In this case, the arbitration clause between the parties designated Singapore as the
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seat of arbitration, provided that the agreement shall be governed and construed in accordance with the laws of
Singapore and conferred on the courts at Singapore, exclusive jurisdiction to decide any dispute. The Delhi High
Court held that this clause clearly constitutes an “implied exclusion” and that Part I of the Act was inapplicable. The
primary determinant of whether there was an implied exclusion was held to be the intention of the parties. The
Court observed53:
“In the present case we do not have even to labour to find out the intention of the parties inasmuch as express and specific
provisions are made in the arbitration clause manifesting the intention which is loud and clear. The two parties herein, one
Indian and other American, have chosen neutral arbitral tribunal, namely, SIAC. It is also made clear that the arbitration
proceedings would be conducted as per the rules of SIAC. Not only this, even contract is to be governed by the laws of
Singapore. To remove any shadow of doubt the Agreement between the parties specifically vests jurisdiction on Singapore
Courts. Thus, not only the proper law of contract but the proper law of arbitration agreement, procedural as well as
substantive, is that of Singapore. This is an “unmistakable intention” expressed by the parties governing the contract and
arbitration proceedings. Consequences which follow are that the validity, effect and interpretation of arbitration agreement
is governed by the laws of Singapore; the arbitration proceedings are to be conducted as per the laws of Singapore where
the arbitration proceedings are going to be held and therefore, even in the absence of specific provision, normally the
jurisdiction in respect of procedural matters concerning the conduct of arbitration has to be of Singapore Courts. In the
present case, however, the “overriding principle”, which is also applicable is that it is the courts of Singapore only which will
have the jurisdiction as substantive law governing the arbitration agreement is of that country and the agreement also
states so loudly and clearly....
When the parties have consciously chosen the applicability of Singapore laws, procedural as well as substantive, including
the law governing arbitration proceedings, by necessary implication Indian law, i.e.,
Arbitration and Conciliation Act, 1996 is excluded.
..
In the present case substantive as well as curial, i.e., procedural law chosen by the parties is that of Singapore and even
the Courts of Singapore are accepted as the forum to agitate the matters which would come within the domain of Court
proceedings...
..
The manner in which Singapore laws, substantive as well as curial, are made applicable and jurisdiction is also conferred
upon the Singapore Court, it amounts to exclusion of those provisions by necessary implication. It would, thus, be an
incongruous situation where not only arbitration proceedings but all other judicial proceedings are to take place in
Singapore and at the same time parties are permitted to have recourse to Indian
Arbitration and Conciliation Act, 1996 in so far as invocation of Section 9 thereof is concerned. Once it is
accepted that laws for interpretation of contract as well as arbitration proceedings which are to be applied are Singapore
laws which means provisions of Singapore
Arbitration Act , 2001 are applicable, can there be a situation where Indian
Arbitration and Conciliation Act, 1996 shall also apply at the same time (even to a limited extent of Section 9
thereof) as is sought to be contended. Answer has to be in the negative.”
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It was thus held that in the given fact situation an application for interim relief under S. 9 was not maintainable
before the Indian Courts.
Thus in determining the intention of the parties, the following factors are of importance: a) seat of the arbitration, b)
proper law of contract, c) the existence of an exclusive jurisdiction clause. The rationale of the decision in Max India
54 seems to be that where the seat of the arbitration is abroad, proper law of the contract is specified to be the same
as the law of the seat and the Courts at the seat of arbitration have been granted exclusive jurisdiction to decide on
any disputes, there is a reasonable presumption that the law of that country would also be the proper law of the
The above view has subsequently been reiterated by the Delhi High Court in DGS Realtors Pvt. Ltd. v. Realogy
Corporation 55 in a fact scenario where there existed no “exclusive jurisdiction” clause. Where the
governing law of the contract was that of New Jersey, USA and the place of arbitration being New York, there was
held to be an implied exclusion of Part I and an application under Section 9 would not be maintainable. The Court
followed the same logic as was followed in Max India Ltd 56 and observed that there would be a
presumption that the law governing the arbitration agreement was US law and this would necessarily amount to an
implied exclusion of Indian law.
The Bombay High Court in Frontier Drilling A.S. v. Jagson Internatural Ltd. 57 has made obiter
observations to the same effect. While dealing with a Section 9 application, the Court held that Part I would be
excluded when the substantive law of the contract was English Law and the place of arbitration was London. The
presumption in this case again was that English law would be the proper law of the arbitration agreement itself.58
However, where the facts were almost identical to those in Max India 59 and the contract provided that
a) the seat of arbitration be London, b) English law govern the arbitration proceedings, c) English law govern the
contract and d) English courts have exclusive jurisdiction to decide any disputes, the Andhra Pradesh High Court
held that there was no implied exclusion of Part 1.60
The Andhra Pradesh did not even go into whether there existed an implied exclusion and held the ratio of Bhatia to
be directly applicable. The Bombay and Delhi High Courts, however, applied the ratio of Bhatia and clearly
explained how there was an implied exclusion in the given facts, and to this extent, seem to be more logical.
There have also arisen cases where the proper law of arbitration agreement has been specified to be foreign law.
This, it is submitted would definitely amount to an implied exclusion of Part I and may even qualify as an express
exclusion.
Where the contract provided for London being the seat of the arbitration and the “Rules of Arbitration of Great
Britain” to govern the procedural issues, the Supreme Court in Aurohill Global Commodities Ltd. v. MSTC Ltd.
61 held that a Section 11 application would not be maintainable.62
While the Supreme Court did not go into the question as to what constitutes an implied exclusion, it can be inferred
from the decision in Aurohill 63 that where the seat of the arbitration is abroad and the law of that
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foreign country governs the arbitration agreement, there amounts to an implied/express exclusion of part I.
Similarly, the Gujarat High Court held that when the law governing the arbitration agreement was English law and
London was the seat of arbitration, even though the rest of the contract was governed by Indian law, there was
deemed to be an implied/ express exclusion of Part I.64
However, when interim relief was sought with regard to disputes arising out of a charter party agreement for
discharge of cargo onboard a ship docked in Kakinada and the agreement provided for arbitration at London under
the English
Arbitration Act , the Delhi High Court held that such relief could be granted. The court at Delhi found
that it had jurisdiction to grant such relief since a part of the cause of action had arisen in Delhi where the
agreement was executed. Thus there was held to be no implied exclusion in this case.65 This decision appears
anomalous and must be read in the context of its seculiar facts, since that an intention to exclude the Indian Act
seems to be evident in this case.
In another case66, the Madras High Court held that it had no jurisdiction to set aside an award, when the seat of the
arbitration was Singapore, almost all hearings were conducted in Singapore (with one hearing being conducted in
Hong Kong) and governing law of the arbitration agreement was specified to be English law. The conclusion of the
Madras High Court was not altered by the fact that:
1. There existed a provision stating that subject to the clause that provided for the governing law of the
arbitration agreement, the substantive law of the contract was Indian law
2. Two of the arbitrators signed the award in Chennai.
It is however worth noting that the Madras High Court, while stressing on the factors that would imply that the
Singaporean Courts would have jurisdiction, went on to hold that
“even in Bhatia International case, the Apex Court had drawn a distinction while considering the award as to whether it is a
foreign award or domestic award. While holding that Part I also can be made applicable in respect of foreign awards one of
the test would be such international commercial arbitration may be held in non convention country. In the event, such
arbitration is held in a convention country, like the one on hand, Part-II of the Act would alone apply to the arbitration. For all
the above reasons we find that on facts of this case, the award being a foreign award and the arbitral proceedings were
held in convention countries and the parties have agreed for such arbitral proceedings, the challenge to such foreign award
is not maintainable under Part-I of the Act.”
It is submitted that these observations do not appear to be good law as the very facts of Bhatia International v. Bulk
Trading S.A. 67 suggests that Part I would govern international commercial arbitrations conducted in
Convention countries like France. The Madras High Court could have justified its conclusion by holding that there
was an express/ or implied exclusion of Part I. but the current reasoning seems to go clearly against the decision of
the Supreme Court in Bhatia Interntional.
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Exception to applicability of ratio of Bhatia International in certain cases
The Supreme Court in Shivnath Rai 68 has provided an exception to Bhatia International's line of
reasoning.
In a case where the arbitration is conducted in Singapore and the law governing the contract is Indian law, following
the ratio of Bhatia International 69, Part I would be applicable and an application under Section 11(6) for
appointment of an arbitrator would lie.
However, when the Singaporean arbitrator passed an award and such an award was challenged before the
Singapore High Court, the Indian Supreme Court extended the application of Section 4270, to the given facts and
held that only the Singaporean Courts would have jurisdiction to decide any disputes.71
It is submitted that Section 42 specifically refers to applications made under Part I of the
Arbitration and Conciliation Act 1996 and an application for setting aside an award before Singaporean
Courts clearly is not made pursuant to the Indian Act. This judgment, however, is the law of the land and provides a
useful exception to the applicability of Bhatia International v. Bulk Trading S.A. 72
This judgment in Shivnath Rai 73 is also significant in that it recognizes that Courts at the seat of the
arbitration have jurisdiction to rule on the arbitral proceedings.
Summary of the position of law
Thus, following the dicta in of the Supreme Court and various High Courts, the propositions that emerge are:
1. Part I mandatorily applies when arbitration is “held” in India, which can be logically interpreted to mean
where the seat of the arbitration is in India.74
2. Part I applies to arbitrations conducted outside India unless applicability of Part I is impliedly or expressly
excluded.75
a. It obviously follows that an arbitration conducted outside India will be governed by Part I of the 1996
Act if it is expressly specified so in the contract.76
3. An “implied” exclusion cannot be inferred from either of the Singer presumptions on their own, but must be
determined based on the intention of the parties.
In order to decide whether parties have intended that Part I be excluded, the following principles which
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have evolved through precedents, may be used:
(a) Where the seat of the arbitration is located abroad and the proper law of the contract is not specified, it
cannot be presumed that the parties intended to exclude Part I.77
(b) Where the seat of the arbitration is not specified and the proper law of the contract is foreign, it cannot
be presumed that the parties intended to exclude Part I.78
(c) Where the proper law of contract is foreign and the seat of the arbitration is located abroad, it can be
presumed that the parties intended to exclude Part I.79
(i) Where the seat of the arbitration is abroad, the proper law of the contract is the law of the same
foreign country and the courts of that foreign country have been granted exclusive jurisdiction to
decide any disputes, it can be presumed that the parties intended to exclude Part I.80 There exist
authorities to the contrary, 81 but this does not appear to be good law.
(d) Where the seat of the arbitration is abroad and the proper law of arbitration agreement is foreign law,
there is an implied/ or express exclusion of Part I. 82 Indian Courts would not have jurisdiction even in
case the substantive law of the underlying agreement was Indian83 and the award was signed in India.
84
(e) Where the same facts as in (d) exist but the contract is executed in India and the cause of action arose
in India, an intention to exclude Part I may not be presumed. 85 This, however, might require
reconsideration.
4. Where an application relating to the arbitration is made before a competent foreign court, all further
applications have to be made before such a court because of the applicability of Section 42 and the
jurisdiction of Indian Courts stand ousted. 86
Setting aside of a foreign award by an Indian court: Applicability of Section 34 to foreign

awards
The controversy surrounding applicability of Section 34 to foreign awards has been as a result of the language of
Paragraph 26 of the Bhatia International 87 . judgment which reads as follows:
“Mr. Sen had also submitted that Part II, which deals with enforcement of foreign awards does not contain any provision
similar to Section 9 or Section 17. As indicated earlier Mr. Sen had submitted that this indicated the intention of Legislature
not to apply Sections 9 and 17 to arbitrations, like the present, which are taking place in a foreign country. The said Act is
one consolidated and integrated Act. General provisions applicable to all arbitrations will not be repeated in all chapters or
parts. The general provisions will apply to all chapters or parts unless the statute expressly states that they are not to apply
or where, in respect of a matter, there is a separate provision in a separate Chapter or Part. Part II deals with enforcement
of foreign awards. Thus Sections 44 in (Chapter I) and Section 53(in Chapter II) define foreign awards, as being awards
covered by arbitrations under the New York Convention and the Geneva Convention respectively. Part II then contains
provisions for enforcement of “foreign awards” which necessarily would be different. For that reason special provisions for
enforcement of foreign awards are made in Part II. To the extent that Part II provides a separate definition of an arbitral
award and separate provisions for enforcement of foreign awards, the provisions in Part I dealing with these aspects will not
apply to such foreign awards. It must immediately be clarified that the arbitration not having taken place in India, all or some
Navneet Krishn
Page 45 of 77
of the provisions of Part I may also get excluded by an express or implied agreement of parties. But if not so excluded the
provisions of Part I will also apply to “foreign awards”. The opening words ofsections 45 and 54, which are in Part II, read
“notwithstanding anything contained in Part I”. Such a non-obstante clause had to be put in because the provisions of Part I
apply to Part II.”
The Bombay High Court, in Force Shipping v. Ashapura Minechem Ltd. 88, interpreted this paragraph to
be part of the ratio of the case and summarized the ratio of Bhatia International 89 as follows:
“(a) When there are general provisions under the statute unless statute expressly states that they are not to
apply then in that event, the general provisions would apply;
(b) When the statute provides special provisions for enforcement it is the special provisions which would apply
and not the general provisions.”
Thus, when there were special provisions in Part II that dealt with enforcement of foreign awards, it was held that
enforcement provisions under Part I including Section 34 would not apply.
A similar ratio was accepted by other High Courts. In a case90 it was held that since a foreign award can be set
aside only by the courts of a country in which, or under the law of which, that award was made an argument that a
Singapore award was not enforceable in India because proceedings to set aside the award in India had
commenced was held to be not valid.
Where the law applicable to the arbitration was London and the award was rendered in London, such an award
could not be set aside by an Indian Court under Section 34.91 Similarly, where an arbitration agreement was
governed by Swiss law it could not be set aside under Section 34.92
However, this line of decisions came to be overruled in Venture Global Engineering v. Satyam Computer Services
Ltd. 93, where it was held that paragraph 26 of Bhatia International v. Bulk Trading S.A. 94
merely stated the submission of the Counsel and that did not echo the view of the Court.
The view of the High Courts on whether para 26 constituted the ratio of Bhatia International v. Bulk Trading S.A.
95 was perhaps correct. Mr Sen was seeking to argue that provisions of Part I will not apply to arbitrations
conducted outside India. Thus the statement
“The said Act is one consolidated and integrated Act. General provisions applicable to all arbitrations will not be repeated in
all chapters or parts. The general provisions will apply to all chapters or parts unless the statute expressly states that they
are not to apply or where, in respect of a matter, there is a separate provision in a separate Chapter or Part.”
would go against his argument. The portion starting from “ The said Act is one consolidated and integrated Act.”
Navneet Krishn
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thus appears to be part of the decision of the Court.
Relying on the ratio of Bhatia International 96, the Supreme Court in Venture Global 97, has
laid down that applicability of Part 1 to foreign arbitrations unless expressly excluded would also mean that Section
34 applies automatically to international arbitrations. It was moreover held that there was no conflict between
Section 34 and Section 48.
Once the applicability of Section 34 to foreign awards was affirmed, the next question before the Court was to
determine whether on the facts of the case, there was an implied exclusion of Part 1.
The agreement contained a provision which read:
“(b) This Agreement shall be construed in accordance with and governed by the laws of the State of Michigan, United
States, without regard to the conflicts of law rules of such jurisdiction. Disputes between the parties that cannot be
resolved via negotiations shall be submitted for final, binding arbitration to the London Court of Arbitration.
(c) Notwithstanding anything to the contrary in this agreement, the Shareholders shall at all times act in accordance
with the
Companies Act and other applicable Acts/Rules being in force, in India at any time.”
It was held by the Apex Court that the latter condition was a strong indicator regarding the applicability of Part 1.
It was further opined that the award had a close nexus to India as “(a) the company was situated in India; (b) the
transfer of the “ownership interests” shall be made in India under the laws of India as set out above; (c) all the steps
necessary have to be taken in India before the ownership interests stood transferred.”
Since the enforcement of a foreign award could potentially violate principles of Indian public policy, (while possibly
not viotating the list under the law of the country where the award was made) it was held that a party should not be
able to circumvent the Indian public policy test and get the award enforced.
It is also important to note that the governing law clause had a provision stating “the Shareholders shall at all times
actin accordance with the
Companies Act and other applicable Acts/Rules being in force, in India at any time.” It was held that
this clearly implies that the parties intended the Indian
Arbitration Act to apply. This would mean the inclusion of Part 1 which contains the substantive law
relating to the arbitration agreement.
It is submitted that there exist very convincing reasons as to why Section 34 should not be applicable to set aside
foreign awards. These are:
Navneet Krishn
Page 47 of 77
1. A comparison of the schemes of Sections 48 and 34 clearly indicate that it was not contemplated that Section 34 apply to
foreign awards. An opposition to enforcement on the grounds of incapacity of a party against whom award is made, under
Section 48(1)(a) is to be determined under the law applicable to them. While Section 34 contains a similar ground for
setting aside of the award, similar wording regarding applicable law is absent. This indicates that Section 34 is not
applicable to foreign awards. While pointing out this difference in the language, the Bombay High Court1 observed:
“To hold to the contrary would lead to absurd results. It would permit a party aggrieved by a foreign award a right to
challenge the same both under Sections 34 and 48 of the Act. The applicable law on the basis whereof an award is
challenged would be different under the two sections. This is clearly not the intention of the legislature it would involve
legislation, an exercise not open to this Court.”
2. Furthermore, it is submitted that the decision in Venture Global 2 goes against the host of foreign
authorities on the subject that interpret Article V of the NYC lay down that an arbitral award can only be set aside by the
courts of the country where the award is made.3
It might be argued that the ratio of Bhatia International 4 was restricted to the fact that Section 9 applies
to arbitrations conducted outside India. However, in light of the ruling in Bhatia International 5 that the
language of Section 2(2) which stated that Part I would apply where the place of arbitration was in India, did not
mean that Part I would “only” apply when the place of arbitration was in India, it is submitted that the ratio of Bhatia
International 6 extends to the applicability of the entire Part I and not just S. 9. Thus, in the light of the
decision in Bhatia International v. Bulk Trading S.A. 7, the Supreme Court, in Satyam was bound, to
this extent, to take the view it took.
Restricting the applicability of Venture Global
The ratio of Venture Global 8 was held to be not binding on the Madras High Court9 where the seat of
the arbitration was Singapore, almost all hearings were conducted in Singapore (with one hearing being conducted
in Hong Kong) and governing law of the arbitration agreement was specified to be English law. The conclusion of
the Madras High Court was not altered by the fact that:
1. There existed a provision stating that subject to the clause that provided for the governing law of the
arbitration agreement, the substantive law of the contract was Indian law
2. Two of the arbitrators signed the award in Chennai.
The Madras High Court held that in the given fact scenario a Section 34 application could not be filed to set aside
the award.
It is however worth noting that the Madras High Court, while stressing on the factors that would imply that the
Navneet Krishn
Page 48 of 77
Singaporean Courts would have jurisdiction, went on to hold that
“even in Bhatia International case, the Apex Court had drawn a distinction while considering the award as to whether it is a
foreign award or domestic award. While holding that Part I also can be made applicable in respect of foreign awards one of
the test would be such international commercial arbitration may be held in non convention country. In the event, such
arbitration is held in a convention country, like the one on hand, Part-II of the Act would alone apply to the arbitration. For all
the above reasons we find that on facts of this case, the award being a foreign award and the arbitral proceedings were
held in convention countries and the parties have agreed for such arbitral proceedings, the challenge to such foreign award
is not maintainable under Part-I of the Act.”
It is submitted that these observations do not constitute good law as the very facts of Bhatia International
10 suggests that Part I would govern international commercial arbitrations conducted in Convention countries like
France.
The Madras High Court could have, perhaps justified its conclusion by holding that there was an express/ or implied
exclusion of Part I.
Venture Global and allied cases—recognition by foreign Courts
The ruling on Venture Global 11 seems to mark a departure from the internationally recognized
principles.12 English Courts have not recognized the principles that formed the basis of the ruling in Venture Global
13. Consequently, in Shashoua v. Sharma 14, the Queen's Bench Division granted an anti-suit injunction
restraining a person who had obtained an arbitral award rendered in England, from challenging the award before
Indian Courts. This was so even though the proper law of the underlying contract was Indian law.
Further Suggested Reading (Challenge to Foreign Awards Under S. 34)
1. Summet Kachwaha, “Enforcement of Arbitration Awards In India”, Vol. 4 (1) Asian Intl arbn J 64 (2008).
2. Raghav Sharma, “Sanctity of Foreign Awards: Recent Developments in India”, 75 Arbitration 148 (2009).
3. D.R. Dhanuka, “Jurisdiction of Indian Courts to Entertain Petitions to challenge ‘Foreign Awards’: Under
Arbitration and Conciliation Act, 1996 ”,
2009 (1) ARB LR 1 .
4. Sarosh Zaiwalla, “Commentary on the Indian Supreme Court Judgment in Venture Global Engineering v. Satyam
Computers Services Ltd”, 25 (4) J Intl Arbn 507 (2008).
Navneet Krishn
Page 49 of 77
5. Dharmendra Rautray, “Case Comment on Venture Global Engineering v. Satyam Computer Services Ltd.
Venture Global Engineering v. Satyam Computer Services Ltd. Foreign Awards are open to Challenge on merits as
domestic awards, NTPC v. Singer Co. NTPC v. Singer Co. Case revisited”, 11(2) Int Alr 29 (2008).
Nature of award rendered in a Convention country in an arbitration to which Part I is applicable
Pursuant to the ratio of Bhatia International v. Bulk Trading S.A. 15 Part I of the
Arbitration and Conciliation Act 1996 is applicable to arbitrations conducted outside India unless it is
expressly or impliedly excluded.Section 2(7) states that an arbitral award “ made under this Part (i.e. Part I) shall be
considered as a domestic award”. Thus if an arbitration is conducted outside India in a country which is a signatory
to the New York Convention or the Geneva Convention and Part I is not excluded, it follows that the award is a
“domestic award”. However, the award would also be a “foreign award” under Section 44 and Section 53.16 The
question therefore arises—whether this is to be treated as a foreign award or as a domestic award for the purpose
of enforcement.17
This situation seems to be addressed in Para 26 of the judgment in Bhatia International 18 which states:
“ The said Act is one consolidated and integrated Act. The general provisions will apply to all chapters or parts unless the
statute expressly states that they are not to apply or where, in respect of a matter, there is a separate provision in a
separate Chapter or Part. Part II deals with enforcement of foreign awards. Thus Sections 44 in (Chapter I) and Section
53(in Chapter II) define foreign awards, as being awards covered by arbitrations under the New York Convention and the
Geneva Convention respectively. Part II then contains provisions for enforcement of “foreign awards” which necessarily
would be different. For that reason special provisions for enforcement of foreign awards are made in Part II. To the extent
that Part II provides a separate definition of an arbitral award and separate provisions for enforcement of foreign awards,
the provisions in Part I dealing with these aspects will not apply to such foreign awards.”
Though, this was held in Venture Global 19 to be part of the submission of the counsel it appears that
the Supreme Court in Bhatia International 20 may have infact intended this portion to be part of its
ruling. There are also other reasons which suggest that such an award should be treated as a “foreign award”. 21
Part II contains special provisions dealing with enforcement of awards falling within the ambit of the New York
Convention and Geneva Convention . Where a provision of Part I and an equivalent provision of Part II govern an
award, the special provision (i.e. the provision under Part II) should be applicable. Thus, an award rendered outside
India in a convention country, but to which part I applies, would be a “foreign award”.
While this argument was not specifically raised before the Madras High Court22, the Court held that an award
rendered in an arbitration where a) Singapore was the seat of the arbitration, b) English law governed the arbitration
agreement and c) all the hearings were abroad, was not a domestic award and would be enforceable as a foreign
award. This decision is rather non-controversial as the Court also held that there was an exclusion of Part I.
However, the following observations made by the Madras High Court are apposite:
Navneet Krishn
Page 50 of 77
“To determine, as to whether the award is a foreign award, the relevant test would be, firstly, the relationship between the
parties must be commercial; secondly, the award must be made in pursuance of the agreement in writing; and thirdly, the
award must be made in convention country.”
The Madras High Court seems to suggest that the test laid down by it for determination of a foreign award is
exhaustive. Moreover, it was further observed that
“In Bhatia International case, while holding that even in case of a foreign award, Part I of the Act could be made applicable,
the Apex Court has, in fact, held that the parties to the agreement can exclude the provisions of Part I of the Act in case of
International Commercial Arbitrations including those that take place outside India. Hence, we have no hesitation to hold
that the award in question is a foreign award.”
Thus the Madras High Court, interprets Bhatia International to hold that Part I may be applicable to arbitrations that
result in “foreign awards”. Thus if Part I applies to “foreign awards”, it necessarily follows that every award to which
Part I applies is not necessarily a “domestic award”.
The only logical conclusion is that awards that would qualify as “foreign awards” because of the operation of
Section 44, are not rendered “domestic” because of an extension of the principles laid down in Bhatia International.
Further Suggested Reading (Applicability of Part I of The Act)
Prior to Bhatia International
1. P Ramaswamy, “Interim Measures of Protection under the Indian

Arbitration and Conciliation Act, 1996 ”, 15(4) Arbn Intl 399-404 (1999).
2. Pratibha M Singh and Devashish Krishan, “The Indian 1996

Arbitration Act – Solutions for a Current Dilemma”, 18(1) J. INTL. ARBN., 41–58 (2001).
3. O.P. Malhotra, “Jurisdiction of the Court to Order Interim Measures under S. Section 9 of the Indian
Arbitration and Conciliation Act : 1996 where the Place of Arbitration is Out of India”, 41 JILI 439
(1999).
4. H.C. Johari, “Difficulties Arising from Limited Applicability of Part I of Arbitration &
Conciliation Act, 1996 to International Arbitration”,
Navneet Krishn
Page 51 of 77
1999 Arb LR 1 .
5. H.C. Johari, “Application for Interim Measure Protection before the Arbitral Proceedings”, in A.K. Bansal & O.P.
Chadha, “Cases & Materials on Arbitration &
Conciliation Act 1996 ”, 1st ed., p. 809 (1999).
6. Gaurab Banerji, “Can Indian Courts Grant Interim Relief in Foreign Arbitrations”, 29 Indian Advocate 23 (1999 -
2000).
7. V.V. Singh, “Interim Protection: Jurisdiction of Indian Courts in Foreign Arbitration Cases”,
AIR 1998 Jour 97 .
Subsequent to Bhatia International
1. S.K. Dholakia, “Bhatia International v. Bulk Trading: A Critical Review”, 2003 (5) SCC Jour 22.
2. Raghav Sharma, “Bhatia International v. Bulk Trading: Ambushing International Commercial Arbitration Outside
India”, 26(3) J. INTL. ARBN. (2009) 357.
3. A.K. Ganguli, “Emerging Trend in the Enforcement of Arbitration Awards”, 50 JILI (2008) 51.
1. F.S. Nariman, “Arbitration & ADR in India”, P.C. Rao & William Sheffield (Ed.), “Alternate dispute
Resolution- What it is and How it works”, 1st ed. 1997, reprint 2008, p. 45.
2. SARAH E. HILMER, “Did Arbitration Fail India or did India Fail Arbitration”, 10(2) INT ALR 2007, 33-37
(2007).
1. RUSSELL ON ARBITRATION, (23rd edn., 2007) at p. 206-207, para 5-057.
2. See for example C v. D,

[2007] EWHC 1541 .
3. James Miller & Partners v. Whitworth Street Estates (Manchester) Ltd.,

[1970] AC 583 ; Union of India v. Mcdonnell Douglas Corp., [1993] 2 Lloyd's Rep
48 at 50.
4. MUSTILL and Boyd, “Commercial Arbitration”, 2nd ed. (1989), p. 60.
Navneet Krishn
Page 52 of 77
5. Bremer Vulkan Schiffbau und Maschineenfabrik v. South India Shipping Corpn, [1981] 1
Lloyd's Rep 253 :
[1981] 2 WLR 141 , carrying through an analysis which was first developed in
Heyman v. Darwins Ltd.,
[1942] AC 356 .
6. Per Steyn J., Smith Ltd. v. H&S International, [1991] 2 Lloyd's Rep. 127 at 130.
7. National Thermal Power Corpn. Ltd. v. Singer Co.,

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 ; See also Heyman v. Darwins Ltd.,
1942 (1) All ER 337 .
8. Shipyard R.S. v. Ship Management T.S, Yearbook of Commercial Arbitration, Vol. XXXI
(2006), German Maritime Association case, p. 66; James Miller & Partners Ltd. v. Whitworth Street Estates
(Manchester) Ltd.,
[1970] AC 583 ,
[1970] 1 All ER 796 , [1970] 1 Lloyd's Rep 269, HL.
9. Halsbury's Laws of England, Para 1206; See also Buyer (Poland) v. Seller (Poland),
Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No. 73, p. 509, Black-Clawson International Ltd. v.
Papierwerke Waldhof-Aschaffenburg AG, [1981] 2 Lloyd's Rep 446, Vita Food Products Inc. v. Unus Shipping Co. Ltd.,
[1939] AC 277
[1939] 1 All ER 513 , PC; Lloyd v. Guibert,
(1865) LR 1 QB 115; R. v. International Trustee for the Protection of Bondholders
AG,
[1937] AC 500 :
[1937] 2 All ER 164 , HL; Tzortzis v. Monark Line A/B,
[1968] 1 All ER 949 :
[1968] 1 WLR 406 , CA; James Miller & Partners Ltd. v. Whitworth Street Estates
(Manchester) Ltd.,
[1970] AC 583 :
[1970] 1 All ER 796 ; Altmann v. Austria, Yearbook of Commercial Arbitration, Vol.
XXXI (2006), p. 13.
10. Paul Smith Ltd. V. H & S International Holdings Inc, [1991] 2 Lloyd's Rep. 127, Vita Food
Products Inc. v. Unus Shipping Co. Ltd.,
[1939] AC 277
(1865) LR 1 QB 115; R v. International Trustee for the Protection of Bondholders
AG,
[1937] AC 500 :
[1968] 1 All ER 949 :
(Manchester) Ltd.,
[1970] AC 583 :
XXXI (2006), p. 13, Paul Smith Ltd. V. H & S International Holdings Inc., [1991] 2 Lloyd's Rep. 127. See also
Buyer (Poland) v. Seller (Poland), Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No. 73, p. 509,
Black-Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg AG, [1981] 2 Lloyd's Rep 446.
Navneet Krishn
Page 53 of 77
11. Black-Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg AG, [1981] 2

Lloyd's Rep 446; See also Buyer (Poland) v. Seller (Poland), Yearbook of Commercial Arbitration, Vol.
XXX (2005), Germany No. 73, p. 509.
12. Shashoua v. Sharma,

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 , C v. D,
[2008] 1 All ER (Comm) 1001
13. Article V(1)(a), New York Convention, 1958.
14. Vita Food Products Inc. v. Unus Shipping Co. Ltd.,

[1939] AC 277 :
AG,
[1937] AC 500 :
[1937] 2 All ER 164 , HI; Tzortzis v. Monark Line A/B, [1968] 1 All ER 949 :
(Manchester) Ltd.,
[1970] AC 583 :
XXXI (2006), p. 13, Paul Smith Ltd. V. H & S International Holdings Inc., [1991] 2 Lloyd's Rep. 127. See also
15.
[2007] 2 All ER (Comm) 701 .

(1939) AC 277 .
17. The Assunzione (1954) p. 150; Mount Albert Borough Council v. Australasian
Temperance and General Mutual Life Assurance Society Ltd.,
(1938) AC 224 .
18. Black-Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg AG, [1981] 2

Lloyd's Rep 446; See also Buyer (Poland) v. Seller (Poland), Yearbook of Commercial Arbitration, Vol.
XXX (2005), Germany No. 73, p. 509.
19. Lew, “The Law Applicable to the Form and Substance of the arbitration clause”. ICCA Congress Series
No.14, 1998, Paris at para.136.
20. Starlight Shipping Co. v. Tai Ping Insurance Co. Ltd. (Hubei Branch), [2008] 1 Lloyd's
Rep. 230 :
[2008] 1 All ER (Comm) 593 .
21. Dicey, Morris and Collins, “The Conflict of Laws”, vol. 1, 14th ed. 2006, p. 718. See also
International Tank and Pipe SAK v. Kuwait Aviation Fuelling Co. KSG,
[1975] QB 224 (CA); Qatar Petroleum v. Shell International Petroleum, [1983] 2
Lloyd's Rep. 35 (CA); The Marques de Bolarque, [1984] 1 Lloyd's Rep. 652; Paul Smith Ltd. V. H & S International
Holdings Inc., [1991] 2 Lloyd's Rep. 127; Union of India v. Mcdonnell Douglas Corporation, [1993] 2 Lloyd's Rep. 48;
Navneet Krishn
Page 54 of 77
Sumitomo Heavy Industries Limited v. Oil and Natural Gas Commission, [1994] 1 Lloyd's Rep. 45; Sonatrach Petroleum
Corp v. Ferrell International Ltd.,
[2002] 1 All ER (Comm) 627 ; Svenska Petroleum Exploration AB v. Government of
the Republic of Lithuania (No. 2), [2006] 1 Lloyd's Rep. 181.

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .
24.
[2008] 1 All ER (Comm) 1001 .
25.
[2007] 1 All ER (Comm) 591 .
26.
[2008] 1 All ER (Comm) 1001 .
27.
[2007] 1 All ER (Comm) 591 .
28. Manufacturer (Croatia) v. Buyer (Austria), Yearbook of Commercial Arbitration, Vol. XXX
(2005), Austria No. 12, p. 416 (The law applicable to interpret an ambiguous arbitration contract was held to be the law
of the place where the award is to be rendered.).
29. Atlantic Underwriting Agencies Ltd. v. Compagnie di Assicurazione di Milano, [ 1979] 2

Lloyd's Rep. 240, The Castle Alpha, [1989] 2 Lloyd's Rep. 383.
30. XL Insurance Ltd. v. Owens Corning, [2000] 2 Lloyd's Rep. 500.
31. Bremer Vulkan Schiffbau and Maschinenfabrik v. South India Shipping Corpn. Ltd.,
[1981] AC 909 .
32. Egon Oldendorff v. Libera Corpn., [1996] 1 Lloyd's Rep 380
33. James Miller & Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd., [1970] 1
Lloyd's Rep 269.
Lloyd's Rep 269.
35. Yisroel Meir Halpern and Shmuel Halpern v. Nochum Mordecai Halpern, David Moshe
Halpern, Bezalel Yaacov Halpern, Akiva Aaron Halpern and Esther Vaisfiche, Yearbook of Commercial Arbitration, Vol.
XXXI (2006), UK No. 75, p. 964.
Navneet Krishn
Page 55 of 77
36. See also Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd.,
[1993] AC 334 .
37. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), Case 439, 26 June 2000, p. 251.
38. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), UK No. 63, p. 872.
39. Consortium Member A v. Consortium Member B, Yearbook of Commercial Arbitration,

Vol. XXXIII (2008), Greece No. 14, p. 552.
40. Jacobs Marcus & Co. v. The Credit Lyonnais,(1884) 12 Q.B.D. 589.
41. The Fehmarn,

(1958) 1 All ER 333 . as affirmed in National Thermal Power
Corpn. Ltd. v. Singer Co.,
(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .
42. Hamyln & Co. v. Talisker Distillery,

[1891] 4 All ER 849 ; Case 373 : Germany : Kammergericht Berlin, Yearbook of
Commercial Arbitration, Vol. XXVI (2001), p. 328 (Where the parties specified a non-existent German arbitral institution
in the arbitration clause, the clause itself would not be deemed invalid. The clause would have to be construed
according to the true intention of the parties and since there existed only one recognized arbitral institution in Germany,
that institution would be deemed to govern the arbitration).
43. RUSSELL ON ARBITRATION, 23rd ed., para 3-052, p. 112.
44. Eisenwerk Hensel Bayreuth Dipl._ing Burkhardt Gmbh v. Australian Granites, Yearbook
of Commercial Arbitration, vol. XXV (2000), Australia No. 18, p. 663.
45. See further JAN PAULSSON, “Vicarious Hypochondria and Institutional Arbitration” 6(3)
Arbn. Intl., 226-52 (1990); GK KWATRA, “The Indian Council of Arbitration - Note on the Amendments to the Rules of
Arbitration of the Indian Council of Arbitration”, Vol. XXIII Yearbook Commercial Arbitration, 307 (AJ van den berg ed.,
1998).
46. Dicey, Morris and Collins, “The Conflict of Laws”, vol. 1, 14th ed. 2006, p. 713.
47. Dicey, Morris and Collins, “The Conflict of Laws”, vol. 1, 14th ed. 2006, p. 723.
XXXI (2006), UK No. 75, p. 964.

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
Navneet Krishn
Page 56 of 77
LNIND 1992 SC 393 ]:

(1992) 2 SCC 551 .
50. Altmann v. Austria, Yearbook of Commercial Arbitration, Vol. XXXI (2006), p. 13.
51. Alan Redfern and Martin Hunter, “Law and Practice of International Commercial Arbitration” 4th ed. 2004,
p. 82.
52. See Article 28(6) of ICC Rules.
53. Shashoua v. Sharma,,

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .
55. Naviera Amazonica Peruana SA v. Cia Internacional de Seguros del Peru, [1988] 1
Lloyd's Rep. 116; Bank Mellat v. Helliniki Techniki SA,
[1984] QB 291 :
[1983] 3 All ER 428 ; Spring Hope Rockwool v. Industrial Clean Air Inc., 504 F.
Supp 1385 (1981).
p. 86.
57. Bank Mellat v. Helliniki Techniki SA,

[1984] QB 291 :
[1983] 3 All ER 428 , CA, per Kerr LJ; C v. D,
[2007] EWCA Civ 1282 :
[2008] 1 All ER (Comm) 1001 : [2008] 1 Lloyd's Rep 239. See also
Naviera Amazonica Peruana SA v. Cia Internacional de Seguros del Peru, [1988] 1 Lloyd's Rep. 116.
58. [1988] 1 Lloyd's Rep 116.
59. Union of India v. Mcdonnell Douglas Corp., [1993] 2 Lloyd's Rep. 48.
60. Naviera Amazonica Peruana SA v. Cia Internacional de Seguros del Peru, [1988] 1
Lloyd's Rep. 116.
61. Mann, “Where an award is made?”, (1985) 1 Arbn. Intl., p. 107. (“The award, it is submitted, is no more
than a part, the final and vital part of a procedure which must have a territorial, central point or seat. It would be very
odd if, possibly without the knowledge of the parties or even unwittingly, the arbitrators had the power to sever that part
from the preceding procedure and thus give a totally different character to the whole.”).
62. Dubois and Vanderwalle v. Boots Frites BV, Yearbook of Commercial Arbitration, vol.
XXIV (1999), France No. 29 p. 640
Navneet Krishn
Page 57 of 77
63. Virgillo de Agostini v. Milloil, Yearbook of Commercial Arbitration, vol. XXV (2000), Italy
No. 153., p. 739.

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .
65.
(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 , See also Bank Mellat v. Helliniki Techniki SA,
(1983) 3 All ER 428 .
66. The Swiss law expressly states that the parties may subject the arbitral procedure to the procedural law of
their choice- See Article 182 of the Swiss PIL Act of 1987.
pp. 86-87.
pp. 86-88.
69. [1984] 1 Q.B. 291.
70. Naviera Maritima Peruana S.A. v. Compania Internacional de Seguros de Peru, [1988] 1
Lloyd's Rep 1116.
XXXI (2006), UK No. 75, p. 964.
72. Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred Mcalpine Business Services Ltd.,
[2008] 1 Lloyd's Rep. 608 :
[2008] 2 All ER (Comm) 493 .
73. Arab National Bank v. El Abdali, [2005] 1 Lloyd's Rep 541.
74. Arab National Bank v. El Abdali, [2005] 1 Lloyd's Rep 541.
75. Yearbook of Commercial Arbitration, Vol. XXXII (2007), ICC Case no. 7722 of 1999, p. 13.
76. Atlantic Underwriting Agencies Ltd. v. Compagnie di Assicurazione di Milano, [1979] 2

Lloyd's Rep. 240.
Navneet Krishn
Page 58 of 77
77. Astro Venturoso Compania Naviera v. Hellenic Shipyards S.A., (The'Mariannina'), [1983]
1 Lloyd's Rep. 12.
78. Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 525, p. 1179.

[1939] AC 277 :
AG,
[1937] AC 500 :
[1937] 2 All ER 164 , HL; Tzortzis v. Monark Line A/B, [1968] 1 All ER 949 :
(Manchester) Ltd.,
[1970] AC 583 :
XXXI (2006), p. 13, Paul Smith Ltd. v. H & S International Holdings Inc., [1991] 2 Lloyd's Rep. 127. See also
80. Dicey and Morris, The Conflict of Law, vol. 2, 13th edn., 2000, pp 1196-
97, para 32-005. The passage corresponding to this passage (in the 7th edn, 1958) was cited with approval by Lord
Wilberforce in Compagnie Tunisienne de Navigation SA v. Compagnie d'Armement Maritime SA,
[1971] AC 572 ; For modern principles see Coast Lines Ltd. v. Hudig and Veder
Chartering NV,
[1972] 2 QB 34 (CA); XAG v. A Bank,
[1983] 2 All ER 464 ; Amin Ras heed Shipping Corpn. v. Kuwait Insurance Co.
[1984] AC 50 .
Lloyd's Rep 269.
82. Hamlyn & Co. v. Talisker Distillery,

[1894] AC 202 , HL; Mackender v. Feldia AG,
[1966] 3 All ER 847 , CA; Hellenic Steel Co. v. Svolamar Shipping Co. Ltd., [1991] 1
Lloyd's Rep 370, CA.
83. Centrax Ltd. v. Citibank NA,

[1999] 1 All ER (Comm) 557 ; American Motorists Insurance Co. v. Cellstar Corpn.,
[2003] All ER (D) 26 (Mar).

[1939] AC 277
AG,
[1937] AC 500 ,
[1968] 1 All ER 949 :
(Manchester) Ltd.,
[1970] AC 583 ,
XXXI (2006), p. 13, Paul Smith Ltd. v. H&S International Holdings Inc., [1991] 2 Lloyd's Rep. 127. See also
Navneet Krishn
Page 59 of 77
85. Bank A v. Bank B, Yearbook of Commercial Arbitration, vol. XXV (2000), Germany No.
49, p. 710.
XXXI (2006), UK No. 75, p. 964.
87. Musawi v. R.E. International (UK) Ltd. and others,

[2007] EWHC 2981 (CH).
88. Musawi v. R.E. International (UK) Ltd. and others,

[2007] EWHC 2981 (CH).
XXXI (2006), UK No. 75, p. 964.
90. National Thermal Power Corporation v. Singer Comparny,

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].
2. Citation Infowares Limited v. Equinox Corporation,

(2009) 5 UJ 2066 :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 9 JT 316 .
Navneet Krishn
Page 60 of 77
3. Indtel Technical Services Pvt. Ltd. v. W.S. Atkins Rail Ltd.,

2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].
4. Bhatia International v. Bulk Trading S.A.,

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
7. Sara International Ltd. v. Arab Shipping Co. (P) Ltd.,

2009 (3) Arb LR 81 [
LNIND 2009 DEL 2071 ] (Del).
8. “such cases”, in this context referred to cases where the arbitration was held in India.

(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]: (2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
Navneet Krishn
Page 61 of 77
(2008) 10 SCC 308 [

LNIND 2008 SC 1692 ].

2009 (5) UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .
13. National Thermal Power Corporation v. Singer Company,

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 5 UJ 2066 :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .
16. This is based on the presumption that by default, the substantive law governing the arbitration can be that
of only one country. See further Commentary infra under the heading “Operating premise behind above analysis”.

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
18. This Presumption was held to be applicable in DGS Realtors Pvt. Ltd. v. Realogy Corporation
MANU/DE/2115/2009. However, this observation seems to be merely by way of obiter dicta.
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
Navneet Krishn
Page 62 of 77
LNIND 2009 SC 923 ] :

(2009) 8 JT 316 .

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .
Navneet Krishn
Page 63 of 77

AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
AIR 2002 SC 1473 [
LNIND 2002 SC 218 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 1 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2009) 8 JT 316 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
Navneet Krishn
Page 64 of 77
(2002) 4 SCC 105 [

LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ] :
AIR 2002 SC 1473 [
LNIND 2002 SC 218 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
39. For more details on the pro-enforcement stand adopted by the NYC refer to commentary under Section 44
under the heading “ Background to NYC”.
40. Max India Ltd. v. General Binding Corporation,

2009 (3) Arb LR 162 (Del)(DB).

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 (SC), para 14.
Navneet Krishn
Page 65 of 77

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
4. Oil and Natural Gas Co. v. Western Co. of North America,

(1987) 1 Arb LR 60 :
AIR 1987 SC 674 [
LNIND 1987 SC 55 ]:
(1987) 1 SCC 496 [
LNIND 1987 SC 55 ].
6. See further Commentary in the Chapter “Principles of Private International Law that are
applicable in International Commercial Arbitration” under the heading “Seat of arbitration”

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
8. Bharti Televentures Ltd. v. DSS Enterprises,

(2001) 3 RAJ 433 :
(2001) 92 DLT 788 :
(2001) 3 Arb LR 175 (Del); Marriott International Inc. v. Ansal Hotels Ltd.,
AIR 2000 Del 337 : (2000) 3 Arb LR 369 :
(2000) 86 DLT 873 [
LNIND 2000 DEL 503 ] :
(2000) 56 DRJ 435 [
LNIND 2000 DEL 503 ].
9. Venture Global Engineering v. Satyam Computer Services Ltd.,

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ].
10. For more details refer to heading “Nature of award rendered in a Convention country in an arbitration to
which Part I is applicable” later in this Chapter.
11. Tamil Nadu Electricity Board v. Videocon Power Limited,

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
Navneet Krishn
Page 66 of 77
(2002) 4 SCC 105 [

LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
16. Shreejee Traco (I) Pvt. Ltd. v. Paperline International Inc.,

(2003) 3 RAJ 534 :
(2003) 9 SCC 79 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
19. Sara International Ltd. v. Arab Shipping Co. (P) Ltd.,

2009 (3) Arb LR 81 [
LNIND 2009 DEL 2071 ] (Del).

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
Navneet Krishn
Page 67 of 77
(2002) 4 SCC 105 [

LNIND 2002 SC 1441 ].

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ] ;
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ] ;
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
27. See Commentary later on in this Chapter under the heading “Implied exclusion—Mode
of determination”.
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].

(2009) 5 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 .

AIR 1993 SC 998 [
Navneet Krishn
Page 68 of 77
LNIND 1992 SC 393 ]:

(1992) 2 SCC 551 .
31. In the words of the Court in Citation Infowares Limited v. Equinox Corporation,
(2009) 5 UJ 2066 :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 .
“Again in paragraph 37 the Court expressed that the decision in Bhatia International's case has been
rendered by a Bench of three Judges and governs the scope of application under Section 11, thereby expressing the
binding nature of the judgment. It was specifically held that unless language of the provisions of Part I are excluded by
agreement between the parties either expressly or by implication, Part I of the Act including Section 11 would be
applicable even where the international commercial agreements are governed by the clause of another country. It is
not, therefore, necessary to consider the argument of Shri K.K. Venugopal, learned Senior counsel to the effect that the
law laid down in National Thermal Power Corporation's case (cited supra) .would govern the field. Even otherwise it is
difficult to accept the contention that National Thermal Power Corporation's case (cited supra) can clinch the issue.”

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .

(2009) 5 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 .

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 4 RAJ 204 :
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ].
Navneet Krishn
Page 69 of 77

(2009) 5 UJ 2066 (SC) :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 .
39. Aurohill Global Commodities Ltd. v. MSTC

Ltd.,
(2007) 3 Arb LR 188 :
AIR 2007 SC 2706 [
LNIND 2007 SC 914 ]:
(2007) 4 RAJ 77 :
(2007) 7 SCC 120 [
LNIND 2007 SC 914 ] ; Max India Ltd. v. General Binding Corporation,
2009 (3) Arb LR 162 (Del-DB), DGS Realtors Pvt. Ltd. v. Realogy Corporation,
MANU/DE/2115/2009; National Aluminium Company Limited v. GERALD Metals,
2004 (2) Arb LR 382 (AP); Hardly Oil and Gas Limited v. Hindustan Oil Exploration
Company Limited,
(2006)1 GLR 658 ; Kola Shipping Ltd. v. Shakti Bhog Foods Ltd.,
(2005) 3 Arb LR 228 , 233 (Del); Tamil Nadu Electricity Board v. Videocon Power
Limited,
(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ] ; Frontier Drilling A.S. v. Jagson Internatural Ltd.,
(2003) 3 Arb. LR 548 :
(2004) 1 RAJ 355 (Bom).

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 10 JT 316 .
45. Infowares Limited v. Equinox Corporation,

(2009) 5 UJ 2066 :
(2009) 7 SCC 220 [
Navneet Krishn
Page 70 of 77
LNIND 2009 SC 923 ] :

(2008) 10 JT 316 .

(1999) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .

(1999) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .
48. Infowares Limited v. Equinox Corporation,

(2005) UJ 2066 :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 .
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 10 JT 316 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
51. Bhatia International v. Bulk Trading

S.A.,
(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ] . (For more details refer to commentary under heading
“Applicability of Singer in the light of later jurisprudence”).

(2009) 3 Arb LR 162 (Del-DB).

(2009) 3 Arb LR 162 (Del-DB).

(2009) 3 Arb LR 162 (Del)(DB).
Navneet Krishn
Page 71 of 77
55. MANU/DE/2115/2009.

(2009) 3 Arb LR 162 (Del)(DB).
57. Frontier Drilling A.S. v. Jagson Internatural Ltd.,

(2003) 3 Arb LR 548 :
(2000) 6 Bom CR 299 .
58. However, in the light of a challenge to the validity of the arbitration clause before the Delhi High Court by
the respondents, and an injunction issued by the Delhi High Court restraining the parties from proceeding with the
arbitration, the Respondent could not claim that the English Courts alone have jurisdiction. On this grounds the Bombay
high Court assumed jurisdiction.

(2009) 3 Arb LR 162 (Del)(DB).
60. National Aluminium Company Limited v. GERALD Metals,

(2004) 2 Arb LR 382 (AP).
61. Aurohill Global Commodities Ltd. v. MSTC Ltd.,

(2007) 3 Arb LR 188 :
AIR 2007 SC 2706 [
LNIND 2007 SC 914 ]:
(2007) 7 SCC 120 [
LNIND 2007 SC 914 ] :
(2007) 4 RAJ 77 .
62. The Court had also decided that a later “in principle” approval given by one party to be bound by Indian
procedural rules did not amount to a waiver of the provision to be bound by the “Rules of Arbitration of Great Britain”.
Inspite of holding that it had jurisdiction, the Supreme Court however went into the merits of the case.

(2007) 3 Arb LR 188 :
AIR 2007 SC 2706 [
LNIND 2007 SC 914 ]:
(2007) 7 SCC 120 [
LNIND 2007 SC 914 ] :
(2007) 4 RAJ 77 .
64. Hardly Oil and Gas Limited v. Hindustan Oil Exploration Company Limited,
(2006)1 GLR 658 .
65. Kola Shipping Ltd. v. Shakti Bhog Foods Ltd.,

(2005) 3 Arb LR 228 , 233 (Del).
66. Tamil Nadu Electricity Board v. Videocon Power Limited, MANU/TN/0135/2009.
67.
(2002) 1 Arb LR 675 (SC).
Navneet Krishn
Page 72 of 77
(2008) 2 Arb LR 121 :
AIR 2008 SC 1906 [
LNIND 2008 SC 628 ]:
(2008) 2 RAJ 269 :
(2008) 5 SCC 135 [
LNIND 2008 SC 628 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
70. Section 42 states “Jurisdiction.- Notwithstanding anything contained elsewhere in this Part or in any other
law for the time being in force, where with respect to an arbitration agreement any application under this Part has been
made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications
arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.”
(2008) 2 Arb LR 121 :
AIR 2008 SC 1906 [
LNIND 2008 SC 628 ]:
(2008) 2 RAJ 269 :
(2008) 5 SCC 135 [
LNIND 2008 SC 628 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
(2008) 2 Arb LR 121 :
AIR 2008 SC 1906 [
LNIND 2008 SC 628 ]:
(2008) 2 RAJ 269 :
(2008) 5 SCC 135 [
LNIND 2008 SC 628 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
Navneet Krishn
Page 73 of 77
LNIND 2002 SC 1441 ]:

(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
76. National Agricultural Co-op Marketing Federation of India Ltd. v. Gains Trading Ltd.,
(2007) 2 Arb LR 339 :
AIR 2007 SC 2327 [
LNIND 2007 SC 753 ]:
(2007) 5 SCC 692 [
LNIND 2007 SC 753 ] :
(2007) 3 RAJ 646 (Where the arbitration agreement provided for arbitration in Hong
Kong in accordance with the provisions of the
Arbitration and Conciliation Act, 1996 , it was held that it is the Indian law which would govern the
entire process of the arbitration from the appointment of the arbitrator till the award is made and executed or given
effect to).

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
78. Indtel Technical Services Pvt. Ltd. v. W.S. Atkins Rail

Ltd.
(2008) 3 Arb LR 391 :
AIR 2009 SC 1132 [
LNIND 2008 SC 1692 ]:
(2008) 10 SCC 308 [
LNIND 2008 SC 1692 ] ;
(2008) 4 RAJ 204 , Citation Infowares Limited v. Equinox Corporation,
(2009) 5 UJ 2066 :
(2009) 7 SCC 220 [
LNIND 2009 SC 923 ] :
(2008) 10 JT 316 ; Venture Global Engineering v. Satyam Computer Services Ltd.,
(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ].
79. DGS Realtors Pvt. Ltd. v. Realogy Corporation MANU/DE/2115/2009; Frontier Drilling
A.S. v. Jagson Internatural Ltd.,
(2003) 3 Arb. LR 548 :
(2004) 1 RAJ 355 .

(2009) 3 Arb LR 162 (DEL)(DB).
81. National Aluminium Company Limited v. GERALD Metals,

(2004) 2 Arb LR 382 (AP).

(2007) 3 Arb LR 188 :
AIR 2007 SC 2706 [
Navneet Krishn
Page 74 of 77
LNIND 2007 SC 914 ]:

(2007) 4 RAJ 77 :
(2007) 7 SCC 120 [
LNIND 2007 SC 914 ] ; Hardly Oil and Gas Limited v. Hindustan Oil Exploration
Company Limited,
(2006) 1 Arb LR 61 (Guj) :
(2006) 1 GLR 658 .
83. Tamil Nadu Electricity Board v. Videocon Power

Limited,
(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ] ; Hardly Oil and Gas Limited v. Hindustan Oil Exploration
Company Limited,
(2006)1 GLR 658 .

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].
85. Kola Shipping Ltd. v. Shakti Bhog Foods Ltd.,

(2005) 3 Arb LR 228 (Del).
(2008) 2 Arb LR 121 :
AIR 2008 SC 1906 [
LNIND 2008 SC 628 ]:
(2002) 2 RAJ 269 :
(2008) 5 SCC 135 [
LNIND 2008 SC 628 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
88. Force Shipping v. Ashapura Minechem

Ltd.,
(2003) 3 Arb LR 32 :
(2003) 6 Bom CR 328 [
LNIND 2003 BOM 249 ], See also Nirma Ltd. v. Lurgi Energie Und
Entsorgung GMBH, Germany,
(2003) 2 Arb LR 241 :
AIR 2003 Guj 145 [
LNIND 2002 GUJ 709 ]; Bombay Gas Company Limited v. Mark Victor
Mascarenhas,
1998 1 LJ 977 ; Inventa Fischer Gmbh & Co., K.G. v. Polygenta Technologies Ltd.,
(2005) 2 Arb LR 125 :
(2005) 2 RAJ 436 ; Trusuns Chemical Industry Ltd. v. Tata International Ltd.,
AIR 2004 Guj 274 [
LNIND 2004 GUJ 91 ]; Bharat Aluminium Co. Ltd. v. Kaiser Aluminium Technical
Services,
AIR 2005 Chh 21 ; Bulk Trading SA v. Dalmia Cement (Bharat) Limited,
(2006) 1 Arb LR 38 :
(2006) 1 RAJ 54 (Del).
Navneet Krishn
Page 75 of 77

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
90. Videocon Power Limited v. Tamil Nadu Electricity Board,

(2005) 3 Arb LR 399 (Mad).
91. Bharat Aluminium Co. Ltd. v. Kaiser Aluminium Technical Services Inc.,
AIR 2005 Chh 21 .
92. Inventa Fischer Gmbh and Co. v. Polygenta Technologies Ltd.,

(2005) 2 Arb LR 125 (Bom)See also Jindal Drugs Ltd. Mumbai v.
Noy Vallesina Engineering SPA, Italy,
(2002) 2 Arb LR 322 (Bom); Vikrant Tyres Limited v. Techno Export Foreign Trade
Company Limited.,
ILR 2005 Kar 4738 ; Transocean Shipping Agency (P) Ltd. v. Black Sea Shipping,
(1998) 1 Arb LR 228 :
AIR 1998 SC 707 [
LNIND 1998 SC 54 ]:
(1998) 1 RAJ 231 :
(1998) 2 SCC 281 [
LNIND 1998 SC 54 ].

(2008) 1 Arb LR 137 :
AIR 2008 SC 1961 : (2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ] . See further Commentary under S. 48 under the heading
“Setting aside foreign awards in a Country other than the country where the award is rendered : A comparative study”.

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
Navneet Krishn
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(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ].
1. Goldcrest Exports v. Swissoen N.V.,

(2005) 3 Arb LR 58 (Bom).

(2005) 3 Arb LR 58 (Bom).
3. Empresa Colombiana de Vias Ferreas v. Drummond Ltd., Yearbook of Commercial

Arbitration, Vol. XXIX (2004), Colombia No. 4, p. 643; Steel Corporation of the Philippines v. International Steel
Services, Inc., Yearbook of Commercial Arbitration, Vol. XXXIII (2008), p. 1125; Gulf Petro Trading Company v.
Nigerian National Petroleum Corporation, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), US No. 633, p. 1089;
C v. D,
[2007] 2 All ER (Comm) 557 ; Black-Clawson International Ltd. v. Papierwerke
Waldhof-Aschaffenburg AG,
[1975] 1 All ER 810 ; Titan Corporation v. Alcatel CIT SA, Yearbook of Commercial
Arbitration, Vol. XXX (2005); Svea Court of Appeal, Division 2, 28 February 2005, p. 139; International Standard
Electric Corporation v. Bridas Sociedad Anonima Petrolera, Industrial Y Comercial 745 F. Supp. 172; M&C Corporation
v. ERWIN BEHR Gmbh & Co., KG, a foreign corporation 87 F. 3d 844; Yusuf Ahmed Alghanim & Sons v. Toys, “R” US.
INC. Thr. (HK) Ltd., 126 F.3d 15; Karaha Bodas Co. L.L.C. v. Perusahaan Pertambangan Minyakdan Gas Bumi
Negara, 364 F.3d 274; C v. D,
(2007) EWHC 1541 . For a comparative perspective, refer to the commentary in S.
48 under the heading “Setting aside foreign awards in a country other than the country where the award is renders : A
comparative study”.

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ].

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
Navneet Krishn
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(2008) 4 SCC 190 [

LNIND 2008 SC 48 ].
12. For a comparative perspective, refer to the commentary in S. 48 under the heading “Setting aside foreign
awards in a country other than the country where the award is rendered: A comparative study”

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ].
14.
[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .
16. For more details see commentary under Section 44 under heading “Position under the 1996 Act”.
17. Since the Supreme Court in Venture Global,

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 469 :
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ] has held that a “foreign award” may be set aside under S. 34,
this question only assumes significance in the context of the different procedures for the enforcement of a domestic
award (under S. 36) and a foreign award (under S. 97).

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 1 RAJ 285 :
(2008) 4 JT 190 .
21. For more details see commentary under the heading “ Setting Aside of a Foreign Award by an Indian
Court: Applicability of Section 34 to Foreign Awards”).

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].
End of Document
Navneet Krishn
NEW YORK CONVENTION AWARDS
PART II ENFORCEMENT OF CERTAIN FOREIGN AWARDS > CHAPTER I NEW YORK
CONVENTION AWARDS
CHAPTER I NEW YORK

CONVENTION AWARDS
Enforcement of Foreign Awards
A foreign award was enforceable under : (1) the

Foreign Awards (Recognition and Enforcement) Act, 1961 ; (2) the Arbitration (Protocol and
Convention) Act, 1937. These two Acts have been repealed by the
Arbitration and Conciliation Act, 1996 which came into force on 22.8.1996 and a foreign award under
the New York Convention and under the Geneva Convention can be enforced in accordance with the provisions of
Part II of the 1996 Act. Any other foreign award may be enforced under the general law apart from the 1996 Act.
Different considerations apply where the award is sought to be enforced under one of these laws.
Part II of the 1996 Act deals with ‘Enforcement of Foreign Awards’. Chapter I (containing Sections 44 to 52) relates
to ‘New York Convention Awards’, and incorporates substantially the provisions of the
Foreign Awards (Recognition and Enforcement) Act, 1961 (1961 Act) which stands repealed by the
1996 Act. Chapter II (containing Sections 53to 60) relates to ‘ Geneva Convention Awards’ and incorporates
substantially the provisions of Arbitration (Protocol and Convention)Act, 1937 which has also been repealed by the
1996 Act. The statement of objects and reasons on the Bill stated,inter alia, that the objective of the bill is “to
provide that, for the purposes of enforcement of foreign awards, every arbitral award made in a country to which
one of the international Conventions relating to foreign arbitral awards to which India is a party applies, will be
treated as a foreign award.” The Supreme Courthad observed that the scheme of the
Arbitration Act , 1940 and the Foreign Awards Act, 1961 were not identical. Hence the decisions under
the
Arbitration Act though on analogous provisions might not be of any help in deciding matters arising
under the Foreign Awards Act, 1961. This was so because the Acts were exhaustive in their respective domain.
The
Arbitration Act , 1940 was consolidating enactment governing all the domestic awards. The Foreign
Awards Act was a complete Code in itself. It provided for all the possible contingencies in relation to foreign awards
which were made in pursuance to agreements to which Article II of the International Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (adopted at New York on June 10, 1958) applied.1 The focus of the
NYC is not on the nationality of the party seeking to enforce an award but on the situs of the arbitration.2
The New York Convention only applies to the recognition and enforcement of arbitral awards and not to actions to
restrain a pending arbitration.3
Sections 44 to 52 of the 1996 Act now incorporate substantially the provisions of the 1961 Act and lay down the
Navneet Krishn
Page 2 of 6
procedure of enforcement of New York Convention (NYC) awards.
Background to NYC
The following explanation of the background to the NYC is to be found in a judgment of the High Court of Delhi.4
“After the First World War, commensurate with the importance of international trade and the increased use of international
commercial arbitration, a need was felt for providing proper arbitral machinery for the resolution of disputes between the
contracting parties subject to the jurisdiction of different States. In this regard ICC promoted an international convention for
removal of impediments to the enforceability of the arbitral clause. The first serious effort in this direction was made under
the auspices of The League of Nations, which fructified in the conclusion of a treaty on 24 September, 1923, called Protocol
on Arbitration Clause s (for short “Protocol”) which was ratified by 30 states. The Protocol though baptised as “Protocol on
Arbitration Clause s” also catered for arbitral procedure and execution of arbitral awards. Protocol comprised of 8 Articles of
which Articles 1 to 3 need to be noticed, for the rest are not relevant to the issues in question. Article 1 of the Protocol,inter
alia, provided that each of the contracting States recognise the validity of an agreement, whether relating to existing or
future differences, between parties subject, respectively, to the jurisdiction of different contracting States by which the
parties to a contract agree to submit to arbitration all or any differences that may arise in connection with the contract
relating to commercial matters or to any other matter capable of settlement by arbitration, whether or not the parties are
subject to the jurisdiction of a country in which arbitration was to take place. Each contracting State, however, was given a
right to limit the aforesaid obligations to contracts relating to commercial matters. This Article established the International
validity and enforceability of the arbitration agreements contained in the international commercial agreements.
Article 2 dealt with the arbitral procedure and so far as it is relevant read as follows:
“ 2. The arbitral procedure, including the

constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country
in whose territory the arbitration takes place...”
Article 3, which secured the enforcement of the award, read as under:
“Each contracting State undertakes to ensure the execution by its authorities and in accordance with the provisions of its
national laws of arbitral awards made in its own territory under the preceding articles”.
According to the above Article, two conditions were required to be fulfilled before the contracting State could be
saddled with the responsibility to ensure the execution of the award:
Navneet Krishn
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(1) The arbitral award should have been rendered in accordance with the provisions of the national laws of the
executing State; and
(2) The arbitral award should have been rendered in the territory of the executing State.
Thus under the Protocol only domestic awards could be enforced by the courts of the member States. This was one
of the glaring shortcomings of the Protocol.
In order to overcome the deficiencies exhibited by the Protocol, the League of Nations was instrumental in the
conclusion of another treaty for securing the recognition and enforcement of the International arbitral awards arising
out of the arbitration agreements falling under the Geneva Protocol. This treaty, called International Convention on
the Execution of Foreign Arbitral Awards (for short, ‘ Geneva Convention '), was concluded on 26 September, 1927,
at Geneva. This was ratified by 24 States. Undoubtedly, Geneva Convention supplemented the Protocol by making
it possible to enforce an award in a contracting State other than where the award was rendered. As per the Geneva
Convention each high contracting State was required to recognise as binding and to enforce, in accordance with the
rules of the procedure of its territory, arbitration award made in another contracting State pursuant to an agreement
covered by the Protocol. India was a signatory to both the Protocol and the Geneva Convention subject to the
reservation of limiting India's obligations in respect thereof to contracts which were considered as commercial under
the laws of India. For implementing and giving effect to the Protocol and the Geneva Convention, the Arbitration
(Protocol and Convention) Act, 1937, was enacted. The objects and reasons of the Act were as follows:
“The Government of India have had for sometime under consideration the question of India's adherence to the
Geneva Protocol on Arbitration Clause s (1923) and the International Convention on the Execution of Foreign
Arbitral Awards (1927). The object of these instruments is to meet the widely expressed desire of the commercial
world that arbitration agreements should be ensured of effective recognition and protection. A large number of
countries including many of first class commercial and industrial importance,e.g., the United Kingdom, France,
Germany, the Netherlands have adhered to these instruments.
After consulting local Governments, High Courts and commercial bodies, a majority of whom were found to be in
favour of India's accession to these Instruments, the case was placed before the Commerce Department, Standing
Advisory Committee of the Legislature, who recommended that India should adhere to the Instruments. These have
accordingly been signed at Geneva on behalf of India, subject to reservations limiting India's obligations under the
Instruments to commercial contracts and excluding the Indian States from the scope of the Instruments”.
“Notwithstanding the laudable object of the Geneva Convention, subsequent experience showed that the instrument
was not conducive to the speedy enforcement of foreign arbitral awards and requirements of international trade.
The most important reason for this was that the beneficiary of the award was required to show to the court, before
which the matter came for enforcement, that the award had become final in the country in which it was made. Thus
the party opposing the enforcement of the award could effectively prevent its execution on the ground that the
award was subject-matter of litigation in the country where it was rendered. The Geneva Convention also laid too
much emphasis on the remedies that were open to the parties to invoke the law of the country where award was
made for the purposes of setting aside the same.”5
Realising that in the interest of international developing trade it was important to further the means of obtaining the
enforcement in one country of international arbitral awards rendered in another country, relating to commercial
disputes, the International Chamber of Commerce issued a draft convention in 1953 on International Arbitral
Awards which, inter alia, targeted essentially to achieving an international commercial arbitration which was to be
free of a national law. The United Nations Economic and Social Council (ECOSOC) to whom ICC draft was
presented prepared another draft in 1955. The making of the draft has a small history which may be of academic
Navneet Krishn
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interest.
ECOSOC by its resolution No. 520 (XVII) dated 6 May, 1954, established an ad hoc Committee of eight Member
States to study the matter raised by the International Chamber of Commerce in the light of all the relevant
considerations and to report its conclusions to the former submitting such proposals as latter deemed appropriate,
including a draft convention. The Committee held 13 public meetings from March 1 to 15, 1955, at New York and on
the last day, viz., 15 March, 1955, adopted a draft Convention on the Recognition and Enforcement of Foreign
Arbitral Awards alongwith its recommendations and submitted the same to the ECOSOC. Thereupon ECOSOC at
its 853rd meeting vide its Resolution 570 (XIX) dated 20 May, 1955, requested the Secretary General to transmit
the Draft Convention and the report of the Committee to the Governments of States, Members and non-members of
the United Nations, for their consideration and comments and the desirability of convening a conference to
conclude a convention.
Upon receipt of0 the comments of number of governments and inter and non-governmental organisations,
ECOSOC at its 923rd plenary meeting dated 3 May, 1956, decided to convene a “Conference to conclude a
convention on the recognition and enforcement of foreign arbitral awards. Consequently, the conference was held
at New York from 20 May to 10 June, 1958, and the New International Convention on the Recognition and
Enforcement of Arbitral Awards was adopted by the conference on the last day, viz., 10 June, 1958, which came to
be known as New York Convention. The New York Convention makes provision for the recognition and
enforcement of an arbitral agreement subject to certain conditions being satisfied. Besides it also provides for the
recognition and enforcement of an award resulting from an arbitration agreement to which the convention applies.
In order to give legislative effect to the New York Convention, Parliament enacted the
Foreign Awards (Recognition and Enforcement) Act, 1961 (for short, ‘ FARE Act'). By virtue of the
provisions of Section 10 of the FARE Act, the Arbitration, Protocol and Convention Act, 1937, stands repealed in
relation to foreign awards to which this Act applies.
The FARE Act aims at providing a mechanism for speedy referral of disputes to arbitration between the contracting
parties and for speedy enforcement of resultant foreign arbitral awards made in the territory of a State other than
the State where the recognition and enforcement of such awards is sought. It does not apply to domestic arbitral
awards, that is to say, awards shaped on the basis of arbitration agreements governed by the internal system of
laws of the State in which recognition and enforcement is sought.”6
The NYC adopts a pro-enforcement policy.7 When courts are under any doubt as to whether to enforce an award or
not, the benefit of doubt should be in favour of enforcing the award.8
The NYC should be interpreted keeping mind its background and purpose. However, it cannot be interpreted to
cover situations that were not contemplated.
1. The short issue before the Supreme Court of Germany9 was whether sovereign immunity as a defence
against the enforcement of an arbitral award passed in the context of a claim under the Bilateral
Investment treaty is impliedly waived by reference to the New York Convention.
Navneet Krishn
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The Court held that international treaties should not be interpreted in such a manner so as to mean that states are
bound by more than what was originally intended. The reference to the New York Convention was made in order to
reduce the scope of the absolute immunity that prevailed at that time with respect to both jurisdiction and execution.
The New York Convention did not in any manner restrict the scope of the defence of sovereign immunity as was
applicable in the public international law generally.
1. Renusagar Power Co. Ltd. v. General Electric Company,

(1984) 4 SCC 679 [
LNIND 1984 SC 384 ] :
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ].
2. Cogeneration Ltd. Partnership, Inc., 198 F.3d 88 (2d Cir 1999).
3. Firooz Ghassabian v. Fatollah Hematian, Yearbook of Commercial Arbitration, Vol.

XXXIII (2008), p. 1224.
4. Gas Authority of India Ltd. v. Spie Capag, SA,

(1994) 1 Comp LJ 374 , 383-385 (Del) :
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ]:
(1994) 1 Arb LR 429 .
5. Owners & Parties Interested in the Vessel M.V. “Baltic Confidence” v. State Trading
Corporation of I,
(2001) 3 RAJ 1 :
AIR 2001 SC 3381 : 2001 (Supp-I) SCR 699 :
(2001) 7 SCC 473 :
(2001) 6 JT 610 :
(2001) 5 Scale 356 :
(2001) 6 SLT 6 :
(2001) 6 Supreme 282 : (2001) 8 SRJ 520 :
(2001) 3 Arb LR 96 (SC), whether a particular dispute arising between the parties
comes with the purview of the arbitration clause as incorporated in the Bill of Lading is a matter to be decided by the
arbitrator or the court, but that does not mean that despite incorporation of the arbitration clause in the Bill of Lading by
specific reference the parties had not intended that the disputes arising under the Bill of Lading should be resolved by
arbitrator the question of binding nature of the arbitration clause must be determined by looking at the fact whether the
arbitration clause was incorporated in the bill of lading by reference.
6. Gas Authority of India Ltd. v. Spie Capag, SA,

(1994) 1 Comp LJ 374 , 383-385 (Del) :
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ]:
(1994) 1 Arb LR 429 .
7. Mitsubishi v. Soler Chrysler-Plymouth, 473 U.S. 614, L.Ed.2d 444 (1985); Revere Copper
& Brass Inc. v. Overseas Private Investment Corporation, 628 F.2d 81 (D.C. Cir.1980).
8. Oltchim, S.A v. Velco Chemicals, Inc., Yearbook of Commercial Arbitration, Vol. XXXI
(2006), US No. 528, p. 992; GreCon Dimter Inc. (Germany) v. J.R.Normnand Inc. (Canada) and Scierie Thomas Louis
Navneet Krishn
Page 6 of 6
Tremblay Inc. (Canada), Canada No. 22, p. 611. See also Theresa Ballard v. Illinois Central Railroad
Company and R.L.Clark, Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 526, p. 978.
9. Franz J Sedelmayer (Germany) v. Russian Federation,Yearbook of Commercial

Arbitration, Vol. XXXI (2006), Germany No. 91, p. 707. See also Claimant v. German Company,
Yearbook of Commercial Arbitration, Vol. XXXI (2006), Germany No. 93, p. 718.
End of Document
Navneet Krishn
CONVENTION AWARDS
S. 44.
Definition
In this Chapter, unless the context otherwise requires, “foreign award” means 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—
(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First
Schedule applies, and
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have
been made may, by notification in the Official Gazette, declare to be territories to which the said
Convention applies.
Section 44 is based on Articles I and II (1) and (2) of New York Convention and
Section 2 of Foreign Awards (Recognition and Enforcement) Act, 1961 , [FARE Act,
1961].1
The ‘Convention set forth in the First Schedule’ refers to the New York Convention.
1. Meaning of Foreign award
Part II of the
Arbitration and Conciliation Act, 1996 deals with enforcement of “foreign awards”. Thus
in order to determine enforceability under Part II it is of paramount importance to understand what sort of
arbitral awards fall within the ambit of the expression “foreign award”. The definition of a “foreign award” can be
best understood by dividing the statutory definition into six different parts:
(1) ‘arbitral award‘
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(2) ‘differences between parties‘
(3) ‘arising out of legal relationships’ between persons (whether contractual or not)
(4) ‘considered as commercial‘

(5) in pursuance of:
a. an ‘agreement in writing‘
b. to which the New York Convention applies
(6) made in a territory which the Central Government declares to be territories to which the New York
Convention applies.
In effect, it is these six conditions that the Delhi High Court approved in a recent decision on the scope and
application of s. 44.2
’Arbitral award‘
For commentary on the meaning of ‘arbitral award’ refer to commentary under Section 2(c).
’Differences between parties’
While the mere making of a claim does not constitute a dispute, a dispute is deemed to exist once it can be
reasonably inferred that a claim is not admitted.3 Negotiation and discussions surrounding the issue are key
indicators of existence of a dispute.4
A failure to duly make a payment under a contract constitutes a dispute or difference between the parties.5
1. One party owed the other some money under a charterparty. Even though the former accepted its liability it
had not paid the amount due. This was enough to constitute a dispute that was to be resolved through
arbitration.6
’Arising out of legal relationships’ between persons 7
The term ‘arising out of legal relationships’ has a wide connotation and it is hard to contemplate too many
disputes that would arise out of a relationship that is not a legal relationship.
Navneet Krishn
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Where a contract involved employment of a U.S. citizen working in the US for a foreign corporation, the contract
was held to involve inter-state or foreign commerce. The US District Court accordingly found that the arbitration
agreement arose out of a legal relationship that was considered commercial within the meaning of New York
Convention.8
Capacity to enter into a legal relationship
The capacity to enter into a legal relationship is governed by the lex fori (law of the forum), rules governing the
arbitration and the percentage chance of enforceability if the award was rendered, in that order.9 When it was
proved that the claimant was not a legal entity, the burden was on the claimant to show from where it acquired
the right to sue as a business entity. 10
Parties involved in the legal relationship
An issue relating to whether a party is involved in a legal relationship comes up when a State owned entity
enters into an arbitration agreement. Where a State owned entity enters into the arbitration agreement, it does
not mean that the State itself is a party to that agreement.
1. It was provided for in a contract that any disputes between “Founders” would be resolved firstly through negotiations
and if negotiations failed, through either international arbitration or by the Court at Lithuania. The State claimed that
while Geonafta was a Founder, the State was not. The fact that Geonafta, at the time of signing of the contract, was
state owned did not matter. The Court observed that the State had not entered into an arbitration agreement. The
Court,11 held:
“I thus accept that the mere fact that a state enterprise agrees to arbitrate does not itself imply consent by a state itself
to arbitrate. There must be a manifestation of the State's own intention so to do. That proposition is well-established by
the authorities to which counsel for the defendants referred...”.
2. The Grain Board of Iraq entered into a contract which included an arbitration clause. Disputes arose and at the stage
of making an arbitral reference the Grain Board of Iraq argued that it was tantamount to being State and hence was
immune from the arbitral proceedings under the State Immunity Act. This argument was rejected as on a perusal of the
certificate of incorporation and objects of the Grain Board the Court declared it to have separate legal capacity.12
However a country and the organ of that country are the same entity and hence an arbitration agreement entered into
by the organ of the country can be enforced against the country as a whole.13
When there was a ‘spin off’ of a division of a company by way of a court sanctioned scheme of arrangement
pursuant to which all liabilities relating to the division after a fixed date were transferred from one company to
another, the latter would become the party to the arbitration agreement and an arbitral award rendered after
Navneet Krishn
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that fixed date would be a liability for the latter.14
The legal relationship between the parties continues even in case of a reorganization/ restructuring and
importance should not be given to the exact description of the legal entity.
1. A notice of arbitration was not served by the same legal entity that had entered into the arbitration agreement that
formed part of a reinsurance contract. The claim was brought by one of the parties that had derived its right from the
original reinsured. It was held that the entity bringing the claim could reasonably be understood by the other party to
have derived its right from the original insured. Considering companies were likely to undergo reorganizations and
restructurings, there was change likely to happen to their corporate name and structure. In such a scenario an
arbitration agreement would continue to exist and bind the parties.15
In case of assignment of a contract (including the arbitration) clause a third party assignee is deemed to be a
party to the arbitration agreement and can enforce the arbitration clause.16
1. A company (“A”) contracted with another to construct a ship, which was further sub-contracted to another person
(“B”) and B contracted with C to provide the diesel engines for the ship through an agreement which had an arbitration
clause and B assigned its rights under the latter agreement to A. It was held that a litigation proceeding commenced by
A before the Swedish Court was not maintainable by virtue of the existence of the arbitration clause, which was
enforceable by A for the following reasons:
(i) If the opposite is held to be true, then C would be in a much less favourable position because
(a) it was in the interest of C to have the dispute decided by arbitral tribunal given the technical nature of the dispute.
(b) C operated in a fiercely competitive field, and therefore should be protected against any indiscretion
(c) C would be powerless to oppose this assignment
(ii) In case of assignment of a contractual right, the assignee cannot have more rights than the assignor. Therefore, the
ability to be able to decide the forum, which did not exist for the assignor, cannot exist for the assignee.
(ii) Only when a particular relationship or circumstance was proved would this general rule not be applicable. For
example, if C was scared that the assignee will not be able to bear the costs of the arbitration proceedings, and also
that the assignor will be able to escape from such costs by assignment, then this would be a particular circumstance
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that the court could take into account. In the given fact scenario, such an exception could not be applied.
Where there is one defendant that has a legal relationship with the plaintiff by virtue of being a signatory to an
agreement and another who is a non-signatory and hence does not have a legal relationship, the claims against
them can be split up and the former dealt with by arbitration.17 The ratio of the Supreme Court's decision in
Sukanya Holdings 18 that courts may not split the cause of action should be applied
restrictively. The Court must, in the opinion of the Delhi High Court “examine this question with reference to
substance and not merely form as there may be cases where the plaintiff intentionally introduces parties to get
over the arbitration agreement.”19 Moreover, it is relevant to notice that Sukanya Holdings was decided under S.
8, which, unlike S. 45, does not contain the expression “claiming through or under.”
1. The Plaintiff had entered into an Agreement with Defendant No. 1 and 2 licensing to them the right to run the night
club ‘Pyramid’ and use the trademarks/marks of the plaintiff and logos in connection with the said night club. The
agreement was terminated in light of Defendant No. 1's plans to open a different night club in collaboration with
Defendants Nos. 4 and 5 resulting in disputes between the parties. The Delhi High Court held that the dispute vis a vis
the signatories (i.e. the Plaintiff and Defendant No. 1) should be resolved by way of arbitration.20
2. The first defendant had entered into a contract (which contained an arbitration clause) by which the plaintiff was
supposed to supply a cooling water system package. The plaintiff had entered into an agreement with the second
defendant (which also contained an arbitration clause) pursuant to which the second defendant had to furnish a bank
guarantee to the first defendant. Disputes arose and the second defendant defaulted in furnishing the bank guarantee.
However, the fourth defendant submitted one. The plaintiff filed a suit restraining the first defendant from encashing the
bank guarantee. The Court referred this dispute to the arbitration tribunal as no claims were made against any
defendants other than the first and second defendant and the Court observed that defendants 3-4 were made parties
to the suit only to circumvent the arbitration clause.21
Similarly, the ratio of Sukanya Holdings 22 would not apply in case one of the co-
defendants is the agent of the other, and in such a scenario, even when the agent is not a party to the
arbitration agreement, a dispute between the parties involving the agent as well may be resolved by
arbitration.23
“Considered as commercial”
Meaning of “Commercial”
The expression ‘commercial’ should be construed broadly having regard to the manifold activities which are
integral part of international trade today.24 Affirming the decision of the Division Bench of the Calcutta High
Court in Boeing Co. v. R.M. Investment Trading Co. (P.) Ltd. 25 it was held that rendering
of consultancy services by R.M. Investment for promoting a commercial transaction (such as, the sale of
aircrafts by Boeing to customers in India) as consultant is a “commercial transaction”26 The Court observed:
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“[in] construing the expression ‘commercial’ in Section 2 of the Act it has to be borne in mind that the ‘Act is calculated
and designed to subserve the cause of facilitating international trade and promotion thereof by providing for speedy
settlement of disputes arising in such trade through arbitration and any expression or phrase occurring [therein] should
receive, consistent with its literal and grammatical sense, a liberal construction...The expression ‘commercial’ should,
therefore, be construed broadly having regard to the manifold activities which are integral part of international trade
today.”
The expression ‘commercial’ must be liberally construed. As pointed out by the Supreme Court in Koch
Navigation Inc. v. Hindustan Petroleum Co. Ltd., 27 liberal construction is to be given to
any expression or phrase used in the Act which, however, must be consistent with its literal and grammatical
sense, since the Act is calculated and designed to subserve the cause of facilitating international trade and
promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration.
Since the word “commercial” must be given a wide interpretation, even though a dispute arising out of the sale
of a house was unconnected to the regular business of either party, since it was done in a business like way
with the assistance of professional realtors, within a legal framework appropriate for a transaction and involving
a large sum of money, the dispute was held to be “commercial” in nature.28
Disputes arising out of a power purchase agreement have been held to be commercial.29 In Fatechand
Himmatlal v. State of Maharashtra, 30 it has been held by the Supreme Court that any
service or activity which in the modern complexities of business would be considered to be a lubricant for the
wheels of commerce is ‘commercial’.
In Josef Meisaner GMBR & Co. v. Kanoria Chemicals & Industries Ltd., 31 it was held that
the agreement for supply of technical know-how and expertise by Meisaner to Kanoria in exchange for payment
of a ‘fee’ by KANORIA to MEISANER did not contain any element of transactions between merchants and
traders as understood in Indian Law. Consequently, the section of the 1961 Act was held to have no
application.
The Supreme Court, in R.M. Investment's case (supra), observed that while construing the expression of
‘commercial relationship’, guidance can also be taken from UNCITRAL Model Law:
“The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a
commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the
following transactions : any trade transaction for the supply or exchange of goods or services; distribution agreement;
commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing;
investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of
industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road.”
‘Commercial’ under law in India
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In Kamani Engg. Corp. Ltd. v. Societe De Traction Et. D’ Electricity Sociate Anonyme, 32 it
was observed: “It is difficult to find the exact meaning of the phrase “matters considered as commercial under
the law in force in India”. Neither side has been able to point out any particular law wherein the phrases
“commercial” or “matters commercial” have been defined. The intent of the Legislature while using the above
phrase was that in matters of commercial contracts foreign arbitrations and awards should be recognised and
enforced. Having regard to the purpose of the Act, widest meaning must be given to the word “commercial”.
The contract in this case was on the face of it only a contract for technical assistance; it did not involve the
defendants into any business of the plaintiffs; it was not in any sense participation in profits between the parties;
by this contract, the defendants refused to be involved into any business of the plaintiffs and/or any contracts of
the plaintiffs; they have scrupulously kept themselves out of any commercial relations with the plaintiffs.
Accordingly, it was held that contract was more like a retainer or contract that was made between a solicitor, a
counsel and an advocate on the one hand and a client on the other. Such a contract cannot be described as
commercial.”
In Indian Organic Chemicals Ltd. v. Chemtex Fibres Inc., 33 plaintiff wanted to establish in
India facilities for manufacture of 6,100 m.t. of plastic staple fibre per annum, etc. The defendant No. 1 was to
supply machinery. The technical know-how was supplied by the defendant No. 2 who was also to prove the
machinery supplied. Defendant No. 3 stood as a guarantor for proper performance by defendants Nos. 1 and 2.
Three agreements were entered into between the parties. The Bombay High Court held that there must be
some legal provision in the agreement which specifies or indicates or provides for recognition of legal
relationship as commercial. An agreement must be commercial as not normally understood but by virtue of
provisions of law in force in India. This view was overruled by the Division Bench of the Bombay Court in
European Grain and Shipping Ltd. v. Bombay Extractions (P) Ltd., 34 where it was held
that mere use of the word ‘under’ preceding the words ‘the law in force in India’ would not necessarily mean
that one has to find a statutory provision or a provision of law which specifically deals with the subject of
particular legal relationship being commercial in nature. The Division Bench held that it was not necessary that
there should be a statutory provision enumerating such legal relationship for determining whether the
relationship is commercial or not. It was finally held—“We have no doubt that the contract in the instant case
which was for the sale and purchase of a commodity, was clearly a contract which brought about legal
relationship which was commercial in nature under the Indian law.”
The phrase ‘commercial relationship’ is in contradistinction with matrimonial or family or cultural or social or
political relationship. Where two brothers enter into a commercial venture, the relationship between the two is
‘commercial’, as would be in the case of two individuals who are not relatives.35
Foreign courts have also given the term “commercial” a liberal interpretation.36 In this context it has been held
that employment contracts37 including seamen's employment contracts38 are commercial contracts.
’Agreement in writing‘
As a general rule, ‘arbitration is a matter of contract and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit’.39 According to the NYC, a foreign arbitration clause does not
have to be worded formally or according to a formula and only needs to be in writing. This provision mandates
that there must be ‘a record to evidence the agreement of the parties to resolve the dispute by an arbitral
process.’ The form of this record could be flexible on account of the changing modes of communication.40 The
requirement of written form is met where the arbitration clause or agreement appears in an agreement signed
by the parties or an exchange of letters41, telexes42, telegrams, etc., specific approval in writing is not necessary
as it is not provided in the Convention43. The phrase “signed by the parties or contained in an exchange of
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letters or telegrams” applies to both an arbitration clause in a contract and an arbitration agreement.44
1. Using a seal is not a prerequisite for a valid arbitration agreement. The opposition to enforcement of an award on the
grounds that no arbitration agreement existed was turned down when the allegation was based on the fact that the seal
of the defendant had not been used at the place of signing. 45
An electronic arbitration agreement that can be printed and stored constitutes an “agreement in writing” as the
natural meaning attached to the word written means to communicate by way of characters, which therefore
does not exclude from its purview electronic contracts.46
1. The Plaintiffs has filed a suit against the defendants claiming that the latter's product illegally allowed access to the
user's communication and also transferred this to the latter. In defence, the defendants argued that the Court did not
have jurisdiction as the License Agreement that the user had to accept before installing the product contained an
arbitration clause and thereby constituted an arbitration agreement.
The plaintiffs contended that such an arbitral agreement does not conform to the ‘agreement in writing’
requirement.
The Court took the view that the natural meaning attached to the word “written” is “communicate by way of
characters”, which therefore does not exclude from its purview electronic contracts. However, this may not be
the case for all electronic contracts, and a fact that was significant to the court's finding in this case was that the
contract in question could be easily printed and stored.47
Arbitration Agreement In Writing—Applicability of Section 7 (4)
When the entering into of an arbitration clause through facsimile communication was in question in Glencore
Grain Rotterdam B.V. v. Shivnath Rai Harnarain (India) Co. 48, the Delhi High Court relied
on the decision of the Supreme Court in Smita Conductors Ltd. v. Euro Alloys Ltd. 49 to
reach the conclusion that the arbitration agreement could be entered into without the parties signing it. This
decision was a decision based on domestic arbitration where the fact situation was similar. The necessary
corollary is that for the determination of what constitutes an “arbitration agreement”, the same standards,
namely the tests prescribed in Section 7(4) apply even to the context of foreign awards.
It may however be seen that this result contradicts the view of the same High Court in Virender Yadav v.
Aerosvit Airlines 50, where it was observed that Section 7 has no relevance while
interpreting a proceeding that was commenced pursuant to Section 45.
“... Section 45 of the Act... starts by clarifying that nothing contained in Part-I of the Act or in the
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Code of Civil Procedure shall be applicable to the said provision, thus making it mandatory for
a judicial authority seized of an action in a matter where the parties have made an agreement as in the present case,
to refer them to arbitration, except in three circumstances specified therein. Furthermore, the intention of the legislature
can also be gathered by perusing Section 7 of the Act which starts by stating that for the purposes of Part I of the Act,
the definition of arbitration agreement is as contained therein. It is the admitted position that the relationship of the
plaintiff and the defendants No. 1 & 2 is governed by Part II of the Act and hence, the provisions of Part I cannot be
imported into Part II while dealing with an application under Section 45 of the Act. It therefore has to be held that
Section 7 has no application to a case covered under Section 45 of the Act and the definition of “Arbitration
Agreement” as contained in Section 7, cannot be expanded and read into Section 45 of the Act.”
Foreign jurisprudence on an equivalent provision in the NYC however suggests that the view in Glencore Grain
51 is preferable. There have been innumerable cases enumerated in the following sections which would qualify
and cover the expanded definition of “arbitration agreement” in Section 7(4).
The Madras High Court, in Andritz Oy v. Enmas Engineering Pvt. Ltd. 52 took a half-way
house approach. The Court took the view that recourse could not be taken to Section 7 for the purpose of
determining the existence of “agreement in writing” and hence a solution must be found in Part II itself.
However, since Section 44 referred to “an agreement in writing for arbitration” to which the Convention set forth
in the First Schedule applies and Article II(2) of the First Schedule stated that an “agreement in writing” shall
include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an
exchange of letters or telegrams, according to the learned judge, it contained all the elements of Section 7.
Acceptance mandatory to constitute an “agreement in writing”
Based on an application of the general principles of contract law, it is clear that when the offer to enter into an
arbitration agreement has not been accepted by the other party, there exists no “agreement in writing”.53
1. In the case of Moscow Dynamo v. Alexander M Ovechkin 54, the defendant, a hockey player
who had signed up with the Petitioner team to play for them for the 2004-05 season and the 2004-2005 contract
contained an arbitration clause. He was sent a similar agreement with an arbitration clause for the 2005-2006 season
which he ignored completely and signed an agreement with another team Avangard Omsk. There was a clause in the
rules stating that the former team would have the rights to match the terms of the latter team and if it did, the player
would have to continue playing for the former team. On this basis Defendant had to play for the Petitioner team.
However, the rules later changed and a new collective bargaining agreement was entered into following which the
Defendant did not play for the Petitioners, who commenced arbitration and obtained an award in their favour and
sought to enforce it. Court denied enforcement on the grounds that there was no arbitration agreement. While the
defendant had been sent a contract with an arbitration clause he had never accepted the contract. Hence there was
deemed to be no arbitration agreement.
2. The charterer's agent sent an unsigned charterparty to the ship-owner's agent with a clause for arbitration at London
and the latter did not react to it. The charterer's agent then sent a fax to the ship-owners agent making reference to an
earlier charterparty that made reference to arbitration by the German Maritime Arbitration Association. There was no
confirmation to this fax but the goods were loaded shortly onto the ship and the cargo was damaged during the
voyage. The Insurer stepped into the shoes of the charter party and claimed against the ship-owner. The arbitral
tribunal had tol go into whether there was a valid arbitration agreement and Consequently whether it had jurisdiction to
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decide the matter. In this regard it held that there was no arbitration agreement as there was no acceptance to the
charterparty sent by the cherterer's agent. It was laid down that silence does not amount to acceptance and therefore
the arbitral panel had no jurisdiction.55 It is of course a moot question whether loading the steel amounted to
acceptance by conduct. The Court however did not go into this issue.
Signature of parties
(i) Requirement of signature to constitute valid arbitration agreement
The Courts have on most occasions adopted a flexible approach regarding the requirement of a signature to
constitute a valid arbitration agreement. The Courts have gone by the intention of the parties rather than laying
down a strict rule requiring the agreement to be signed by the parties.
1. A party had signed only the first page of the agreement and contended that it never signed the second or third page
of the contract, and thus there was no agreement to arbitrate disputes under the contract. The court found that a valid
agreement to arbitrate disputes was agreed upon by the parties, because both parties had agreed to having signed the
first page of the contract that specifically stated that the parties agreed to be bound by the conditions contained in the
subsequent pages of the contract. The court held that respondent was bound by the contents of the entire
agreement.56
2. A party claimed that there existed no arbitration agreement as the agreement had been entered into by its brokers
and that it had not signed it. However since the applicable law was English law under which a charterparty need not be
signed and the conduct of the parties and the correspondence between them suggested that they intended to act upon
the charterparty, the charterparty, including the arbitration clause in it was declared to be valid.57
3. The defendants received a re-cap telex from charterers of the vessel, which provided details of the vessel and gave
requirements for the terms of bills of lading and payment of freight. The accompanying standard form had provided for
arbitration in London. In reply, the defendants stated that the re-cap telex was ‘in order’. The issue before the Court
was whether this resulted in incorporation of a valid arbitration agreement even though the charterparty was unsigned.
The court held that it was possible for a contract contained in or evidenced by a re-cap telex to qualify as having been
reduced to writing. Whilst a contract for chartering a ship was normally embodied, in due course, in printed form, the
parties’ agreement could remain in written fax or telex exchanges; a signed charterparty was unnecessary.58
4. The parties entered into a sales agreement that provided that German law applied and German courts had
jurisdiction. Subsequently, upon the Claimant's request, a finance company intervened and placed a fresh order,
through an agreement signed by the finance company as well as both the Claimant and defendant. Problems arose
and individual arbitrations commenced between the finance company and Defendant and Claimant and Defendant. An
attempt was made by the claimant to club the two arbitrations. It was alleged by the Defendant that the arbitration
clause was not valid as the Claimant signed the contract as agent for the finance company. This was referred to by the
ICC Court to a sole arbitrator in Geneva following the Swiss PIL Act as agreed to in the terms of reference by the
parties. The arbitrator held that the signature was made by the parties in the column that read “for specific reference”
and on a factual analysis reached the conclusion that the Claimant was not acting as an agent to the finance company.
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59
5. The terms of a charterparty were that no binding contract would come into effect until both parties had signed all the
contract terms agreed. However, subsequently, this requirement had been waived by one of the parties and the parties
had acted pursuant to the charterparty. When the party who waived the requirement for signature later claimed that
due to the absence of signature, there was no valid contract and no valid arbitration clause, this argument was rejected
by the Queens Bench.60
6. The parties had not signed the charterparty and the addendum to it. However, when a perusal of all their
communication, including a communication by fax led the Spanish Supreme Court to the conclusion that they intended
that any disputes arising from their commercial relationship be resolved by arbitration, the lack of the parties’ signature
does not render the arbitration agreement non-existent.61
7. No arbitration agreement was signed by the parties. However, from the exchange of the telefaxes it was clear that
the parties intended the dispute to be settled by arbitration. The Court thus held that a valid arbitration agreement
existed.62
8. The parties had not signed the agreement containing the arbitration clause. However, they had negotiated the
standard form agreement of one of the parties which had incorporated an arbitration clause from another contract by
reference and there had been no objection to this provision. When the parties accepted the contract by conduct, i.e. by
performing the contract, the arbitration clause was deemed to be included.63
There are some cases that go against this trend, and may be noted—
1. The Plaintiff entered into a contract for sale of certain goods to the defendant through the defendant's broker, who
sent confirmations to the Plaintiff, which referred to a standard contract containing an arbitration clause. Consequently
when disputes arose and an arbitral award was passed in favour of the Plaintiff, the defendant claimed that it had
never intended to agree with the arbitration clause. The Supreme Court of Spain held that the defendant had not
signed any confirmation and hence there was in fact no arbitration agreement.64 It may be noted that the broker acted
as the agent of the defendant and unless it could be proved that confirming the sale and concluding an arbitration
agreement was outside the powers of the agent, the principal ought to be bound by the agreement.
(ii) Who can be deemed to be a signatory?
When the agreement is signed by the subsidiary of a company, the holding company is not deemed to be a
signatory and hence cannot enforce the arbitration agreement.
1. The arbitration agreement was entered into between the subsidiary of the Plaintiff and the Defendant. When the
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Plaintiff filed a suit against the defendant regarding certain disputes that had arisen, the Defendant was not permitted
to enforce the arbitration agreement.65
2. It has been held that an arbitration agreement cannot be entered into by the subsidiary of a company and enforced
by the company itself. Where the arbitration agreement was entered into by Glencore Grain Rotterdam BV (subsidiary),
Glencore Grain Limited (the parent) was not allowed to enforce the agreement as it was not a party to it.66
The applicability of the above ratio in the Indian context is doubtful as the Indian Courts have taken the view
that arbitration would lie against both the agent and the principal even though the agent was not a signatory to
the arbitration agreement.67 This ratio may be extended to cover a holding company-subsidiary relationship as
well.68
Where a claim was made against a non-signatory to the arbitration agreement but there existed a power of
attorney authorizing the signatory to enter into the agreement on behalf of that non-signatory it meant the
arbitration agreement cannot be deemed not to be in existence due to the lack of power of the signatory.69
(iii) Exceptional cases where a signed arbitration agreement does not give rise to binding
obligations
An arbitration agreement that is signed in most cases gives rise to binding obligations to arbitrate the dispute,
subject to the following exceptional circumstances:
1. Where one of the parties had no option but to accept the arbitration agreement.
(a) The Plaintiff entered into the Customer's Agreement based on advice from one of the defendants which gave a
positive opinion with a paragraph that any disputes arising from the opinion be referred to arbitration. The latter's
argument that though the Plaintiff did not sign the letter with the provision for arbitration, he relied on it and was
deemed to accept it was rejected on the grounds that the Plaintiff received and acted on that defendant's advice almost
one year before receiving the written opinion letter containing the arbitration clause. Since the advice had already been
rendered and fees paid there was no chance for the Plaintiff to reject the letter containing the provision for arbitration.
Hence there was no agreement to arbitrate.70
2. Where the (legal) person executing the document had no power to do so.
(a) It has been held that an arbitration agreement cannot be entered into by the subsidiary of a company and enforced
by the company itself. Where the arbitration agreement was entered into Glencore Grain Rotterdam BV, Glencore
Grain Limited will not be allowed to enforce the agreement as it was not a party to it.71 This is based on the
fundamental corporate law principle of independent legal personality.
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(b) The arbitration agreement was entered into between the subsidiary of the Plaintiff and the Defendant. When the
Plaintiff filed a suit against the defendant regarding certain disputes that had arisen, the Defendant was not permitted
to enforce the arbitration agreement.72
(c) The person who executed the contract was not empowered to do so. It was held that no arbitration agreement
existed.73
(d) The contract was entered into by the broker of a party. However, when signing the agreement he was not acting in
the capacity of a broker and the other party was not able to prove that he was acting in the capacity of a broker.74
(The applicability of (a) and (b) in the Indian context is doubtful as the Indian Courts have taken the view that arbitration
would lie against both the agent and the principal even though the agent was not a signatory to the arbitration
agreement. This ratio may be extended to cover a holding company-subsidiary relationship as well.75)
3. Where the party while signing the document was not able to decipher its contents.
(a) The arbitration agreement was illegible and the one that was legible was not signed. It was deemed that there was
no arbitration agreement that had been entered into.76
(iv) Exceptional cases where a non-signatory can enforce an arbitration agreement

(Based on US jurisprudence)
The general rule that has emerged from US jurisprudence it that only the signatories to an arbitration are bound
by the arbitration agreement and can enforce an arbitration agreement; however subject to the exception that
non-signatories could seek referral to arbitration under the theories of contractual right and equitable estoppel.
(1) Theory of contractual right
According to this theory, the right to compel arbitration stems from a contractual right, and hence an entity that is
neither a party to nor agent for nor beneficiary of the contract lacks the locus standi to compel arbitration. However a
non-signatory to an arbitration agreement may be a third-party beneficiary, a successor in interest, or an agent
intended to benefit from the arbitration clause. In such a case, applying the general principles of contracts, the third
party would get rights to enforce the contract (or arbitration agreement).77
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(2) Theory of equitable estoppel
Equitable estoppel applies when:
(a) the complaint raises allegations of substantially interdependent and concerted misconduct (violation of
complainants right) by both a signatory and one or more non-signatories; and
(b) his misconduct (violation of complainants right) is founded in and intertwined with the underlying contractual
obligations.
In such a scenario, a signatory is estopped from avoiding arbitration with a non-signatory.78
Incorporation of arbitration clause by reference
A reference in the main contract to the general terms which contained an arbitration clause is enough to
incorporate an arbitration clause.79
1. Eleven contracts were entered into between the parties and there was communication between the parties
suggesting that the terms of the London Rice Brokers’ Association Contract number 3 applied. The arbitration clause in
the latter contract was deemed to be incorporated in the eleven contracts between the parties.80
2. The purchase order referred to the attached ‘Hebei contract’ and included the statement “All the terms and
conditions should conform with the main contract”. Section 19 of the ‘Hebei Contract’ attached to the plaintiff's
purchase order contained an arbitration clause. The US District Court found that an ‘agreement in writing’ existed
between the two parties.81
3. The parties entered into an exclusive distributorship agreement pursuant to which the defendant became the
exclusive distributor in Taiwan of viscose fiber supplied by the plaintiff. After every delivery the plaintiff would issue a
confirmation order. The general conditions provided for the application of Czech law and arbitration of disputes before
the Arbitration Court of the Economic and Agricultural Chamber of Czech Republic. A dispute arose between the
parties when the defendant claimed a breach of this Agreement by the plaintiff's main supplier. The two parties along
with the main supplier (Solana) entered into a tripartite agreement confirming that the plaintiff had exclusive rights to
the viscose fibre supplied by the defendant in Taiwan. Another dispute arose and the plaintiff commenced arbitration
proceedings and obtained an award in its favour, which it sought to enforce in Spain. The defendant claimed that the
award was not enforceable as there was no arbitration agreement that had been signed by both parties. The Spanish
Supreme Court in Centrotex, S.A. v. Agencia Gestora de Negocios 82 held that where there is
no arbitration agreement signed by the parties, it would ascertain whether there is a common intention of the parties to
conclude an arbitration clause. In the present case, the parties’ attention to submit disputes to arbitrators could be
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reasonably inferred, as the standard form on which the contract and confirmations of order were drawn up included an
arbitration clause. In the words of the Court:
“This common intention must ensue from the parties’ communications and activities as a whole, always necessarily
bearing in mind that the silence or inactivity of the party to which an offer directly or indirectly containing an arbitration
clause is addressed may not be deemed to have any effect to this aim.
...
The documents supplied sufficiently show that the deliveries were subject to the same general conditions, which
included an applicable law clause and an arbitration clause. As mentioned, the arbitration clause was contained in
clause 14 of the general conditions of contract modified according to the terms printed on the reverse of the
confirmations of order issued by Centrotex to Agensa through an intermediary. The [arbitration clause] was also printed
in red on the obverse of the said document, at the bottom, over the space for the signatures of the parties to the
contract. It was also included in the general conditions of contract printed on the back of the separate invoices sent
together with each delivery of [fiber], which Centrotex took care to send to Agensa and Agensa does not deny having
received.”
This decision would perhaps have been on surer ground if it unambiguously stated that the arbitration clause had been
incorporated by reference to the general conditions. By stating that when the agreement is not signed the court would
look at the intention of the parties, this decision has the potential to be misinterpreted in such a manner so as to render
the term “in writing” nugatory. The New York Convention used the term “in writing” only to rule out from the scope of
the legislation cases where the parties may have intended to incorporate an arbitration clause but failed to do so in
writing. To this extent, the decision of the Spanish Supreme Court must be read to only lay down the principle that an
arbitration clause may be incorporated by reference to generally agreed terms.
4. The Plaintiff and Defendant entered into contracts for the purchase of hides by the Plaintiff. The contracts referred to
the general conditions in International Standard Contract no. 2, issued by the International Tanners Council and
International Council of Hides, Skins and Leather Trade Associations, one clause of which stated that, “failing amicable
settlement negotiations, disputes shall be referred to arbitration according to the international custom of the trade and
the rules for arbitration and appeal obtaining in the place specified for that purpose in Clause 1”. The parties did not
specify such a place in their contract. When disputes arose, the Plaintiff commenced litigation proceedings before the
Italian Courts. The Defendant claimed that the Court did not have jurisdiction in the light of the arbitration clause that
had been incorporated by reference. The Court held that the arbitration clause had been validly built in by incorporation
and that the arbitral institution referred to in Clause 1 was the Chamber of Arbitration at the Genoa Chamber of
Commerce. 83
5. An arbitration clause was contained in the General Conditions. There were 7 separate contracts between the
parties, and the intention of the parties seemed to be to recognize the general conditions as binding. This meant that
each of the contracts incorporated the General Conditions and there was no need to incorporate them separately.84
6. A contract referred to the “Standard Conditions” as being binding and the “Standard Conditions” included an
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arbitration clause. In such a circumstance, the arbitration clause was deemed to be part of the contract.85
7. A bill of lading issued pursuant to a charter party, incorporates the arbitration clause in the charter party.86
Thus the proposition of law that has been laid down by the plethora of cases discussed above is that an
arbitration clause may be validly incorporated into a contract by a general reference to standard conditions.
Where an arbitration clause is incorporated by reference to another contract that has not been negotiated by
the parties, it cannot, in the absence of proof to that effect, be argued that the latter contract was unilaterally
imposed on the other party resulting in the contents of the contract that was incorporated including the
arbitration clause being void. 87
However, when an arbitration agreement is to be incorporated into a contract by reference to specific provisions
of another contract, this has to be done by express reference to the arbitration clause of that agreement.
1. The contract of sale made references to other provisions of the charterparty and there was no reference to the
arbitration clause, there was no arbitration agreement in writing.88
Laws of most countries recognize incorporation by reference but laws of certain countries like Germany do not.
1. A contract for performance of dredging works was concluded orally and claimant subsequently issued invoices that
made a reference to the standard terms of the claimant company which in turn contained a provision for arbitration of
disputes in Netherlands. The German lower Court held that the award passed by the arbitral tribunal in Netherlands
could not be enforced in Germany as under German law mere reference to standard conditions does not result in
incorporation of arbitration clause. Hence it was argued that no arbitration clause existed. The Supreme Court,
however, while agreeing that under German law, there was no arbitration clause stated that under Dutch laws this was
valid and directed the lower court to go into this conflict of law issue.89
‘Agreement in writing'- other examples
Certain other propositions have emerged regarding what constitutes an “agreement in writing”.
1. Where a party amends many clauses of the first draft of a contract but leaves the arbitration clause untouched it
cannot later claim that it had not accepted the arbitration clause.
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a. The plaintiff had sent repeated facsimiles to the defendant stating that all the terms of London Rice Brokers’
Association Contract number 3 applied, such agreement containing an arbitration clause. The defendant replied
suggesting certain amendments but none relating to the arbitration clause. The arbitration clause is deemed to have
been accepted.90
2. Where a person joins an association accepting to be bound by the statute of the association, the arbitration clause in
the statute of the association automatically becomes binding and is an “arbitration agreement” for the purposes of the
New York Convention.91
3. Where an employment contract contained an arbitration clause and subsequently certain additional conditions were
specified in a Sign-On Employment Agreement, the latter contract does not supersede the former and the arbitration
clause in the former continues to be operational.92
Short form arbitration clauses
Short form arbitration clauses do not constitute a valid arbitration agreement in writing.
1. An arbitration clause that reads “Contract/ Arbitration : GROFOR Conditions, arbitration Hamburg” is not a valid
arbitration clause.93
Existence of an arbitration clause to be determined so as to not lead to a denial of justice
The issue of existence of an arbitration clause cannot be decided in such a manner as to result in neither the
arbitrator nor the Court having jurisdiction to decide the issue, as this would constitute a denial of justice.
1. An agreement with an arbitration clause was concluded between the parties. When the licensor commenced court
proceedings in Germany, the Court directed the parties towards arbitration. Once arbitration was completed and an
award was passed, the licensee sought to challenge the enforcement on the ground that there was no arbitration
agreement. This ground was rejected. It was held that if neither the Courts nor the arbitrator had jurisdiction, there
would clearly be a denial of justice. It was further held that the licensee had itself commenced arbitration thereby
implying there is an arbitration agreement.94
Arbitration clause need not have the term ‘arbitration’ in it
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1. When most of the disputes were resolved by mediation and at the end of mediation, it was agreed that the only
dispute left, i.e. the amount of compensation payable to the Plaintiff was to be decided by an independent auditor, and
there was no mention of the word “arbitration “, the resolution of the dispute amounted to an arbitration as this seemed
to be the intention of the parties.95 The question before the Court was whether this amounted to an “arbitration” and if
an award rendered was enforceable under the New York Convention. The words “arbitration” need not be included in
the clause to constitute an arbitration. The intent of the parties was more important and in the present case the intent
was to submit to binding arbitration.
Burden of Proof
If a foreign law is found to apply to the agreement, it is not the party seeking enforcement but the party
opposing it who has the burden to prove the contents in order to establish the alleged invalidity of the
agreement.96
Valid arbitration agreement need not exclude the jurisdiction of the courts
The German Supreme Court97 declared that a clause that states that if a party was dissatisfied with the arbitral
award it could start court proceedings on the same matter was valid. The argument that this was not a valid
arbitration agreement as it did not exclude the jurisdiction of the Courts was rejected and the Court held that
arbitration proceedings gave effect to the contract and the parties’ intentions. The basis of the award becoming
binding was the parties’ agreement, who were free to make the acceptance of the binding nature of the award
conditional.
“To which the New York Convention applies”
Under Section 44, corresponding to Section 2 of the 1961 Act, an arbitral award is a ‘foreign award'—
(a) if it is made in pursuance of an agreement to which New York Convention (NYC)98 applies; and
(b) if it is made in a territory to which NYC applies on reciprocity basis.
This heading deals with condition (a) while the next section99 deals with condition (b).
The applicability of the NYC is determined by Article 1(1) of the NYC, which states:
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“This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other
than the State where the recognition and enforcement of such awards are sought, and arising out of differences
between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in
the State where their recognition and enforcement are sought”.
The NYC thus applies:
(1) to the recognition and enforcement of arbitral awards made in the territory of a State other than the
State where the recognition and enforcement of such awards are sought
(2) to arbitral awards not considered as domestic awards in the State where their recognition and
enforcement are sought.
An award is considered as a domestic award in India in case the arbitration is conducted in India; or, if it is
conducted in a country that is not a signatory to either the NYC or the Geneva Convention s, and Part I is not
excluded expressly or impliedly.1
Furthermore, unless it is made in the territories which are declared by the Central Government to be territories
to which the New York Convention applies, it is not a foreign award which may be enforced under Part II of the
1996 Act (formerly under the
Foreign Awards (Recognition and Enforcement) Act, 1961 ). Such an award obviously is
not an Indian award (domestic award) or an award made in India or at any rate made in arbitration whose
procedure is governed by Indian law.
The pre-1996 position
The conditions which must be satisfied under the old (1940) Act to qualify an award as a foreign award are that
the award should have been made in pursuance of an agreement in writing for arbitration to be governed by the
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, and not to be
governed by the law of India; and such an award should have been made outside India in the territory of a
foreign State notified by the Government of India as having made reciprocal provisions for enforcement of the
Convention. An award is ‘foreign’ not merely because it is made in the territory of a foreign State, but because it
is made in such a territory on an arbitration agreement not governed by the law of India.2 In its decision in
National Thermal Power Corpn. v. Singer Co.
3 the Supreme Court held that the Foreign Awards Act, 1961 had no application where the proper law of
contract as chosen by the parties was the law in force in India with jurisdiction of courts at Delhi because it
would then be an Indian award and not a foreign award even if the contract is of international nature and the
procedural matters were to be governed by the rules of International Chambers of Commerce. Following the
decision in Oil and Natural Gas Corpn. Ltd. v. Rt Hon Sir Michael Kart 4 it was held that
an award under an agreement governed by the laws of India was not a foreign award even if it was made in a
foreign territory. This was affirmed by the Supreme Court in Sumitomo Heavy Industries Ltd. v. ONGC Ltd.
5
In a case originating from a transaction in Pakistan,6 the court said that the basis for holding an award to be
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domestic or foreign was the governing law of the arbitration agreement which in this case was the law of
Pakistan. Moreover, in this case the arbitration agreement was embedded and contained in the main contract
and was therefore governed by the law of Pakistan, even on the assumption that there was no express choice
of law regarding the arbitration agreement itself. Furthermore, the contract had the closest connection with
Pakistan where all works thereunder were to be performed and where the breach, if any, was committed.
Therefore the arbitration awards were not foreign awards within the meaning of the Arbitration (Protocol and
Convention) Act 1937, which excluded from its application arbitrations governed by the law of Pakistan.7 The
Arbitration Act , 1940 applied to all arbitrations except as otherwise provided by any law.
There was nothing in theact which restricted or confined its applicability only to awards made in Pakistan or
made in proceedings conducted there. The Actapplied to all awards governed by the law of Pakistan
irrespective of the place where the same had been made or delivered. All awards were liable to be filed in the
court having jurisdiction over the subject matter of reference which in the present case was the civil court in
Sheikupura (Pakistan). Therefore, the applications filed by the petitioner were competent in terms of the
Arbitration Act . The control over the arbitration agreement vested in the courts of the
country where the seat of arbitration was located as also in the country with which the contract had the closest
connection. Even where the arbitration was conducted overseas subject to the local curial law as to matters of
procedure, exclusive procedural jurisdiction was not conferred on the foreign court. In any event, under the law
of Pakistan, the right to challenge an award was not a matter of procedure but of substance and therefore
should be governed by the proper law of the arbitration agreement, which in this case was the law of Pakistan.8
Under the old Act a contract with a company whose business was located outside India which carries an
arbitration clause would not constitute a domestic arbitration agreement. Accordingly the New York Convention
and the
Foreign Awards (Recognition and Enforcement) Act, 1961 9 would
be applicable.10 In a subsequent litigation between the same parties, reference to arbitration was not allowed to
be claimed in respect of a matter not covered by the arbitration clause. The court recorded a finding that Indian
law was applicable and that the arbitration was a domestic one and not one under the
Foreign Awards (Recognition and Enforcement) Act and that the court could stay judicial
proceedings in a foreign country on the matter.11
What is clear from the above case that historically, the basis for determining the whether an award was
domestic was the applicable law.
This was the case prior to the coming into force of the 1996 Act as the 1961 Act, contained a specific provision
to exclude its operation to what may be regarded as a ‘domestic award’ in the sense of the award having been
made on an arbitration agreement governed by the law of India, although the dispute was with a foreigner, and
the arbitration was held and the award was made in a foreign State. Section 9(b) excluded the applicability of
the Act to any award made on an arbitration agreement governed by the law of India.
In National Thermal Power Corpn. Ltd. v. Singer Co. 12 the question for determination
was whether or not an interim award made in London which arose out of an arbitration agreement governed by
the laws of India fell within the purview of the 1961 Act. The Apex Court held that an award made on an
arbitration agreement governed by the law of India, though rendered outside India, was attracted by the saving
clause (b) in S. 9 of the 1961 Act, and was therefore, not treated in India as a ‘foreign award’. It was further held
that such an award necessarily fell under the [repealed]
Arbitration Act , 1940, and was amenable to the jurisdiction of the Indian courts and
controlled by the Indian system of law just as in the case of any other domestic award, except that the
proceedings held abroad and leading to the award were in certain respects amenable to be controlled by the
public policy and the mandatory requirements of the law of the place of arbitration and the competent Courts of
that place.
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Position under the 1996 Act
In the absence of a provision corresponding to

S. 9(b) of the Foreign Awards (Recognition and Enforcement) Act, 1961 (now repealed)
under the new 1996 Act, it appears that a party will be able to seek enforcement of an award rendered outside
India, but governed by Indian law as a ‘foreign award’ in accordance with Ss. 48 and 49 of the Act.13
Thus, now the only conditions for applicability of the Part II are :
(1) (a) the award must be rendered in a foreign country, or
(b) the award must not be considered to be a domestic award; and
(2) the award must be rendered in a country that has been notified by the Indian Government as one
which has reciprocal provisions for implementation of NYC.14
Nature of award rendered in a Convention Country in an arbitration to which Part I is

applicable
Pursuant to the ratio of Bhatia International, 15 Part I of the
Arbitration and Conciliation Act 1996 is applicable to arbitrations conducted outside India
unless the application of Part I is expressly or impliedly excluded.Section 2(7) states that an arbitral award “
made under this Part (i.e. Part I) shall be considered as a domestic award”. Thus if an arbitration is conducted
outside India in a country which is a signatory to the New York Convention or the Geneva Convention and Part
I is not excluded, it follows that the award is a “domestic award”. However, the award would also be a “foreign
award” under Section 44 and Section 53.
The question then is whether the award is a domestic or foreign award. This is important to decide because:
(a) In case the award is a domestic award, a Court seized with a dispute covered by an arbitration clause would use
the standards set in Section 8 to decide whether to refer the matter to arbitration. If the award is however one that
would be covered by Section 44, the Court would have to meet the standards specified under Section 45 to decide on
referring the matter to arbitration. (Of course, if the Court adopts the same standard to judge application under both Ss.
8 and 45, this problem will not arise.)
(b) In case of enforcement of a domestic award, the award automatically becomes enforceable if no application is filed
to set it aside.16 A foreign award becomes enforceable only after being presented before Court.17
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This situation seems to be addressed in Para 26 of the judgment in Bhatia International 18
which states:
“The said Act is one consolidated and integrated Act. The general provisions will apply to all chapters or parts unless
the statute expressly states that they are not to apply or where, in respect of a matter, there is a separate provision in a
separate Chapter or Part. Part II deals with enforcement of foreign awards. Thus Sections 44 in (Chapter I) and
Section 53(in Chapter II) define foreign awards, as being awards covered by arbitrations under the New York
Convention and the Geneva Convention respectively. Part II then contains provisions for enforcement of “foreign
awards” which necessarily would be different. For that reason special provisions for enforcement of foreign awards are
made in Part II. To the extent that Part II provides a separate definition of an arbitral award and separate provisions for
enforcement of foreign awards, the provisions in Part I dealing with these aspects will not apply to such foreign
awards.”
Though this was held in Venture Global 19 to be part of the submission of the counsel it
appears that the Supreme Court in Bhatia International 20 may have infact intended this
21
portion to be part of its ruling. Be that as it may, there are also other reasons which suggest that such an
award should be treated as a “foreign award”.
Part II contains special provisions dealing with enforcement of awards falling within the ambit of the New York
Convention and Geneva Convention . Where a provision of Part I and an equivalent provision of Part II govern
an award, the special provision (i.e. the provision under part II) would be applicable. It is thus submitted that an
award rendered outside India in a convention country, but to which part I applies, would be a “foreign award”.
While this argument was not specifically raised before the Madras High Court22, the Madras High Court held
that an award rendered in an arbitration where a) Singapore was the seat of the arbitration, b) English law
governed the arbitration agreement and c) all the hearings were abroad, was not a domestic award and would
be enforceable as a foreign award. This decision is rather non-controversial as the Madras High Court also held
that there was an implied exclusion of Part I. However, the following observations made by the Madras High
Court23 are apposite:
“To determine, as to whether the award is a foreign award, the relevant test would be, firstly, the relationship between
the parties must be commercial; secondly, the award must be made in pursuance of the agreement in writing; and
thirdly, the award must be made in convention country.”
The Madras High Court 24 seems to suggest that the test laid down by it for determination
of a foreign award is exhaustive. Moreover, it was observed that
“In Bhatia International case, while holding that even in case of a foreign award, Part I of the Act could be made
applicable, the Apex Court has, in fact, held that the parties to the agreement can exclude the provisions of Part I of the
Act in case of International Commercial Arbitrations including those that take place outside India. Hence, we have no
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hesitation to hold that the award in question is a foreign award.”
Thus the Madras High Court, interprets Bhatia International to hold that Part I may be applicable to arbitrations
that result in “foreign awards”. Thus if Part I applies to “foreign awards”, it necessarily follows that every award
to which Part I applies is not necessarily a “domestic award”.
The only logical conclusion is that awards that would qualify as “foreign awards” because of the operation of
Section 44, are not rendered “domestic” because of an extension of the principles laid down in Bhatia
International.
Wording of the definition of “foreign award” in the NYC—Certain Observations
By default the NYC governs the enforcement of all awards rendered in a foreign country or “State”, irrespective
of whether the “State” is a signatory to the NYC or not. This is made by clear by use of the term “State” in
Article I(1) of the NYC which enunciates the scope of the Convention, as against the term “Contracting State”
used in other portions of the NYC such as Article I (3), II(1) etc to refer to signatories to the Convention.
However, countries are provided the liberty to legislate their local laws such that the NYC is applicable only vis
a vis awards rendered in other signatory countries.25 India has made use of this provision while enacting
Section 44 to restrict the applicability of Part II to enforcement of awards rendered in countries signatory to the
NYC.
Moreover, Article I(a) of the NYC provides that it shall apply to recognition and enforcement of arbitral awards
made in a foreign State and also to arbitral awards not considered as domestic awards in the State where
enforcement is sought. It is difficult to imagine an award that would be covered by the latter but not by the
former as all awards rendered abroad (whether in a country that is signatory to the NYC or not) are covered by
the first part of Article I(1). Unless some country refuses to recognize certain types of awards rendered within its
own territory as a domestic award, the latter condition in Article I(1) seems to be redundant.
Citizenship as a basis for determining nature of the award
In the USA, the relevant United States Code was amended by Public Law No. 91-368 by adding Chapter 2 for
implementing the New York Convention. Section 202 fixes, inter alia, the criteria on the basis of which an
arbitration agreement or an award can be called as a convention award and convention arbitration agreement.
It reads as under—
“ 202. Agreement or award falling under the Convention.—An arbitration agreement or arbitral award arising out of a
legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or
agreement described in Section 2 of this title, falls under Convention. An agreement or award arising out of such a
relationship which is entirely between the citizens of the United State shall be deemed not to fall under the Convention
unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some
other reasonable relation with one or more foreign States. For the purpose of this section corporation is a citizen of the
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United States if it is incorporated or has its principal place in United States”.
Citing the above provision, the Delhi High Court in Gas Authority of India Ltd. v. Spie Capag, S.A.,
26 held that the clear import of Section 202 is that the Convention applies to an arbitration agreement between
parties out of which at least one of them is not a citizen of the United States, irrespective of the fact whether the
place of arbitration is within or outside the United States; that the New York Convention will apply to an
arbitration agreement if it has a foreign element or flavor involving international trade and commerce even
though such an agreement does not lead to a foreign award.
However, in India, for treating an award as a foreign award it is not necessary that the parties should belong to
different States (countries) or be subject to two different national jurisdictions.27 This case related to disputes
between two brothers who were Non-resident Indians and who were doing business and held properties jointly
in India and in USA. The award was held to be a foreign award, as the relationship between the two was found
to be ‘commercial’.
An award, though made outside India and in a country which is not a party to the NYC, is not a ‘foreign award’
for the purposes of Chapter I of Part II.28
2. Territories which the Central Government declares to be territories to which the

New York Convention applies
The declaration in Section 44(b) limits the applicability of the Convention only to arbitral awards made in the
territories of other contracting States (countries). In the absence of a declaration in terms of clause (b), India
would have been bound to apply the Convention to arbitral awards rendered in any other country, whether or
not such a country where the award had been rendered was a party to the Convention.29 An award made in
territories which have not been declared to be territories to which the Convention applies is not a foreign award,
though there was satisfactory reciprocal arrangement for the enforcement of foreign awards between the
countries to which the parties to the foreign arbitration belonged.30
The issue of whether a country that becomes independent needs to be notified separately, for an award
rendered in that country to be considered a foreign award by Indian Courts has come up in the past.
A notification issued by the Central Government on 7.2.1972 pursuant to Section 2 of the 1961 Act
(corresponding to Section 44 of the 1996 Act ) declared USSR to be a territory to which the New York
Convention applied. As a result awards made in the USSR were enforceable in India under the 1961 Act. In
Transocean Shipping Agency (P.) Ltd. v. Black Sea Shipping, 31 it was contended that on
the break-up of the USSR in 1991-92, a new notification under Section 2 should have been issued recognising
Ukraine which was a part of the USSR, as a reciprocal territory in order to enforce in India an award made in
Ukraine. Rejecting the argument, the Supreme Court held:
“Prior to 1992 an award made in Ukraine was an award made in a reciprocating territory as notified and this position
continues even after the political separation of various Soviet Socialist Republics. Ukraine continues to be a signatory
to the New York Convention and the notification of 7-2-1972 continues to operate in the territories then forming part of
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the USSR, including the territory of Ukraine. Although the appellants have relied upon the various agreements between
India and the Russian Republic where India has recognised Russian Republic as a successor of the old State of
USSR, this makes no difference to the recognition granted under the notification of 7-2-1972 to the entire territory of
USSR as then in existence as a reciprocating territory for the purposes of
Section 2 of the Foreign Awards (Recognition and Enforcement) Act, 1961 . There is no
implied curtailment of the notification of 7-2-1972 as now applying only to that territory which forms a part of the
Russian Republic.”
The converse was the case when China resumed sovereignty on Hong Kong. Ng Fung Hong Limited sought
enforcement in Hong Kong of an award made by the China International Economic and Trade Commission
(CIETAC). In ex parte proceedings, Findlay, J, held that since the People's Republic of China resumed
sovereignty over Hong Kong on 1 July 1997 and it and Hong Kong are no longer separate parties to the 1958
New York Convention vis-a-vis each other, a CIETAC award is thus not a NYC award. Nor could the award be
enforced under Sect. 2GG of the Arbitration Ordinance which applied exclusively to awards made in Hong
Kong. The only remaining option was to enforce the award on an action on the basis that the award constituted
a debt due by the defendant to the plaintiff.32 It may be seen that this case is perhaps a departure from the
global pro-enforcement trend post the NYC.
In order for a country to be included as a country that has implemented the NYC (Convention country), there
must be reciprocal provisions in the laws of that country to implement awards passed in India or any other
award under the NYC.
Thus it was held that the NYC could not be relied upon to enforce a foreign award in a country which had
acceded to the convention but had not passed implementing legislation.33
Another issue for consideration is whether the declaration of a country as a Convention country for the
purposes of enforcement of awards rendered in that country, should be made on the date of the award or
whether it would suffice if such a declaration is made prior to the date of enforcement. This question came up
for consideration before the UK Courts.
A convention award is defined in S.

Section 7(1)of the Arbitration Act , 1975 [English]34[now Section 100(1)of (UK)
Arbitration Act, 1996 ] as an award made in pursuance of an arbitration agreement in the
territory of a State, other than the United Kingdom, which is a party to the New York Convention. [That is a
Convention on the Recognition and Enforcement of Foreign Arbitral awards adopted by the United Nations
Conference on International Commercial Arbitration on June 10, 1958].Section 7(2)of the English Act [Corr.
tosec. 100(3) of the English 1996 Act] provided:
“If Her Majesty by Order in Council declares that any State specified in the Order is a party to the New York
Convention the Order shall, while in force, be conclusive evidence that State is a party to that Convention.”
One of the questions in Government of the State of Kuwait v. Sir

Frederick Snow & Partners 35 arising out of a contract for the construction of an
international airport was whether the award under that contract was a convention award. The New York
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Convention came into force in June 1959. The award in this case was made in Sept. 1973. At that time neither
the United Kingdom nor Kuwait was a party. The United Kingdom became a party in 1975 when the Act of 1975
was passed and Kuwait joined in July 1978. The proceedings to enforce the award as a convention award were
instituted in March 1979. The order to accept Kuwait as a party was made in April 1979. On this point the court
held that although under S. 7(2) of the 1975 Act an order in Council of the convention was conclusive evidence,
that fact could be proved by other evidence. The real issue, therefore, was whether an award made in Kuwait in
1973 could be enforced as a Convention award under the Act of 1975. The court of Appeal answered the
question in the positive. The argument against “retroactivity” was described to be without substance. The
presumption against retrospective construction does not apply to statutes of procedural nature. There was no
vested right in any body that the award should not be enforced under the Convention of which it could be said
that retrospective operation deprived them.
An appeal against this decision to the House of Lords was dismissed.36 Lord Brandon said that the phrase in
the section “which is a party to the New York Convention” related to the time of enforcement and not to any
other time. “In particular, if it had been the intention of the legislature that the phrase should relate to the date of
the award, then the draftsmen would surely have used words which made the intention clear that such as
“which is and was at the date of the award a party to the New York Convention.”
Where the arbitration arising out of a contract of reinsurance of which the sole arbitrator was an English QC and
the arbitration took place in London and the reinsurance contract and the arbitration agreement were both
governed by English law, but all the awards were dated and signed by the arbitrator at Paris, and the final
interim award was collected from the arbitrator's London Chambers, the question arose whether it was a
Convention Award.37 An application was moved in the court for leave to appeal against the award, for an order
for statement of further reasons for the award and for remission. The argument against the application was that
it being a Convention Award within the meaning of S.
Section 7(1)of the Arbitration Act , 1975 (English), it was binding as such for all purposes
on the parties as provided in S. 3 (2) of that Act. The trial judge rejected this contention. He was of the view that
though signed in Paris, the award was not a Convention Award because the central point and seat of the
proceedings was London and so it was made in London.38 The court of appeal dismissed the appeal against
the judgment of the trial judge because of estoppel39 and the matter was before the House of Lords.40 Their
Lordships unanimously held that the award was deemed to be made at the place where it was signed. It was
signed in Paris. Lord Oliver said:.41
“An award, whilst it is no doubt the final culmination of a continuing process, is not in itself a continuing process. It is
simply a written instrument and I can see no context for departing from what I apprehend to be the ordinary, common
and natural construction of the word ‘made’. A document is made when and where it is perfected. An award is
perfected when it is signed, at any rate in the absence of something in the arbitration agreement or the rules under
which the arbitration is conducted requiring some further formality before the award becomes effective.”
The following comment on the judgment is worth noticing :42
“While finding this conclusion irresistible, Lord Oliver remarked that it was anomalous and regrettable that the fortuitous
circumstance of signature in Paris should stamp what was clearly intended to be an award subject to all the procedural
regulations of an English arbitration with the character of a Convention award, and he approved the advice in Redfern
and Hunter's Lawand PRACTICE of International Commercial Arbitration that “it is certainly safer (if less convenient)
for the arbitrators actually to meet at the place of arbitration for the purpose of checking, signing and dating their
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award.”
In reference to the question whether an application for further reasons, remissions etc could be maintained,
their Lordships answered the question in the positive. Their Lordships said that the High Court had jurisdiction
as an enforcing court and also the court of the seat of the arbitration (the curial court) was entitled to exercise in
reference to the award the same powers as if the award had been made in England. “The High Court remained
capable of exercising its curial jurisdiction over the arbitration and of adjourning, if it thinks fit, decision on the
enforceability of the award until the pending proceedings for review have been determined.”43
An argument that Panama is not a signatory to NYC does not hold on account of the existence of documentary
evidence to the contrary.44
Notified reciprocating States
The countries notified as reciprocating States in terms of Section 2 of the 1961 Act [corr. to sec. 44(b) of 1996
Act] are listed below:45
Austria, Belgium, Botswana, Bulgaria, Central African Republic, Chile, Cuba, Czechoslovak Socialist Republic,
Denmark, Ecuador, Arab Republic of Egypt, Finland, France, German Democratic Republic, Federal Republic
of Germany, Ghana, Greece, Hungary, Italy, Japan, Kuwait, Republic of Korea, Malagasy Republic, Mexico,
Morocco, Nigeria, The Netherlands, Norway, Philippines, Poland, Romania, San Marino, Spain, Sweden,
Switzerland, Syrian Arab Republic, Thailand, Trinidad and Tobago, Tunisia, Union of Soviet Socialist Republics,
United Kingdom, United Republic of Tanzania, and United States of America.
“Unless the context otherwise requires”
An example of when the term “unless the context otherwise requires” in S. 44 may become relevant, is given in
Centrotrade Minerals and Metal Inc. v. Hindustan Copper Limited 46, where the following
observations are apposite:
“In this connection, the next question is whether the expression “unless the context otherwise requires” as used in
Section 44 of the Act ever comes into play. This question can be looked into by the following illustration where the
expression takes relevance. Let us consider a contract, including the arbitration agreement, governed by Indian Law
and under it the scat of arbitration is mentioned as U.K.. However, before the commencement of the arbitration
proceeding, the parties agree that though the physical seat of arbitration is in U.K., for all purposes the seat of
arbitration shall be deemed to be India and the arbitral proceedings shall be conducted under the curial law of India. In
this situation, though all the conditions under Section 44 were satisfied the award by the arbitrator cannot be said to be
a foreign award. In such a situation, the expression “unless the context otherwise requires” in Section 44 takes
meaning and becomes applicable and relevant.”47
Navneet Krishn
Page 28 of 43
“More favourable agreement” provision under NYC
Article VII (1) of NYC reads as follows:
“The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements
entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of
an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such
award is sought to be relied upon.”
This shows that the parties to an international commercial arbitration agreement can agree to seek enforcement of an
arbitral award on the basis of the domestic law instead of the New York Convention notwithstanding the fact that they
may have agreed to enforce arbitration agreement under Article II of the Convention.48
It has been held that a London arbitration clause in a charterparty governed by Spanish law is not null and void. This
decision was delivered in Cia Maritime Zorroza SA v. Sesostris SAE,
(The Marques de Bolaraque), 49 wherein the issue was whether injunction restraining the
Charterers from proceeding with arbitration should be granted on the ground that an agreement was null and void. The
time charterparty was that of a Spanish vessel. It was in terms of an amended New York Produce Exchange form
which included an arbitration clause amended to read “Arbitration in London”. The charterers were also Spanish. The
hire was also to be paid in Spain (pesetas). The claim arose out of a voyage from Canada to Spain against the ship
owners. The claimants appointed an arbitrator in London. A similar appointment (without prejudice) was also made by
the owners. The owners contended that there was no valid arbitration clause in the charterparty. This was as because
the matter was to be governed by Spanish law and that law declared void clauses ousting jurisdiction. The judge
consulted expert opinion on Spanish law and concluded:
“On this state of the law, an arbitration agreement between any parties governed by Spanish law but which
provided for arbitration outside Spain would be void because it would be contrary to the
Arbitration Act of U.K., it would be void in so far as it purported to be an ouster of the
jurisdiction of Spanish courts and it would be ineffective as creating binding rights in Spain, because the award
would be unenforceable in Spain.”
An arbitration agreement is null and void when the competent arbitral tribunal is neither unambiguously determined nor
unambiguously determinable. The reference to ‘the arbitral tribunal of the International Chamber of Commerce in Paris,
seat in Zurich’ has more than one meaning, since not only the International Chamber of Commerce in Paris, but also
the Zurich Chamber of Commerce have a permanent arbitration tribunal and their own Rules. It is true that the clause
could be read to mean an arbitral tribunal under the Rules of the International Chamber of Commerce in Paris with
Zurich as the seat of the proceedings, which would be possible according to the Rules of the International Chamber of
Commerce. However, it is uncertain whether this would be in accordance with the expectations of the parties. Even the
defendant, who relies on the arbitration clause, has not opposed ... the objection of ambiguity by referring to that
obviously possible interpretation. Rather, it suggests an alternative which falls outside the spectrum of possible
explanations of the contractual provision at issue.50
Navneet Krishn
Page 29 of 43
As for the effect of the New York Convention of 1958 to which both Spain and England were ratifying parties, the court
said:
“It seems to me absolutely inescapable that the scope of the Convention in Spanish law is that it potentially applies to
all foreign awards made in another Convention country which are sought to be enforced in Spain and therefore
potentially applies also to all agreements for arbitration in another Convention country.”
It followed that the judge rejected the submission that the evidence showed that there was a public policy
principle in Spanish law which invalidated the arbitration clause, subsequent to the New York Convention. He
therefore declined to make the declaration sought that the arbitration clause was null and void under Spanish
law.
When the award was in accordance with the descriptions envisaged under S. 44, then its validity could not be
challenged.51
3. Multi-Tiered Arbitration Proceeding
A multi-tiered arbitration proceeding in which an Indian arbitral award can be appealed against before a London
based arbitral tribunal, is not contemplated by the 1996 Act, according to Justice Sinha, in Centrotrade Minerals
and Metal Inc. v. Hindustan Copper Limited. 52 Justice Tarun Chaterjee, took a different
view and held such a procedure to be valid and the ultimate award to be a foreign award as it satisfies all the
requirements laid down in Section 44. This case has been claborately discussed elsewhere.53
Further Suggested Reading (Section 44)
1. Gaillard, “Interference of Courts in the International Arbitral Process”, N.Y. LAW JOURNAL (2001).
2. W Park, “National Law and Commercial Justice: Safeguarding Procedural Integrity in International
Arbitration”, 63 TULANE L REV 647 (1989).
JUDICIAL AUTHORITY'S POWER TO DETERMINE VALIDITY OF ARBITRATION

AGREEMENT AND REFER PARTIES TO ARBITRATION
Section 3 of the 1961 Act [repealed] empowered the Court to stay the legal proceedings, unless the court was
satisfied that the agreement was null and void, inoperative or incapable of being performed. Under Section 45
of the 1996 Act, which adopts Article II of NYC, there is no mention of the power to stay the proceeding.
Instead, it is made obligatory on the court, at the request of one of the parties to the agreement, to refer the
Navneet Krishn
Page 30 of 43
parties to arbitration, except on the grounds of invalidity, etc., of the agreement as stated above, “if any party to
a submission made in pursuance of an agreement” to which NYC applies commences any legal proceedings
against the other party to the agreement.
Under the scheme questions of existence, validity or effect (scope) of the arbitration agreement itself, in cases
where the arbitration clause embraces within its scope such question, (unless decided by the Court in a Section
3 petition) could be initially determined by the arbitrators, which would be subject to the final decision of the
Court. This position under the New York Convention (to give effect to which the Foreign Awards Act was
passed) has been clarified by Albert Jan van den Berg in his treatise of New York Convention.54 This is what
learned author stated:
“The Convention does not imply that the arbitrator may give a final decision on his competence. Under almost all
arbitration laws the arbitrator has no power to give such final decision; as arbitration excludes the competence of the
Courts, which is considered as a far-reaching effect, the Courts retain the last word in this matter. Many laws, however,
allow the arbitrator to give a provisional ruling on his competence in order not to delay the arbitration and to alleviate
dilatory tactics by obstructive respondents. This principle that the Court has the last word on the arbitrator's
competence is not different for the New York Convention. If it were otherwise, the Convention would have contained
express provisions to that effect in order to make clear that it deviates from the prevailing principle of the national
arbitration laws.”
1. For text of 1961 Act, see Appendix 8.
2. National Ability S.A. v. Tinna Oil and Chemicals Ltd.,

(2008) 3 Arb LR 37 :
(2008) 4 RAJ 505 :
(2008) 405 DRJ 446 (Del).
3. Collins (Contractors) Ltd. v. Baltic Quay Management Ltd.,

[2004] EWCA Civ 1757 .
4. Collins (Contractors) Ltd. v. Baltic Quay Management Ltd.,

[2004] EWCA Civ 1757 .
5. Exfin Shipping (India) Ltd. Mumbai v. Tolani Shipping Co. Ltd. Mumbai, [2006] 2 Lloyd's
Rep. 389 :
[2006] 2 All ER (Comm) 938 .
Rep. 389 :
[2006] 2 All ER (Comm) 938 .
7. See also Commentary under Section 7, under the heading ‘Defined Legal Relationship’.
Navneet Krishn
Page 31 of 43
8. Prograph International Inc. (Canada) v. Ralph Barhydt (U.S.), U.S. No.

242, (1997) 23 Yearbook Commercial Arbitration, P. 90.
9. X v. Y., Yearbook of Commercial Arbitration, Vol. XXXIII (2008), ICC Case No. 12073, p.
63.
10. X v. Y., Yearbook of Commercial Arbitration, Vol. XXXIII (2008), ICC Case No. 12073, p.
63.
11. Svenska Petroleum Exploration AB v. Government of the Republic of Lithuania and AB

Geonafta, Yearbook of Commercial Arbitration, Vol. XXXI (2006), UK No. 72, p. 906.
12. Ministry of Trade of Iraq v. Tsavliris Salvage (International) Ltd.,

[2008] 2 All ER (Comm) 805 .
13. Compagnie Noga D'importation Et D'exportation S.A. v. The Russian Federation, 361 F.
3d 676 : 2004 U.S. App. LEXIS 4893.
14. National Ability S.A. v. Tinna Oil and Chemicals Ltd., (2008) 3 Arb LR 37 :
(2008) 4 RAJ 505 :
(2008) 405 DRJ 446 (Del).
15. Harper Versicherungs AG (aka Harper Insurance Ltd) (formerly Turegum

Versicherungsgesellschaft) v. Indemnity Marine Assurance Co. Ltd., [2006] 2 Lloyd's Rep. 263 :
[2006] 2 All ER (Comm) 225 .
16. MS Emja Braack Schiffahrts KG v. Wartsila Diesel Aktiebolag, Yearbook of Commercial

Arbitration, vol. XXIV (1999), Sweden, p. 317.
17. Ministry of Sound International Ltd. v. Indus Renaissance Partners Entertainment Pvt.
Ltd.,
(2009) 156 DLT 406 .
18. Sukanya Holdings Pvt. Ltd. v. Jayesh H.Pandya,

(2003) 2 Arb LR 43 :
AIR 2003 SC 2252 [
LNIND 2003 SC 430 ]:
(2003) 2 RAJ 32 :
(2003) 5 SCC 531 [
LNIND 2003 SC 430 ] . See further Commentary under S. 8 under the heading
“Splitting of Claim”.
Ltd.,
(2009) 156 DLT 406 .
Ltd.,
(2009) 156 DLT 406 .
Navneet Krishn
Page 32 of 43
21. W.P.I.L. v. NTPC Ltd.,

2009 (1) Arb LR 378 (Del).
22. Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya,

(2003) 2 Arb LR 43 :
AIR 2003 SC 2252 [
LNIND 2003 SC 430 ]:
(2003) 2 RAJ 32 :
(2003) 5 SCC 531 [
LNIND 2003 SC 430 ].
23. Zenith Ltd. v. M.V. Pontoporos with Oldendorff Carries Gmbh v. Zenith Limited,
2005 (4) Bom CR 452 [
LNIND 2005 BOM 647 ] ; Societe Commercial De Coreales and Financiers v. State
Trading Corporation of India, New Delhi,
AIR 1998 Guj 94 [
LNIND 1997 GUJ 407 ].
24. R.M. Investments & Trading Co. P. Ltd. v. Boeing Co.,

(1994) 1 Arb LR 282 :
AIR 1994 SC 1136 : (1994) 4 SCC 541.
25.
(1994) 1 Comp LJ 415 :
AIR 1993 Cal 184 [
LNIND 1993 CAL 127 ].
26. R.M. Investments & Trading Co. P. Ltd. v. Boeing Co.,

(1994) 1 Arb LR 282 :
AIR 1994 SC 1136 : (1994) 4 SCC 541.
27.
AIR 1989 SC 2198 [
LNIND 1989 SC 834 ]:
(1989) 4 SCC 259 [
LNIND 1989 SC 834 ].
28. RE Carter et al. v. Mclaughtin et al., Case 390; Canada Ontario Court, Yearbook of
Commercial Arbitration, Vol. XXVI (2001), p. 322.

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].
30.
AIR 1977 SC 1825 [
LNIND 1977 SC 63 ]:
(1977) 2 SCC 670 [
LNIND 1977 SC 63 ].
31.
AIR 1986 Cal 45 [
LNIND 1985 CAL 215 ].
Navneet Krishn
Page 33 of 43
32.
AIR 1965 Bom 114 [
LNIND 1963 BOM 31 ]: 66 Bom LR 758.
33.
AIR 1978 Bom 106 .
34.
AIR 1983 Bom 36 [
LNIND 1981 BOM 258 ]:
(1992) 84 Bom LR 246 (DB).
35. Mukesh H. Mehta v. Harendra H. Mehta,

(1995) 5 Comp LJ 517 , 525 (Bom).
36. Mexico v. Metalclad, Yearbook of Commercial Arbitration, Vol. XXX (2005), British
Columbia Supreme Court, p. 150.
37. Inacio Eufemio Lobo v. Celebrity Cruises, Inc., Yearbook of Commercial Arbitration, Vol.
XXXIII (2008), US no. 612, p. 820.
38. Gheroghe Tuca v. Ocean Freighters Ltd., Yearbook of Commercial Arbitration, Vol. XXXI
(2006), US No. 576; Inacio Eufemio Lobo v. Celebrity Cruises, Inc., Yearbook of Commercial Arbitration, Vol. XXXIII
(2008), US no. 612, p. 820.
39. AT & T Technologies, Inc. v. Communications Workers of America, 475 US 643, 647,
106, S. Ct. 1415, 1418, 89 L. Ed. 2d 648 (1986); see also Beisep 284 F.3d at 667 n. 4 (citing EEOC v. Waffle House,
Inc., 534 US 279, 151 L. Ed. 2d 755, 122 S. Ct. 754 (2002)); Greg. J. Lannes, III v. Operators International et al.,
Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 611, p. 1041.
40. Comandate Marine Corporation V. Pan Australia Shipping Pty Ltd., [2008] 1 Lloyd's Rep.
119.
41. Precious Stones Shipping Limited v. Querqus Alimentaria, Sl, Yearbook of Commercial
Arbitration, Vol. XXVI (2001), Spain No. 52, p. 540.
42. Strategic Bulk Carriers Inc. Sociaded Iberica de Molturaction, Yearbook of Commercial
43. Vicere Livio (Italy) v. Prodexport (Rumania), (1997) 22 Yearbook Commercial Arbitration
(Italy No. 142), P. 715 (Italy Supreme Court).
44. Sphere Drake Insurance PLC v. Marine Towing, Inc., 16 F.3d 666, 669 (5th Cir.1994);
Standard Bent Glass Corp. v. Glassrobots OY, United States Court of Appeals, Third Circuit, No. 02–2169 PER
CONTRA Kahn Lucas Lancaster, Inc. v. Lark International Ltd., 186 F.3d 210 (2d Cir. 1999).
45. Buyer v. China, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany No.
105, p. 495.
Navneet Krishn
Page 34 of 43
46. Michael Lieschke and Ors. v. Real Networks, Yearbook of Commercial Arbitration, vol.
XXV (2000), US, p. 530
47. Michael Lieschke and Ors. v. Real Networks, Yearbook of Commercial Arbitration, vol.
XXV (2000), US, p. 530
48. Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain (India) Co.,
(2008) 4 Arb LR 497 :
(2008) 155 DLT 457 (Del). See also Austbulk Shipping SDN BHD
v. P.E.C. Limited,
(2005) 2 Arb LR 6 (Del).
49. Smita Conductors Ltd. v. Euro Alloys Ltd.,

(2001) 3 Arb LR 275 :
AIR 2001 SC 3730 [
LNIND 2001 SC 1881 ]:
(2001) 3 RAJ 188 :
(2001) 7 SCC 728 [
LNIND 2001 SC 1881 ].
50. Virender Yadav v. Aerosvit Airlines,

(2008) 3 Arb LR 445 :
(2008) 153 DLT 250 (Del). See also views expressed in India Household and
Healthcare Ltd. v. LG Household and Healthcare Ltd.,
(2007) 1 Arb LR 468 (SC) :
AIR 2007 SC 1376 [
LNIND 2007 SC 296 ]:
(2007) 5 SCC 510 [
LNIND 2007 SC 296 ]; JS Ocean Liner LLC v. MV Golden Progress,
(2007) 2 Arb LR 104 [
LNIND 2007 BOM 103 ] :
(2007) 2 Bom CR 1 [
LNIND 2007 BOM 103 ] (Bom)(FB); Rashtriya Ispat Nigam Limited v. Verma
Transport Company,
AIR 2006 SC 2800 [
LNIND 2006 SC 597 ]:
(2006) 3 Arb LR 210 :
(2006) 3 RAJ 199 :
(2006) 7 SCC 275 [
LNIND 2006 SC 1439 ], suggesting that provisions of Part I cannot be used to
interpret provisions of Part II.
51. Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain (India) Co., (2008) 4 Arb LR
497 :
(2008) 155 DLT 457 (Del). See also Austbulk Shipping SDN BHD
v. P.E.C. Limited,
(2005) 2 Arb LR 6 (Del).
52. Andritz Oy v. Enmas Engineering Pvt. Ltd.,

(2007) 3 Arb LR 545 :
(2007) 3 RAJ 598 : (2007) 4 Mad LJ 290 (Mad).
53. Delta Cereales Espana SL v. Barredo Hermanos SA, Tirbunal Supremo [Supreme
Court], Yearbook of Commercial Arbitration, Vol. XXVI (2001), Spain No 31, p. 857.
Navneet Krishn
Page 35 of 43
54. Moscow Dynamo v. Alexander M Ovechkin, Yearbook of Commercial Arbitration, Vol.

XXXI (2006), US No. 568, p. 1396.
55. Insurer v. Shipowner, Yearbook of Commercial Arbitration (2005), vol. XXX, German
Maritime Arbitration Association, p. 13.
56. Agro-engineering (Russ. Fed.) v. American Custom Service In. (US).,

(1997) 22 Yearbook Commercial Arbitration (US No. 228), R. 990 (US Dt. Ct.).
57. Austbulk Shipping SDN BHD v. P.E.C. Limited,

(2005) 2 Arb LR 6 (Del).
58. Welex AG v. Rosa Maritime Ltd., UK No. 65, p. 633. See also Seller v.
Buyer, Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No. 76, p. 536; Seller v. Buyer, Yearbook of
Commercial Arbitration, Vol. XXVIII (2003), ICC Case No. 8547, p. 27.
59. Buyer (Italy) v. Seller (Germany), Yearbook of Commercial Arbitration, Vol. XXX (2005),
ICC Case No. 9781, p. 22.
60. Oceanografia SA de CV v. DSND Subsea AS (The Botnica), [2007] 1 Lloyd's Rep. 37 :

[2007] 1 All ER (Comm) 28 .
61. Kil Management A/S (Denmark) v. J.Garcia Carrion, SA, Yearbook of Commercial
62. Shipowner v. Time Charterer, Yearbook of Commercial Arbitration, vol. XXV (2000),
Germany No. 50, p. 714.
63. Standard Bent Glass Corp. v. Glassrobots OY,United States Court of Appeals, Third
Circuit, No. 02–2169.
64. Union de Cooperative Centre v. Aguicersa, ST, Yearbook of Commercial Arbitration, Vol.
XXVII (2002), Spain No. 37, p. 546.
65. INTERGEN N.V. v. Eric F. GRINA, Alstom (Switzerland) Limited, and Alstom Power NV,
Defendants, No. 03–1056, United States Court of Appeals, First Circuit.
66. Glencore Grain Limited v. Sociedad Iberica de Molturacion, SA, Yearbook of Commercial
Arbitration, Vol. XXX (2005), Spain No. 38, p. 605.
(2005) 4 Bom CR 452 [
AIR 1998 Guj 94 [
LNIND 1997 GUJ 407 ].
68. See also Commentary under S. 45 under the heading “Claiming through or under”.
Navneet Krishn
Page 36 of 43

(2008) 3 Arb LR 37 :
(2008) 105 DRJ 446 [
LNIND 2008 DEL 1237 ] (Del); See also Seb Trygg Holding Ab v.
Manches,
[2006] 1 All ER 437 .
70. Paul Reddam v. KPMG LLP, Yearbook of Commercial Arbitration, Vol. XXXI (2006), US
No. 529, 997.
72. INTERGEN N.V., v. Eric F. GRINA, Alstom (Switzerland) Limited, and Alstom Power NV,
73. Shipyard R.S. v. Ship Management T.S, Yearbook of Commercial Arbitration, Vol. XXXI
(2006); German Maritime Arbitration Association case, p. 66.
74. Satico Shipping Company Limited v. Maderas Iglesias (Spain), Yearbook of Commercial
Arbitration, Vol. XXXII (2007), Spain No. 57, p. 582.
(2005) 4 Bom CR 452 [
AIR 1998 Guj. 94 [
LNIND 1997 GUJ 407 ].
76. Buyer v. Seller, Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No. 75,
p. 528.
77. Britton v. Co-op. Banking Group, 4 E 3d 742 (9th Cir.1993); Newport Petroleum Inc. v.
Tug Justine Foss,1997 WI. 876955 (W.I) Wash 1997; Creative Telecommunications. Inc. v. Breeden, 120 E. Supp. 2d
1225, 1240 (1) Hawaii, 1999; William F. Galtney, Jr. and others v. KPMG, LLP and others, US No. 541, p. 1133;
Stephen L Hansen v. KPMG LLP, Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 535, p. 1070.
78. Grigson v. Creative Artists Agency L.L.C., 210 F.3d 526 (5th Cir. 2000), Choctaw
Generation Ltd. Partnership v. American Home Assur. Co., 271 E 3d 403, 407 (2nd Cir. 2001); Sunkist Soft Drinks, Inc.
v. Sunkist Growers, IC. 10 E3d 753, 757 (11th Cir.1993); J.J. Ryan & Sons. Inc. v. Rhone Poulenc Textile, S.A., 863 E
2d 315, 320-321 (4th Cir. 1988); Hughes Masonry Co., Inc. v. Greater Clark County Sch. Bldg. Corpn., 659 E.2d 836,
841 n. 9 (7th Cir. 1981); Medical Air Technology Corp. v. Marwan Inv., Inc., 303 E3d 11, 18-19 (1st Cir.2002); Metalclad
Corp. v. Ventana Envtl. Org. P'ship, 109 Cal. App. 4th 1705, 1717, 1 Cal. Rptr. 3d 328 (2003); MS Dealer Serv. Corp. v.
Franklin, 177 E 3d 942, 947 (11th Cir.1999); Sankyo Corporation v. Nakamaru Trading Corporation, Yearbook of
Commercial Arbitration, Vol. XXXI (2006), US No. 529, p. 997; Nova Hut AS v. Kaiser Group International Inc.,
Yearbook of Commercial Arbitration, Vol. XXIX (2004), US No. 481, p. 1251; William F. Galtney, Jr. and others v.
KPMG, LLP and others, US No. 541, p. 1133; Stephen L Hansen v. KPMG LLP, Yearbook of Commercial Arbitration,
Vol. XXXI (2006), US No. 535, p. 1070, Signature Marketing Pty. Ltd. and Jayfield Pty. Ltd. v. Slim Print International,
Llc et. al. 2001 U.S. Dist. LEXIS 21222; Marubeni Corporation and Marubeni Pulp and Paper (North America), Inc. v.
Mobile Bay Wood Chip Center, Southeast Wood Fiber, LLC and Mid Atlantic Terminals, LLC, United States District
Court, No. Civ.A. 02-0914-PL; LM Industries, Inc. and LM International, Inc. and others v. Stolt-Niesen SA, Yearbook of
Commercial Arbitration, Vol. XXX (2005), US No. 505, p. 963.
Navneet Krishn
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79. Alimenta S.A. v. National Agricultural Co-Operative Marketing Federation of India

Limited,
AIR 1987 SC 643 : (1998) 1 Arb LR 349 :
(1987) 1 SCC 615 [
LNIND 1987 SC 880 ] :
(1987) 1 Arb LR 78 ; Vikrant Tyres Limited. v. Techno Export Foreign Trade
Company Limited,
ILR 2005 KAR 4738 . See also Consmaremma- Consorzio tra
produttori agricoli societa Cooperative a responsabilita limitata (Italy) v. Hermanos Escot Madrid, SA, Yearbook of
Commercial Arbitration, Vol. XXVI (2001), Spain No. 32, p. 858.
(2008) 4 Arb LR 497 :
(2008) 155 DLT 457 (Del).
81. Polytek Engineering Co. Ltd. (Hong Kong) v. Jacobson Companies (US), (1998) 23
Yearbook Commercial Arbitration (U.S. No. 268), p. 1103, See also Kahn Lucas Lancester Inc. (US) v.
Lark International Ltd., [Hong Kong], Yearbook of Commercial Arbitration, 1029, where a party manifested its assent to
the purchase orders when it performed pursuant to their terms and drew down payment on the letter of credit.
82. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Spain No. 45, p. 834.
83. Conceria Madera srl v. Fortstar Leather Ltd., Yearbook of Commercial Arbitration, Vol.
XXXI (2006), Spain No. 45, p. 834.
84. Seller (Netherlands) v. Buyer (Italy), Yearbook of Commercial Arbitration, Vol. XXXII
(2007), Netherlands Arbitration Institute, p. 93.
85. Pueblo Film Distribution Hungary KFT v. Laurenfilm, SA, Yearbook of Commercial
86. Granitalia v. Agenzia Maritime Sorrentini, Italy No. 160, Yearbook of Commercial
Arbitration, Vol. XXVII (2002), p. 506.
88. Coimex Trading (Suisse) S.A. v. Cargill International S.A., Yearbook of Commercial
Arbitration, Vol. XXXI (2006), US No. 537, p. 1090.
89. Claimant v. Defendant, Yearbook of Commercial Arbitration, Vol. XXXI (2006), Germany
No. 89, p. 679.
90. Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain (India) Co., (2008) 4 Arb LR
497 :
(2008) 155 DLT 457 (Del).
91. Yearbook of Commercial Arbitration, Vol. XXVII (2002), Case 405, Germany, p. 267.
Navneet Krishn
Page 38 of 43
92. Jane Doe v. Royal Caribbean Cruises Ltd., Yearbook of Commercial Arbitration, Vol.
XXXI (2006), US No. 532, p. 1049.
93. Delia Cusano d/b/a Savonnerie Le Serail v. Peter Cremer Gmbh, Yearbook of
Commercial Arbitration, Vol. XXXIII (2008), France No. 46, p. 487.
94. Licensor v. Licensee, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany
No. 112, p. 524.
95. Sheridan Shofield v. International Development Group Co. Ltd., Yearbook of Commercial
96. Societe Arabe des Engrais Phosphetes (Tunisia) v. Societe Industrielle d'Acide (Tunisia),
(1997) 22 Yearbook Commercial Arbitration (Italy No.146) (Supreme Court of Italy).
97. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), p. 231.
98. First Schedule to the 1996 Act.
99. See further Commentary under S. 44infra under the heading “Territories
which the Central Government declares to be territories to which the New York Convention apples.”
1. Bhatia International v. Bulk Trading,

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ] :
(2002) 1 RAJ 469 .

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .

(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 2 SCC 551 .
4. (1996) Supp Arb LR 617 (Bom).
5.
AIR 1998 SC 825 [
LNIND 1997 SC 1550 ]:
(1998) 1 SCC 305 [
Navneet Krishn
Page 39 of 43
LNIND 1997 SC 1550 ]. The decision on the award is reported in (1994) 1 Llyod's
Law Reports 451.
6. Rupali Polyester Ltd. v. Bunni, 3 LRC 617 (SC).
7. National Thermal Power Corp. v. Singer(1992) 2 Com LJ 256 and Sumitomo Heavy
Industires Ltd. v. Oil and Natural Gas Commission, (1994) 1 Lloyd's Law Rep 45 considered.
8. The court applied National Thermal Power Corp. v. Singer,(1992) 2 Com LJ 256; Suresh Binha v.
Akuahari,
AIR 1957 Pat 256 ; M.A. Chowdhury v. Mitsui OSK Lines, PLD
1970 SC 373 and Ugin Export & Import Enterprises for Foreign Trade v. M. Iftikar &
Co. Ltd.,(1993) SCMR 866.
9. For text of FARE Act, 1961, see Appendix 4.
10. Gas Authority of India v. SPIE CAPAG SA,

AIR 1994 Del 75 [
LNIND 1993 DEL 633 ]:
(1994) 1 Arb LR 429 .
11. Gas Authority of India Ltd. v. SPIE CAPAG SA,

(1995) 2 Arb LR 70 (Del).
12.
(1992) 2 Arb LR 154 :
AIR 1993 SC 998 [
LNIND 1992 SC 393 ]:
(1992) 3 SCC 551 [
LNIND 1992 SC 393 ].
13. Centrotrade Minerals and Metal Inc. v. Hindustan Copper Limited,

(2006) 3 Arb LR 201 :
(2006) 11 SCC 245 [
LNIND 2006 SC 375 ] :
(2006) 5 JT 507 .
14. See Article I(a) of the NYC.

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ] :
(2002) 1 RAJ 469 .
16. See Commentary under S. 36 of the Act.
17. See Commentary under S. 47 of the Act.
Navneet Krishn
Page 40 of 43

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ] :
(2002) 1 RAJ 469 .

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ] :
(2008) 1 RAJ 285 .

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ] :
(2002) 1 RAJ 469 .
21. For more details see commentary in the Chapter titled “Applicability of Part I to Arbitratioms conducted
outside India under the heading “Setting Aside of a Foreign Award by an Indian Court: Applicability of Section 34 to
Foreign Awards”.

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].

(2009) 4 MLJ 633 [
LNIND 2009 MAD 304 ].
25. See Article I(3) of the NYC
26.
(1994) 1 Comp LJ 374 , 400 :
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ].
27. Mukesh H. Mehta v. Harendre H. Mehta,

(1995) 5 Comp LJ 517 , 522.
28. Ramji Dayawala & Sons P. Ltd. v. Invest Import,

AIR 1981 SC 2085 [
Navneet Krishn
Page 41 of 43
LNIND 1980 SC 422 ]:

(1981) 1 SCC 80 [
LNIND 1980 SC 422 ].
29. See Gas Authority of India Ltd. v. Spie Capag, S.A., (1994) 1 Comp LJ,
375, 388 :
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ].
30. Dalmia Cement Ltd. v. National Bank of Pakistan,

(1975) QB 9 :
1974 3 WLR 138 :
(1974) 3 All ER 189 . General Electric Canada Inc. v. National Hydroelectric Power
Corpn. Ltd.,
(2003) 2 RAJ 383 (Del), merely because the venue of the Arbitral Tribunal was in
Paris and that the arbitration was subject to the Rules of Procedure of ICC, Paris, the award could not be termed to be
a foreign award, the reason being that in terms of a clause of the contract, the contract was to be governed and
interpreted in accordance with the laws of India.
31.
(1998) 1 Arb LR 228 :
(1998) 1 RAJ 231 :
AIR 1998 SC 707 [
LNIND 1998 SC 54 ]:
(1998) 2 SCC 281 [
LNIND 1998 SC 54 ].
32. Ng Fung Hong Ltd. v. ABC, Yearbook Commercial Arbitration, Vol. XXII-1998 P. 685 both
U.K. and China were parties to the NY Convention.
33. Bangladesh Air Service (Pvt.) Ltd. v. British Airways PLC, (1998) 23 Yearbook
Commercial Arbitration [Bangladesh No.1], P. 624 (Appellate Division).
34. For text of English Act, 1975, see Appendix 18.
35. (1983) 1 Lloyd's Rep. 596.
36. Minister of Public Works of the Government of the State of Kuwait v. Sir Frederick Snow
& Partners,
(1984) 2 WLR 240 : (1984) 1 Lloyd's Rep 458 :
(1984) 1 All ER 733 (HL).
37. Hiscox v. Outhwaite (No. 1),

(1991) 3 All ER 641 : (1991) JBL 641 :
(1991) 3 WLR 297 (HL).
38. (1991) 2 Lloyd's Rep. 1.
39.
(1991) 2 WLR 1321 .
Navneet Krishn
Page 42 of 43
40.
(1991) 3 All ER 641 .
41.
(1991) 3 All ER at pp. 641 , 646.
42. (1991) JBL 580 by Enid A Marshall.
43. Lord Oliver,

(1991) 3 All ER at 650 .

(2008) 3 Arb LR 37 :
(2008) 105 DRJ 446 [
LNIND 2008 DEL 1237 ] :
(2008) 4 RAJ 505 (Del).
45. Notifications issued under 1961 Act remain valid for the purposes of the 1996 Act by virtue of the
provisions of Section 85(2)(b).

2006 (3) Arb LR 201 :
(2006) 11 SCC 245 [
LNIND 2006 SC 375 ] :
(2006) 5 JT 507 .

2006 (3) Arb LR 201 :
(2006) 11 SCC 245 [
LNIND 2006 SC 375 ] :
(2006) 5 JT 507 .
48. Gas Authority of India Ltd. v. SPIE CAPAG SA,

(1994) 1 Comp LJ 374 , 401 :
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ]; Export & Import Enterprises for Foreign Trade v. M Iftikhar
& Co. Ltd.,(1993) SCMR 866 applied.
49. (1984) 1 Lloyd's Rep 652, injunction not granted.
50. Slovenian Company v. Agent (Germany), (1997) 22 Yearbook Commercial Arbitration

(Germany No. 47), p. 707 (German Court of Appeal), arbitration clauses found to be null and void.
51. Austbulk Shipping SNDBHD v. PEC Ltd.,

(2005) 1 Arb LR 6
(2005) 1 RAJ 597 , 608 (Del).
52. Centrotrade Minerals and Metal Inc. v. Hindustan Copper Limited.,

(2006) 3 Arb LR 201 :
(2006) 11 SCC 245 [
Navneet Krishn
Page 43 of 43
LNIND 2006 SC 375 ] :

(2006) 5 JT 507 .
53. See Commentary under S. 7 under the heading “Multi-tier Clauses”.
54. At p. 312.
End of Document
Navneet Krishn
CONVENTION AWARDS
S. 45. Power of
judicial authority to refer parties to arbitration
Notwithstanding anything contained in Part I or in the

Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action
in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the
request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless
it finds that the said agreement is null and void, inoperative or incapable of being performed.
Section 45 is based on Article II(3) of NYC. It corresponds to Section 3 of the FARE Act, 1961 except that
Section 45 mandates the judicial authority to refer parties to arbitration.
Under clause (a) of Section 48(1) of the 1996 Act, the court can refuse enforcement of a foreign award if it is
satisfied that the agreement is not valid under the law to which the parties have subjected it or under the law of
the country where the award was made, or under clause (c) that the award deals with matters not falling within
the terms of the submission to arbitration. Thus, the existence, validity and scope of an arbitration agreement
can be determined by court—
(1) before the commencement of arbitration proceedings [ S. 45], or

(2) at the stage of enforcement of the award [ S. 48].
1. Ingredients of this provision
The ingredients of this section are: a judicial authority should be seized of an action in the matter of which the
parties have made an agreement for arbitration; one of the parties should make a request for referring the
parties to arbitration and that the judicial body does not find that the said agreement is null and void, inoperative
or incapable of being performed. In the absence of a valid arbitration agreement, a judicial authority will not be
seized of its authority and a stay will not be granted.1 Where a judicial authority is seized of a matter in which
there is an agreement between the parties for arbitration, the plaintiff must advance arguments to convince the
authority that the agreement is null and void, inoperative or incapable of being performed. This language is to
be interpreted narrowly to encompass only those situations—such as fraud, mistake, duress, and waiver—that
can be applied neutrally on an international scale2, or when it contravenes fundamental policies of the forum
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State.3 If a dispute has been resolved (by friendly agreement or otherwise) an agreement to arbitrate that
dispute is inoperative.4
Section 45 (like Section 3 of the repealed 1961 Act) starts with a non obstante clause, giving it an overriding
effect to the provisions and making it prevail over anything contrary thereto contained in Part I of the 1996 Act
or the
Code of Civil Procedure, 1908 . The use of the word “shall” makes it obligatory on the
court to refer the parties to arbitration in the legal proceedings initiated by a party to the arbitration agreement
provided the conditions specified therein are fulfilled.5 These conditions were culled out by the Supreme Court
in Renusagar Power Co. Ltd. v. General Electric Co. 6, under the 1961 Act. They were as
follows:
”(i) there must be an agreement to which Article II of the Convention set forth in the Schedule applies;
(ii) a party to that agreement must commence legal proceedings against another party thereto;
(iii) the legal proceedings must be in respect of any matter agreed to be referred to arbitration in such
agreement (now, in a matter in respect of which the parties have made an agreement);
(iv) the application for stay, (now, reference to arbitration) must be made before filing the written statement
or taking any other steps in the legal proceedings [there is now no such requirement in S. 45];7
(v) the court has to be satisfied that the agreement is valid, operative and capable of being performed;
(this relates to the satisfaction about the existence and validity of the arbitration agreement);8
(vi) the court has to be satisfied that there are disputes between the parties with regard to the matters
agreed to be referred; (this relates to scope of the arbitration agreement touching the issue of
arbitrability of the claims)”.
This statement was cited in Gas Authority of India Ltd. v. SPIE CAPAG SA, 9
The following passage was relied on by the Delhi High Court in W.P.I.L. v. NTPC Ltd. 10
to enumerate the objective and scope of Section 45:
“ Section 45 thereof enjoins a judicial authority (the Company Law Board being one such judicial authority) when
requested by any one of the parties or any person claiming through or under him, where the parties have made an
agreement referred to in Section 44, to refer the parties to arbitration, unless it finds that the said agreement is null and
void, inoperative or incapable of being performed. [I]ndisputably, there exists an arbitration agreement between the
parties whereby their disputes arising out of the contract would be referable to an arbitrator having his legal seat at
Zurich, Switzerland, and to which disputes the substantive law of contract as prevalent in India would apply. The
Company Law Board would thus be obliged to proceed in accordance with Section 45 and refer the parties to
arbitration, because the agreement is neither null and void, nor inoperative or incapable of being performed.
Incapability, of course, has not to be understood as being inconvenienced. When the parties enter into such agreement
with open eyes they are presumed to have incurred on themselves the inconveniences inherent in the deal. Thus, only
an application by any of the parties is required to be made, which would set the judicial authority to act in the manner
provided.”
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The arbitration agreement is enforceable by the court pursuant to Art. II of the Convention. Art. II(3) of the
Convention [Corr. to Section 45] ‘imposes a mandatory duty on the courts of a Contracting State to recognize
and enforce an agreement to arbitrate’.11
However, when a cross-claim was made as a defence to the plaintiff's claim, and the cross-claim was made
based on an agreement which contained an arbitration clause, the provision for mandatory stay of litigation
would not apply.12
2. Extent of discretion under Section 45
Section 45 requires that in order to specifically perform the arbitration agreement the Court has to be satisfied
that the agreement is valid, operative and capable of being performed. A party will not be entitled to a stay
under Section 45 in the absence of a valid arbitration agreement between the parties.13
In Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., 14 the Supreme Court held that the
review by the Court to determine the validity of the arbitral agreement was to be on a prima facie basis. The
rationale for such a decision was as follows:
(a) Section 8(3) contemplates that even in a situation where an application to the court has been made under
Section 8(1), the arbitration process may continue and even a final award be made. The absence of such a
provision under Section 45 means that the arbitral proceedings shall not commence or proceed till such time
the nature of the agreement is decided upon. If such a decision was a final conclusion based on parties leading
evidence the delay caused would defeat the basic principles of the Act which is to enable expeditious arbitration
with limited court interference.
(b) In case of an affirmative finding with respect to existence of an arbitration agreement, the party challenging
such a finding would have sufficient scope to present its case as:
(i) The arbitral tribunal is competent to rule on its own jurisdiction even if the court takes the view that the
arbitral agreement is valid based on a prima facie analysis. Thus nothing prevents the arbitrator from trying the
issue fully and rendering a final decision thereupon.
(ii) This issue can be raised under Section 48(a) while opposing the enforcement of the award.
(c) In case a reference to arbitration was not made, there was still a right to appeal under Section 50.
(d) A final finding under Section 45 on the issue of validity of the arbitration agreement would mean that on the
basis of the principle of res judicata such an argument may not be raised while challenging the enforcement of
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the arbitral award under Section 48(a), rendering Section 48(a) redundant.
(e) Even in case res judicata did not apply, there was a chance that there would be multiple trials relating to the
same issue.
(f) In cases where the law governing the arbitration agreement was a foreign law, a determination of validity of
the arbitration agreement would require a proof of the foreign law on the point itself. It was unfeasible to prove
foreign law on the basis of affidavits alone and this would require enormous amounts of time and money.
(g) A ruling to the contrary would also lead to certain anomalies expressed by the Court in the following
manner:
“Treating the finding under Section 45 as final results in a paradoxical situation. A final decision rendered by the
competent court on the nature of the arbitral agreement may have to be ignored by the arbitral tribunal, which would be
entitled to decide the issue afresh on the material presented to it. It may also lead to another curious result, that the
competent court in the jurisdiction where the arbitration proceeds (Japan, as in the present case) would have to reckon
with the fully binding effect of a finding made under Section 45 by a competent court in India arrived at by following a
summary procedure without admitting all relevant evidence.”
Thus the “two basic requirements, namely, expedition at the pre-reference stage, and a fair opportunity to
contest the award after full trial, would be fully satisfied by interpreting Section 45 as enabling the court to act
on prima facie view.”
Thus, the Court while adopting an approach that would be in consonance with the basic objectives of
arbitration, held that :15
“...if the [opposite] view postulated by learned Brother Sabharwal (the dissenting Judge) were to prevail, then all
international commercial arbitrations can be defeated by a totally bogus defence that the agreement is forged or
fabricated. If such a defence were to be allowed, it would necessarily require a full-fledged trial (with oral evidence) at
the pre-reference stage with all its consequential delay and expense. On the other hand, if only a prima facie view were
to be taken, then the issue could still be examined in-depth after a full trial either before the arbitral tribunal or at any
rate under Section 48(1)(a) when the enforceability of the ensuing award is questioned.”
In a concurring judgment D.M. Dharmadhikari, J summed up the law as follows :16
“.. if on prima facie examination of the documents and material on record including the arbitration agreement on which
request for reference is made by one of the parties, the judicial authority or the court decides to make a reference
it(sic) may merely mention the submissions and contentions of the parties and summarily decide the objection if any
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raised on the alleged nullity, voidness, inoperativeness or incapability of the arbitration agreement. In case, however,
on a prima facie view of the matter which is required to be objectively taken on the basis of material and evidence
produced by the parties on the record of the case, the judicial authority including a regular civil court, is inclined to
reject the request for reference on the ground that the agreement is ‘null and void’ or ‘inoperative’ or ‘incapable of
being performed’ within the meaning of Section 45 of the Act, the judicial authority or the court must afford full
opportunities to the parties to lead whatever documentary or oral evidence they want to lead and then decide the
question like trial of a preliminary issue on jurisdiction or limitation in regular civil suit and pass an elaborate reasoned
order. Where a judicial authority or the court refuses to make a reference on the grounds available under Section 45 of
the Act, it is necessary for the judicial authority or the court which is seized of the matter to pass a reasoned order as
the same is subject to appeal to the appellate court under Section 50(1)(a) of the Act and further appeal to this Court
under Sub-section (2) of the said section.”
This is now the law of the land and has been applied subsequently by High Courts.17
The minority judge, Y.K. Sabharwal, J enunciated a “final finding” approach which had earlier been laid down in
Renusagar Power Co. Ltd. v. General Electric Co. 18 with respect to the Foreign Awards
Act. In that case it was held that
“...there is no question of the Court getting satisfied about these conditions on any prima facie view or a pro tanto
finding thereon. Parties have to put their entire material before the Court on these issues (whichever may be raised)
and the Court has to record its finding thereon after considering such material.”
The minority judge took the view that when a provision under the old Act was interpreted in a particular manner
and the Parliament while enacting the new Act, aware of such an interpretation, retained the same wording, it
would give rise to a presumption that the Parliament intended to follow the same interpretation. In the view of
the learned judge, the Parliament had consciously adopted the conventional approach.
It appears that the majority decision in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.
19 is preferable. When there are two different interpretations possible, that interpretation that is in keeping with
the objective of the statute must be adopted.20 The 1996 Act was enacted to meet the challenges of the
globalization era, where untimely judicial interventions would act as a disincentive for multi nationals to do
business in India. The 1996 Act followed the UNCITRAL Model law and incorporated the provisions of the NYC,
with the basic objective of expediting arbitral proceedings and provide speedy remedies for parties. The
objectives of the 1996 Act are clearly more in favour of removal of judicial interventions as compared to the
Foreign Awards Act. This becomes obvious from the speedier enforcement procedures under the 1996 Act. In
such a scenario, the reliance placed on case laws decided under the earlier statute must be limited.21
The majority view has been subsequently reiterated in Andritz Oy v. Enmas Engineering Pvt. Ltd.
22
Similarly, based on a prima facie review, the Delhi High Court refused to declare the arbitration agreement
between the parties in TE India Private Ltd. v. Shri Mukesh Sharma 23, as invalid as the
Respondent had produced before the Court the shareholders agreement between the parties which contained
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an arbitration clause.
Similarly, where it was argued that a distributorship agreement containing an arbitration clause was not meant
to be acted upon in light of a subsequent oral agreement entered into between the parties, the Delhi High Court
rejected this argument upon a prima facie analysis.24
Conversely based solely on admitted facts and evidence, the Madras High Court denied a reference to
arbitration as the arbitration agreement was inoperative.25 It seems that in such a scenario, following the ratio of
Shin Etsu, the matter should have been subjected to a detailed trial.
The view in foreign Courts have been divided:
The French
Code of Civil Procedure follows the prima facie approach. The Swiss Courts have also
adopted a similar approach.26
Section 32 of the English

Arbitration Act adopts a different approach, whereby the courts may only rule on the
issue of jurisdiction with the agreement of the parties or, if the parties do not agree, with the consent of the
arbitral tribunal.
The American approach courts perform a ‘limited inquiry’ by deciding the following four questions:
(1) Is there an agreement in writing to arbitrate the subject of the dispute? Convention, Arts. II(1), II(2) [Corr. to
sec. 44(a)].
(2) Does the agreement provide for arbitration in the territory of a signatory of the Convention? Convention,
Arts. I(1), I(3) [Corr. to sec. 44(b)].
(3) Does the agreement arise out of a legal relationship, whether contractual or not, which is considered as
commercial? Convention, Art. I(3) [Sec. 44].
(4) Is a party to the agreement not an American citizen, or does the commercial relationship have some
reasonable relation with one or more foreign states? 9 U.S.C. Sect. 202.27
’If these questions are answered in the affirmative, a court is required to order arbitration’ unless the court finds
the agreement to be null and void, inoperative, or incapable of being performed.28
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If a party, despite the agreement to submit certain matters to arbitration, initiates legal proceedings, the court
should decline to exercise its jurisdiction and refer the parties to arbitration as agreed to by them subject, of
course, to the existence, validity, and scope of the agreement. The court acquires its jurisdiction to refer the
matter to arbitration only at the request of a party to the arbitration agreement to refer the matter for arbitration.
The onus of establishing that the agreement is ‘null and void, inoperative or incapable of being performed’, lies
on the party opposing any reference to arbitration.
Effect of Patel Engineering on Shin-Etsu
It was argued before the Delhi High Court that the decision in Patel Engineering 29 has
modified the ratio of Shin-Etsu 30 , and post-Patel Engineering the Court is now permitted
to analyse all the evidence on record, even while dealing with an application under Section 45. This was
rejected by the Delhi High Court on the basis that the two decisions dealt with entirely different issues.31
The Pre Shin-Etsu approach: The Renusagar ratio
In Renusagar Power Co. Ltd. v. General Electric Co. Ltd. 32, it was observed:
“There is no question of the court getting satisfied about these conditions on any prima facie view or pro tanto
finding thereon. Parties have to put their entire material before the court on these issues (whichever may be
raised) and the court has to record its finding thereon after considering such material.”33 In this case the
requirements of a stay were held to be fully satisfied because the arbitration clause was worded in the widest
possible language. The court distinguished the matter relating to the validity or existence of the arbitration
agreement from those of its effect or its scope. Validity and existence may be for the court to decide. In
construing the validity of arbitration clauses, it must be determined whether the essential terms are sufficiently
definite so as to enable the judicial authority to give them an exact meaning.34 A positive finding on this point
can carry the matter before the arbitrator who can then decide upon the scope of the agreement.
Burden of proof
A suit was filed against the defendant for recovery of certain amount. The defendant sought stay of the
recovery suit on the ground that there was a valid and subsisting arbitration agreement between the parties.
The plaintiff disputed the existence of the contract. The suit for recovery was stayed. When a party disputes the
binding nature of the signed document, it is for him to prove the terms in the contract or the circumstances in
which he came to sign the documents.35
Effects of not filing an application under Section 45
Where a party files a suit relating to an issue relating to validity of an agreement including the arbitration clause,
falling within the ambit of an arbitration clause, but no reference under Section 45 is made, the civil court would
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continue to have jurisdiction over the issue even if the parties commenced arbitration on the same issue
subsequently and an award was passed. The Bombay High Court, in Global Marketing Direct Limited v. GTL
Lld. 36, further held that even if Section 45 was invoked, since there was no time frame
specified in Section 45, the civil court would have jurisdiction till such time it decided on the issue of validity of
the agreement.
Following the ratio of Shin Etsu, the scope of enquiry under the latter part would be restricted to a prima facie
analysis. Furthermore, it is submitted that in case the award was sought to be enforced and converted as a
decree, the claim before the Court would be barred by res judicata.
Courts discretion limited to stated grounds
It is mandatory, by virtue of Section 45 of the Act, that a judicial body will have to refer the parties to arbitration
once it is seized of an action in respect of which the parties have made an agreement for arbitration to which
the convention in the First Schedule to the Act applies (Foreign Arbitration).
Therefore, even if a dispute involves arbitrable as well as non-arbitrable issues, so long as the arbitration
agreement is valid, the Court will refer the parties to arbitration.37
An argument that conducting arbitration pursuant to an international arbitration clause would result in undue
hardship for a party cannot be alleged, unless the party can prove that unequal bargaining power, fraud, or
misrepresentation induced it to enter into the agreement to arbitrate in the country where it was to be held.38
Thus the prohibitive costs of an international arbitration cannot be argued as a ground to oppose reference to
arbitration under Section 45.39 China Resource Prods. (U.S.A.), Ltd. v. Fayda Int’ I., Inc.
40 reiterates this proposition. Where defendant was aware at the time it signed the contract that arbitration
would take place in China, and presented no evidence of unequal bargaining power, fraud, or
misrepresentation, it was held that it could not argue that arbitration would result in a great expense of time and
money. These factors, it was held, should have been considered before signing the agreement.
It is, however difficult to set a universal standard for determining unequal bargaining power.41
An argument that a referral to arbitration should not be made as court proceedings would be more convenient
due to the requirements of obtaining evidence from a different country does not hold good.
1. An aircraft leasing agreement was entered into between the parties with a provision for arbitration in
accordance with International Arbitration Association Rules and Procedures in a hearing before the Stockholm
or London International Arbitrage. The Plaintiff claimed that the amount due to them under the “Wet lease
agreement” had not been paid and commenced proceedings before the Sindh High Court. The Defendant filed
an application to stay the proceedings in the light of the arbitration clause and Section 34 of the Pakistani
Arbitration Act 1934.
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The Court held that all the conditions for stay were satisfied, i.e.
(a) Proceedings were commenced by one party to the arbitration agreement against another party to it
(b) The dispute concerns a matter falling within the scope of the arbitration agreement
(c) The party seeking a stay did not participate in the proceedings and is not hence barred by estoppels/waiver.
(The Plaintiff claimed that the Defendant did not mention arbitration at all initially when it brought the dispute to
the note of the Defendant and that this was misleading. Court held that if this was the case, the Defendant
would be penalised in terms of award of cost during the arbitration but there was no other consequence.)
The Plaintiff further claimed that the arbitration was in London or Stockholm and evidence was fully based in
Karachi, thus making the whole process very expensive. It was thus argued that a stay of the court proceedings
must not be granted. However, it was held that the parties entered into the Agreement with full knowledge of
this fact. Neither party could now take this stand. 42
Section 45 not to restrict admiralty jurisdiction of courts
Section 45 does not direct a Court exercising its admiralty jurisdiction pursuant to Letters Patent Clause 32, the
Colonial Courts of Admiralty Act, 1890 and Admiralty Court Jurisdiction Act, 1861 from referring the matter to
arbitration. Thus an action in rem for recovery of the claim and arrest of the vessel to provide security pending
arbitration is maintainable.43
3. “Null and void, inoperative or incapable of being performed”
“Null and void”
The Madras High Court in Ramasamy Athappan v. Secretariat of Court, International Chamber of Commerce,
France 44 discussed in extenso the scope of the term “null and void”.
“Two types of nullity and voidity are contemplated by the

Indian Contract Act, 1872 , viz., (i) agreements which are unenforceable and of no legal effect
right from the inception, which are termed as void ab initio and (ii) agreements which might be valid at the inception but
which becomes void on account of something that made them unenforceable after the inception.” 45
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The following cases would result in an agreement being rendered “void”:
(i) where both parties to the agreement, are under a mistake of fact (
Section 20 of the Indian Contract Act );
(ii) where the consideration or object the agreement is illegal (

(iii) where consideration and objects are unlawful in part (

(iv) where the agreement is without consideration under certain contingencies (

(v) where the agreement is in restraint of legal proceedings (with a few exceptions) (
(vi) where the agreement is uncertain (

Section 29 of the Indian Contract Act ); and
(vii) where the agreement is contingent upon the happening of impossible events (
Section 36 of the Indian Contract Act ).46
The Court further observed that:
“While the provisions of Sections Section 20, 23 to 30 and 36 of the

Indian Contract Act, 1872 , deal with agreements which are void from their very
inception,Section 35 deals with agreements which become void subsequently, though they are not vitiated at the
time of their making.Section 35 reads as follows:—
“ 35. When contracts become void, which are contingent on happening of specified even within fixed time. --
Contingent contracts to do or not to do anything if a specified uncertain event happens within a fixed time become
void if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event
becomes impossible.”47
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However, for the Court to review the validity of the arbitration agreement under Section 45, a challenge is to be
made to the arbitration agreement itself and not merely the underlying contract containing the arbitration clause.
Reference to arbitration is mandatory unless the arbitration agreement itself is void. It is the validity of the
arbitration agreement (as opposed to the underlying contract) that has to be decided by the Court based on a
prima facie analysis. Based on the doctrine of separability, the agreement containing the arbitration clause being
declared null and void will not result in the arbitration agreement being null and void.48 (For more details refer to
commentary on Section 16) Thus where it was alleged that the arbitration agreement was null and void, without
proving the existence of any of the situations listed above, and based solely on the allegation that the joint venture
agreement that contained the arbitration clause was null and void, the argument was rejected.49
“Incapable of being performed”
The term “incapable of being performed” envisages frustration of the arbitration agreement.50 A contract is said to
be frustrated in three situations contemplated by
Section 56 of the Indian Contract Act , namely where there is an:
(i) agreement to do an act which is impossible in itself
(ii) agreement to do an act which becomes impossible after the making of the contract and
(iii) agreement to do an act, which becomes unlawful later, on account of some event which the promisor
could not prevent.
The Madras High Courtobserved: “

Section 45 of the Arbitration and Conciliation Act, 1996 does not speak of incapability
or incapacity of a party to a contract, but speaks of incapability of the arbitration agreement from being
performed...The arbitration by itself is not incapable of being performed, even if the joint venture agreement
between the parties is presumed to be incapable of being performed.”51
This phrase has no relation with

Section 16 of the Specific Relief Act which bars a person incapable of performing his
part of the contract, from seeking specific performance of the contract.52
“Inoperative”
An arbitration clause is said to be inoperative in cases where it contains an inherent contradiction which cannot be
given effect to.53 The following scenarios would be included within the ambit of this clause :54
1. Where the one part of the arbitration clause mandates arbitration in one country and another part mandates
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arbitration in a different country.55
2. When the dispute arising out of the contract is resolved.56
3. When the contract is followed by a long period of delay or inactivity. In such a scenario “the party seeking to
establish abandonment must show that the other party so conducted himself as to entitle him to assume and that
he did assume, that the contract was agreed to be abandoned sub silentio”.
4. When a party by his words or actions either expressly declares that he is unable to perform his obligations or
evinces an intention not to do so.57
5. By acts of omission or commission by the parties including cases of waiver, abandonment, renunciation,
election, acquiescence etc.58
Waiver of right (arbitration agreement rendered ‘inoperative')
The right to arbitration, like any other contractual right can be waived.59 A waiver of arbitration rights requires an
unequivocal demonstration of intent to waive.60
Waiver can be in various forms:
“Waiver by election'... would arise when a person is entitled to alternative rights inconsistent with one another
and that person acts in a manner which is consistent only with his having chosen to rely on one of them.
Such cases do not require detriment to the other party as foundation for their application.61 A second type of
waiver is ‘waiver by estoppel’. It arises when the innocent party so conducts himself as to lead the party in
default to believe that he will not exercise that right. This type of waiver is actually an application of the
principle of equitable estoppel.”62
An arbitration agreement becomes “inoperative” when the parties have waived or abandoned the arbitration
clause by invoking jurisdiction of a civil court. The operating premise behind this principle, is that “where a party
has decided to give a go-bye and novated the arbitration clause, they cannot later on be permitted to turn around
and invoke the arbitration clause when civil proceedings are initiated by the other side.”63
An arbitration clause does not prohibit the filing of a civil suit; however once the suit is filed that party gives up its
right to enforce the arbitration clause. Thus the right of a party to commence litigation is subject to the right of the
other party to refer the dispute to arbitration.64 The other party may file an application under Section 8 or 45 to
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relegate the matter to arbitration; failing which if the other party participates in the court proceedings it gives up its
right to arbitration. Thus when the plaintiff filed a writ petition which was disposed of granting liberty to the plaintiff
to initiate civil or arbitration proceedings and the plaintiff chose the former course it was deemed to waive its right
to arbitration. When the defendant, fully aware of the arbitration clause, participated in the proceedings and filed a
counterclaim the defendant too waived its right to arbitrate.65
However, when, soon after filing the civil suit, the defendant filed an application to invoke the arbitration
proceedings and continued with the court proceedings as well, it was held to not amount to the waiver of the right
to arbitration.66
When a party files a suit for injunction relating to a matter not concerning the underlying contract or for interim
relief under Section 9, it does not amount to waiver of right to arbitration.67
In determining whether a party has waived its right to arbitration, the court examines the following factors:
(1) whether the party's actions are inconsistent with the right to arbitrate;
(2) whether the litigation machinery has been substantially invoked and the parties were well into
preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate;
(3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long
period before seeking a stay;
(4) whether a defendant seeking arbitration filed a counter-claim without asking for a stay of the
proceedings;
(5) whether important intervening steps (e.g., taking advantage of judicial discovery procedures not
available in arbitration) had taken place; and
(6) whether the delay affected, misled, or prejudiced the opposing party.68
US Courts have adopted the following test to determine whether there has been a waiver of the right to arbitration:
“under the totality of the circumstances...(where a person) has acted inconsistently with the arbitration right,”
and by doing so has that party “in some way prejudiced the other party.”69
Thus, where within a year of commencement of litigation, the other party sought to enforce its right to arbitrate,
there was deemed to be no waiver of this right. 70
The issue of waiver of right to arbitrate has come up on numerous occasions in foreign jurisprudence. The
predominant view has been that waiver of right to arbitration is not a favored finding, and there is a presumption
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against it.71 The presumption becomes stronger when the party seeking arbitration has included a demand for
arbitration in its reply to the claims.72 There cannot be a finding of waiver of right to arbitration when the party
makes no submissions on the merits of the case.
1. The Plaintiff and Defendant 1 entered into an agreement pursuant to which Defendant 1 transferred 80% of its
stake in an oil exploration license in the Bass Strait to the Plaintiff (through the Farmin Agreement) and entered
into a joint venture for oil exploration (through a Joint Operating Agreement) and Plaintiff in turn transferred 50 %
of its stake to Defendant 2. Disputes arose between Plaintiff and Defendant 1 on whether the latter should
contribute towards exploration costs and Defendant 1 sent a notice threatening to terminate the contract. The
Plaintiff commenced proceedings against Defendant 1 in the Supreme Court for an injunction (“Proceeding 1”)
restraining it from terminating the contract. Defendant 2 started simultaneous proceedings (“Proceeding 2”)
against the other two parties for protection of its interests. Defendant 1 sought a stay in both proceedings on the
grounds that Proceeding 1 was be determined by arbitration and Proceeding 2 to be stayed till Proceeding 1 was
decided.
The Court decided that the issues here fell within the scope of the arbitration clause of the Farmin Agreement.
Plaintiff raised an objection that Defendant 1 instead of threatening to terminate should have gone straight to
arbitration and this constituted a waiver of his right.
The Court, however rejected this argument as Defendant 1 had not participated in any judicial proceedings.
Moreover, the Farmin Agreement itself provided it a right to terminate which was concurrent with the right to
arbitration. A stay was denied in the latter proceeding as the issues to be decided in both situations were different
and Defendant 2 was not a party to the arbitration clause. 73
2. One party terminated the agreement and moved the court and the other party filed a motion for remand to
arbitration. The mere fact that the party filed a motion before the court does not amount to a waiver of that party's
right to arbitration as that party has not defended itself on the merits of the case.74
3. A party submitted a witness list to be used should the case go to trial. This was the only evidence of a party's
affirmative participation in a judicial proceeding. It was held that this does not amount to invoking legal
proceedings and hence does not constitute a waiver of its right to arbitration.75
4. The Petitioner originally fully controlled the Respondent. The Respondent company was then sold to an
individual. Problems arose relating to competition from the other group of members of the seller and alleged
financial irregularities on behalf of the Buyer. The Respondent commenced proceedings against the Petitioner in
the High Court of New South Wales for the disclosure of certain documents. Later, the Petitioners commenced
proceedings against the respondent who sought that the dispute be resolved by arbitration.
The Court, in ACD Tridon Inc v. Tridon Australia Pty Ltd.76 when posed with the question of applicability of waiver,
held that the respondent had not waived its right to arbitration as they had not taken any stand suggesting the
same in the litigation. Moreover, the incorrect use of the term ‘waiver’ was explained by the Court as follows:
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“Tridon relies on `waiver’ by the defendants, through their conduct of various phases of the proceeding to
date. The word `waiver’ is frequently used in the law, but it is often used imprecisely. As Mchugh J
(dissenting) pointed out in Commonwealth v. Verwayen,
(1990) 170 CLR 394 , 491, most of the cases
which purport to apply the doctrine of waiver are really cases of contract, estoppel or election: see also
Mason CJ at 407, Brennan J at 421 ff, and Toohey J at 472. Tridon does not rely on equitable estoppel,
because it does not contend that the defendants’ relevant conduct has caused it any detriment that cannot
be addressed by an order for costs. There is no suggestion that the defendants’ omission to raise the
arbitration clauses at an earlier time was attributable to a contract.”
It may be noted that while the distinction between waiver and estoppel exists, the above judgment does not set
out why the doctrine of waiver is not applicable in the present context. The final result, it is submitted is correct as
there was no argument on merits by the defendant in the judicial proceedings and hence there was no indication
of their intention to waive their right to arbitration. The observation, however, that it was the doctrine of estoppel
that the Petitioner relied upon rather than the doctrine of waiver seems not entirely accurate.
5. When a party replies to a Notice for arbitration from the other party, stating that the dispute that had arisen did
not fall within the ambit of the arbitration clause and that the procedure specified in the Australian International
Arbitration Act and UNCITRAL Model law had not been followed (and that only the
Victoria Commercial
Arbitration Act had been followed), it was held by the Supreme Court of Victoria in
Stericorp Ltd. v. Stericycle Inc. (US) 77 that it did not amount to waiver of right to
arbitration.
It is submitted that once a party claims that a particular dispute does not fall within the scope of the arbitration
clause, it cannot later claim that the same dispute should be referred to arbitration. While it has not waived its right
to arbitrate per se, it ought to have done so in the specific context of the dispute at hand.
6. A dispute arose between the parties in respect of alleged breaches of contract and representations by the
defendant. The Plaintiff commenced proceedings before the Federal Court of Australia and obtained arrest of the
defendants ship, which was later released upon payment of security. Similarly the Defendant obtained an arrest of
the Plaintiffs vessel as well. Subsequently the defendant commenced arbitration in London and required an
assurance from the Plaintiff that it would submit all disputes to arbitrations failing which it would seek an anti-suit
injunction in the High Court in London to restrain the Plaintiff from taking any steps to prosecute its claims
otherwise than in the London arbitration. The Plaintiff then sought an anti-suit injunction in the Federal Court of
Australia to restrain the defendant from filing proceedings before the London Court. The lower Court granted the
anti-suit injunction and held that the proceedings commenced by the defendant earlier for the arrest of the
plaintiff's ship had resulted in the arbitration clause becoming inoperative.
This was however overruled by the Full Court of the Federal Court of Australia which held that such an act does
not in itself amount to a repudiation of an arbitration agreement and that all relevant circumstances must be
examined in order to reach a conclusion of waiver. The proceedings could have been filed, in the instant case,
only to obtain security for arbitration. In such a scenario it was held that the party initiating litigation is not deemed
to have waived its right to arbitration.78
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In order to determine whether there has been a waiver of the right to arbitration, it is important to see whether the
legal proceedings have been instituted by the party which has allegedly waived its right to arbitrate.
1. An application for rejection of complaint cannot be construed as any step in the legal proceedings. It was no bar
to the invoking of jurisdiction under
S. 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 (now repealed
and reenacted as Part II of the
Arbitration and Conciliation Act, 1996 ).79
2. Instituting a judicial proceeding for costs based on the premise that the litigation would proceed to trial in the
absence of settlement results in the person instituting the proceeding waiving its right to arbitration.80
3. Instituting in rem proceedings for security for alleged breach of the time charter does not amount to waiver of
right to arbitration as an action in rem is an action against a thing (rem is thing in Latin)
than a person (contrast with action in personam)81. Thus, in this case, an action in rem
would be against the ship than against the ship owner.82
4. A party doses not waive its right to invoke arbitration of the dispute by filing a criminal complaint.83
5. When a party initiates court proceedings to complement arbitral proceedings, i.e. to decide on some of the
claims that were not arbitrable and against parties who were not signatory to the arbitration agreement, it does not
amount to waiver of a party's right to arbitration.84
The doctrine of waiver applies when a party deliberately chooses not to adopt a particular course of action, when
such a course of action is open to it.85 The two types of waivers were explained by Gaudron J as follows:
“If, in the course of litigation, a person fails to plead a matter, take an available objection or pursue a
particular point of law, the matter proceeds on the basis that the point which might have been taken is not in
issue. Were it otherwise the conduct of litigation would be unmanageable. Of course, leave may be granted
for the point to be raised notwithstanding the failure to take the point at the appropriate time. Generally, leave
is granted if the point can be raised without injustice to the other party. That question may depend upon
whether disadvantage to the other party can be avoided by adjournment or an appropriate costs order. But
other issues may be taken into account...
...
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When a party to litigation deliberately chooses not to take a point or fails to take a point when it comes to
notice, the courts may adopt a more stringent attitude, treating the point as having been irrevocably
abandoned. Usually, the party who has thus failed to take the point is said to have “waived” it.”
Thus when a party had the option to go for arbitration but deliberately chose not to, based on the latter principle
laid down above, that party would be deemed to have waived its right to arbitrate.
1. A party had commenced civil actions, filed company petitions and issued criminal complaints relating to the
same dispute. It is deemed to have waived its right to arbitrate.86
2. A party had participated substantially in litigation proceedings it. It was deemed to have waived its right to
arbitrate. Arbitration should not be compelled when the party seeking to compel it has waived its right to do so.87
3. A party filed a motion for summary judgment. Even though this motion was submitted as an alternative to
dismissal or compelled arbitration, it resulted in a waiver of the right to arbitration. In the words of the Court :
“Where a party moves for summary judgment through a motion including or referring to matters outside the
pleading, that party has made a decision to take advantage of the judicial system and should not be able
thereafter to seek compelled arbitration. A defendant who seeks arbitration only as an alternative to summary
judgment takes the risk that the court will rule on the merits of the plaintiff's claims, thereby precluding the
defendant from seeking arbitration subsequently.”88
These principles apply both in cases of a plaintiff commencing litigation proceedings and the defendant filing a
counterclaim in such proceedings. The ICC Tribunal in Contractor (Germany) v. Employer (Jordan),
89 succinctly laid down the position of law relating to waiver of right to arbitration.
1. The Claimant filed a case for interim injunction against enforcement of bank guarantees by Respondent in a dispute
relating to a construction contract. Claimant then requested for a judgment for the same which was opposed by way of
a counterclaim. It was deemed that both parties had waived their right to arbitration.
Waiver of right to arbitration may be express or implied. Filing a suit on the merits of the case that is to be referred to
arbitration constitutes an irrefutable presumption that that party has waived its right to arbitration. Not objecting to a
claim and dealing with the merits of the case by the Respondent also results in a waiver of his right to arbitration.
Waiver can be implicit or result from an act that clearly indicates the party's intention not to be bound anymore by the
agreement. Such an intention, it was held90 is clear if a party applies to a national court for a decision on the merits of a
dispute that ought to be arbitrated.
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Applying these principles to the given facts, the ICC Tribunal held:
“Claimant clearly indicated its intention not to be bound by the arbitration agreement when it applied to the Jordanian
court for a final relief. At that moment respondent could have requested the Court to suspend the proceedings and
send the matter to arbitration according to the arbitration agreement. (Art. 6 JAL 1958). However, respondent chose
not to object to the change of forum and sealed the agreement to waive the arbitration to the civil court by filing a
counterclaim for damages rather than requesting the stay of the proceedings. The Arbitral Tribunal lost its jurisdiction
because both parties applied to the courts for decisions on the merits of the dispute.
...
That is, the mere fact of filing a suit by a party to an arbitration agreement constitutes an irrefutable presumption that it
waived its right to arbitrate regardless of its actual intent, provided the suit pertains to matters covered by the
arbitration agreement. The same also applies to failure by the defendant to raise the defense before entering into the
merits of the dispute...This strict waiver rule is necessary due to the type of the defence and the time at which it must
be raised. The aim of the defense is to suspend the court proceedings and it must be raised before entering into the
merits of the dispute.”
It was further held that the express declaration by the Claimant in the statement of claim that the Claimant did
not intend waiving its right to arbitration does not amount to not waiving the right to arbitration.
Claimant also alleged that the Respondent was the person who went into the core issue of the dispute that was
to be resolved through arbitration, before the court, and it did not raise these issues itself. However, the central
issue was not who first went into the merits of the case but the fact that the court did go into the merits of the
case without any objection from either party. In this case the defendant had refused to respond to the plaintiff's
notification seeking to settle the dispute according to arbitration. This was another factor that was used by the
court to determine his waiver of the right to arbitration.
A party may also expressly reserve its right to arbitration. When the Plaintiff filed for interim relief before the
Court after expressly reserving its right to arbitration, it is not deemed to have waived its right to arbitration.91
The burden of proving waiver was on the Defendant who had failed to discharge the burden.
There is no waiver of the right to arbitration when a party clearly expresses its intention to arbitrate before
commencing court proceedings. Thus:
1. When a party files it petition seeking enforcement of an arbitration agreement after receiving the originating
writ but before filing its own statement in reply, it is deemed to have unambiguously expressed its intention to
rely on the arbitration clause and cannot be said to have waived its right to arbitration.92
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2. When a party initiates arbitration and soon after initiates a number of court proceedings relating to matters
falling outside the scope of the arbitration but ancilliary to it, it is deemed not to have waived its right to
arbitration.93
4. Referral to arbitration and conditions for grant of stay
Where a valid arbitration exists covering the area of the dispute in question, the Court/ tribunal is mandated by
the language of Section 45 to refer the dispute to arbitration and stay the court proceedings.
An argument that the tribunal before which the dispute has been brought up is more competent to handle the
dispute is not acceptable, that referring the matter to arbitration would be expensive, time consuming and would
require transfer of document between countries for production as evidence is not maintainable.94 The Company
Law Board (“CLB”), while rejecting these arguments dealt with the grant of stay in extensio.
In this case, the CLB further considered a decision of the Supreme Court on the purport of Section 45.95 In a
petition filed before the CLB under
Section 111 of the Companies Act, 1956 , the issue of foreign arbitration agreement was
raised and a prayer was sought for staying proceedings under
Section 34(e) of the Arbitration Act , 1940. Considering the facts and circumstances of
that case, the Southern Bench of the CLB declined to exercise its discretion to stay the proceedings. On an
appeal, the Karnataka High Court upheld the decision of the CLB. On an SLP filed before the Supreme Court,
the Supreme Court directed the CLB to refer the parties to arbitration in terms of
Section 45 of Arbitration and Conciliation Act . It observed96:
“Without adverting to the correctness or otherwise of the decision of the High Court, it becomes otherwise plain that it
has refused to interfere in the orders of the CLB dated 9th July, 1993 and the dispute is kept within the domain of the
said Board for disposal. One of the questions which it is supposed to de-cide is about the title to the shares in dispute.
While so, the Arbitration and Conciliation Ordinance, 1996, which Ordinance before its lapse has been re-promulgated.
Section 45 thereof enjoins a judicial authority (the CLB being one such judicial authority) when requested by any one of
the parties or any person claiming through or under him, where the parties have made an agreement referred to in
Section 44, to refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or
incapable of being performed. Undisputedly, there exists an arbitration agreement between the parties whereby their
disputes arising out of the contract would be referable to an arbitrator having his legal seat at Zurich, Switzerland, and
to which disputes the substantive law of contract as prevalent in India would apply. The CLB would thus be obliged to
proceed in accordance with Section 45 and refer the parties to arbitration, because the agreement is neither null and
void, nor inoperative or incapable of being performed. Incapability, of course, has not to be understood as being
inconvenienced. When the parties enter into such agreement with open eyes they are presumed to have incurred on
themselves the inconveniences inherent in the deal. Thus, only an application by any of the parties is required to be
made which would set the judicial authority to act in the manner provided.”
On the facts and circumstances of the case, the CLB concluded that the principal agreement still subsisted and
that the supplemental agreement had to be read as a part and parcel of the principal agreement which
contained an arbitration clause and that the matter complained of in the petition before it had arisen out of and
in connection with the said agreement and that there was nothing to show that the agreement was null and
void, inoperative or incapable of being performed. The CLB, accordingly referred the parties to arbitration in
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terms of Section 45.
Thus the position of law that has emerged is that when there exists a valid arbitration agreement, referral to
arbitration and stay of litigation proceedings is mandatory and no other factors are relevant in this regard. The
New York Convention stipulates this and was held to prevail over domestic Israeli law which provides Courts
with discretion in this regard.97 When there is an arbitration clause in the contract the grant of a stay of legal
proceedings is mandatory.
1. The parties entered into an exclusive distributorship contract under which the Plaintiff was the sole distributor
of the Defendant's electronic products in Spain. The contract contained a clause referring disputes to arbitration
at the American Arbitration Association (AAA) in New York under New York State law.
When a dispute arose between the parties due to the Defendants’ alleged breach of the exclusivity provision,
and the Plaintiff commenced proceedings before the Court, the Spanish Supreme Court in Kern Electronics,
S.A. v. Goldstar Company Limited 98 stayed the proceedings.
2. A charterparty was entered into between a Greek party and Cyprian party, concluded by way of exchange of
telexes and providing for arbitration in London with English law as the applicable law. In such a scenario the
Greek Courts would not have jurisdiction. The Greek Supreme Court applied English law to govern the validity
of the agreement and held that the contract could be concluded by way of exchange of telex and was valid and
hence there existed a valid arbitration agreement. Consequently, it was the arbitrator who would have
jurisdiction to decide the dispute arising out of the charterparty.99
3. There was a Shareholders Agreement governing the relations between the shareholders, which contained an
arbitration clause. The Appellant was not allowed to argue that the right to file a petition for oppression on the
basis of fraud was a statutory right and hence there existed a right to file a petition before the High Court and
that this right could not be taken away by the presence of an arbitration clause.99a The argument that this was
against public policy was rejected. There was also a clause stating that “the rights and remedies granted under
this Agreement shall not be exclusive but shall be in addition to other rights and remedies available under law
or equity.” The Court held that this could not be interpreted to mean that parties were entitled to recourse to
courts for disputes to be covered by arbitration under the Agreement. Such an interpretation would render the
arbitration clause useless.
At a more general level, it may be seen that the right to file a suit for a wrong is equally a statutory right, which
is on par with right to file a petition for oppression. The right to specifically perform an arbitration agreement is
expressly stated to take precedence over this right to file a suit or, as it so happened on the facts of this case,
petition for oppression.
Such a referral to arbitration is mandatory even if a dispute covered by an arbitration clause arises out of cross-
claim made in the course of litigation proceedings dealing with disputes not covered by the arbitration clause.
1. A and B entered into three contracts, the first two without an arbitration clause and the last which contained
an arbitration clause. A sued B for disputes relating to the first two contracts. B raised a counter claim by which
it sought to set-off amounts owed by A to B under the third contract with any liability that would arise under the
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former proceedings. The applicable law was Turkish law. The Queens Bench stayed the proceedings. This was
because under Turkish law, a claim for set-off was treated as an individual claim separate from the rest of the
proceedings and such a claim in the present case would fall within the ambit of the arbitration clause. In such
circumstances the Court would not be competent to decide on the cross claim issue.1
An argument that a referral to arbitration should not be made as court proceedings would be more convenient
due to the requirements of obtaining evidence from a different country does not hold good.
2. An aircraft leasing agreement was entered into between the parties with a provision for arbitration in
accordance with International Arbitration Association Rules and Procedures in a hearing before the Stockholm
or London International Arbitrage. The Plaintiff claimed that the amount due to them under the “Wet lease
agreement” had not been paid and commenced proceedings before the Sindh High Court. The Defendant filed
an application to stay the proceedings in the light of the arbitration clause and Section 34 of the Pakistani
Arbitration Act 1934.
The Court held that all the conditions for stay were satisfied, i.e.
(a) Proceedings were commenced by one party to the arbitration agreement against another party to it
(b) The dispute concerns a matter falling within the scope of the arbitration agreement
(c) The party seeking a stay did not participate in the proceedings and was not hence barred by estoppels
or waiver. (The Plaintiff claimed that the Defendant did not mention arbitration at all initially when it
brought the dispute to the note of the Defendant and that this was misleading. Court held that if this
was the case, the Defendant would be penalised in terms of award of cost during the arbitration but
there was no other consequence.)
The Plaintiff further claimed that the arbitration was in London or Stockholm and evidence was fully based in
Karachi, thus making the whole process very expensive. It was thus argued that a stay of the court proceedings
must not be granted. However, it was held that the parties entered into the Agreement with full knowledge of
this fact. Neither party could now take this stand.2
Section 45, however does not apply with regards an arbitration in a non-Convention country.
1. Yugoslavia had not ratified the protocol pursuant to which 1961 Act was enacted, it was therefore, held that
the respondent could not maintain an application under Section 3 of the 1961 Act (corresponding to sec. 45 of
the 1996 Act).3
For a claim for recovery of money, it was observed that when a plaintiff bases its right to sue on the contract
itself, not upon a statute or some other basis outside the contract, the provision requiring arbitration as a
condition precedent to recovery must be observed.4
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Grant of stay pending criminal proceedings
A stay of enforcement proceedings would not be granted pending criminal proceedings where the claims in the
criminal proceedings were unrelated to the core issue in the arbitration.5
Arbitration clause with non-mandatory language
Even where the arbitration clause reads that the “parties.. may” refer their disputes to arbitration, it does not
mean that arbitration is non-mandatory in nature.
1. The sales contract in the factual matrix of Vigel S.p.A v. China National Machine Tool Corporation
6 contained a clause that the “parties.. may” refer their disputes to arbitration at the China International
Economic and Trade Arbitration Commission. Following a dispute that was resolved by arbitration, when the
award was sought to be enforced in Italy, it was argued by the Respondent that parties never concretely agreed
to refer disputes to arbitration as indicated by the use of the word “may”. However, the Court dismissed their
argument as arbitration was by definition an option open to an interested party. In the words of the court:
“This argument fails because of a basic mistake, that commencing an action may be something other than an option.
The availability of an action, either before the court or before an arbitrator (whatever [the action] is called in the latter
case), necessarily means that its commencement is a mere option of the interested party, or else a requirement to
obtain judicial or arbitral protection. It is never an obligation or, even less, a duty ... This consideration suffices to
conclude that in no case could the parties could have properly used a verb expressing a duty or obligation when
referring to arbitration, as argued in the ground at issue.”
Refusal to Refer
There was an appeal against the refusal by a single judge refusing to refer the parties to arbitration. There was
a conflict of decisions on the point whether the appeal would lie to a Division Bench. The matter was directed to
be placed before a Bench of three judges.7
Where the arbitration clause in question was excluded from the time charterparty made between the parties
and also from the bills of lading of which the plaintiff was the holder and the arbitration clause also appeared to
be vague and uncertain, an application for reference to arbitration was held to be not maintainable.8
A court may refuse to refer a dispute to arbitration, if under the law applicable to the arbitration agreement, the
jurisdiction of courts cannot be taken away even if there existed an arbitration agreement.
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1. UAE law was applicable to an arbitration agreement. According to UAE law, the jurisdiction of the Court
could not be taken away. In other words, even if an arbitration clause existed, either party may bring the dispute
before a Court in UAE which would have jurisdiction to decide the dispute and was not obligated to refer the
dispute to arbitration. In such a scenario, when the dispute was brought before the UK Courts, the Courts
decided to exercise jurisdiction and hear the matter.9
5. “Claiming through or under”
The Delhi High Court in Virender Yadav v. Aerosvit Airlines 10 was faced with the issue of
whether a dispute involving the agent of a signatory to the arbitration agreement could be referred to arbitration.
In this context the Court had to examine the scope of the phrase “claiming through or under” and decide
whether this phrase included within its ambit agents of signatories.
In the underlying fact scenario, the plaintiff had a right to be the exclusive cargo agent of defendant 1 and 2 and
this right had been violated by defendant 1 and 2 when they entered into an agreement with defendant 3
appointing defendant No. 3 as a cargo agent within the territory of India.
The Plaintiff argued that a conjoint reading of Section 7 and Section 2(b) meant that the arbitration agreement
has to be in writing and contained in a document signed by the parties. Since there was no arbitration
agreement between the plaintiff and defendant No. 3, there could be no arbitration between them and since the
cause of action against all three defendants could not be bifurcated, the arbitration clause could not be invoked.
The Court firstly observed that the claim fell within the ambit of Section 45 as the arbitration was a foreign
arbitration. Moreover, the term “claiming through or under” could not be construed narrowly and would definitely
include agents of parties. It was noted11—
“The ‘agreement’ referred to in Section 44 of the Act is defined as one arising out of a legal relationship whether
contractual or not, considered as commercial under the law in force in India. It is not the case of the parties that the
agreement governing the parties is not one that falls under Section 44 of the Act. In the present case, the defendants
No. 1 & 2 have made the request for referring the parties to arbitration. However, in case such a request was
forwarded by any person claiming through or under one of such parties who had entered into an agreement as defined
under Section 44 of the Act, like the defendant No. 3 herein, the same was also required to be referred by the judicial
authority to arbitration.
...
Fact remains that while defendant No. 3, who is the agent of defendant No. 1 supports defendants No. 1 & 2 and has
expressed its willingness to submit itself to arbitration, it is only the plaintiff who is resisting the said request. The
expression “claiming through or under” as finds mention in Section 45 of the Act cannot be construed so narrowly as to
exclude the agent of the defendants No. 1 & 2. The defendants and their actions are so closely interrelated that it has
to be held that the defendant No. 3 being an agent of defendants No. 1 & 2 falls within the purview of the arbitration
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clause, irrespective of the fact that it is not an independent signatory to the arbitration agreement.
Once it is held that the liability of the defendant No. 3 as the agent of the defendant No. 1 and that of defendant No. 1
as the principal of defendant No. 3 arises from the same cause of action and that the defendant No. 3 has not been
sued in its independent capacity, but only in the capacity of an agent of defendant No. 1, and there is an arbitration
agreement governing the plaintiff and the defendant No. 1, then it follows that the plaintiff would not have any
independent cause of action against the defendant No. 3. This principal grievance of the plaintiff is the action on the
part of the defendants No. 1 & 2 in appointing defendant No. 3 as an agent for the same territory during the currency of
the allegedly exclusive agreement with the plaintiff. This dispute which forms the basis of the suit instituted by the
plaintiff against the defendants can be resolved through arbitration under Section 45 of the Act as the same hinges on
the interpretation of the Agreement dated 20.10.2004. If the arbitral tribunal ultimately arrives at the conclusion that the
action of the defendants No. 1 & 2 in appointing defendant No. 3 as its agent in the territory of India during the currency
of the Agreement dated 20.10.2004 with the plaintiff is illegal or invalid, the direct outcome thereof would be that the
appointment by the defendants No. 1 & 2 of the defendant No. 3 shall be held to be invalid. As a result, the relief
sought by the plaintiff against the defendant No. 3 in the suit shall be automatically available to it, even in the absence
of defendant No. 3 before the arbitration tribunal. The relief sought by the plaintiff against the defendant No. 3 cannot
be stated to be ‘independent’ merely because the plaintiff has made a passing allegation of fraud against the defendant
No. 3 without substantiating it with any cogent averment in the plaint.”
It is important to notice a difference in the language of s. 8 and s. 45. S. 8, the equivalent provision for domestic
arbitration, does not contain the expression “claiming through or under”. In this connection, the decisions in
Roussel-Uclaf 12 and Ashok Sancheti 13 are instructive. In Uclaf,14
two companies entered into a contract that contained an arbitration clause, and the question arose whether a
wholly owned subsidiary of the defendant company was bound to arbitrate under the clause signed by its
parent. On facts, it was established that the subsidiary was no more than “the representative and the selling
arm” of the parent company. S. Section 1(1)of the English
Arbitration Act , 1975, which is nearly identical to s. 45 of the Indian Act, governed the
question. The Court held that the expression “claiming through or under” is conceivably relevant to a subsidiary
company, and observed as follows:
“The two parties and their actions are, in my judgment, so closely related on the facts in this case that it would be right
to hold that the subsidiary can establish that it is within the purview of the arbitration clause, on the basis that it is
“claiming through or under” the parent to do what it is in fact doing whether ultimately held to be wrongful or not.”
The decision was perceived as widening the scope of the arbitration agreement to beyond what was intended
by the legislature,15 and the question arose once again, very recently, in City of London v. Ashok Sancheti.16
However, it is important to notice one crucial distinction on facts: in this case, Ashok Sancheti, an Indian
solicitor living in England, argued that the Corporation of London was bound by the arbitration clause contained
in the Bilateral Investment Treaty that India and England had entered into, and relied, inter alia, for this
proposition on the decision in Roussel Uclaf. The question was therefore whether the Corporation was an
“organ”, and the Court of Appeal observed as follows:
“The fact that in certain circumstances a State may be responsible under international law for the acts of one of its local
authorities, or may have to take steps to redress wrongs committed by one of its local authorities, does not make that
local authority a party to the arbitration agreement. It therefore held that the Corporation could not said to be claiming
Navneet Krishn
Page 25 of 44
“through or under” the United Kingdom.”
In this regard, there exists foreign case laws to suggest that when the agreement is signed by the subsidiary of
a company, the holding company is not deemed to be a signatory and hence cannot enforce the arbitration
agreement.
1. The arbitration agreement was entered into between the subsidiary of the Plaintiff and the Defendant. When
the Plaintiff filed a suit against the defendant regarding certain disputes that had arisen, the Defendant was not
permitted to enforce the arbitration agreement.17
2. It has been held that an arbitration agreement cannot be entered into by the subsidiary of a company and
enforced by the company itself. Where the arbitration agreement was entered into Glencore Grain Rotterdam
BV, Glencore Grain Limited will not be allowed to enforce the agreement as it was not a party to it.18
The applicability of the above line of reasoning in the Indian context is doubtful as the Indian Courts have taken
the view that arbitration would lie against both the agent and the principal even though the agent was not a
signatory to the arbitration agreement.19 This may perhaps be extended to cover a holding company-subsidiary
relationship as well.
6. Application to be under S. 45, not S. 8
In the case of an international arbitration, an application for an order of reference has to be made under S. 45
and not S. 8. The Supreme Court explained the reasons as follows:20
“Arbitration agreement relied on by the appellants was for an international arbitration, and therefore, the
appellants ought to have invoked Section 45 of the Act and not Section 8. For two reasons, we are of the
opinion that the impugned order of the Delhi High Court deserves to be set aside and the matter is remitted for
the consideration of the High Court. Firstly, the statutory provision which is attracted to the facts on which the
relief claimed by the appellants is founded, is Section 45 of the Act and the scope of power exercised by the
judicial authority under Section 45 of the Act is not identical with that under Section 8 of the Act. Secondly, the
appellants have placed forceful reliance on a document which purports to be a letter written by respondent No.
2 to the appellant No. 1 and which has been filed in this Court by the respondents herein, was not filed by the
appellants before the High Court, and in any case, it was certainly not available for the consideration of the
High Court when the learned judges disposed of the application under Section 8 of the Act filed by the
appellants. Inasmuch as we are of the opinion that proceeding on fundamentally wrong premises of law has
occasioned a failure of justice, we deem it proper to set aside the impugned order of the High Court and send
the matter back to the High Court to bear and decide the application afresh.”
However, a wrong heading in the cause title will not result in dismissal of the application. Thus where the cause
title stated that the claim was made pursuant to Section 8, but the claim was infact pursuant to Section 45, that
does not lead to dismissal of the claim.21
Navneet Krishn
Page 26 of 44
7. Section 8 and Section 45 - Differences
Section 8 and Section 45 though directing the Court to specifically perform an arbitration agreement vary in
regards the discretion they grant the court.22
This difference arises from the difference in the words used in the two sections.23
The differences between Section 8 and Section 45 are:
”(a) that Section 8 comes into operation whenever a contract contains an arbitration clause, but Section 45 is
attracted only when the matter is the subject of a New York Convention Arbitration Agreement;
(b) that Section 8 envisages the filing of an application by a party to the suit seeking reference of the dispute to
arbitration, but Section 45 contemplates only a “request” for the purpose;
(c) that Section 8 contemplates no adjudication by the court, while Section 45 contemplates the returning of a
judicial finding that the agreement to arbitrate has not become inoperative or incapable of performance;
(d) that Section 8 read in conjunction with Sections 5 and 16 prohibits interference by a civil court, while Section
45 expects a court to be satisfied that the agreement has not become null and void, inoperative or incapable of
being performed, before acceding to the request of a person to make a reference; and
(e) that the scope of an enquiry under Section 8 is to return a prima facie finding while the scope of an enquiry
under Section 45 is larger, just short of deciding contentious issues of fact going to the root of the disputes.”24
In the light of the Supreme Court decision in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd,
25 point (c) does not remain good law.
The primary distinction appears to be that Section 8 leaves no discretion with the court in the matter of referring
parties to arbitration whereas Section 45 grants the court the power to refuse a reference to arbitration if it
“finds” that the arbitration agreement is “null and void, inoperative or incapable of being performed”.26
In addition, the discussion earlier in this section on the difference between the two provisions in terms of the
expression “claiming through or under” may be referred to.27
Navneet Krishn
Page 27 of 44
Contrary observation have been made by the Delhi High Court which stated that following the decision in Shin-
Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd. 28 the scope of Section 8 and 45 are the
same.29
8. Declaration of invalidity of an arbitration agreement under S. 45—permissibility

of
A party to an international arbitration agreement can approach an Indian Court under Section 45 for a
declaration that the arbitration agreement is null and void, in-operative, or incapable of being performed. It was
held that it would lead to “anomalous and dangerous consequences” if such a claim could only be raised by a
party when the suit was filed by the other party.30
It is submitted that Section 45 is not a provision meant to provide a remedy for a party claiming that an
arbitration agreement is void. It is merely a provision directing the court to refer disputes to arbitration if there
existed a specific arbitration clause covering that particular dispute. A party which is of the view that the
arbitration agreement is void, needs to treat the agreement to be void and file a normal civil suit relating to the
dispute. In case the defendant files a reference under Section 45, it may then be argued that the arbitration
agreement is void.
9. Doctrine of Severability under Part II—Effect of Invalidity of Underlying Contract

on Arbitration Clause
In the context of Part I, Section 2(1)(b) read with Section 7 and Section 16(1) make it clear that the arbitration
agreement is a separate agreement by itself and the invalidity of the main agreement does not automatically
render the arbitration agreement void. Section 16(1) expressly states that an arbitration clause shall be treated
as an independent agreement and the nullity of the contract shall not result in the invalidity of the arbitration
clause.
This does not automatically apply in the context of Part II as Section 7(1) is expressly stated to apply to Part I.
In Andritz v. Enmas Engineering Pvt. Ltd. 31, the Madras High Court took the view that
recourse could not be taken to Section 7(2) for the purpose of determining the question of severability insofar
as the provisions of Part II are concerned and hence a solution must be found in Part II itself.
However, since Section 44 referred to “an agreement in writing for arbitration” to which the Convention set forth
in the First Schedule applies and Article II(2) of the First Schedule stated that an “agreement in writing” shall
include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an
exchange of letters or telegrams, it contained all the elements of Section 7 and hence made it clear that the
arbitration clause would be treated separately from the rest of the contract. The next question that was to be
determined was the effect of invalidity of the underlying contract on the arbitration clause.
Navneet Krishn
Page 28 of 44
In the opinion of Ramasubramaniam J, while the doctrine of separability led to the conclusion that arbitration
clause need not always follow the fate of the underlying contract, the corollary that it will always survive the
main contract is not true. The result would be different in the case of
(a) voidable contracts,
(b) contracts that are void ab initio, i.e. contracts which are void from their very making, and
(c) frustrated contracts, i.e. contracts which were enforceable at the beginning, but which became void
after a point of time.
(a) Voidable contracts
This includes cases of coercion, fraud or misrepresentation or undue influence, which are determined based on
fact. Since it is a factual issue, according to the learned judge, the determination of fact would be by the
arbitration tribunal.
(b) Contracts that are void ab initio
In such cases the arbitration clause would not survive the main contract. This was succinctly illustrated as
follows:
“Suppose an agreement is entered into between a person in India and a foreigner, whereby the foreigner agrees to
supply arms and ammunition to the Indian citizen who holds no licence for such import, such an agreement would be
hit by Section 23 of the Contract Act. This agreement would be void ab initio and hence the arbitration clause
contained in such an agreement cannot certainly survive the main agreement. To hold otherwise, would tantamount to
permitting an arbitration into the rights and liabilities of the parties to the agreement out of which, no such rights and
liabilities, ever flowed nor could ever flow.”
(c) Frustrated contracts.
Ramasubramaniam J opined that
“In cases of frustration it is the performance of the contract which comes to an end but the contract would still be in
existence for purposes such as the resolution of disputes arising under or in connection with it. The question as to
whether the contract became impossible of performance and was discharged under the doctrine of frustration would
still have to be decided under the arbitration clause which operates in respect of such purposes.”
Navneet Krishn
Page 29 of 44
The approach of the Madras High Court is similar to that of the American Courts.32 US Courts have taken the
view that there is a presumption in favour of arbitration which is defeated and the trial regarding the validity of
the agreement ordered on the production of “some evidence” (this is similar to the Shin Etsu approach which
prescribes a prima facie analysis). According to the US Courts the scenario would be different in case of void
contracts.33 In such cases “the agreement does not come into existence--it is void and wholly unenforceable.” In
such a situation, if the party shows some evidence of the nullity of the contract, it is entitled to trial on
arbitrability. However, in case of a voidable contract, which unless rescinded, imposes on the parties the same
obligations as a valid contract, “for the party to receive a trial on the validity of the arbitration clause, the party
must specifically allege that the arbitration clause is itself voidable.”34
The Madras High Court seems to have followed the above approach.
Challenge to underlying contract and not arbitration clause
If it is argued that a foreign arbitral tribunal lacks jurisdiction because the contract containing the arbitration
clause was entered into on its behalf by a person who did not have authority to do so, the decision in this
regard would have to be taken by the arbitral tribunal itself and not the Court. Hence a suit for declaration that
the arbitral tribunal lacks jurisdiction would not lie. It was held that grant of such a remedy was discretionary
and in the light of the more efficacious remedy available before the arbitrator, this discretion would not be
exercised favourably.35
This goes against the approach originally adopted by the US Courts. The US Court of Appeal held that when a
party claimed that the contract had been entered into on its behalf by a third party which lacked the authority to
do so, that party could not argue that the arbitration clause was severable and hence the issue of validity of the
contract be decided by the arbitrator. When the existence of the entire contract itself was disputed by the party
the same party could not claim that the arbitration clause alone was valid.36
The position in US has however, subsequently charged, and the US Supreme Court in Buckeye Check
37 has now adopted a similar line of reasoning as the Delhi High Court. Thus, the position in USA is that when
an arbitration agreement exists but a challenge is made to such an agreement on a standalone basis, i.e. the
arbitration agreement is challenged as being void, and the underlying agreement which contains the arbitration
clause is not challenged, the dispute is to be decided by the Court. However, when the challenge is to the
underlying agreement, the dispute is decided by the arbitrator.
1. The plaintiffs challenged the Deferred Deposit and Disclosure Agreements as a whole rather than the
arbitration provisions alone, the US Supreme Court in Buckeye Check Cashing, Inc (US) v. John Cardegna
(US) 38 concluded that the arbitration provisions were enforceable and the dispute was
referred to an arbitrator. Had the challenge been to the arbitration agreement itself, the Court would have had
jurisdiction to deal with the dispute. Based on the above, the Supreme Court concluded that the relevant
propositions were, (1) an arbitration provision is severable from the remainder of the contract as a matter of
substantive federal arbitration law; (2) the issue of the contract's validity is considered by the arbitrator in the
first instance unless the challenge is to the arbitration clause itself; (3) this arbitration law applies in state as
well as federal courts.
Navneet Krishn
Page 30 of 44
10. Where two interpretations are possible, that in favour of arbitration should be
adopted
Since the 1996 Act adopts a pro-arbitration stand, where two possible interpretations are possible- one
resulting in the remedy being before Court and the other before an arbitrator, the latter view is to be preferred.
The case of Ministry of Sound International Ltd. v. Indus Renaissance Partners Entertainment Pvt. Ltd.39,
involved a question of interpretation of the dispute resolution clause where a literal interpretation suggested that
arbitration proceedings were subject to any proceedings for an injunction being initiated in court. This argument
was rejected as the Court took a view that is in consonance with the pro-arbitration policy that is universally
accepted today. The Court held:
A contract providing for arbitration is a commercial document inter parties and must be interpreted in a manner
as to give efficacy by adopting a common sense approach rather than pedantic or legalistic interpretation.
Reasonable construction should be adopted.
11. Limitation
No time limit has been prescribed for moving an application before the judicial authority for referring the matter
to arbitration.40
BINDING NATURE OF FOREIGN AWARD
Section 46 declares that a foreign award shall be treated as binding on persons between whom it was made.
This is applicable, as specified in the section itself, to foreign awards which would be enforceable in accordance
with the conditions laid down in Section 48.
1. Korp Gems (India) Pvt. Ltd. v. Precious Diamond Ltd.,

(2007) 3 Arb LR 32 :
(2008) 2 RAJ 201 : (2007) 2 Cal HN 544.
2. Prograph International Inc. (Nova Scotia Canada) v. Ralph Barhydt (U.S.), (1998) 23
Yearbook Commercial Arbitration, (US No. 242) P. 901.
3. Twilite International, Inc. (U.S.) v. Anam Pacific, Yearbook Commercial Arbitration XXIII
(1998) (US No. 243), P. 960, citing Rhone Mediterranee Compagnia Francese v. Achille Lauro, 712 F. 2d. 50. (3rd Cir.
1983) reported in Yearbook IX (1984) P. 474 (US No. 51).
Navneet Krishn
Page 31 of 44
4. Shanghai Foreign Trade Corpn. (PR China) v. Sigma Metallurgical Co. Pty Ltd.
(Austraila), (1996) 11 International Arb. Rep. A-1 (Supreme Court of New South Wales, Australia) reported in (1997)
22 Yearbook Commercial Arbitration [Australia No. 20] P. 609.
5. W. Wood & Sons Ltd. v. Bengal Corpn.,

AIR 1959 Cal 8 [
LNIND 1958 CAL 15 ];Kamani Engineering Corpn. v. Societe De Traction,
AIR 1965 Bom. 114 [
LNIND 1963 BOM 31 ]: 66 Bom LR 758, held “shall” means “may”, the court was not
bound to stay proceedings.
6.
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ]at 1182 :
(1984) 4 SCC 679 [
LNIND 1984 SC 384 ] . This was followed in State of Orissa v.
Klockner & Co.,
AIR 1996 SC 2140 [
LNIND 1996 SC 795 ]:
(1996) 8 SCC 377 [
LNIND 1996 SC 795 ], on appeal from the decision of the Orissa High Court in sub-
nom State of Orissa v. Klockner & Co. A.G.,
(1995) 2 Arb LR 541 (Ori), where the court said that the stay of a suit filed in a local
court was mandatory because the agreement provided for a firm seat of arbitration and also under foreign law and that
filing an application for stay did not have the effect of filing a written statement within the meaning of
Section 34 of the Arbitration Act , 1940.
7. Global Marketing Direct Ltd. v. GTL Ltd.,

(2004) 3 RAJ 275 (Bom), a formal application is required to be made so that the
court and the other side may come to know why a request under the section has been made.
8. Global Marketing Direct Ltd. v. GTL Ltd.,

(2004) 3 RAJ 275 (Bom), jurisdiction continues until the court has decided the
question of validity of the agreement. Ispat Industries Ltd. v. Thor Orchid,
(2004) 3 RAJ 430 (Bom), before making an order of reference the court has to
make an inquiry to find out whether the agreement in question is null and void, inoperative or incapable of being
performed. Section 8 does not confer such jurisdiction on court, but S. 45 empowers the exercise such jurisdiction.
9.
AIR 1994 Del 75 [
LNIND 1993 DEL 633 ]:
(1994) 1 Arb LR 429 .
10.
(2009) 1 Arb LR 378 (Del).
11. Prograph International Inv. v. Barhydt, 928 F Supp 983, 988 (ND Cal 1996)(Orrick, D.J.)
citing Riley v. Kingsley Underwriting Agencies Ltd., 969 F. 2d 953, 959 (10th Cir. 1992). cited with approval in Twi-lite
International Inc. (U.S.) v. Anam Pacific Corpn. (U.S.), (1998) 23 Yearbook Commercial Arbitration (U.S. No. 243), p.
910.
12. Prekons Insaat Sanayi AS v. Rowlands Castle Contracting Group Ltd., [2007] 1 Lloyd's
Rep. 98; See also Aectra Refining & Marketing Inc. v. Exmar NV (The New Vanguard and The
Pacifica), [1994] 1 W.L.R. 1634 CA (Civ Div) and Bim Kemi AB v. Blackburn Chemicals Ltd., (No.1)
[2001] EWCA Civ 457 : [2001] 2 Lloyd's Rep. 93.
Navneet Krishn
Page 32 of 44
13. Korp Gems (India) Pvt. Ltd. v. Precious Diamond Ltd.,

(2007) 3 Arb LR 32 :
(2008) 2 RAJ 201 : (2007) 2 Cal HN 544.
14. Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre

Ltd.,
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234 :
(2005) 3 RAJ 1 .

Ltd.,
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234 :
(2005) 3 RAJ 1 .

Ltd.,
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234 :
(2005) 3 RAJ 1 .
17. Caribjet Inc. v. Air India Limited,

(2007) 3 Arb LR 41 :
AIR 2007 (NOC) 1826 : (2007) 3 RAJ 336 (Bom).
18.
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ], 1190 :
(1984) 4 SCC 679 [
LNIND 1984 SC 384 ].

Ltd.,
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234 :
(2005) 3 RAJ 1 .
20. Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate,

AIR 1958 SC 353 [
LNIND 1958 SC 1 ]:
1958 SCR 1156 [
LNIND 1958 SC 1 ]; State of UP v. C.Tobit,
AIR 1958 SC 414 [
LNIND 1958 SC 9 ]:
1958 SCR 1275 [
LNIND 1958 SC 9 ]; Santasingh v. State of Punjab,
AIR 1976 SC 2386 [
LNIND 1976 SC 268 ]:
(1976) 4 SCC 190 [
LNIND 1976 SC 268 ]; New India Sugar Mills v. Commissioner of Sales Tax, Bihar,
AIR 1963 SC 1207 : 1963 Supp (2) SCR 459; Kanwar singh v. Delhi Administration,
AIR 1965 SC 871 [
LNIND 1964 SC 194 ]:
(1965) 1 SCR 7 [
LNIND 1964 SC 194 ]; Deputy Custodian Evacuee Property New Delhi v. Official
Receiver of the Estate of Daulat Ram Surana, Delhi,
AIR 1965 SC 951 [
LNIND 1964 SC 220 ]:
(1965) 1 SCR 220 [
Navneet Krishn
Page 33 of 44
LNIND 1964 SC 220 ]; Motor Owners Insurance Co. Ltd. v. J.K.Modi,

AIR 1981 SC 2059 [
LNIND 1981 SC 403 ]:
(1981) 4 SCC 660 [
LNIND 1981 SC 403 ]; Ambica Quarry Works v. State of Gujrat,
AIR 1987 SC 1073 [
LNIND 1986 SC 513 ]:
(1987) 1 SCC 213 [
LNIND 1986 SC 513 ]; Kameshwarr Singh Shrivastava v. IV. Addl. District Judge
Lucknow,
AIR 1987 SC 138 [
LNIND 1986 SC 449 ]:
(1986) 4 SCC 661 [
LNIND 1986 SC 449 ]; Municipal Corporation of Greater Bombay v. Indian Oil
Corporation,
AIR 1991 SC 686 [
LNIND 1990 SC 821 ]: 1991 Supp (2) SCC 18; N.K. Jain v. C.K. Shah,
AIR 1991 SC 1289 [
LNIND 1991 SC 173 ]:
(1991) 2 SCC 495 [
LNIND 1991 SC 173 ]; K. Veeraswamy v. UOI,
(1991) 3 SCC 655 [
LNIND 1991 SC 320 ] ; Land Acquisition officer and Mandal Revenue Officer v.
Narsaiah,
(2001) 3 JT 157 :
AIR 2001 SC 1117 [
LNIND 2001 SC 575 ]:
(2001) 3 SCC 530 [
LNIND 2001 SC 575 ]; Carew & Company v. UOI,
AIR 1975 SC 2260 [
LNIND 1975 SC 290 ]:
(1975) 2 SCC 791 [
LNIND 1975 SC 290 ]; State of Haryana v. Sampuran Singh,
AIR 1975 SC 1952 [
LNIND 1975 SC 320 ]; G.P. Singh, Principles of Statutory Interpretation, 9th ed.
2004, p. 109-111.
21. Sundaram Finance v. NEPC India Limited,

(1999) 1 Arb LR 305 :
AIR 1999 SC 565 [
LNIND 1999 SC 26 ]:
(1999) 2 SCC 479 [
LNIND 1999 SC 26 ] :
(1999) 1 RAJ 365 .
22. Andritz Oy v. Enmas Engineering Pvt. Ltd.,

(2007) 3 Arb LR 545 :
(2007) 2 RAJ 637 : (2007) 4 Mad LJ 860.
23.
(2006) 1 Arb LR 155 [
LNIND 2005 DEL 1533 ] :
(2006) 1 RAJ 200 (Del).
24. Usha Drager Private Ltd. v. Draegerwerk Aktiengesellschaft,

(2006) 1 RAJ 498 (Del), since only a prima facie analysis was permissible, oral
evidence to prove the existence of the alleged oral agreement could not be considered, moreover, the parties had also
acted in furtherance of the distributorship agreement.
Navneet Krishn
Page 34 of 44
25. Ramasamy Athappan v. Secretariat of Court, International Chamber of Commerce,

France,
2009 (3) MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .
26. Fondation M. v. Banque X.,1996 BULL. ASA 527 (Swiss Fed. Trib., Apr. 29, 1996).
27. Ledee v. Ceramiche Rango, 684 F.2d 184, 186-187 (1st Cir. 1982). See also
Credit Suisse First Boston, LLC v. Jorge David Gonzalez Padilla, Yearbook of Commercial Arbitration, Vol. XXX (2005),
US No. 495, p. 865; Francisca Umali Magsino v. Spiaggia Maritime Ltd. And M/V SEA PATRON, Yearbook of
Commercial Arbitration, Vol. XXX (2005), US No. 506, p. 986; Rizalyn Bautista and others v. Star Cruises and others,
Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 513, p. 1070; Inacio Eufemio Lobo v. Celebrity Cruises,
Inc., Yearbook of Commercial Arbitration, Vol. XXXIII (2008), US no. 612, p. 820; Sankyo Corporation v. Nakamaru
Trading Corporation, Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 529, p. 997; CanWest Global
Communications Corp. v. Mirkaei Tikshoret Limited, Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No.
536, p. 1079; HGL SAS v. Spanghero SA and others, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), France
No. 43, p. 478; U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co. Ltd.,2003 U.S. Dist. LEXIS 25536; Intertec
Contracting A/S, Intertec (Gibraltara) Ltd. and Intertec Overseas Limited v. Turner Steiner International, S.A.; Turner
Steiner East Asia Limited and The Turner Corporation,2000 U.S. Dist. LEXIS 7413; Chloe Z Fishing Co., INC. v.
Odyssey Re (London) Limited, 109 F. Supp. 2d 1236; 2000 U.S. Dist. LEXIS 12645; 2000 AMC 2409; Ernesto
Francisco Versus M/T Stolt Achievement, Stolt Achievement, Inc., Stolt-Nielsen Transportation Group, Ltd., 2001 U.S.
Dist. LEXIS 3902; Elpidio E. AMON v. Norwegian Cruise Lines, Ltd., United States District Court, S.D. Florida, No. 02-
21025-CIV.
28. Riley v. Kingsley Underwriting Agencies Ltd., 969 F. 2d 953, 959 (10th Cir. 1992).
Nicholas Piramal India Ltd. v. Cultor Food Science, Inc.,
AIR 2003 AP 254 [
LNIND 2002 AP 1184 ], a party questioning the validity of an arbitration agreement
could not automatically get an injunction. Bharti Televentures Ltd. v. DSS Enterprises,
(2001) 3 RAJ 433 :
(2001) 92 DLT 788 :
(2001) 3 Arb LR 175 (Del), the court acquires jurisdiction to refer parties to
arbitration only at the request of one of the parties or any person claiming through or under the party to the arbitration
agreement. The section has an overriding effect and prevails over anything contrary thereto contained in Part I or the
code of Civil Procedure, 1908 . State Trading Corpn. of India Ltd. v. Owners and Persons Interested in
the Vessel MV Baltic C,
(1999) 3 RAJ 123 (Cal), execution of two agreements, materially different from
each other, and also vague and uncertain, the court said that it could only proceed when there was no dispute with
regard to the arbitration agreement and the same could be said to be binding on the parties.
29. S.B.P. & Co. v. Patel Engineering,

(2005) 3 Arb LR 285 :
AIR 2006 SC 450 [
LNIND 2005 SC 851 ]:
(2005) 3 RAJ 388 :
(2005) 8 SCC 618 [
LNIND 2005 SC 851 ].
30. Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.,

(2005) 3 Arb LR 1 (SC).

(2006) 1 RAJ 498 (Del), while Patel Engineering dealt with the nature of the power
of the Chief Justice under Section 11(6),Shin-Etsu dealt with the nature of power under Section 45.
Navneet Krishn
Page 35 of 44
32.
1984 Arb LR 240 :
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ]:
(1984) 4 SCC 679 [
LNIND 1984 SC 384 ].
33. See Renusagar Power Co. Ltd. v. General Electric Co. Ltd.,
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ], 1190 :
(1984) 4 SCC 679 [
LNIND 1984 SC 384 ], with reference to ‘stay of proceedings’ under sec. 3 of the
1961 Act, now ‘reference to arbitration’ under sec. 45 of the 1996 Act;
34. Nealy v. Bankers Trust Co. of Texas, 757 F 2d. 621 5th Cir. 1985, cited with approval in
National Material Trading (US) v. M/V Kaptan CEBI, (Turkey), Yearbook Commercial Arbitration, (US
No. 245), P. 923.
35. Ormaa Impex Pvt. Ltd. v. Nisai Asb Pte Ltd.,

AIR 1998 Del 15 [
LNIND 1997 DEL 140 ]:
(1997) 1 Arb LR 698 (Del).
36.
(2004) 3 Arb LR 56 : (2004) 3 Mh LJ 420 : (2004) 3 All MR 409 (Bom).

(2006) 1 RAJ 498 (Del).
38. Mitsui & Co. Ltd. v. Delta Brands, Inc., Yearbook of Commercial Arbitration, Vol. XXX
(2005), US No. 524, p. 1165. See also Travel Automation Ltd. v. Abacus International Pvt. Ltd.,
Yearbook of Commercial Arbitration, Vol. XXXII (2007), Pakistan No. 1, p. 438.

(2006) 1 RAJ 498 (Del).
40. 747 F. Supp. 1101.
41. Rizalyn Bautista and others v. Star Cruises and others, Yearbook of Commercial
Arbitration, Vol. XXX (2005), US No. 513, p. 1070.
42. Lithuanian Airlines v. Bhoja Airlines (Pvt) Ltd., Yearbook of Commercial Arbitration, Vol.
XXX (2005), Sindh High Court, Suit No. 41 of 2002, p. 129.
43. JS Ocean Liner LLC v. MV Golden, Progress

2007 (2) Arb LR 104 [
LNIND 2007 BOM 103 ] (Bom)(FB).

France,
(2009) 3 MLJ 84 [
Navneet Krishn
Page 36 of 44
LNIND 2008 MAD 3575 ] (Mad) :

AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
Navneet Krishn
Page 37 of 44
LNIND 2008 MAD 3575 ] (Mad) :

AIR 2009 (NOC) 639 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .
55. See Lovelock Limited v. Exportles, (1968) 1 Lloyd's Rep. 163.
56. Shanghai Foreign Trade Corporation (PR China) v. Sigma Metallurgical Co. Pty. Ltd.,
Yearbook Commercial Arbitration, Vol. XXII-1997, page 609.

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .
58. F.C.I. v. Yadav Engineer and Contractor,

1983 Arb LR 123 :
AIR 1982 SC 1302 [
LNIND 1982 SC 116 ]:
(1982) 2 SCC 499 [
LNIND 1982 SC 116 ].
59. Williams v. Cigna Fin. Advisors, Inc., 56 F.3d 656; Miller Brewing Co. v. Fort Worth
Distrib. Co. Inc., 781 F. 2d 494 (5th Cir. 1986).
60. Jackson Trak Group, Inc. v. Mid States Port Auth., 242 Kar. 683, 751 P 2d 122, 129
(1988). Cited in Malarky Enterprises (U.S.) v. Healthcare Technology Ltd. (U.K.), (1998) 23 Yearbook Commercial
Arbitration (US No. 248) P. 945.
61. R. Samudra Vijayam Chettiar v. Srinivasa Alwar,

AIR 1956 Mad 301 [
LNIND 1955 MAD 245 ].

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .
Ltd.,
(2009) 156 DLT 406 .
64. NB Three Shipping Ltd. v. Harebell Shipping Ltd., [2005] 1 Lloyd's Rep. 509 :
[2005] 1 All ER (Comm) 200 .
Navneet Krishn
Page 38 of 44
65. Raj v. VSNL,

(2004) 2 Arb LR 614 :
(2004) 3 RAJ 238 (Del).
Ltd.,
(2009) 1 Arb LR 566 (Del) : 156
(2009) DLT 406 .

(2001) 3 RAJ 433 :
(2001) 92 DLT 788 :
(2001) 3 Arb LR 175 (Del).
68. Jackson Trak Group, Inc. v. Mid States Port Auth., 242 Kan 683, 751 P. 2d 122, 129
(1988). Cited in Malarky Enterprises (U.S.) v. Healthcare Technology Ltd. (U.K.), (1998) 23 Yearbook Commercial
Arbitration, (US No. 248) P. 945.
69. Marubeni Corporation and Marubeni Pulp and Paper (North America), Inc. v. Mobile Bay
Wood Chip Center, Southeast Wood Fiber, LLC and Mid Atlantic Terminals, LLC, United States District Court, No.
Civ.A. 02-0914-PL.
70. Marubeni Corporation and Marubeni Pulp and Paper (North America), Inc. v. Mobile Bay
Wood Chip Center, Southeast Wood Fiber, LLC and Mid Atlantic Terminals, LLC, United States District Court, No.
Civ.A. 02-0914-PL.
71. Steel Warehouse Co. v. Abalone Shipping Ltd. of Nicosai, 141 F.3d 234 (5th Cir. 1998);
Miller Brewing, 781 F.2d; Moses H. Cone Mem'l Hosp. v. Mercury Constr. Co., 460 U.S. 1, 24.
72. Steel Warehouse Co. v. Abalone Shipping Ltd. of Nicosai, 141 F.3d 234 (5th Cir. 1998);
Import & Export, Inc. v. Wilmod Co., 524 F.2d 468 (5th Cir. 1975).
73. Origin Energy Resources Limited v. Benaris International N.V and Woodside Energy
Limited, Yearbook of Commercial Arbitration, Vol. XXX (2005), Supreme Court of Tasmania, p. 371.
74. Cangene Corporation v. Octapharma AG, Yearbook of Commercial Arbitration, Vol. XXX
(2005), Canada No. 15, p. 440
75. Keytrade USA, Inc. v. M/V AIN TEMOUCHENT, Yearbook of Commercial Arbitration,
Vol. XXX (2005), US No. 486, p. 777.
76. ACD Tridon Inc v. Tridon Australia Pty Ltd, Yearbook of Commercial Arbitration, Vol.
XXIX (2004), Australia No. 23, p. 533.
77. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Australia No. 27, p. 549.
78. Pan Australia Shipping Pty v. The Ship COMANDATE (NO), Yearbook of Commercial
Arbitration, Vol. XXXII (2007), Australia No. 30, p. 24.
Navneet Krishn
Page 39 of 44
79. State of Orissa v. Klockner & Co.,

AIR 1996 SC 2140 [
LNIND 1996 SC 795 ]:
(1996) 8 SCC 377 [
LNIND 1996 SC 795 ]; Orissa Mining Corpn. v. Klockner & Co.,
AIR 1996 SC 2140 [
LNIND 1996 SC 795 ]:
(1996) 8 SCC 377 [
LNIND 1996 SC 795 ]. The court considered the decision in General Electric Co. v.
Renusagar Power Co.,
(1987) 4 SCC 137 [
LNIND 1987 SC 568 ].
80. La Donna Pty Ltd. v. Wolford AG, Yearbook of Commercial Arbitration, Vol. XXXII (2007),
Australia No. 29, p. 216.
81. Lectic Law Library Legal Lexicon, http : //www.lectlaw.com/def/i087.htm.
82. Comandate Marine Corporation v. Pan Australia Shipping Pty Ltd., [2008] 1 Lloyd's Rep.
119; See also House of Lords in Republic of India v. India Steamship Co. Ltd. (No 2) (The Indian
Grace), [1998] 1 Lloyd's Rep 1;
[1998] AC 878 .
83. Consorcio Rive, S.A. de C.V. Briggs of Cancun, Inc., Yearbook of Commercial Arbitration, Vol. XXVI
(2001), p. 1066.
84. BEA Hotels NV v. Bellway LLC, [2007] 2 Lloyd's Rep. 493.
85. Ketteman v. Hansel Properties Ltd.,

[1987] AC 189 .

France,
(2009) 3 MLJ 84 [
LNIND 2008 MAD 3575 ] (Mad) :
AIR 2009 (NOC) 639 .
87. Intereested Underwriter's at Lloyd's and others v. M/T SAN SEBASTIAN, Yearbook of
Commercial Arbitration, Vol. XXXIII (2008), US No. 619; See also Morewitz v. West of England Ship
Owners Mut. Protection and Indemnity Association, 62 F. 3d 1356.
88. Khan v. Parsons Global Services Ltd., 521 F.3d 421.
89. Contractor (Germany) v. Employer (Jordan), Yearbook of Commercial Arbitration, Vol.

XXXI (2006), ICC Case No.10904, p. 95.
90. Contractor (Germany) v. Employer (Jordan), Yearbook of Commercial Arbitration, Vol.

XXXI (2006), ICC Case No.10904, p. 95.
Navneet Krishn
Page 40 of 44
91. Mitsui & Co., Ltd. V. Delta Brands, Inc., Yearbook of Commercial Arbitration, Vol. XXX
(2005), US No. 524, p. 1165.
92. American Bureau of Shipping v. Tencara P.A., Yearbook of Commercial Arbitration, Vol.
XXVII (2002), Italy No. 161, p. 509.
93. BEA Hotels NV v. Bellway LLC, [2007] 2 Lloyd's Rep. 493.
94. Navin Kedia. v. Chennai Power Generation Ltd.,

(1998) 3 Corp LA 1 :
(1998) 4 Comp LJ 128 (CLB).
95. Unreported, Civil Appeal No. 7055/96 dated 10-4-1996.
96. Unreported, Civil Appeal No. 7055/96 dated 10-4-1996.
97. Hotels.com v. Zuz Tourism Ltd., Yearbook of Commercial Arbitration, Vol. XXXI (2006),
Israel No.2, p. 791.
98. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Spain No. 44, p. 825. See also
Netsys Technology Group AB v. Open Text Corp., Case 367, Ontario Superior Court of Justice, Yearbook of
99. Interpoint Shipping Limited v. Myloi Soyas, Yearbook of Commercial Arbitration, Vol.
XXXIII (2008), Greece No. 15, p. 555.
99a. VIA net Works Limited v. Stuart Fogarty, Yearbook of Commercial Arbitration, Vol. XXXIII
(2008), Ireland No. 2, p. 591.
1. Prekons Insaat Sanayi AS v. Rowlands Castle Contracting Group Ltd., [2007] 1 Lloyd's
Rep. 98.
2. Lithuanian Airlines v. Bhoja Airlines (Pvt) Ltd., Yearbook of Commercial Arbitration, Vol.
XXX (2005), Sindh High Court, Suit No. 41 of 2002, p. 129.
3. Ramji Dayawala & Sons Pvt. Ltd. v. Invest Import,

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ], 2101 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ] ; Global Maketing Direct Ltd. v. GTL Ltd.,
(2004) 3 RAJ 275 (Bom), the result of a case involving international commercial
arbitration would depend upon whether the New York Convention or Geneva Convention would apply.
4. Aasma v. Am. Steamship Owners Mutual Protection and Indemnity Assoc., 95 F.3d 400-
405 (6th Cir. 1996) 15; Cheshire Place Associates v. West of England, Shop Owners Mut. Ins. Assoc., 815 F. Supp.
593; Greg. J. Lannes, III v. Operators International et al., Yearbook of Commercial Arbitration, Vol. XXX (2005), US No.
611, p. 1041.
Navneet Krishn
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5. SNF SAS (France) v. Cytec Industries BV, Yearbook of Commercial Arbitration, Vol.
XXXII (2007), France No. 38, p. 282.
6. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Italy No. 168, p. 802. See also
Theresa Ballard v. Illinois Central Railroad Company and R.L. Clark, Yearbook of Commercial Arbitration, Vol. XXXI
(2006), US No. 526, p. 978.
7. Orma Impex Pte. Ltd. v. Nissai Ash Pte. Ltd.,

AIR 1999 SC 2871 : 1999 (2) SCC 541 :
1999 (3) RAJ 406 . The conflict was between the decisions in State of W.B. v.
Gourangalal Chatterjee,
(1993) 3 SCC 1 [
LNIND 1993 SC 448 ] :
(1992) 4 SCC 272 [
LNIND 1992 SC 609 ] ; Union of India v. Mohindra Supply Co.,
AIR 1962 SC 256 [
LNIND 1961 SC 295 ]and Vanita M. Khanolkar v. Pragna M Pai,
AIR 1998 SC 424 : (1998) 1 SCC 500.
8. State Trading Corpn. of India Ltd. v. Nessel M.V. Baltic Confidence,

AIR 1999 Cal 99 [
LNIND 1998 CAL 338 ], the provision relating to arbitration was spread into two
clauses and they were materially different. Shivnath Rai Hanuman (India) Co. v. Stalgrani SPA,
(2001) 3 RAJ 518 :
(2001) 93 DLT 222 (Del), GAFTA Rules governed the contract, the arbitrator
appointed under such Rules had the power to decide the question of his own jurisdiction, the rules did not have a
statutory force because they have not been framed under Part II, Rules which are applicable are those which are
contained in the First Schedule under S. 44, if any. Societe Commercial Coreales & Financial v. State Trading Corpn. of
India,
(1998) 1 RAJ 156 : (1998) 1 GCD 451 (Guj), absence of any pleading or material to
show that the arbitration agreement was null and void, in operative or incapable of being performed, proceedings in the
suit were stayed. Bharti Televentures Ltd. v. DSS Enterprises,
(2001) 3 RAJ 433 :
(2001) 92 DLT 788 (Del), the question whether the arbitration clause was null and
void or inoperative or incapable of being performed as envisaged under S. 45 would arise only if both the parties have
such an agreement in writing, onus to prove these elements lies upon the party opposing the reference.
9. Abu Dhabi Investment Co. v. H Clarkson & Co. Ltd., [2006] 2 Lloyd's Rep. 381.
10.
(2008) 3 Arb LR 445 (Del). See also Zenith Ltd. v. M.V.
Pontoporos with Oldendorff Carries Gmbh v. Zenith Limited,
(2005) 4 Bom CR 452 [
AIR 1998 Guj. 94 [
LNIND 1997 GUJ 407 ].
11.
(2008) 3 Arb LR 445 (Del). See also Zenith Ltd. v. M.V.
Pontoporos with Oldendorff Carries Gmbh v. Zenith Limited,
(2005) 4 Bom CR 452 [
AIR 1998 Guj. 94 [
LNIND 1997 GUJ 407 ].
Navneet Krishn
Page 42 of 44
12. Roussel Uclaf v. G.D. Searle & Co., [1978] 1 Lloyd's Rep 225.
13. City of London v. Ashok Sancheti,

[2008] EWCA Civ 1283 .
14. Roussel Uclaf v. G.D. Searle & Co., [1978] 1 Lloyd's Rep 225.
15. Mustill And Boyd, Commercial Arbitration (2nd edn., 1989); Grupo Torras SA v. Sheikh Farhad
Mohammad Al-Sabah, [1995] 1 Lloyd's Rep 374, 451.
16. City of London v. Ashok Sancheti,

[2008] EWCA Civ 1283 .
17. INTERGEN N.V., v. Eric F. GRINA, Alstom (Switzerland) Limited, and Alstom Power NV,
2005 (4) Bom CR 452 [
AIR 1998 Guj 94 [
LNIND 1997 GUJ 407 ].
20. Learonal v. R.B. Business Promotions Pvt. Ltd.,

2002 (3) RAJ 24 :
2002 (5) JT 24 : 2002 (Supp) Arb LR 1 (SC); Jagson International Ltd. v. Frontier
Drilling,
(2004) 3 RAJ 200 (Del), the court is bound to see, before permitting invocation of S.
45, the nature of the agreement i.e. whether it is enforceable or whether it is null and void, inoperative or incapable of
being enforced. The agreement in this case was a charter agreement. It contained an arbitration clause. There was no
allegation of fraud. The agreement had already been acted upon.
Ltd.,
(2009) 156 DLT 406 :
(2009) Arb LR 566 (Del).

(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234.
23. India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd.,
(2007) 1 Arb LR 468 :
AIR 2007 SC 1376 [
LNIND 2007 SC 296 ]:
(2007) 5 SCC 510 [
LNIND 2007 SC 296 ] :
(2007) 2 RAJ 20 .
Navneet Krishn
Page 43 of 44

(2001) 3 RAJ 433 :
(2001) 92 DLT 788 :
(2001) 3 Arb LR 175 (Del).
25.
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234.

(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234.
27. See further Commentary under S. 45supra under the heading “Claiming through or
under”.
28.
(2005) 3 Arb LR 1 :
AIR 2005 SC 3766 : (2005) 7 SCC 234.
29. Shree Krishna Vanaspati Industries (P) Ltd. v. Virgoz Oils and Fats Pte Ltd.,
MANU/DE/1681/2009.
30. Vikrant Tyres Limited v. Techno Export Foreign Trade Company Limited and Ors.,
ILR 2005 KAR 4738 .
31.
(2007) 3 Arb LR 545 :
(2007) 3 RAJ 598 : (2007) 4 Mad LJ 290.
32. Sphere Drake Insurance Limited, Plaintiff-Appellant v. Clarendon National Insurance

Company and Clarendon America Insurance Company, Defendants-Appellees, 263 F.3d 26.

Company and Clarendon America Insurance Company, Defendants-Appellees, 263 F.3d 26..

Company and Clarendon America Insurance Company, Defendants-Appellees, 263 F.3d 26. See also
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967). PER CONTRA China Minmetals Materials Import
And Export Co. Ltd. v. Chi Mei Corporation, No. 02–2897, 02–3542., United States Court of Appeals, Third Circuit.
35. Shree Krishna Vanaspati Industries (P) Ltd. v. Virgoz Oils and Fats Pte Ltd.,
MANU/DE/1681/ 2009.
36. Sandvik AB v. Advent International Corp; Advent International Gmbh; Global Private
Equity III L.P.; Global Private Equity Iii-A L.P.; Global Private Equity Iii-B L.P.; Advent Pggm Global L.P.; Advent
Partners Gpe-Iii Lp; Advent Partners (Na) Gpe-Iii L.P.; Advent Euro-Italian Direct Investment Program L.P.; Advent
European Co-Investment Program L.P.; Advent Partners L.P.; Ralf Huep; Global Private Equity Iii-C L.P. Advent
International Corp.; Global Private Equity Iii L.P.; Global Private Equity Iii-A L.P.; Global Private Equity Iii-B L.P.; Advent
Navneet Krishn
Page 44 of 44
Pggm Global L.P.; Advent Partners Gpe-Iii Lp; Advent Partners (Na) Gpe-Iii L.P.; Advent Euro-Italian Direct Investment
Program; Advent European Co-Investment Program L.P.; Advent Partners L.P. Global Private Equity Iii-C L.P., 220
F.3d 99; 2000 U.S. App. LEXIS 17545.
37. Buckeye Check Cashing, Inc (US) v. John Cardegna (US), Yearbook of Commercial
Arbitration, Vol. XXXI (2006), p. 326
38. Yearbook of Commercial Arbitration, Vol. XXXI (2006), p. 326.
39.
(2009) 156 DLT 406 :
(2009) 1 Arb LR 566 (Del). See also Duferco International
Investment Holding (Guemsey) Ltd. v. Pan Financial Insurance Co., Case 387; Canada Ontario Court of Justice,
Yearbook of Commercial Arbitration, Vol. XXVI (2001), p. 319.
40. Global Marketing Direct Ltd. v. GTI Limited,

(2004) 3 RAJ 275 (Bom).
End of Document
Navneet Krishn
CONVENTION AWARDS
S. 46. When
foreign award binding
Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes
on the persons as between whom it was made, and may accordingly be relied on by any of those persons by
way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to
enforcing a foreign award shall be construed as including references to relying on an award.
Section 46 is based on Article III of NYC and corresponds to Section 4(2) of the FARE Act, 1961.41
This section does not lay down the point of time when the award becomes binding, nor the time frame after
which it will be deemed to be binding. A ‘domestic award’ becomes final and binding on the expiry of 3 months
of the date of receipt of the award, unless an application challenging that award has been made within the said
period of 3 months. The court has power to extend the period for challenge by another 30 days [ Ss. 35 and 36
read with Section 34]. In the absence of similar time limit in respect of binding nature of foreign awards, the time
limit has to be determined in conformity with Section 48(e) which lays down that the foreign award can be
opposed if it “has not yet become binding on the parties, or has been set aside or suspended by a competent
authority of the country in which, or under the law of which that award was made”.
When a person signs a document which contains certain contractual terms, normally parties are bound by such
contract. When a party to the contract disputes the binding nature of the signed document, it is for him to prove
the terms in the contract or the circumstances in which he came to sign the documents.42
[See also Notes under Section 36].
PRODUCTION OF EVIDENCE FOR ENFORCEMENT
Navneet Krishn
Page 2 of 2
Section 47 lays down the procedural conditions to be satisfied by the party seeking enforcement of a foreign
award.
42. Oqmaa Impex Pvt. Ltd. v. Nissai ASB Pvt. Ltd.,

(1997) 1 Arb LR 698 , 700 (Del).
End of Document
Navneet Krishn
CONVENTION AWARDS
S. 47. Evidence
(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce
before the Court—
(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in
which it was made;
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking
to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular
agent of the country to which that party belongs or certified as correct in such other manner as may be
sufficient according to the law in force in India.
Explanation.—In this section and all the following sections of this Chapter, “Court” means
the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the
subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or
any Court of Small Causes.
Section 47 corresponds to Article IV of NYC.
Navneet Krishn
Page 2 of 11
This Section lays down the procedural requirements that need to be complied with by a party in order to enforce
a foreign award. While the term “enforcement” has not been defined, based on a reference to Collins English
Dictionary, the Supreme Court observed that the word ‘enforcement’ means to ‘impose’ or to ‘compel’ an
‘obedience of law’.1
The requirements of Section 47 are satisfied if the party seeking enforcement submits printed copies of the
award and arbitration agreement, duly certified by the concerned officer/employees, and an affidavit stating the
validity of these.2 Where due to the non-existence of an arbitration agreement, the requirements of Article IV of
the NYC (i.e. Section 47) are not satisfied, the award cannot be enforced by the Court.3
Once these documents are submitted, all grounds for refusing enforcement [under S. 48] are subsequently to
be proved by the defendant.
1. Documents to be produced under Section 47
It was held by the German Court of Appeal4, that production of original copy of the arbitral award is not
required. Supplying of certified copy of the award and the arbitration agreement would suffice as the aim of the
NYC was to make the enforcer produce such evidence as is enough to prove the existence of an arbitration
agreement and arbitral award.
The party seeking enforcement of the award must produce the duly authenticated original award or a copy of
the award.5 The authentication is to be made in accordance with the law of the country wherein the award was
made. It is also required to supply the original arbitration agreement or certified copy thereof. These documents
form the prima facie evidence to prove the existence of an agreement to arbitrate6 and the award is a foreign
award. The party can furnish additional evidence in this regard. In the case of a foreign award, it would not be
open for Indian Courts to call for records and satisfy about genuineness and authenticity. Therefore, before
effective steps are taken for execution as a decree, the Court must satisfy itself about the authenticity and
genuineness which can only be done by taking recourse to original agreement and evidence. Original
agreement would enable the Court to ensure the relationship between the parties and source of its cropping for
resolution and reference to arbitration.7
Submission of such documents is not mandatory when the authenticity of the award is not contested.
1. In a case before the Swiss Supreme Court8, the appellee had supplied only a photocopy of a fax of the
arbitration agreement. While this was insufficient to the requirements of Article IV(1)(b) [corr. to Section
47(1)(b)], the court found that the photocopy reflected the entirety of the fees agreement, including the arbitral
clause and the appellant did not contest its authenticity. The alleged violation of Article IV(1)(b) was held to be
unfounded.
Navneet Krishn
Page 3 of 11
The certification of the award by the petitioner's solicitor who participated in the arbitration and had personal
knowledge that the agreement and award was genuine was sufficient to satisfy the requirements of this section.
9
Courts should not strictly construe the non-production of arbitration agreement and should ask the party
seeking to enforce the arbitral award to resubmit the document when there are a certain mistakes. 10
1. In Austbulk Shipping SDN BHD v. P.E.C. Limited 11 it was laid down by the Delhi High Court
that a petition for enforcement of foreign award has to be accompanied by original or certified copy of award and
original or certified copy of arbitration agreement for the satisfaction of the Court that the award is a foreign award;
otherwise the same is to be returned by the Court to the party seeking to enforce the award who may file a fresh
petition along with accompanied documents as there is no limitation prescribed thereof. The grounds for refusal of
enforcement in Section 48 are exhaustive and none of them contemplate a ground on which a prayer for enforcement
could be refused when it is not accompanied by any of the evidence/document as mentioned in Section 47.
2. In Wei Mao International (Hong Kong) Co. Ltd. v. Shanxi Tianli Industrial Col. Ltd., 12 the
Chinese lower court refused to enforce a foreign award because it did not follow the procedure set out in the
Arrangement Concerning Mutual Recognition of Arbitral Awards Between the Mainland and the Hong Kong Special
Administrative Region, on the grounds that
— the material submitted by the Appellant was insufficient and did not constitute a valid application.
— the arbitration agreement had not been attested in Hong Kong.
— the application was made after the statutory limitation period of 6 months.
The Supreme People's Court of China held that it was an institutional award issued by ICC Arbitration Court which is
governed by the New York Convention, which prevails over the Arrangement that was applied. If the materials
submitted were incomplete the Claimant should have been asked to supplement the incomplete material within a
reasonable period instead of the lower court refusing to enforce the arbitral award.
In case a party seeking to enforce an award does not produce these documents and the enforcement
proceedings is dismissed, since the requirement to produce the documents is only a procedural requirement
and it is not a decision on the merits of the case, the dismissal does not operate as res judicata.
13
Navneet Krishn
Page 4 of 11
However, when the award would be set aside on grounds other than non-submission of the original or certified
copy of the arbitration agreement, the Court, in the interests of “procedural economy” will not give the parties a
chance to cure the procedural defect.
1. A party sought to enforce an arbitral award and such enforcement was opposed on the grounds that
a. There was no valid arbitration agreement.
b. The original and certified copy of the award had not been produced.
When both grounds were established, while ordinarily a party would be given the chance to correct the
procedural defect of not producing the original or certified copy of the arbitration agreement, in the present case
since even the production of the same would have had no consequence, the party seeking to enforce the award
was not given a chance to cure the defect.
Even if the non-production of the award is not raised as a ground for setting aside an arbitral award, it can be
used as a ground to prevent enforcement of the award. In a case14, the Court denied enforcement as the party
seeking to enforce failed to produce original or certified copies of the arbitration agreement. It was argued that
this claim had not been made to set aside the award in England and hence the party could not claim lack of
arbitration agreement defence while enforcing in Germany. However the Court held that this situation where the
arbitrators finding on jurisdiction is arbitrary was an exception to the general rule of estoppel.
Requirement of translated copies
If the original documents are in a language other than English or other Indian languages, the English translation
thereof is to be produced. Certification of the translation must be by the diplomatic or consular agent of the
country to which the party belongs or according to Indian law.
When the Court of enforcement has sufficient command over the language of the award, the New York
Convention does not mandate the production of a copy of the award translated to the language of the forum.15
The translation of the arbitration agreement must accompany the original or the duly certified copy of the
arbitration agreement.16 The formal requirements under the provision of Art IV(1)(b) of the Convention to be
examined by the court seized of the matter should not be too demanding. The Swiss Supreme Court held in the
Navneet Krishn
Page 5 of 11
field of public law that even an interpretation ‘contra legem’ is allowed when the strict application of the law is
unreasonable and contrary to the meaning of the provision it applies17, and added that the Convention allows,
apart from written and signed acts, those acts which have a less strict form but are accepted by the trade
usages of the parties.18
While “arbitral award” under the New York Convention included the entire award in addition to the translation of
the award, not submitting the entire award does not sanction the dismissing of the enforcement request.19 It
was however held that dissenting opinions, though permitted according to the ICC Rules, do not form part of
the award and need not be submitted before the Court.
2. Effect of an award certified as final
A foreign award which is certified and attested as final can be put into enforcement without taking out any
proceedings for determination of its enforceability.20
In Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., 21 the Supreme Court made the
following observations in para 29 while considering the difference between an award under the Foreign Award
Act and the 1940 Act:
“The only difference as found is that while under the Foreign Award Act a decree follows: Under the new Act the
foreign award is already stamped as the decree. Thus, in our view, a party holding foreign award, can apply for
enforcement of it but the Court before taking further effective steps for the execution of the award has to proceed in
accordance with Sections 47 to 49. In one proceeding there may be different stages. In the first stage the Court may
have to decide about the enforceability of the award having regard to the requirement of the said provisions. Once the
Court decides that foreign award is enforceable, it can proceed to take further effective steps for execution of the
same. There arises no question of making foreign award as a rule of Court/decree again. If the object and purpose can
be served in the same proceedings, in our view, there is no need to take two separate proceedings resulting in
multiplicity of litigation. It is also clear from objectives contained in para 4 of the Statement of Objects and Reasons,
Sections 47 to 49 and Scheme of the Act that every final arbitral award is to be enforced as if it were a decree of the
Court. The submission that the execution petition could not be permitted to convert as an application under Section 47
is technical and is of no consequence in the view we have taken. In our opinion, for enforcement of foreign award there
is no need to take separate proceedings, one for deciding the enforceability of the award to make rule of the Court or
decree and the other to take up execution thereafter. In one proceeding, as already stated above, the Court enforcing a
foreign award can deal with the entire matter.”
Thus once the procedure specified in Ss. 47 to 49 are followed, the award becomes enforceable as a decree.
3. Other expressions used in this Section
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The definition of ‘court’ in the Explanation to this section is on the same lines as in Section 2(1)(e) except for
the reference to “award” in the former instead of “arbitration” in the latter.
Explaining some other expressions used in the section, the Bombay High Court said:22
“We then come to the issue as to the meaning of the expression subject matter of the award and whether that
would mean also subject matter of the arbitration proceedings. This is important because under Section 2(e)
the expression with reference to the expression ‘Court’ means the subject matter of the arbitration. The subject
matter of the arbitration would include contracts. The subject matter of an award cannot include a contract as
adjudication in respect of the claims under the contract has been done and has resulted into an award. The
subject matter of the award, therefore, is liable to be construed to mean what is the relief finally awarded by the
award. It may be in the form of money, it can be for specific performance, or the like. Under the
Foreign Awards (Recognition and Enforcement) Act, 1961 , the said issue was an issue
before the Apex Court in the case of Brace Transport Corporation of Monrovia Bermuda v. Orient Middle East
Lined Ltd., Saudi Arabia.23 Two paragraphs from the judgment may be reproduced:
“It was then submitted that the subject matter of the award was money and the 1st and 2nd respondents had money in
the jurisdiction of the Bhavnagar Court in the form of part of the purchase price of the said vessel payable to them by
the 3rd and 4th respondent”.
“This being an award for money its subject matter may be said to be money, just as the subject matter of the
money decree may be said to be money”.
4. Oral evidence
Permission to lead oral evidence was not allowed at the stage of hearing of objections. The court said:
“The whole purpose of the 1996 Act would be completely defeated by granting permission to the applicant to lead oral
evidence at the stage of objections raised against an arbitral award. The 1996 Act requires expeditious disposal of the
objections and the minimal interference by the Court as is evident from the Statement of Objects and Reasons of the
Act.24”
5. Territorial jurisdiction
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A contract for supply of goods was finalised between an Indian and a foreign company. The terms of the
contract were negotiated and finalised at Bombay. The contract document was signed by the Indian company in
the Punjab and sent to Bombay. The representatives of the foreign company signed it at Bombay. The Court
held that the contract was entered into in Bombay. The Court at Bombay had jurisdiction to entertain the
petition under S. 49.25
6. Limitation
An award was passed by the Grain and Seed Trade Association (GAFTA). Arbitration Rules framed by GAFTA
which applied to the proceedings prohibited plea of limitation where it was not raised before the Tribunal, and
did not permit such plea to be used for assailing the award. The objectioners had suffered an ex parte award.
They did not raise the plea of limitation before the Tribunal. They were not allowed to object to the enforcement
of the award on that ground.26
Limitation for filing of documents
Whatever documents are required to be annexed and produced at the time of filing of a petition/application are
to be so filed and produced and if the same are not filed or produced, it is the obligation of the forum receiving it
or the court dealing with it to return the same to the concerned party as the same is not filed in accordance with
the requirement of the aforesaid provision. In that event, it is possible for the party desiring to enforce a foreign
award to file a fresh petition after satisfying all the requirements. No period of limitation is also provided in the
Act for filing such a petition. Therefore, to such a petition general law of limitation would apply as there is no
special law of limitation prescribed. Therefore, the petitioner in this case could have filed a fresh petition
accompanied by all the documents, provided the same was returned to it immediately after filing on the ground
that the petition/ application is not accompanied by all the documents, which are to be placed on record.27
Period of limitation under the

Limitation Act for enforcement of a foreign award
An argument that since the Legislature had provided a period of limitation in relation to an application under
Section 34 but not for one under Section 47 meant that there should be no period of limitation for making an
application under Section 47, was rejected.28
A foreign award does not become a decree of the Court under Section 49 till such time the stages
contemplated under Section 47 and 48 are completed. Hence the provision of the
Limitation Act that applies to enforcement of decrees (Section 136) does not apply to
enforcement of foreign awards till such time. Enforcement of foreign awards would be governed by the residual
provision of the
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Limitation Act (Section 137).29
Thus, a foreign award that is already stamped as a decree should be enforced within a period of 12 years (the
time a normal decree holder has).30
[See also Notes under Section 36].
GROUNDS FOR REFUSAL OF ENFORCEMENT
Section 48 lays down the conditions for enforcement of a foreign award made under NYC.
1. S.N.D. Kiran Prabha v. Government of Andhra Pradesh,

(1989) 2 Scale 1083 :
(1990) 1 SCC 328 . While this observation was not made in the context of
enforcement of arbitral awards, this definition was relied on by the Delhi High Court in Marina World Shipping
Corporation Ltd. v. Jindal Exports (P) Limited,
(2005) 4 RAJ 510 :
(2004) 2 Comp LJ 50 (Del) :
(2004) 54 SCL 312 (Del), while dealing with enforcement of foreign awards.
2. ARk Shipping Co. Ltd. v. GRT Shipmanagement Pvt. Ltd.,

(2008) 1 Arb LR 317 :
(2008) 3 RAJ 428 :
(2007) 6 Bom CR 311 [
LNIND 2007 BOM 962 ] (Bom).
3. Czarina, L.L.C., as assignee of Halvanon Insurance Co. Ltd., v. W.F. Poe Syndicate,
United States Court of Appeals, Eleventh Circuit, No. 03–10518.
4. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Germany No. 62, p. 722.
5. Company A v. Company B, Yearbook of Commercial Arbitration, Vol. XXXIII (2008),

Germany No. 111, p. 517; Geb Shipping Company Limited v. Transportes Maritimos del Pacifico S.A, Yearbook of
Commercial Arbitration, Vol. XXXIII (2008), Peru No. 2, p. 618.
6. Al Haddad Bros. Enters., Inc. v. Agapi, Yearbook Commercial Arbitration (1987) 22 [U.S.
No. 72], P. 549 cited by U.S. District Court in Overseas Cosmos Inc. v. NR Vessel Corp., (1998) 23 Yearbook
Commercial Arbitration (U.S. No. 267), P. 1096.
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7. Western Shipping Corpn.. v. Clare Haven Ltd.,(UK).,

(1998) 1 RAJ 367 , 378 (Guj) : (1997) 3 Guj LR 1985 : 1998 (Supp) Arb LR 53;.
Azov Shipping Co. v. Baltic Shipping Co.,
(1999) 2 All ER (Comm) 453 : (1999) 2 Lloyd's Rep 159 :
(1999) CLC 1425 , the evidence fell far short of establishing that Azov either by its
conduct at the meetings or by the continued incidence of container interchanges, sufficiently indicated its assent to be
bound by the GUCA or therefore by the agreement to arbitrate in cl. 5.5 of the agreement; Azov was not bound to
arbitrate Baltic's claim for payments in respect of container interchanges.
8. Inter Maritime Management SA (Switzerland) v. Russin & Veechi (US), (1997) 22

Yearbook Commercial Arbitration [Switzerland No. 28] P. 789. See also Germany No. 63, p. 724. See also
Max Mauro Stubrin and others v. Inversiones Morice S.A., Yearbook of Commercial Arbitration, Vol. XXXIII (2008),
Chile No. 1, p. 473.
9. See Overseas Cosmos Inc. v. NR Vessel Corp., (1998) 23 Yearbook

Commercial Arbitration (U.S. No. 267) P. 1096 (US Dt. Court).
10. Max Mauro Stubrin and others v. Inversiones Morice S.A., Yearbook of Commercial
Arbitration, Vol. XXXIII (2008), Chile No. 1, p. 473.
11.
(2005) 2 Arb LR 6 (Del).
12. Yearbook of Commercial Arbitration, Vol. XXXI (2006), China PR No. 4, p. 624; See also
Seller v. Buyer (Germany), Court of Appeal, Germany, Germany No. 87, p. 671.
13. Srl Campomarzio Impianti v. Lampart Vegypary Gepgyar, Yearbook of Commercial

Arbitration, vol. XXIV (1999), Italy No. 150, p. 698.
15. Pulsarr Industrial Research B.V. v. Nils H. Nilsen A.S., Yearbook of Commercial
Arbitration, Vol. XXVIII (2003), Norway No. 2, p. 821.
16. Inter Maritime Management SA (Switzerland) v. Russin & Vecchi (US), (1997) 22
Yearbook Commercial Arbitration (Switzerland No.28) P. 789 (Supreme Court of Switzerland).
17. Reported in (1987) 12 Yearbook Commercial Arbitration pp. 502-505 (Switz. No.11).
18. C. Import & Export Co. (PR China) v. GSA (Switzerland), (1998) 23 Yearbook
Commercial Arbitration (Switzerland No. 31) P. 764 (Swiss Supreme Court).
19. DSA v. W Gmbh, Yearbook of Commercial Arbitration, Vol. XXXII (2007), Austria No.16
p. 259.
20. Euro-Asia Chartering Corpn. (Pte) Ltd. v. Fortune International Ltd.,

AIR 2002 Bom 447 [
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LNIND 2002 BOM 485 ]:

(2003) 4 RAJ 320 :
(2003) 2 Arb LR 459 following Fuerst Day
Lawson Ltd. v. Jindal Exports Ltd.,
(2001) 2 Arb LR 1 :
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]:
(2001) 2 RAJ 1 :
(2001) 6 SCC 356 [
LNIND 2001 SC 1180 ].
21.
(2001) 2 Arb LR 1 :
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]:
(2001) 2 RAJ 1 :
(2001) 6 SCC 356 [
LNIND 2001 SC 1180 ] :
2001 CLC 746 .
22. Tata International Ltd. v. Trisuns Chemical Industry Ltd.,

(2002) 4 RAJ 488 (Bom).
23.
(1993) 4 Scale 33 (SC).
24. Stal Bioenergie v. Sbec Systems,

AIR 2005 Del 95 [
LNIND 2004 DEL 884 ].
25. Toepfer International Asia P. Ltd. v. Thapar Ispat Ltd.,

(2000) 1 Arb LR 230 :
AIR 1999 Bom 417 [
LNIND 1999 BOM 363 ]:
(2000) 2 RAJ 311 .

AIR 1999 Bom 417 [
LNIND 1999 BOM 363 ]:
(2000) 2 RAJ 311 :
(2000) 1 Arb LR 230 (Bom).
27. Austbulk Shipping SDN BHD v. P.E.C. Ltd.,

2005 (1) RAJ 597 , 604 (Del).
28. Noy Vallesina Engineering Spa v. Jindal Drugs Limited,

(2006) 3 Arb LR 510 :
(2006) 5 Bom CR 155 [
LNIND 2006 BOM 536 ].
29. Noy Vallesina Engineering Spa v. Jindal Drugs Limited, (2006) 3 Arb LR 510 :
(2006) 5 Bom CR 155 [
LNIND 2006 BOM 536 ].
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30. Compania Naviera ‘SODNOC’ v. Bharat Refineries Ltd. and Mr. Christopher J.W. Moss,
2008 (1) Arb LR 344 (Madras).
End of Document
Navneet Krishn
CONVENTION AWARDS
S. 48.
Conditions for enforcement of foreign awards
(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only
if that party furnishes to the Court proof that—
(a) the parties to the agreement referred to in Section 44 were, under the law applicable to them, under some
incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any
indication thereon, under the law of the country where the award was made; or
(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator
or of the arbitral proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration :
Provided that, if the decisions on matters submitted to arbitration can be separated from
those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may
be enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement
of the parties, or, failing such agreement, was not in accordance with the law of the country where the
arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent
authority of the country in which, or under the law of which, that award was made.
(2) Enforcement of an arbitral award may also be refused if the Court finds that—
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(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
Explanation.—Without prejudice to the generality of clause (b) of this section, it is hereby

declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making
of the award was induced or affected by fraud or corruption.
(3) If an application for the setting aside or suspension of the award has been made to a competent authority
referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the
enforcement of the award and may also, on the application of the party claiming enforcement of the award,
order the other party to give suitable security.
1. UNCITRAL Model Law
Section 48 adopts the provisions of Article 36 of Model Law.
2. Analytical Commentary on Draft Model Law
Article 36. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be
refused only :
(a) at the request of the party against whom it is invoked, if that party furnishes to the competent court where
recognition or enforcement is sought proof that :
(i) the parties to the arbitration agreement referred to in article 7 were, under the law applicable to them, under
some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the award was made; or
(ii) the party against whom the award is invoked was not given proper notice of the appointment of the
arbitrator(s) or of the Arbitral proceedings or was otherwise unable to present his case; or
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(iii) the award deals with a dispute not contemplated by or not failling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that,
if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of
the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement
of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration
took place; or
(v) the award has not yet become binding on the parties or has been set aside or suspended by a court of the
country in which, or under the law of which, that award was made; or
(b) if the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii) the recognition or enforcement of the award would be contrary to the public policy of this state.
(2) If an application for setting aside or suspension of an award has been made to a court referred to in
paragraph (1)(a)(v) of this article, the court where recognition or enforcement is sought may, if it considers it
proper, adjourn its decision and may also, on the application of the party claiming recognition or enforcement of
the award, order the other party to provide appropriate security.
3. Commentary
Grounds for refusing recognition or enforcement of “international” awards, paragraph (1)
1. Based on the prevailing policy considerations stated above,1 article 36(1) adopts
almost literally the well-known grounds set forth in article V of the 1958 New York Convention and declares
them as applicable to refusal of recognition or enforcement of all awards, irrespective of where they were made.
Thus, the provision, like article 35, covers foreign as well as domestic awards, provided they are rendered in
“international commercial arbitration” as referred to in article 1 and, of course, subject to any multilateral or
bilateral treaty to which the enforcement State is a party.
2. As regards foreign awards, full harmony with article V is obviously desirable. The reasons taken from there
were even viewed as providing sufficient safeguards to the enforcement State which would make it
unnecessary to restrict recognition and enforcement by requiring reciprocity. It was also thought that a model
law on international commercial arbitration should not promote the use of such territorial restrictions and that,
from a technical point of view, it was difficult, although not impossible, to devise a workable mechanism in a
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“unilateral” text such as the model law. Nevertheless, the model law does not preclude a State from adopting a
mechanism of reciprocity, in which case the basis or connecting factor and the technique used should be
specified in the national enactment.
3. The list of reasons seems also appropriate for domestic awards, although its correspondence with the
grounds for setting aside entails the potential of what has been referred to as undesirable “double control”, i.e.,
two occasions for judicial review of the same grounds. This should be an acceptable consequence of the
uniform treatment of all awards, based on the policy of reducing the relevance of the place of arbitration. In view
of the different purposes and effects of setting aside and of invoking grounds for refusal of recognition or
enforcement, a party should be free to avail himself of the alternative system of defences (as such recognized
by the 1958 New York Convention) also in those cases where recognition or enforcement happens to be sought
in the State where the arbitration took place. As regards the potential risk of double procedures on the same
grounds, it is submitted that these concerns are essentially met by paragraph (2) (see below, para. 5).
4. The fact that the grounds listed in paragraph (1) are applicable to foreign as well as domestic awards, must
be taken into account when interpreting the text, which is in large measure copied from an article applicable
only to foreign awards (article V of the 1958 New York Convention). For example, the references to “the law of
the country where the award was made” (sub-paragraph (a)(i)) or “the law of the country where the arbitration
took place” (sub-paragraph (a)(iv)) or to “a court of the country in which, or under the law of which, that award
was made” (sub-paragraph (a)(v)) may either lead to a foreign law, which may or may not have been modelled
on the model law, or to the model law of “this State”. In the latter case, i.e., a domestic setting, account should
be taken of the kind of considerations mentioned in respect of the grounds for setting aside, for example, the
limiting effect of an implied wavier or submission (articles 4 and 16(2)) upon the reasons set forth in paragraph
(1)(a)(i) and (iv).2
Suspension of recognition or enforcement, paragraph (2)
5. Paragraph (2) is modelled on article VI of the 1958 New York Convention. In line with the wider scope of the
model law, it covers not only foreign but also domestic awards rendered in international commercial arbitration.
Thus, it can be used to avoid concurrent judicial review of the same grounds and possibly conflicting decisions,
where this risk is not already excluded by the fact that the same court is seized with the application for setting
aside and the other party's application for enforcement.
4. UNCITRAL Report on Adoption of Model Law
The Commission rejected a proposal that article 36 should be made applicable only to international commercial
arbitration awards made in a State other than “this State”. It was felt that the general policy decision to retain
Chapter VIII on recognition and enforcement applicable to awards irrespective of where they were made should
be confirmed [Para 319].
Paragraph (1)
The suggestion was made that article 36 should be interpreted in the sense that an award would not be
recognized where the court found that the arbitral tribunal had proceeded without jurisdiction or had infringed
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the exclusive jurisdiction of the court before which the recognition or enforcement was sought. It was suggested
that that matter might have become of greater importance in light of the Commission's decision in respect of
article 1(2)(c) that an arbitration was international if the parties had expressly agreed that the subject-matter of
the arbitration agreement related to more than one country [Para 320].
The Commission adopted the proposal to modify article 36(1)(a)(i) to conform to the change previously made in
article 34(2)(a)(i). The change involved replacing the words “the parties” with the words “a party” and the words
“were, under the law applicable to them, under some incapacity,” with such words as “lacked the capacity to
conclude such an agreement”. The Commission adopted the suggestion for the purpose of maintaining textual
harmony between articles 34 and 36. However, the Commission expressed the view that the modification did
not entail any substantive discrepancy between article 36(1)(a)(i) and the corresponding provision in the 1958
New York Convention [Para 321].
The Commission decided, in line with its decision on article 34(2)(a)(ii) (above, Para. 286), to replace in
subparagraph (1)(a)(ii) the words “appointment of the arbitrator(s)” by the words “appointment of an arbitrator”
[Para 322].
It was proposed that subparagraph (b)(ii) be deleted since in some common law jurisdictions the term “public
policy” might be interpreted as not covering notions of procedural justice. However, the Commission was
agreed that the subparagraph should be retained under the same understanding which the Commission
expressed in connection with article 34(2)(b)(ii) (see above, paras 296-297) [Para 323].
Paragraph (1) was adopted with the modifications indicated above [Para 324].
Paragraph (2)
5. Scope
The grounds for refusal of enforcement of a NYC award as set out in Section 48 correspond to the provisions of
Section 7 of FARE Act, 19613 and Article V of NYC. The New York Convention speaks of “recognition and
enforcement” of an award. An award may be recognised, without being enforced; but if it is enforced, then it is
necessarily recognised. Recognition alone may be asked for as a shield against re-agitation of issues with
which the award deals. Where a court is asked to enforce an award, it must recognise not only the legal effect
of the award but must use legal sanctions to ensure that it is carried out.4 The grounds for refusal of
enforcement of foreign awards are similar to those for setting aside a domestic arbitral award under Section 34.
Enforcement and execution of foreign award
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Once a foreign award is passed, the same cannot be enforced immediately like a domestic award. The said
award has to be initially put through the process of enforcement, which is mandatory before an award could be
executed. The provisions of the Act, particularly Sections 47, 48 and 49 envisage the mode and manner in
which a foreign award is to be enforced and could be executed. The party seeking to enforce the award has to
make an application under Section 47 of the Act enclosing therewith the evidence mentioned therein, however,
where the original agreement of arbitration or duly certified copy thereof was not filed alongwith the petition but
was placed on record during pendency of the petition, it was held amounting to substantial compliance of s. 47.
Such an application could be resisted by the party against whom enforcement is sought by furnishing proof to
the court of the existence of one or more of the defences as set out in Section 48 of the Act. It is only when the
Court decides and records its satisfaction that the award is enforceable, then only the award could be enforced
as a decree of the court. It is now a settled law as laid down in Fuerst Day Lawson Ltd. vs. Jindal Export
5, that it is not necessary to take up separate proceedings one for deciding the enforceability of the award and
the other to take up execution thereafter and that both the reliefs could be sought for in the same proceeding.6
6. Grounds Exhaustive
The scope of review of an arbitration award is generally construed narrowly, so as to avoid undermining the
twin goals of arbitration, namely settling disputes efficiently and avoiding long and expensive litigation.7
Article V (Section 48) defines an exhaustive list of grounds for refusing enforcement of a foreign award.8
Enforcement of an arbitral award cannot be denied unless one of the grounds under the New York Convention
is established.9
The court is bound to enforce the award unless it is satisfied that one or more of the conditions set forth in the
section exist. It has no power to refuse enforcement on any other ground.10 Other grounds cannot be read into
it by implication.11 An award thus cannot be set aside on the grounds that the arbitrators made a gross mistake
of law or fact.12
Thus opposition to enforcement on the following grounds is not possible—
1. ambiguity of the award13;
2. procedural irregularities not contemplated in the NYC14;
3. lack of territorial jurisdiction of the arbitrator based on the premise that the arbitral hearings were conducted
at a place different from the seat of the arbitration15:
a. An argument was raised that the arbitrator conducted hearings in Switzerland when Italy was the seat of
arbitration thereby implying a lack of territorial jurisdiction for the arbitrator and hence a claim for non-
enforcement of an arbitration award. It was rejected on the grounds:
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(i) Lack of territorial jurisdiction is not one of the grounds stated in the New York Convention.
(ii) There was a difference between the seat of the arbitration and the place where the oral hearing is conducted
and that oral hearings need not be conducted at the seat of the arbitration.
4. lack of arbitrator's power to pass an award16;
It may however be noted that Article V(c) of the NYC provides for setting aside of awards relating to disputes
that did not fall within the purview of the arbitration clauses. Cases where arbitrators exceed their jurisdiction
and decide on disputes that did not fall within the ambit of the arbitration clause are covered by this clause and
such a ground of opposition can be taken.
5. the award is unconscionable and hence null and void (this was held to be a defence under domestic US law
but not under the NYC) 17
6. the contents of the award had been divulged to a third party in breach of a confidentiality agreement18;
7. a pending challenge to the award before a competent court. This can only result in a stay of the enforcement
motion.
a. The Respondent had challenged an arbitral award made in favour of the Petitioner before the Italian Courts.
He argued that the enforcement procedure before the Canadian Courts be dismissed on these grounds. It was
held that observed that even if one of the grounds under the NYC was established, the Court would have the
discretion to enforce the award because of the use of the word “may”. In such a scenario, enforcement could
not be prevented when none of the grounds under the NYC had been established.
However, upon a consideration of the balance of convenience of the parties, the Court held that the
Respondents would suffer extreme prejudice if the award were enforced in Ontario only to he set aside later in
Italy and on this ground stayed the enforcement.19
8. the enforcement of the award going against public interest :
a. Hainan Gaofurui Industrial & Trading Co. Ltd. (Hainan), under the Defendants name, without being
authorized to do so, entered into a contract with the Claimants for the sale of peanuts. The contract contained a
clause providing for arbitration in Hong Kong. A dispute arose between the Claimant and Defendant and was
resolved by arbitration in favour of the Claimant. Enforcement was denied on the ground that one of the parties
lacked capacity to enter into the agreement. But it was held in Hong Kong Heung Chun Cereal and Oil Food
Co. Ltd. v. Anhui Cereal and Oil Food Import and Export Co. Ltd. 20 that enforcement of
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this award would not be against public interest and that ground could not be raised to prevent enforcement.
9. the lack of a written power of attorney authorizing one of the signatories to enter the arbitration agreement
and hence the arbitration agreement being void.
a. The Appellants argued that the order passed by an English arbitral panel should not be enforced as there
was no valid arbitration agreement. The Appellants had claimed that agreement (charter party) was signed
neither by one of the Respondent's managers nor by an authorized representative, since the respondent had
denied that it had given the signatory a written power of attorney to conclude the arbitration agreement. The
Austrian Supreme Court in O Limited (Hong Kong) v. S Gmbh 21 rejected the contention
that the power of attorney to conclude an arbitration agreement must be in writing, on the basis that the New
York Convention does not require this as a precondition for enforcement of an award and that the grounds for
opposition of enforcement as enumerated in the New York Convention are exhaustive.
10. existence of contradictory awards.
a. An arbitration clause provided for parallel arbitrations based on which party commenced arbitration. This
resulted in two different conflicting awards. However this did not render the awards unenforceable.22
11. waiver of right to enforce the arbitration agreement by pursuing criminal action against the objector.
1. The Petitioner commenced arbitration against the Respondent to resolve a dispute relating to a lease
agreement. The Petitioner also filed a criminal complaint against the Respondent alleging a criminal conspiracy
between the Respondent and two others seeking to prevent it from enjoying its full rights as a lessor. The
arbitration was decided in the Petitioner's favour and the Petitioner sought to enforce the award. The
Respondent's argument that the Petitioner by commencing criminal proceedings had waived its right to arbitrate
and hence the arbitral award was not enforceable was rejected and it was held “waiver of the right to arbitrate is
not among the seven defenses to enforcement of a foreign arbitral award set forth in the Convention. Thus, as
a matter of law, defendant's argument that the arbitration award should not be enforced by this Court because
plaintiff waived it is unavailing.”23
12. the award violates an injunction order that has subsequently been quashed.
1. An argument was advanced that an arbitral award was passed in violation of an injunction order (which was
later quashed) and hence the arbitrators lacked the jurisdiction resulting in the award being non-enforceable.
This argument was rejected by the Bombay High Court, in Noy Vallesina Engineering Spa A Corporation
Organized and Existing Under the Laws of Italy v. Jindal Drugs Limited, a Company Incorporated under the
Companies Act, 1956 24 as lack of arbitrators jurisdiction was not
one of the grounds for setting aside an arbitral award. The only ground of some significance was whether the
award deals with the differences not contemplated by or not filing within the terms of the submissions to the
arbitration. Since in the present case this criteria was not satisfied, the award was enforceable.
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Where a ground is advanced as “an additional basis for dismissal”, the court can interpret this ground as to be
falling under any of the grounds specified in this section. Thus, where the additional basis for dismissal was that
the award was rendered on default, the court on the facts of the case construed this ground as one based on
Art. V(1)(b).25 [Corr. to Section 48(1)(b)].
The court may not refuse to grant exequatur26 when its national law permits it and it must, ex officio ascertain
whether this is the case.27 The five grounds for refusal specified in clauses (a) to (e) of Section 48 (1) have to
be established by the party challenging the enforcement of the award. The two other grounds stated in clauses
(a) and (b) of Section 48(2) can also be raised by the court itself. This section casts a duty on the party against
whom the award operates to satisfy the court about the non-enforceability. It is a rebuttal of evidence so as to
challenge the presumption.28
Addition of extra grounds through a clause in the contract
The parties are not free to add to the grounds of opposition to enforcement via a clause in the contract.
In Hall Street Associates, L.L.C v. Mattel, Inc. 29, it was observed that since the grounds
specified in the New York Convention for review are exhaustive and the parties cannot contractually agree to
make error in law a ground for judicial review. This was based on the broad policy to make awards easily
enforceable and limit grounds of review. Thus the argument that arbitration is a creature of contract and that the
parties may choose contractually to add grounds for review was rejected.
However in a dissenting opinion, Justice Stevens took the view that an enumeration of the grounds for judicial
review does not imply that parties cannot add more grounds. He observed that the judicial review provisions
were meant to act as a shield to protect the parties from hostile courts but are not to be sued as a sword to cut
down the parties’ valid and enforceable agreements.
7. Joint stipulation as to forum
A contract between parties belonging to three different countries contained a New York arbitration agreement.
A dispute between them became the subject-matter of arbitration, but before the award, the parties entered into
a joint stipulation providing that “any proceedings to confirm or vacate the arbitration award” will be subject to
the jurisdiction of a particular country (“USDC, SDNY”). After the award was published, the plaintiffs applied for
leave to enforce the award in England. The defendants resisted it saying that England was not the permitted
jurisdiction under the joint stipulation. But leave to enforce the award was granted. The court said that it was
impossible to imply into a provision dealing with proceedings to confirm an award a provision restricting
enforcement abroad. The agreement was confined to confirmation or vacation. It did not extend to
enforcement.30
8. Review by courts under Section 48 cannot be on merits
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In proceedings for enforcement of a foreign award, the scope of enquiry by the Court in which award is sought
to be enforced is limited to grounds mentioned in Section 48 of the 1996 Act and does not enable a party to the
said proceedings to impeach the award on merits.31 An error in law is thus not a ground for refusing
enforcement of an arbitral award.32
The main reason is that the exhaustive list of grounds for refusal of enforcement enumerated in Article V does
not include mistake in fact or law by the arbitrator.33 The Delhi High Court has therefore observed:34
“The scope of enquiry before the Court before whom the application for enforcement of the foreign award is pending is
circumscribed by the conditions for refusal set out in Sections 48(1) and (2) of the Act. It is not open to a party seeking
to resist a foreign award to assail the award on merits or because a mistake of fact or law has been committed by the
arbitral tribunal. Dicey and Morris have even gone as far as to say that the court under this Section is not concerned
even if the arbitral tribunal applied no law at all, assuming this is permissible under the law governing the arbitration
proceedings (The Conflict of Laws, Volume I, 13th Edition, 2000, pp. 622-23, paragraph 16-071). In other words, the
scope of enquiry before the Court in which the award is sought to be enforced is limited to the grounds set out in
Sections 48(1) and (2) and it is not open to the party resisting the award to impeach the award on merits in such
proceedings.”
Assuming that ‘unjust enrichment’ is contrary to public policy of India, the unjust enrichment must relate to the
enforcement of the award and not to the merits of the award, in view of the limited scope of enquiry in
proceedings for enforcement of the foreign award.35
Judges have no license to impose their own brand of justice in determining applicable public policy.36 When the
finding by the arbitrator is a mixed finding on fact and law even when the arbitrator provided reasons though it
was unnecessary for him to do so, the Court cannot go into the merits so long as the arbitrator was within his
powers in passing the award.37
So long as the conclusion arrived at by the Arbitral Tribunal is a plausible conclusion, though possibly not the
only conclusion, no interference is called for by the Court.38
The view that review must not be on the merits of the dispute has been reiterated on numerous occasions by
foreign Courts.39
1. Allegations that enforcement of an award would violate public policy as the award was “unlawful and
unfounded” would require a review based on merits and this was not permissible.40
2. An opposition to enforcement of an award on the ground that an award was not based on the applicable law
and hence enforcement would violate public policy would require the Court to go into the merits of the case
which it was not empowered to go into.
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a. During an enforcement proceeding it was argued that the Syrian arbitral award violated public policy as the
award was not based on German law, which according to the Petitioner was the applicable law to the dispute. It
was observed by the German Court that it did not have the power to go into this question, as it would result in
going into the merits. In the words of the Court41:
“An arbitral award has the effect of a legally valid court decision between the parties and in principle is not subject to a
review of the merits (révision au fond) by a state court. An arbitral tribunal's incorrect decisions are accepted just as
non appealable decisions of German state courts, since neither the setting aside nor the enforcement proceedings
provide for a legal means to review the arbitral award's correctness on the merits. These principles apply both to the
fact that the Syrian arbitral tribunal in Damascus did not apply German law and to the argument that it can neither be
deduced from the reasons for the award whether the arbitrators applied ‘general principles of law and trade usages as
to the merits’ and decided in ‘equity’, nor whether they made their own determination of the facts. Also the objection
that the reasons for the award did not take into consideration the limitation of liability contractually agreed upon by the
parties does not affect public policy, in application of the above-mentioned principles.”
3. Where it was argued that there were three agreements, one of which did not contain an arbitration
agreement and that the arbitrator dealt with an issue pertaining to all agreements and in that regard had
exceeded his powers, the enforcement court42 held that this would amount to a review of the merits of the case
and refused to go into it.
4. When the arbitrators rejected the Plaintiffs argument that the agreement between it and the Defendant
providing for an exclusive supply of chemical compounds from the defendant to the plaintiff was void as it
violated European competition law on the ground that there was no proof of existence of dominant position, the
enforcement court43 would not go into the same issue when it was raised as an objection to enforcement, as it
would amount to a review of the arbitrators decision on merits, which was not permissible.
5. Similarly whether or not the claimant was the successor to S and hence entitled to make a claim was an
issue related to the merits of the case, which the enforcement court was not competent to review.44
6. An argument that different witness statements should have been drawn from witness statements was beyond
the powers of review of the Court.45
7. Where Italian law was the law governing the contract, a claim that damages based on a claim under equity is
against public policy does not lie as Italian law expressly permits award of such damages. The claim thus
translated into whether the principles of equity had been correctly applied and this being a review on the merits
was not permissible.46
9. Procedure for enforcement
Procedure for enforcement of the award under the 1961 Act
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Under the 1961 Act, in order to enforce an award there was a requirement for the party seeking to enforce the
award to file the award. Any party interested in a foreign award may apply in writing to any court having
jurisdiction over the subject-matter of the award that the award be filed in court and the court must then issue
notice to the parties other than the applicant to show cause why the award should not be filed. The foreign
award was not enforceable in the cases specified in Section 7. If the court was satisfied that the foreign award
was enforceable, it could order the award to be filed and could pronounce judgment on the award.47 The
requirement of filing the award has been dispensed with under the 1996 Act.
Section 4(1) of the 1961 Act provided that subject to the provisions of the Act, a foreign award is enforceable in
India as if it were an award made on a matter referred to arbitration in India. A foreign award which is
enforceable under the Act is binding, for all purposes, on the persons as between whom it was made and may
be relied on by them by way of defence, set-off, or otherwise in any legal proceeding in India.48 It was held that
the sub-section was intended to put a foreign award in the same position as an Indian award.49 This provision
has been omitted in the 1996 Act.
The procedure laid down in Sections 5to 7 of the 1961 Actwas a departure from the procedure laid down in
Section 14 of the Arbitration Act , 1940 [both Acts repealed]. An application under the
1961 Act had to be accompanied by the original award or an authenticated copy of it; there was no provision for
a notice to the arbitrator or a direction upon him to produce the award.50 The court is not empowered to set
aside or remit the award. If an application has been made to a competent authority for the setting aside or
suspension of the award, the court may adjourn the proceedings for enforcement of the award on such terms
as to security as it may deem proper.51 There is nothing to prevent the respondent from obtaining from the court
directions for the production of any relevant record52.
The award must be executed as it is and there is no scope for any addition to any foreign award in executing it
but the award to be executed must be properly construed and given effect to. If the award is ambiguous, the
court has jurisdiction to determine what it means.53 In this case the Supreme Court found that the award was
not ambiguous. It was clear that the costs of reference should be paid by the respondent, and that such costs
should be paid as were determined by agreement between the parties and in case of failure of the agreement
by the taxation, such costs were taxed.
Procedure for enforcement of the award under the 1996 Act
The new Act is not very different from the 1961 Act as was elucidated by the Supreme Court in Thyssen
Stahlunion GMBH v. Steel Authority of India Ltd. 54 in the following words:
“As a matter of fact if we examine the provisions of the Foreign Awards Act and the new Act there is not much
difference for the enforcement of the foreign award. Under the Foreign Awards Act when the court is satisfied that the
foreign award is enforceable under that Act the Court shall order the award to be filed and shall proceed to pronounce
the judgment accordingly and upon the judgment so pronounced a decree shall follow. Sections 7 and 8 of the Foreign
Awards Act respectively prescribe the conditions for enforcement of a foreign award and the evidence to be produced
by the party applying for its enforcement. The definition of foreign award is the same in both the enactments. Section
48 and 47 of the new Act correspond to Sections 7 and 8 respectively of the Foreign Awards Act. While Section 49 of
the new Act states that where the Court is satisfied that the foreign award is enforceable under this Chapter (Chapter I,
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Part II, relating to New York Convention Awards) the award is deemed to be a decree of that court. The only difference,
therefore, appears to be that while under the Foreign Awards Act a decree follows, under the new Act the foreign
award is already stamped as a decree. Thus, if the provisions of the Foreign Awards Act and the new Act relating to
enforcement of the foreign award are juxtaposed there would appear to be hardly any difference.”
The Supreme Court in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., 55 laid down that
there are two stages in enforcement of foreign award,
Stage 1- the court would make an inquiry into enforceability of the Award; and,
Stage 2- the court holds that the Award is enforceable.
If the conditions for enforcement are fulfilled and the Court is satisfied about enforceability of a foreign award,
the award is deemed to be a decree of that court and must be executed as it is.56 In other words a foreign
award cannot be executed as a decree unless and until an application for enforcement thereof is made and the
Court is satisfied that the foreign award is enforceable.57
Since an award is not enforceable till such time it is executed as a decree, which happens following the
procedures specified in Sections 46- 49, it cannot be said that the party against whom damages have been
awarded by the arbitrator, owes the other party a “debt” at a stage prior to fulfillment of the requirements of
Sections 46- 49. Moreover, before an award obtains the force of law, the other party should be given an
opportunity to contest the enforcement of the award. In the words of the Delhi High Court“it is mandatory for a
party seeking enforcement of an award to move an application before the competent Civil Court wherein the
opposite party could raise objections to the enforcement of a foreign award. Even if no such objection is raised,
the Court has the obligation to examine and decide whether the condition mentioned in
Section 48(2)of the Arbitration Act is satisfied. Only where the court is so satisfied that
the award is enforceable in India, then only, the said award would be deemed to be a decree of the court.”
Hence a winding up petition filed by the successful party, arising out of the alleged “debt owed to that party, will
not be maintainable.58 The only remedy would be to enforce the arbitral award following the prescribed
procedure.59 Allowing a winding up petition would also lead to multiplicity of proceedings that would defeat the
objectives of the 1996 Act. 60
The Act does not make any distinction between the enforcement and execution. Both words are
interchangeable.61
The Bombay High Court has taken a different view that execution of the foreign award as a decree is only one
facet of enforcement. Enforcement of a foreign award is a larger term than execution of the award and includes
execution of that award as a decree and using that award as a defence in legal proceedings for claiming set off
on the basis of that award etc.62
Once the award becomes a decree it can only be executed in terms of Order 21 of the
C.P.C. Rules have been framed pursuant to the coming into force of the
Arbitration and Conciliation Act, 1996 according to which an execution application should
be presented to the Court within whose jurisdiction the person ordinarily resides or where the property of the
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person against whom execution is sought is situated.63
The procedure for enforcement of a foreign award was summarized as follows by the Delhi High Court:
“Once a foreign award is passed, the same cannot be enforced immediately like a domestic award. The said award
has to be initially put through the process of enforcement, which is mandatory before an award could be executed. The
provisions of the Act, particularly Sections 47, 48 and 49 envisage the mode and manner in which a foreign award is to
be enforced and could be executed. The party seeking to enforce the award has to make an application under Section
47 of the Act enclosing therewith the evidence as mentioned therein. Such an application could be resisted by the party
against whom enforcement is sought by furnishing proof to the court of the existence of one or more of the defenses as
set out in Section 48 of the Act. It is only when the Court decides and records its satisfaction that the award is
enforceable, then only the award could be enforced as a decree of the court. It is now a settled law as laid down in
Fuerst Day Lawson Ltd. v. Jindal Export 64 that it is not necessary to take up separate
proceedings one for deciding the enforceability of the award and the other to take up execution thereafter and that both
the reliefs could be sought for in the same proceeding and one single petitioner, where both the reliefs could be
combined together and sought for. When an application is made in terms of the provisions of Section 47 of the Act for
enforcement of the said award, the court may refuse enforcement of the foreign award on any of the grounds set forth
in Section 48 of the Act. A perusal of Section 48 would indicate that there are seven grounds in all. The first five
grounds indicated in the said section deal mainly with the procedural defects vitiating a foreign award in the country
under the law of which that award was made. The court may exercise jurisdiction to refuse enforcement only when the
party resisting the enforcement of the award makes an application to the court for refusing its enforcement and
furnishes proof to it on existence of one or more of said grounds. But so far other two grounds are concerned, as
contained in Section 48(2), the same are to be examined by the court passing an order for enforcement and execution.
So far those two grounds are concerned, it is necessary for the party resisting enforcement of the award to prove
existence or the court may on its own take notice of existence of the said ground and refuse enforcement of the foreign
award on the said ground.”65
10. “Enforcement” and “recognition” distinguished
While the substantive text of the 1996 Act uses the term “enforcement”, the term “recognition” occurs in
Schedule 2, i.e. in the NYC.
An award that has been enforced has automatically been recognized but not vice-versa.66 The Supreme Court
observed that:
“An award may be recognised, without being enforced; but if it is enforced, then it is necessarily recognised.
Recognition alone may be asked for as a shield against re-agitation of issues with which the award deals. Where a
court is asked to enforce an award, it must recognise not only the legal effect of the award, but must use legal
sanctions to ensure that it is carried out.” 67
11. Enforcement by Third Parties
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An assignee to all the rights arising from a charterparty is also entitled to the sums owed originally to the
assignor under an arbitral award and can enforce the same.68
12. Enforcement of foreign award to be opposed only after commencement of

enforcement proceedings
When a foreign award was sought to be enforced in Italy, the Plaintiff rather than challenging the enforcement
of the award in the enforcement proceedings using the procedure prescribed, started off separate actions
seeking to restrain the enforcement of the award. It was held that it is not possible to get the same effect of
challenging the enforcement following some other procedure.69
13. Enforcement already exhausted
When the Defendant had an ICC arbitral award in its favour enforceable against the Plaintiff and a number of
persons had claims against the Plaintiff, all of which were consolidated by the Government and compensation
paid to all such claimants from a fund set up for such a purpose, Defendant cannot after claiming such
compensation also try and enforce its award separately under the NYC. This was because the arbitral award
had been transformed and having received statutory compensation the NYC was not relevant.70
14. Grounds for refusal of enforcement
Incapacity [Clause (a)]
Enforcement of an award may be refused if the party opposing enforcement proves that the parties to the
agreement were, under the law applicable to them, under some incapacity. Such incapacity may not be on the
part of the opposing party. It could be the claimant's incapacity or incapacity of both the parties as the
expression used is ‘the parties were under some incapacity’.
In the absence of a choice of law provision, the validity of the arbitral clause must be decided according to the
law of the seat of the arbitral tribunal (respectively, according to the New York Convention, to the law of the
country in which the award was made).71 This means that even an arbitral clause which is invalid for lack of
consent or other reasons has effect in so far as it gives the arbitral tribunal jurisdiction according to the law of its
seat to decide the issue of the non-validity of the clause. It also dictates the law applicable to the issue of the
validity of the arbitral clause to the State courts, which are subsequently seised with the confirmation,
recognition or enforcement of the arbitral award.
Inconvenience is not “incapacity” as per in the observations of the Court of Appeal in Janos Paczy v. Haendler
& Natermann Gmbh72 —
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“In my judgment, on the true construction of these words, “incapable of being performed” relates to the arbitration
agreement under the consideration. The incapacity of one party to that agreement to implement his obligations under
the agreement does not, in my judgment, render the agreement one which is incapable of performance within the
Section any more than the inability of a purchaser under a contract for purchase of land to find the purchase price
when the time comes to complete the sale could be said to render the contract for sale incapable of performance. The
agreement only becomes incapable of performance in my view if the circumstances are such that it could no longer be
performed, even if both parties were ready, able and willing to perform it....”
Invalidity of Agreement [Clause (a)]
The scheme of Sections 3 to 7 of the repealed Foreign Awards Act, 1961 corresponding to Sections 45 and 48
of the 1996 Act clearly suggests that the phrase “in respect of any matter agreed to be referred to the
arbitration...” cannot be construed as covering only the disputes or claims but also questions of existence,
validity and effect of the agreement. Parties can also refer such questions of their own choice. Such
determination by the arbitrator is, of course, not final. It would be subject to the decision of the court at the time
when the award is sought to be enforced. Hence the court may stay legal proceedings even if they are initiated
on the question of the arbitrator's jurisdiction.73 If the opposing party proves that the “agreement is not valid
under the law to which the parties have subjected it or, failing any indication thereon, under the law of the
country where the award was made”, the enforcement of the award may be refused. The law governing the
agreement must be indicated expressly or must be implicitly apparent. In the absence of any indication, express
or implicit, the law governing the agreement is the law of the country where the award was made.
The objective of providing for a review by the court of enforcement on the grounds of existence of arbitration
clause is evident from the following quote:
“Arbitral tribunals which make an award on the basis of an arbitration agreement which is either non-existent or invalid,
act without authority:
“the contract contains the submission [to arbitration] and if the contract was never validly made then there is no
submission, and the arbitrators are stripped of any authority or put more accurately, no authority was ever conferred
upon them to hear the dispute.”74
The point seems obvious when made. Yet experience suggests that arbitral tribunals, once appointed to
determine a dispute, are often reluctant to relinquish that appointment. They are tempted to exercise jurisdiction
in cases where, on a strict analysis, it is far from evident that such jurisdiction exists. Their motives are no doubt
admirable. They wish to carry out their task, not to resile from it; and they are anxious not to leave the claimant
without a remedy. Nevertheless, arbitral tribunals do well to remember that their authority depends upon the
agreement of the parties; an award made in the absence of such agreement will be ineffective, and the time
and money spent in obtaining it will have been thrown away.”75
One of the great strengths of international commercial arbitration is its dependence upon the agreement of the
parties. It is a method of resolving disputes which is chosen and accepted by the parties. It is not forced upon
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them. However, if the parties have not made an agreement, the process cannot operate. The Pyramids case
serves as a reminder that the final decision as to whether or not there is an agreement rests with the court, not
with the arbitral tribunal, and that where the court holds that there is no valid agreement, it follows that there is
no valid arbitration.76 In this case, a project was evolved for developing tourism facility in and around Pyramid
areas and the Egyptian Government endorsed it by writing “approved, agreed, and ratified by the Minister of
Tourism”. This was held to be not sufficient to make the Government a party to the agreement. The
Government participated in the proceedings under protest. The award went against it. The Paris Court of
Appeal set aside the award.
Accordingly, the decision of the Paris Court of Appeal meant that the arbitral tribunal's award in the Pyramids
case was unenforceable in any of the major trading countries of the world which has adopted this provision of
the New York Convention. This was no doubt a major disappointment to the claimants in the arbitration, since
the ultimate purpose of a resort to arbitration is to arrive at a decision which is final and binding and which, if not
carried out voluntarily, is capable of international recognition and enforcement. If such a result is not obtained,
the time and care of the parties and of the arbitral tribunal (to say nothing of the money spent) is simply thrown
away. The often elaborate and expensive structure of international commercial arbitration is built on the
agreement of the parties; without this agreement, the structure collapses.
In order to determine the validity of the arbitration agreement, it has been held that the Court can consider all
relevant evidence, including evidence of the position in foreign law.77
Validity of ambiguous arbitration clauses
Ambiguity does not render an arbitration clause null and void.
1. The parties did not specify the seat of arbitration specifically (they specified China and not where in China or under
which institution). It was argued that this ambiguity resulted in the clause being void. The Court in Appeal in Eve, LLC
v. Yantai North Andre Juice Co. Ltd. 78 took the view that the arbitration clause was valid as
any doubts should be resolved in favour of arbitration. It was held that for an arbitration clause to be “null and void”
under the New York Convention, it should involve a case of fraud, mistake, duress and waiver; a case of ambiguity,
however, does not render an arbitration clause null and void.
An arbitration clause that provides for two alternative arbitral institutes to conduct arbitrations is valid under the
New York Convention.79
Right to object to validity of agreement — Applicability of doctrine of estoppel
Where a party participates in the arbitration it cannot later claim during enforcement that there is no arbitration
agreement.80
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The doctrine of estoppel is based on the premise that “...if a defendant participates in the arbitration, it must
raise the objection of the alleged lack of a valid arbitration agreement in the arbitration, otherwise is it estopped
from raising that objection in the enforcement proceedings.”81
This doctrine applies when a party fails to raise the issue of validity of arbitration agreement before the arbitral
tribunal where it ought to have raised it.82
1. A party opposed enforcement on the ground that the agreement was not signed. Since it did not raise this objection
during the arbitral proceedings, it was estopped from raising this argument at this stage.83
2. The doctrine of estoppel was applied by the German Court of Appeal while dealing with the argument that the
arbitration clause was invalid as it was contradictory. The German Court of Appeal in Consultant v. German Company
84 rejected this argument as the Defendant was estopped from arguing this. It never objected before the arbitrator or
before the local courts where it could have raised the issue. The fact that it co-operated in the arbitral process showed
that it accepted the jurisdiction of the tribunal.85 In the words of the court:
“There is a violation of the principle of the fair conduct of proceedings ... when the defendant fully participates in the
examination of the issue of jurisdiction in the arbitration, does not request a review of an unfavourable decision from
the competent state courts and further participates in the discussion on the merits in the arbitration, and then again
raises the objection of the lack of an arbitration agreement at the enforcement stage.”
3. When the Defendant claimed that no arbitration agreement existed as the person who signed the arbitration
agreement on its behalf had no authority to do so, the claim was rejected prima facie on the grounds that the
Defendant had filed counterclaims during the arbitration and hence his right to oppose the arbitration had been
deemed to be waived.86
4. Where a party challenged the enforcement of an arbitral award on the ground of procedural irregularities, in Oh
Young Industrial Co. Ltd. v. E&J Textile Group Inc. 87, the Court of Appeal of California, held
that since the appellants had not raised this ground before the arbitrator where they had the opportunity to do so, it
meant that they had waived their right to raise such an objection.
5. A party had appointed an arbitrator, participated in the arbitration proceedings and never objected to the validity of
the arbitration agreement or arbitral proceedings during the proceedings. In such a scenario, that party was estopped
from raising such an objection at the enforcement stage.88
6. In Creditor (Taiwan) v. Debtor (Germany) 89, the German Court rejected the Defendants
arguments for prevention of enforcement of an arbitral award as he had not raised these grounds to set aside the
award in Taiwan and was hence estopped from raising these defences. The Court doubted if estoppel in this sense
could be used for enforcement under New York Convention as it was not an express defence. However under the Most
Favoured Nation treatment provision (which mandates that the applicable local law adopts a more pro-enforcement
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approach as compared with the NYC, the former shall be applicable) German law was applicable and estoppel was
recognised by German law and hence applied.
Foreign case law rightly suggests that doctrine of estoppel does not apply when the party opposing the
enforcement of the arbitral award on the ground of absence of arbitration agreement raised this ground
unsuccessfully before the tribunal.
1. The defendant resisted enforcement of an arbitral award on the grounds that there was no arbitration agreement as
the broker who executed the contract on behalf of the Defendant had no power to do so. By participating in the
arbitration the Defendant claimed that it was not estopped from raising this defence at the stage of enforcement
because it had raised a preliminary objection. The Court in Oleaginosa Moreno Hermanos Sociedad Anonima
Comercial Industrial Financeira immobiliariay Agropecuria v. Moinho Paulista Ltd. 90 held that
the issue on the power of the broker had been decided by the arbitrator and could not be raised again as the Court
could not review the decision of the arbitrator. However, there was no proof of acceptance of the contract and hence
there was no arbitration agreement. It also accepted the Defendants argument on application of estoppel.
When the party opposing enforcement on the ground that there was no valid arbitration agreement, raised this
issue before the arbitral tribunal and the tribunal had ruled against it, the Bombay High Court took the view that
since that party had not appealed against this award resulting in the award becoming final and binding, the
argument that the arbitration agreement was invalid could no longer be raised at the time of enforcement.91 The
Bombay High Court laid down the proposition as follows:
“where the grounds specially in reference to the existence of Arbitration agreement and their clauses have already
been decided by the Tribunal and against which no appeal is preferred by the respondents allowing the respondents to
re-agitate the same issue... is impermissible.”
It may be noted that such a view is restrictive and though in consonance with the pro-enforcement stand of the
NYC, it may lead to the denial of justice for a party which for some technical or any other legitimate reason
cannot file an appeal. Non-existence of the arbitration agreement is one of the grounds expressly provided for
in Section 48 and in that regard, such a narrow interpretation must not be adopted.
Doctrine of estoppel can also apply when one party states that a whole contract including the arbitration clause
is void under the law of a particular country, but has relied upon other parts of the same contract.
1. There were two contracts entered into for the supply of cotton, the first between the parties and the second between
the Defendant and local Chinese subsidiary of the Plaintiff. Only the second contract had an arbitration clauses but the
second contract had references to the first contract. A dispute arose and an award was passed in favour of the Plaintiff.
The Defendant claimed that award was invalid as the second contract is not valid because a Chinese company is
prohibited by local law from entering into such an agreement.
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It was however held in Shandong Textiles Import and Export Corporation v. Da Hua Non-ferrous Metals Company
Limited 92, by the Hong Kong High Court that the defendant itself had relied on the second
contract during the arbitration process. Now it could not state that the contract was not valid. Moreover, both contracts
were interrelated and signed on the same day and had references to each other. Hence they were effectively only one
contract. Enforcement was thus allowed.
Another ground of rejection in these fact could also be that the Defendant had participated actively in the arbitration
contract. This would estop it from later claiming that the contract itself was void.
When a party claimed before the arbitrator that the arbitrator lacked jurisdiction as the arbitration clause was
void, the same party cannot argue before the Court that in light of the arbitration clause, the Court lacked
jurisdiction.
1. The parties entered into a works contract which contained an arbitration clause which provided that an Engineer was
to decide the dispute or difference of opinion between the parties, and if he could not, within 90 days, then the matter
would have to be referred to ICC Arbitration. The contract also contained a clause ousting the jurisdiction of the
German Courts and sole jurisdiction was accorded to Iraqi courts.
When a dispute relating to payment arose, the Respondent commenced ICC Arbitration where the Petitioner
maintained the arbitral tribunal had no jurisdiction over the matter. Then the Respondent instituted action in the
German courts. The Petitioner objected to the jurisdiction of the German courts on the ground that
a. jurisdiction was ousted by way of the jurisdiction clause, and
b. even if not so, by way of the arbitration clause.
On the first issue, the Court held that according to German law, the jurisdiction of German Courts could only be validly
ousted if the courts of the other country guaranteed due process. They found, on the basis of expert evidence that Iraqi
courts did not and therefore held that the jurisdiction of the German Court was not ousted.
Importantly, on the jurisdiction being questioned on the ground of a pre-existing arbitral clause, the Court held that
such a claim could only be made if bona fide. On facts it was found that the claim was not bona fide, because during
the arbitration proceedings, one of the claims of the Iraqi government was that the arbitral tribunal itself did not have
jurisdiction over the dispute relating to the payment of money. Therefore, it was not correct for the Iraqi government to
also claim before the court that it did not have jurisdiction over the dispute. 93
A party cannot claim that the signatory had no power to enter into the contract including the arbitration
agreement, when that party performs the contract. It is then deemed to have accepted the terms of the
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contract.94 In Washington Mutual Finance Group, LLC v. Bailey 95 it was held:
“In the arbitration context, the doctrine [of estoppel] recognizes that a party may be estopped from asserting that the
lack of his signature on a written contract precludes enforcement of the contract's arbitration clause when he has
consistently maintained that other provisions of the same contract should be enforced to benefit him. To allow [a party]
to claim the benefit of the contract and simultaneously avoid its burdens would both disregard equity and contravene
the purposes underlying enactment of the
Arbitration Act .”
Thus where certain documents were relied on by the Claimant for its claims, the Claimant cannot later state that
these documents are not valid and hence the arbitration clauses in these documents are void.96
The decision in the case of Four Seasons Hotels and Resorts, B.V. v. Consorcio Barr S.A.
97 prescribes a restricted approach regarding waiver of right to claim that an arbitration clause is invalid. The
Appellants, in this case entered into four agreements with the defendants to manage and operate the
defendants hotel. All agreements provided for arbitration in either Miami or Caracas. Disputes arose and the
Appellants commenced arbitration proceedings in Miami. The Respondent participated in the arbitration but at
the same time commenced court proceedings before the Courts in Venezuela. The Venezuelan courts held that
the arbitration clause was invalid as under Venezuelan law, Venezuelan courts had exclusive jurisdiction to
decide disputes relating to immovable property rights.
The Appellants then commenced proceedings before the district court at Miami seeking a preliminary injunction
restraining the Respondents from continuing with the litigation in Venezuela and to co-operate with the
arbitration. In the meantime the arbitral tribunal declared that it had jurisdiction to try the matter as the matter
did not involve immovable property rights. The interim award on jurisdiction restrained the litigation proceeding
in Venezuela.
The Respondent sought a preliminary injunction restraining the enforcement of this award, before the Caracas
Courts. The Court granted the injunction as requested and the Venezuelan Court set aside the arbitral award.
The Appellants, however sought to enforce the award in USA. The district Court held that by actively
participating in the arbitration proceedings the Respondent had waived its right to claim the invalidity of the
arbitration clause. This decision went on appeal before the United States Court of Appeal.
The Court of Appeal allowed the appeal and held :
“On the one hand, it could refuse to participate in the arbitral proceeding altogether to preserve its ability to challenge
any adverse ruling court; by doing so, however, the party would effectively forfeit any ability to present the merits of its
case to the arbitrators. On the other hand, if the party were to participate in the proceeding, it would lose any ability to
challenge the arbitrator's ruling. Nothing in the Convention suggests that parties must make such a choice, and we can
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find no case that supports this preclusive rule.”
The Court of Appeals remanded the case to the district court to decide the matter on merits. On remand the
district court ascertained that the arbitration clause was valid and held that once this was ascertained district
court had no discretion under the Convention to refuse enforcement.1
It is submitted that the above approach is reasonable. It follows from such an approach that when a party had
made express reservations regarding the existence of an arbitration clause before participating in the arbitration
proceedings, it cannot, by its mere participation, be deemed to have waived its right to object to the validity of
the arbitration agreement.
1. In a case2, where a party had specifically raised an argument before the arbitrator that the arbitration agreement was
forged and the arbitrator ruled in the negative, it had not waived its right to dispute the validity of the agreement at a
later stage by participating in the arbitration.
2. When a party had raised an objection as to the validity of the arbitration agreement before the arbitral tribunal, but
the tribunal left the matter for the decision of the Court, the party was not deemed to waive its right to object to the
validity of the agreement by merely participating in the arbitral proceedings.3
Non-applicability to public policy exceptions
The jurisprudence on estoppel does not apply to public policy objections. Thus when an arbitral award is
obtained after concealing a settlement agreement from the arbitrators, it could not be argued that the defendant
should have raised this argument before the arbitrators and having not done so, he had waived his right to raise
such an objection.4
However, in UK, the principle of estoppel has been held to apply to cases involving review of the award on
ground of “serious irregularity”. Thus when a party participated in the arbitration without objecting to the
proceedings, it could not later claim that there was a serious procedural irregularity.5
Invalid Assignment
An award was not enforced at the instance of an assignee of the contract because the assignment was found to
be not valid.6
Inability to Present his Case [Clause (b)]
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Section 48(1)(b) corresponds to Article V(1)(b) of NYC and Section 7(1)(ii) of FARE Act, 1961.7
The court may refuse enforcement if the opposing party can prove that he was unable to present his case
because he was not given proper notice of the appointment of the arbitrator, or because he was not given
proper notice of the arbitral proceedings; or for any other valid reason.8 The tenor of the clause shows that
other procedural lapses or irregularities resulting in denial of natural justice to the opposing party may well be
the grounds for opposing enforcement of the award. To invoke Art. 5(1)(b) [corr. to Section 48(1)(b)] the
respondent must establish that it was denied the opportunity to be heard at a meaningful time or in a
meaningful manner.9 This ground of opposition to enforcement of an arbitral award includes both procedural
and substantive fairness, and in certain cases there may be some overlap with the public policy defence.10 It is
presumed that the arbitrators considered all arguments of the losing party; the burden of proving that a party's
arguments were not considered are on that party itself.11 Thus the burden of proving that there was a denial of
due process is on the party alleging the same.12 When there existed no proof that the parties had not been
heard, the presumption is that there is no denial of due process.13 Thus where one party alleged that the other
party had introduced documentary evidence without giving notice and that it was not given the chance to cross-
examine the author of an important report which was crucial to the merits of the case, and the other party
opposed these claims, the inability of the party making the allegations to prove the allegations meant that the
allegations were rejected.14
1. Rice Trading (Guyana) Ltd. sought enforcement in the Netherlands of an award rendered in appellate proceedings
by the Chamber for Cattle Feed, Rice and Pulses Trade, Antwerp. The President of the Court of First Instance upheld
the objection raised by Nidera Handelscompagnie BV (Nidera), that the appellate arbitrators had violated due process
by not allowing Nidera to react on evidence submitted in the proceedings, and denied enforcement to the Belgian
award. The Court of Appeal affirmed it.15
2. A joint venture agreement containing an arbitration clause providing for arbitration under the auspices of the Indian
Council of Arbitration was entered into between Mr. Kanoria and Mr. Guinness to form an Indian Joint Venture
Company called Indekka. A dispute arose and Indekka commenced an arbitration and obtained an award in its favour.
Claimants sought to enforce this award in London. The opposition to enforcement of the award by the Defendants was
upheld on the grounds that there was a violation of due process as Mr. Guinness had not been provided an opportunity
to present his case. One document had been presented in the arbitration at a later stage, which drastically altered the
nature of the case. The defendant had not been told about the submission of this document and hence could not
counter the issues that arose from the production of this document.
The Claimants argued that the court had discretion to enforce the award even if the case within one of the grounds
specified in the New York Convention as the word “may” had been used and that since the award had not been
challenged in India (the seat of the arbitration), such discretion must be exercised. The Court,16 doubted that it had
such a broad discretion and held that even if it did it could not exercise its discretion based on the given facts as
enforcing the award would give rise to grave injustice. It was observed that if the structural integrity of the award is
fundamentally unsound, the court is unlikely to exercise its discretion in favour of enforcing the award.
3. The notice of arbitral hearing was sent to the wrong address of the Defendant, resulting in the defendant not
participating in the arbitral hearings, and the arbitral tribunal was aware of this fact. Enforcement of such an award was
denied due to violation of due process.17
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While the objective of the due process clause is to ensure that natural justice is not denied to the parties, the
Courts have ensured that the due process defence is used only in justifiable cases.
The due process clause
(1) only requires the arbitral tribunal to take into account arguments brought forward by the parties
(2) does not limit the right of the tribunal to evaluate the evidence presented.
(3) does not force the arbitral tribunal to consider arguments that were immaterial to the reasoning behind
the arbitral award.18
The purpose of this provision is to protect a party from “egregious and injudicious conduct” by a tribunal and not
to protect a party from its own failures or strategic choices.19
When the defendant was repeatedly asked to present its case before the arbitral tribunal and it first refused to
do so pending reopening of courts and later only presented its case with respect to the jurisdiction of the
arbitrators, and did not appear on the dates of the hearings as well as specially reconvened hearings, it could
not later claim that there was a violation of due process as it was denied its right to present its case.20
When a party never made an attempt to be present at the arbitral proceedings or send a representative to the
proceeding despite knowledge of the proceedings, it cannot claim that due to the simultaneous criminal
proceedings initiated against it by the Petitioner, it was unable to present its case during the arbitration
proceedings.21
A party cannot claim a lack of financial resources as a basis of incapacity to attend an arbitration. This may be
raised only if there was evidence of “oppression, high pressure tactics or misrepresentation” at the negotiation
stage.22
An argument that the arbitral tribunal was not competent due to the lack of technical knowledge, to hear a
dispute relating to patent law, and this resulted in the denial of the Respondents right to be heard was
rejected.23
An award cannot be annulled when a party could not present its case because it was prohibited by law from
doing so.
1. The Defendant was an American company that manufactured cigarettes in Mexico. Certain tax rebates were
statutorily provided for in case the manufactured cigarettes were exported but the Defendant was denied these rebates
in certain cases. The Defendant claimed that this was discriminatory and violated the provisions of NAFTA.
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Subsequently, arbitration took place in Canada and an award was in favour of the Defendant. The Petitioner argued
that this award should be annulled as it could not present its case due to the prohibitions in the Mexican Fiscal Code
regarding disclosure of certain information regarding the tax paid by its taxpayers. This, it was alleged was against the
intention of the parties to adopt the NAFTA Rules as the NAFTA Rules prohibited drawing adverse inferences from a
failure to disclosure information when that failure was based on prohibitions in the domestic law of that country on
privacy. The Court in United Mexican States v. Marvin Roy Feldman Karpa 24 held that Mexico
was not required to produce such information which it was not permitted by its law to produce.
It is submitted that this involves a conflict between the right to privacy of tax payers in Mexico and the right of Mexico to
not disclose confidential information on one hand and the right of the Petitioner to get a full disclosure of all information
in order to present its case. In such a scenario, it is that right in larger public interest, namely the former set of rights,
should prevail. Hence this judgment sets a good precedent for Indian courts to follow.
If the arbitral tribunal ignores requests for evidence or incompletely investigates facts, it does not necessarily
amount to denial of due process. However, a claim for denial of due process would be valid in case a party is
not given notice or not given a chance to make a representation or if the award is based on evidence that the
defendant could not contest.25 Moreover, when the arbitrator did not consider evidence submitted by one party
because it did not reach the arbitrator in time and based on other frivolous technicalities, and the delay in the
evidence reaching the arbitrator was because of a disruption in air traffic caused by the September 11th
terrorist attacks, it was held that the case came under Section 48(1)(b).26
Use of a specific language for arbitration
When it is expected that a particular language be used for an arbitration, a party later cannot argue that its lack
of knowledge of that language resulted in it being denied its right to present its case.
1. Respondent argued that the award was not enforceable due to violation of due process as Russian was used in the
arbitral proceedings. This contention was rejected by the Austrian Supreme Court in K v. F AG
27 as it was expected that the arbitration being conducted in Ukraine, one of the two languages spoken in Ukraine
(Russian) was likely to be used during the arbitration. It was held that at the most the Defendant could have proved
that the language was not what was agreed upon in the prescribed procedure, but this too was not proved in the
present case.
2. Where the arbitral tribunal was based in Russia, it was only natural that Russian would be the language of the
arbitration and a party cannot claim that it was denied its right of due process because of the use of Russian. 28
When the parties have agreed that the arbitral tribunal shall decide the language to be used, they cannot later
claim that they were not conversant with the medium used for the arbitration and hence were denied a right to
present their case.
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1. The arbitration was conducted in English and German and one of the parties raised an objection at the enforcement
stage that it could not follow the medium of communication during the arbitration and was hence denied an opportunity
to present its case. The Spanish Supreme Court rejected this argument because by agreeing on the application of the
arbitration rules of the Hamburg Commodity Exchange the parties also agreed on the applicability of the rule that
stated that the arbitral tribunal determines the language of the proceedings with German being used as a rule and the
tribunal being competent to allow the use of a foreign language for single procedural acts. 29
Right to Notice
The right of a party to present its case includes within its ambit the right to be served a notice regarding an
arbitral hearing.30
1. The party opposing enforcement had been unable to present its case before the tribunal and had never been
informed about the proceedings. The Court of Appeal refused to enforce the arbitral award.31
A notice, in order to be a ‘proper notice’ may depend upon the curial law adopted by the parties. A notice may
not be inferred from the facts that a person had means of knowing (an implied notice) particularly when the
obligation to issue a notice is statutorily cast on one party and the right to receive a notice is vested in the other.
On the other hand, whether by attending the proceedings even in the absence of a notice could be construed
as waiver of a party's right to receive the required notice even if such attendance was without prejudice, will
again be governed by the chosen curial law.
Proof of existence of a fax detailing the arbitral hearing is sufficient proof of compliance with notice
requirement.32
A preliminary objection was raised by the appellant that the arbitrators had become functus officio, and that
they were not entitled to proceed with arbitration and, therefore, there was no question of the appellant-objector
appearing before the arbitration tribunal. The arbitration tribunal, as per its notice to the party, considered the
objection as a preliminary issue at the scheduled adjourned meeting. The objector was not present at that
meeting. The objection was rejected (by majority) by the arbitration tribunal and the arbitration proceedings
were continued. On the facts and circumstances of the case, the Supreme Court held that a further notice of the
proceedings need not be given asking the aggrieved party to appear before the tribunal to make its submission
on merits. The enforcement of the award was held to be not barred on the ground that the party was unable to
present its case.33
While there is a right to obtain a notice for arbitral proceedings, this right does not stand violated when the
notice is issued to a person who represents one of the parties.
1. The respondent opposed enforcement on the grounds that there was a violation of due process. It was held in Seller
v. Buyer 34 that merely because notice for arbitral hearing was addressed to “Mr T, [Name of
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Buyer]”, where Mr T was the person who had represented the Buyer, does not mean the Buyer has not been served
notice. There was also proof in the file that the Buyer had attended the hearings.
Notice sent by way of email is valid so long as
(a) the email is addressed to the email address of the intended person and the system does not reject the
email.
(b) If a company has many email addresses (for different divisions of their company or otherwise) then a
receipt by a sender may be necessary, but not in the case where there was only one known email
address of the person.35
Where notice is sent by fax and the recipient of the fax did not check it for a long period, it cannot then argue
that the fax was managed by a third party and that the lapse was on the part of the third party.36
Right to representation by a Counsel as a violation of due process
There exists no right to representation by a Counsel unless expressly agreed otherwise by the parties. 37
Award Exceeds Reference [Clause (c)]
Clause (c) is based on Article V(1)(c) of NYC and Section 7(1)(iii) of FARE Act, 1961.38
The enforcement of an award can be opposed on the grounds that the award—
(i) deals with a difference not contemplated by or not falling within the terms of submission to arbitration;
or
(ii) contains decisions of matters beyond the scope of submission to arbitration.
The proviso to the clause carves out an exception by providing that the award which contained decisions on
matters submitted for reference can be enforced if it is possible to separate them from the decisions on matters
not so submitted. The onus of proving that the award could be separated a per the exception lies on the party
seeking enforcement of the award.
The expression “not contemplated by the terms of submission” indicates the intention of parties as to matters to
be submitted for arbitration. In this context, the Court may be required to look into the scope of the arbitration
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agreement and to decide whether the arbitral tribunal had acted in excess of its jurisdiction which flowed from
the agreement only.
One of the conditions for enforcement of a foreign award is that the award must not deal with questions not
referred or contain decisions on matters beyond the scope of the agreement.39
Where the arbitration clause in a sale contract provided for disputes under the contracts or in relation to the
arrangements comprised in the contracts to be settled by arbitration and the defendant in the arbitral
proceeding made a counterclaim based on an alleged agreement to reschedule debts owed to it and on a claim
for alleged negligent misstatement, the arbitrator would lack jurisdiction to deal with the counterclaim.40
However, such an interpretation should be adopted that gives the arbitration clause sufficient scope in tune with
the intention of the parties and does not render it meaningless.
1. Two parties had entered into an agreement by which one of them, the financer of a movie was entitled to recover
money from the other, the guarantor, in case the movie wasn't completed (“completion guarantee”). Disputes arose
between the parties relating to the amount recoverable by the former when the movie released but was not successful.
The arbitration clause covered a dispute between the parties relating to delivery under the completion guaranty. The
Court had to rule on whether the dispute at hand fell within the purview of the arbitration clause.
The view of the Court was that the completion guaranty was to be interpreted so that the arbitration clause applied to
some disputes arising between the parties to it. The word “delivery” was a defined term and meant “Completion and
Delivery of the film as defined in the Completion Guaranty “. The short issue before the Court was whether the dispute
as a whole related to “Completion and Delivery of the film”. The Court took the view that the arbitration clause could not
be confined only to disputes that related to whether delivery had been effected. That would amount to limiting the
scope of the arbitration clause and removing from its ambit all disputes that were not technical in nature and this was
not in consonance with the intention of the parties. Going by the definition of “delivery”, disputes relating to non-
payment in relation to the “delivery” would also be covered by the arbitration clause.41
Where international law principles are said to be applicable to a contract, an arbitral award based on these
principles cannot be set aside on the grounds that the arbitrator had exceeded his authority.
1. It was provided that a contract of guarantee including an arbitration clause be governed by international law. It was
held that this implicitly referred to international trade usages and to the general legal principles of international trade
(lex mercatoria). Hence an arbitrator who relied on lex mercatoria could not be said to have exceeded his authority.42
The award is not enforceable if it decides disputes as to the arbitrator's jurisdiction which by the foreign law they
have no power to decide.43
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Interpretation of scope of certain phrases commonly used in arbitration clauses
Certain phrases are commonly used in arbitration clauses and understanding how courts have interpreted
these phrases would help act as a useful tool in understanding the scope of the arbitrators reference.
The primary impact of a classification of an arbitration clause into a narrowly worded one or a broadly worded
one is that in case of a finding of the former, the clause would not include collateral matters relating to the
contract and disputes would not be arbitrable.44
US jurisprudence suggests that arbitration clauses in general, as well as clauses containing the phrase ‘relating
to’ or ‘in connection with’, are usually construed broadly. The Fourth Circuit held that it “embraces every dispute
between the parties having a significant relationship to the contract.”45 In Kaverit,46 the Court held that a dispute
is “in connection with a contract” if the existence of the contract is germane to either the claim or the defence.
Indian law follows these principles, and the Supreme Court has held that the expression “in connection with” is
of the “widest amplitude”.47
In contrast, arbitration clauses containing the phrases ‘arising from’ or ‘arising out of’ are usually construed
narrowly.48
In the case of Paul Reddam v. KPMG LLP 49, the arbitration clause stated “all
controversies which may arise between us concerning any transaction .... Or breach of this or any other
agreement between us ... shall be determined by arbitration”. It was argued that this clause must be narrowly
construed because the clause stated expressly potential disputes that are covered by the clause- namely
disputes relating to performance of the contract, which would not include tort claims. The primary basis for this
argument was the earlier US jurisprudence on the interpretation of the phrase “arising out of or arising under”.
The Court surveyed the following authorities starting from with the decision in In re Kinoshita
50.
In re Kinoshita50, while interpreting an arbitration clause which referred any “dispute or difference” that would
“arise under” the Agreement to arbitration, the Court held:
“[V]iews more favorable to arbitration appear to be making headway. But where the clause restricts arbitration to
disputes and controversies relating to the interpretation of the contract and matters of performance, [f]raud in the
inducement is not included. The agreement to arbitrate is limited to such matters as those just enumerated when it
refers to dispute controversies ‘under’ or ‘arising out of’ the contract.”
However, subsequently, the above judgment has been restrictively interpreted. In S.A. Mineracao Da Trindade
Samitri v. Utah Int'l Inc. 51 the Court had to interpret an arbitration clause that provided
that:
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’Whenever any question or dispute shall arise or occur under this [Agreement/Contract], such question or
dispute shall ... be finally settled by arbitration....‘
The Court restricted the application of Kinoshita to its precise facts and held that the inclusion of the words
‘question’ in addition to ‘dispute’, and ‘occur’ in addition to ‘arise’ made the clause of a broader nature.
The case of ACE Capital Re Overseas Ltd. v. Central United Life Insurance Co. 52
followed the same line and the Court observed:
‘Kinoshita ... was decided before the Supreme Court's more recent decisions emphasizing the strong federal
policy in favor of arbitration ... and no decision of recent vintage mentions the case without confining it to its
precise facts .... Kinoshita must be confined to its “precise facts” – that is, to the phrase “arising under” or, at
most, to “its equivalent”
In this light, the decision in Kinoshita did not apply to the facts of Paul Reddam v. KPMG LLP
53 and tortuous claims were held to be included within the ambit of the arbitration clause.
Kinoshita however remains good law for the interpretation of phrases “arising under”. In
Bristol-Myers Squibb Company v. SRI International Business Insurance Company Ltd.54, where the exact same
words as in Kinoshita were used in the arbitration clause, the Court considered itself bound by Kinoshita and
held claims for misrepresentation to fall outside the arbitration clause. The Court however laid down certain
important principles that governs interpretation of arbitration clauses. It held:
’First, ... a court should classify the particular clause as either broad or narrow. Next, if reviewing a narrow
clause, the court must determine whether the dispute is over an issue that “is on its face within the purview of
the clause”, or over a collateral issue that is somehow connected to the main agreement that contains the
arbitration clause. Where the arbitration clause is narrow, a collateral matter will generally be ruled beyond its
purview. Where the arbitration clause is broad, “there arises a presumption of arbitrability” and arbitration of
even a collateral matter will be ordered if the claim alleged “implicates issues of contract construction or the
parties’ rights and obligations under it.”
Australian cases laws lay down that the phrases “arising out of” and “arising in connection with” have a similar
scope. 55
The Australian Federal Court in Walter Rau Neusser Oel und Fett AG (Germany) v. Cross Pacific Trading Ltd.
(Cook Islands) 56, summarised the existing case laws and the principles used to interpret
certain terms often used in arbitration agreements. While holding that claims arising before the conclusion of
the contract do not “arise out of” the contract the Court enunciated in detail how arbitration clauses should be
construed.57 It was held58 :
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“Arbitration clauses contractual provisions and are governed by the ordinary rules of contractual interpretation...a
liberal approach to their meaning should be given, without attempting to restrict their scope..... a dispute necessarily
falls within an arbitration clause unless the court can be persuaded with `positive assurance’ that the clause is not
susceptible of a meaning that would include the dispute with the clause....
The phrase ‘arising out of’ has been the subject of judicial consideration on a number of occasions... Gleeson CJ said:
‘When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have
arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be
construed narrowly. They are unlikely to have intended the different disputes should be resolved before different
tribunals, or that the appropriate tribunal should be determined by fine shades of different in the legal character of
individual issues, or by the ingenuity of lawyers in developing points of argument.’”
The following quote from Samick Lines Co. Ltd. v. Owners of the Àntonis P Lemos‘ 59
may also be noted—
“... in certain contexts the expression “arising out of “ may, on the ordinary and natural meaning of the words used, be
the equivalent of the expression “arising under”, and not that of the wider expression “connected with”. In my view,
however, the expression “arising out of” is, on the ordinary and natural meaning of the words used, capable, in other
contexts, of being the equivalent of the wider expression “connected with”. Whether the expression “arising out of” has
the narrower or the wider meaning in any particular case must depend on the context in which it is used’.
...
After reference to Heyman v. Darwins Ltd, Sellers J, at 421 – 422, made clear that the phrase àrise out of’ was wide
enough to encompass claims not contractual in nature, but which had a `close association’ with the contract, or were
incidental to the contract, or which required the `same investigation of the contract and its terms and performance
under it’ ...and which were `so closely linked with the contract’.”
...
Emmett J saw ‘arising under’ and ‘arising from’ to be equivalent to each other and narrower than ... ‘arising out of our
related to’ and ‘arising thereunder or in connection with’.
...
...the expression “arising from” is at least as wide as the expression “arising out of”... Those definitions rather confirm
that the expression “arising in connection with” is wider than the expression “arising out of”.”
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...
I find it very difficult to make any distinction between the words “arising out of” and ‘arising in connection with’, the two
phrases appearing to me to be virtually synonymous.”
These phrases have also often been interpreted by English Courts, which have however interpreted the phrase
“arising out of” to be of wide scope.
The House of Lords in Premium Nafta Products Ltd. v. Fili Shipping Co. Ltd 60 held that
the terms “arising out of” and “arising under” were not significantly different and use of the latter did not mean
that allegations that the contract (charter in this case) was procured by bribery fell outside the ambit of the
arbitration clause.
In Capital Trust Investments Ltd. v. Radio Design TJ AB 61, the short issue before the
Court of Appeal was whether the inducement of the Plaintiff to subscribe to shares in the respondent company
by fraudulent and/or negligent misrepresentation falls within the ambit of an arbitration agreement which states
“dispute arising out of this application for shares”. The Court, while promoting an expansive interpretation to the
clause held:
“An arbitration or jurisdiction clause is very different from a general release. The purpose of such a clause is to provide
a machinery for the resolution of disputes which might arise in the future. It is not we think suggested that the clause
would not be wide enough to include claims for breach of contract, whether committed negligently or fraudulently or
otherwise. In any event, the clause is in our judgment plainly wide enough to include such claims. As we see it, the
purpose of using the wide words “arising out of” is to ensure that all claims which can fairly be said to arise out of the
application are included. The parties would be likely to have in mind the possibility of claims for negligent
misrepresentation. It is also not unknown for claims based on alleged fraudulent misrepresentation to be made in such
circumstances.
...
In our judgment the parties would be likely to have wanted one tribunal to determine all such claims. It seems to us to
be far more likely than not that the parties intended that claims for damages for deceit or negligent misrepresentation
and claims for damages for breach of contract should all be determined by one tribunal. In these circumstances we see
no sensible basis upon which it could be held that, although the parties used language which it is conceded is wide
enough to include such claims, they must be taken to have intended to exclude them.”
This followed the interpretation of a similarly worded arbitration clause in the cases of Ashville Investments Ltd.
v. Elmer Construction Ltd.62 and Harbour Assurance Co. (United Kingdom) Ltd. v. Kansa General International
Insurance Co. Ltd.63 where it was held that claims for rectification of a contract and claims for a declaration of
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non-liability under a contract on the ground of illegality were held to form within the purview of the arbitration
clause. In the former case the judge observed,
“.... I would be very slow to attribute to reasonable parties an intention that there should in any foreseeable eventuality
be two sets of proceedings.”
RUSSELL ON ARBITRATION64 sums up the position in UK as follows:
“The phrases “disputes arising under the contract” and “disputes arising out of the contract” were specifically
considered by the Court of Appeal in Fiona Trust [2007] EWCA Civ.20 who concluded that they should cover every
dispute except a dispute as to whether there was ever a contract at all. Although previously the words “arising under
the contract” had sometimes been thought to have a narrower meaning, that should no longer be so.65 The words “out
of” and “under” should be widely construed.66 Accordingly the earlier case law suggesting that a provision referring
“disputes arising out of the contract” would not include claims for a contribution under Civil Liability (Contribution) Act
1978 or that “disputes arising under the contract” would not cover rectification claims would no longer seem to apply.
The words “disputes arising out of” have generally been held to have a wide meaning67 but the Court of Appeal's
approach represents a shift towards a broader interpretation of the words “arising under the contract”.”
Canadian Courts have followed the English approach. The Ontario Court of Justice laid down that “all disputes
arising from or out of this agreement” includes claims for misrepresentations and torts.68
It may be notec that not all torts can be said to arise out of the agreement. Ultimately, this question depends on
two factors – a proper construction of the agreement, and an analysis of whether the particular tort claim falls
within the ambit of the arbitration clause so construed. It will suffice to observe that there is no general rule
pointing either to the automatic inclusion or exclusion of tortious claims from the scope of the arbitration clause.
This exercise depends largely on the intention of the parties; thus when the parties intend that the arbitration
clause should also cover disputes that indirectly arise out of the contract, such disputes would fall within the
ambit of the arbitration clause. The key, however, is to find out the true intention of the parties based on the
surrounding circumstances. There exists a number of foreign authority that can be used by Indian Courts when
posed with interpreting a similar clause.
1. A counterclaim was made for negligent misstatement by the defendant resulting in the Plaintiff advancing certain
moneys to a third party and the contracts provided for disputes under the contracts or in relation to the arrangements
comprised in the contracts to be settled by arbitration it was held that since the terms and scope of the arbitration
clauses did not confer jurisdiction in relation to disputes arising in connection with a wholly unrelated alleged
agreement, the present counterclaim would have to be decided by a Court and not the arbitrator.69
2. An arbitration clause formed part of an exclusive distribution agreement between the parties. It covered within its
ambit all disputes “arising out of the agreement” along with disputes “relating to the contract”. This was held to cover
tortious claims linked with the non-performance of the contract and also claims based on competition law as they were
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related to the validity of the contract vesting exclusive distribution rights on one party.70
3. In Heraeus Kulzer Gmbh v. Dellatorre Vera Spa 71, the owner of an orthodontic laboratory,
commenced proceedings for product liability against Merident, which in turn impleaded the Respondent from which it
had purchased the product. Since the defective product was distributed by the respondent on behalf of the Appellant
pursuant to a distributorship agreement between the two, the respondent impleaded the Appellant as well. The
Appellant claimed that their relation with the respondent was governed by the arbitration clause in the distributorship
agreement and hence that Italian Courts would not have jurisdiction. When the matter went up before the Italian
Supreme Court, it ruled in favour of the Appellant. The claim against the Appellant had arisen indirectly from the
distributorship agreement and the statements made by the parties before the Court suggested that their original
intention was that indirect disputes arising out of the distributorship agreement should also be governed by the
arbitration clause.
4. In Creditor (Taiwan) v. Debtor (Germany) 72, the Court observed that “arbitration in Taipei”
meant arbitration under the only institution in Taipei and not ad hoc under the procedural rules. Moreover even if it was
left to the Court to appoint arbitrators it cannot be argued that the Court would not have appointed an all—Taiwanese
panel and hence the Defendant could not say that the award could not be enforced because the panel was all
Taiwanese.
These judgments provide pointers on how Indian Courts may interpret typical arbitration clauses. It is submitted
that Indian courts should arrive at the intention of the parties based on how the parties are likely to have seen
the clause.73 For instance, a party advised by an American law firm is likely to interpret “arising out of” narrowly
based on US standard practice, whereas a party advised by a UK law firm is not likely to have intended so.74
Interpretation of arbitral clauses in Bilateral Investment Treaties
Where a bilateral investment treaty contained a clause which stated that the arbitral tribunal shall have
jurisdiction relating to all claims “concerning compensation”, such an interpretation that would favour
investments should be preferred and in that regard it was held that the term “concerning compensation” would
not include claims relating to whether compensation should be awarded.75
Interpretation of clauses conflicting with arbitration clause
Ace Capital Ltd. v. CMS Energy Corporation 76 involved an
interesting conflict between the arbitration clause and the “service of suit” clause which provided that in the
event of any failure by the underwriters to pay any amount claimed, the underwriters would, at the request of
the insured, submit to the jurisdiction of a court of competent jurisdiction within the United States, and that
nothing in this clause constituted a waiver of the underwriter's right to commence an action in any court of
competent jurisdiction in the United States.
The dispute involved insurance policies providing political risk cover to companies in respect of investments in
gas projects in Argentina and Chile. The Defendants instituted a suit in Michigan. The Plaintiffs sought an anti-
suit injunction in England claiming that the US Court did not have jurisdiction over the matter and it was a
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matter to be decided by an arbitrator.
The Court interpreted the conflicting provisions based on already decided US case law. It was held that the
purpose of service of suit clauses was to ensure that insurers not licensed within a State could be sued in the
United States and not to restrict the scope of the arbitration clause. It was held that the contract was to be read
as a whole. Hence it was held that the arbitration clause applied to the present dispute and thus granted the
anti-suit injunction.
It is submitted that the arbitration clause is a general dispute resolution clause and the “service of suit” clause is
a specific clause which could be used only by the underwriters. When there is a conflict the specific clause
should prevail. The Court, however held that there was no conflict and that the two clauses should be
reconciled such that the US Courts would only have jurisdiction to enforce arbitral awards. Such an
interpretation renders the “service of suit” clause redundant as the US Courts would in any case have statutorily
conferred powers to enforce the award.
Powers of the arbitrators
The arbitrators have the powers elucidated in this section and cannot be said to act outside the scope of their
powers if they exercise the powers enunciated below.
1. The arbitrators have the power to grant remedies not expressly provided for in the contract.
a. In the case of Millicom International V N.V. v. Motorola. Inc 77, the arbitrator awarded a
remedy that was not provided for in the contract (dissolution of the joint ownership of the parties over a joint venture
company) and this was challenged as an act in excess of the arbitrators authority. The US District Court held that the
arbitrators powers need not be restricted to the express powers granted in the arbitration agreement. The scope of the
arbitrator's authority is determined by the intention of the parties as is expressed in the agreement or submissions. An
arbitrator's award must “draw its essence from the parties’ agreement, it is not limited to the mechanical applicability of
contractual provisions.”
In the given fact scenario there was nothing to suggest that the parties intended the powers of the arbitrator to not
include granting of remedies not expressly specified in the contract.
2. Arbitrators can issue interim awards.
a. In Distributer A v. Manufacturer B 78, a conflict relating to a distributorship agreement arose
and the Claimant sought an interim order mandating the Defendant to deliver some documents. The arbitrator held it
could pass such orders and that it was the mandate of the ICC that such awards should be passed that would prevent
further disputes and that would encourage performance of the contract.
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b. When a London arbitration was ongoing between two parties relating to the sale of shares by the Government of
Belize in violation of an options agreement with the Defendant, the Defendant filed for an interim injunction restraining
the sale of shares while arbitration was ongoing. The Supreme Court of Belize had to consider the question as to
whether it had the jurisdiction to grant the injunction.79 It was held that it had the power to grant interim relief in aid of
foreign arbitration when it was just and convenient to do so. In the present case it was held that the interim injunction
did not encroach on the powers of the LCIA Tribunal but was needed to ensure that the order of the tribunal would be
more effective.
3. The arbitrators have the powers to state that the costs would be awarded in a separate award, especially when the
parties had not made any submissions on this issue before the tribunal.80
4. The arbitrators have the power to resolve a difference in views of the parties regarding the payment of certain
moneys. A party cannot argue that this does not constitute a dispute and hence the award should be set aside for lack
of jurisdiction of the arbitrator who only has the power to resolve “disputes”.81
Legality of Composition of Arbitral Tribunal and Procedure [Clause (d)]
Clause (d) corresponds to Article V(1)(d) of NYC and Section 7(1)(iv) of FARE Act, 1961.82
An objection against the enforceability of the award can be based on the ground that—
(a) the composition of the arbitral tribunal was not in accordance with either the agreement or the law of the country
where the arbitration took place;
(b) the arbitral procedure was not in accordance with the agreement or the law of the country where the arbitration took
place.
Enforcement may be refused if the party could establish that he had not participated in the proceedings or had
participated in the proceedings only after duly challenging the composition in accordance with the applicable
law. For invoking (b) above it has to be proved that there was a deviation from the agreed procedure or the law
of the concerned country, and further that such deviation had incapacitated the party from presenting his case
before the arbitral tribunal.
Where the appellant failed to prove before the court that the appointment of arbitrator or the procedure of
arbitration was not in accordance with the law (of Ukraine, in this case) particularly when the other party had
filed an affidavit affirming that the award had been made in conformity with the law of Ukraine, the enforcement
of the award could not be refused,83 affirming the decision of the Bombay High Court to pass a decree in terms
of the award. In this case, the Supreme Court refused to permit the appellants to produce/prove the relevant
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law of Ukraine, which according to them was the prevailing law, when they failed to do so before the High
Court, and their contention was consequently rejected by the High Court. The apex court deprecated the
practice of filing fresh documents or evidence for the first time before it when the High Court had rejected the
claim in the absence of such material.
As to the ground based on Article V(1)(d)—in this case, insufficient, contradictory reasons—the court of Appeal
(Brussels, Belgium) refused to examine the reasoning of the arbitrators as an appellate court.84 It observed:
“The examination of incoherent and contradictory reasoning belongs to an appellate jurisdiction which the
parties (in this case) have contractually ruled out by agreeing that the arbitral award shall be enforceable upon
being rendered, no appeal allowed.”
Discretion of arbitral tribunal determined by its rules
In the case of institutionalized arbitration where the rules of the institution that are applicable to the arbitration
provide the arbitral tribunal flexibility to lay down certain rules relating to various aspects including place of
arbitration, it is not open to the parties to contend that arbitral hearings were conducted in two different
locations resulting in parallel arbitrations which was against the procedure prescribed in the arbitration
agreement.
1. Arbitral proceedings were commenced in Shanghai but subsequently hearings were conducted in Beijing as well.
The Respondent argued that conducting parallel arbitrations in two places was not contemplated by the arbitration
agreement. The arbitration agreement had listed three possible places for arbitration but according to the Respondent
it was upto the Panel to choose one of the three places. The enforcement of the arbitral award was thus opposed by
the Respondent on these grounds.
However the arbitration agreement itself directed that the arbitration be conducted “at the Claimant's option in
accordance with [CIETAC's] arbitration rules,” thereby recognizing that the arbitration clause may itself be unable to
resolve all forum disputes. Thus the Court concluded that the clause allowed the arbitral tribunal to conduct the
arbitration in accordance with its own rules and to interpret the clause itself. In that sense it was open to the arbitral
tribunal to decide on whether it was permissible to conduct hearings at more than one place. An argument that the twin
arbitration proceedings resulted in inefficiency was rejected as the parties by agreeing to the application of the CIETAC
rules had agreed to a procedure followed by the tribunal. 85
Effect of incapacity of one arbitrator to participate in the remaining arbitralprocess
Courts have taken contrasting approaches when the

constitution of the panel cannot remain the same as prescribed in the agreement, due to
one of the arbitrators not being able to participate in the proceedings after a certain point.
Pemex Refinacion v. Tbilisi Shipping Co.86 was a case involving an arbitration that had
been on for 11 years when one out of the three arbitrators (one appointed by Petitioner, one by Defendant and
one by the two other arbitrators) the arbitrator who was appointed by the Petitioner died, the petitioner's request
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to unilaterally appoint another arbitrator was turned down. It was held that the Petitioner could not unilaterally
appoint another arbitrator and that the newly appointed arbitrator could not decide without hearing the
arguments. Hence the whole dispute should be heard again before a freshly constituted panel.
It appears on facts that the decision in this judgment defeats one of the primary objectives of arbitration which is
to render speedy justice. A better approach would have been to follow the same approach as was followed
under the Indian
Arbitration Act of 1940 where it was permissible to have an even number of arbitrators.
A more balanced approach was taken in Mayer Zeiler v. Joseph Deitsch 87. In this case,
the central issue before the Court was whether an arbitration panel composed of three rabbis can proceed to
make an award after one member had resigned from the panel. The parties had agreed to appoint the
members of the Beth Din according to the “Zabla” method recognised by Jewish law in which each party would
elect one arbitrator, and the two appointed arbitrators would appoint a third neutral arbitrator as the presiding
member of the panel.
The arbitral tribunal was referred to as the “Beth Din” which was defined as:
“a judicial tribunal governed by Halachic law, the members of which are the honorable Rabbi Moshe D. Tendler, Rabbi
Shmuel C. Gurwitz and Rabbi Moshe Bogomilsky, or any other tribunal governed by Halachic law upon which the
Parties mutually agree”
Once one of the members resigned it was argued by the petitioner that the Beth Din, as previously constituted,
ceased to exists and a new Beth Din would have to be appointed.
The Court, however took the view that naming of the members did not mean that the arbitration would not
continue if one of them resigned. In the words of the Court:
“...the three members were named only to reflect the choices previously made by the parties and their designated
members, not to state a limitation on the authority of the panel to continue in the unexpected event that one of the
members might resign.
This conclusion is also consistent with the “Zabla” method that the parties had employed in appointing the three
arbitrators...A natural implementation of the Zabla method when a member designated by a party resigns would be that
party's appointment of a substitute.
Reading the parties’ agreement to permit continuation of the panel in the event of a member's resignation, with the
opportunity of the relevant party to appoint a successor, is especially appropriate in the circumstances of this case. The
tribunal had already decided the substantive issues between the two sides. All that remained was determination of the
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amount of tax liabilities in light of the prior determination of the allocation of those liabilities. To read the agreement to
require the proceeding to be halted upon the resignation of one member at that late stage of the proceedings would
enable bad faith manipulation of the arbitration process: in an ongoing and complex arbitration, a party receiving
unfavorable interim rulings would have an incentive to invite the member he designated to resign to forestall an
anticipated ultimate defeat, or even, as in the pending case, after securing favorable rulings that are confirmable, to
precipitate an arbitrator's resignation in the hope of avoiding confirmation of a later unfavorable award. The agreement
should not be read to countenance the waste of resources required to redo a protracted arbitration proceeding in the
event that one member of a panel died or otherwise became unable to serve during the proceeding. A more sensible
reading of the agreement makes continuation of the remaining members of the panel (with an opportunity for
appointment of a replacement) the default position, subject to an explicit agreement of the parties that only a panel with
the three originally designated members still serving is authorized to render an award, albeit by a majority vote.”
A similar practical approach was adopted in the case of Agence Transcongolese des Communications –
Chemin de Fer Congo Ocean (ATC-CFCO) v. Compagnie Miniere de l'Ogooue – Comilog
88, where the arbitrator appointed by one of the parties resigned citing interferences by the legal representatives
of the other party. However, an award was passed by the arbitrator appointed by the other party along with the
president of the tribunal. The French Court of Appeal upheld the award as the possible dilatory and abusive
character of the resignation of the arbitrator was irrelevant to determine whether the award was rendered by a
regularly constituted tribunal. The regularly constituted tribunal had heard the dispute and the mere fact that
one of the arbitrators did not complete his mandate would not render the award unenforceable.
This appears to be a reasonable approach. If the whole arbitration process is to start again upon one of the
arbitrators being under an incapacity to continue, it would act as a tool for parties wishing to stall the process
and hence be a disincentive for parties to use arbitration as a mode of dispute settlement.
No jurisdiction when procedure for appointment is not followed
1. This proposition was laid down in the case of Econet v. First Bank of Nigeria 89 which
involved a dispute pursuant to a Shareholders Agreement.
One provision of the Shareholders Agreement stated:
“The numbers of arbitrators shall be three and they shall be appointed by the Chief Judge of the Federal High Court of
Nigeria upon an application by any of the Parties. The Chief Judge shall specify which of the three arbitrators shall
serve as the Chairman of the arbitral tribunal. The venue of arbitration shall be Nigeria and the language of the
arbitration shall be English.”
When the Chief Judge took no action, the Claimant went before the Permanent Court of Arbitration (PCA) which
appointed ICC as appointing authority.
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The issue raised before the Tribunal was that the PCA had no authority to appoint the panel.
While deciding on its own jurisdiction, the panel observed that in order to arrive at the procedure to appoint the tribunal,
following order has to be followed:
1. Shareholders Agreement.
2. Where there is reference to UNCITRAL Rules as being the governing procedural rules, then the UNCITRAL rules.
3. Substantive law of the country specified.
The SHA :
(a) Provided for the UNCITRAL Rules to apply
(b) did not provide a procedure in case the appointing authority failed in its duty.
UNCITRAL Rules contemplated that the PCA would get jurisdiction to appoint the appointing authority to appoint the
second arbitrator in case of arbitration where each party selected one arbitrator (out of a total of three) and respondent
failed to select his arbitrator within 30 days. UNCITRAL Rules did not provide for when the appointing authority did not
act.
Substantive law of the country, i.e. the Nigerian

Arbitration and Conciliation Act provided that when a third party including an institution failed
to perform its duty, either party may request court to take necessary measures unless another procedure is agreed to
by the parties.
Applying these principles, the tribunal held that the intention of the parties as garnered from the fact that the Nigerian
Chief judge was the appointing authority was that Nigerian jurists should be arbitrators. This objective was not
achieved when ICC arbitration was ordered. On this basis it was deemed that the procedure had not been followed and
hence the tribunal lacked jurisdiction to continue.
It appears that while the ruling on the grounds that the PCA did not have authority to appoint the tribunal is accurate,
the corollary that the intention of the parties was that Nigerian jurists should constitute the arbitral panel seems without
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basis.
Effect of ambiguity in prescribed procedure
Ambiguous arbitration clauses very often raise the question of what the parties intended the arbitral procedure
to be. In the case of Tema Frugoli Spa v. Hubei Space Quarry Industry
90, a contract between the parties contained an arbitration clause that provided for arbitration of disputes before
the international arbitral panel in Stockholm if the arbitration was commenced by the appellant and before the
CIETAC in Beijing if the arbitration was commenced by the respondent. When disputes arose, the appellant
commenced proceedings in Stockholm and obtained an award in its favour.
The respondent simultaneously, but after the time the appellant commenced proceedings, commenced
arbitration proceedings at CIETAC in Beijing. The appellant did not appear before the CIETAC as the hearings
were scheduled for the same time. The respondent obtained an award in its favour, which it sought to enforce.
The appellant challenged this enforcement on the grounds that the mandate of the arbitration agreement had
not been followed and the Supreme Court ruled in its favour, observing that the composition of the arbitral
tribunal and the arbitral proceeding in the present case was not in accordance with the agreement of the
parties. In the Courts view the parties had contemplated only one arbitration. This finding was further
strengthened by the fact that both parties had raised an objection in the arbitration commenced by the other
arguing that the arbitral tribunal lacked jurisdiction because they had commenced arbitration in Stockholm and
Beijing, respectively. The parties thus intended that commencement of one arbitration precludes the other.
Moreover, the existence of contradictory awards for the same dispute is not in consonance with the objective of
arbitration which is to finally settle disputes between parties. Since the appellant had first commenced
arbitration, the latter award which was sought to be enforced was unenforceable.
Award not yet binding, set aside or suspended [Clause (e)].
Clause (e) corresponds to Article V(1)(e) of NYC and Section 7(1)(v) of FARE Act, 1961.
Clause (e) of Section 48(1) states the foreign award cannot be enforced if—
(i) the award has not yet become binding; or

(ii) the award has been set aside or suspended by a competent authority of the country in which or under
the law of which the award was made.
The award is binding so long as there is no future recourse on merits under the law to which the agreement is
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subject.
1. Thus when enforcement of a Jordanian award before the Court in Belgium was opposed and it was
contended that the award was not binding on the parties, inter alia, as under Jordanian law an award is
binding only if it has been confirmed by a competent court, the argument was rejected as
(a) The New York Convention provides that the enforcement may be refused, only if the proof is
furnished which indicates that “the award has not yet become binding on the parties or has been
set aside or suspended by a competent authority of the country in which, or under the law of which,
that award was rendered.”
(b) The qualification of competent authority only relates to the second half of the provision, that is, the
setting aside or suspension of the award, and does not relate to the first half, that is, binding value.
(c) The New York Convention envisions that an award is binding on the parties when there is no
recourse on merits. Whether an award is open to recourse on merits is to be decided, according to
the law designated by the arbitration agreement and only in the absence thereof by the law of the
country where the award was given.
(d) In the instant case, the arbitration agreement provided that it becomes enforceable as soon as the
award is made, and is not subject to appeal. Hence, recourse to Jordanian law is not warranted,
and the award will be binding.91
Where a partial award is made requiring certain payments it was held that it could not be enforced till the
dispute was resolved totally.
1. A partial award in arbitration was made under the UNCITRAL Arbitration Rules by an ad hoc tribunal in Switzerland
between the Respondent and the Petitioner requiring the former to pay various sums to the latter. On enforcement, the
defence of the Respondent was that the partial award could not be enforced in Court. The Court negatived the
contention that the partial award could be enforced. It relied on Art. V(1)(e) of the NYC which provided for the finality of
an arbitral decision as a compulsory requirement for an enforcement proceeding. Further the Court held that to
maintain the contrary would allow the preliminary enforcement of a partial award, while the subsequent temporary or
partial award may provide, for example, compensation for a counterclaim with respect to a counterclaim objection, and
in this way introduce a lack of clarity and make impossible the final settlement of the relations between the parties.92
It appears that in this case, the Court does not consider the full effect of the term ‘binding’ which only means any ruling
made (whether partial or complete) which is a final decision of the tribunal.
If the court is satisfied that an application has been made for setting aside or suspension of the award, it may
instead of outright refusal to enforce the award adjourn its decision of enforcement until the suspension is lifted,
or enforce the award, and order the party seeking enforcement to provide suitable security. In an unreported
decision cited in Russel on Arbitration,93 it was held that suspension must have occurred as a result of the order
of the competent authority and not by operation of law.
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Where an appeal is pending in a French Court and French law deems that an appeal has a suspensive effect, it
cannot be said that for the purposes of the NYC that the award is suspended.
1. In Alto Mar Girassol v. Lumbermens Mutual Casualty Company 94, an arbitral award in
favour of the Defendants had been sought to be set aside before the French Court and during the pendency of
these proceedings it was submitted that enforcement should be denied because the award had been
suspended by operation of French law under which an appeal against a decision granting or refusing
enforcement of the award has a suspensive effect. However as observed by the Court, if the award was
question was deemed to be suspended in the sense of Art. V(1)(e) of the 1958 New York Convention, any
award coming from a country where awards are suspended during the time allowed for appeal and during the
appeal process would be unenforceable under the Convention. This would go against the pro-enforcement
stand of the New York Convention.
However, it was held that a stay could be granted in the present case as the there was no deliberate attempt by
the Defendant to stall proceedings and there was a good chance of two contrary decisions in case the Court
allowed enforcement.
Enforcement of annulled award
This ground for refusal of enforcement is controversial. The issue of whether an annulled award is still
enforceable in other countries has come up before foreign courts on a number of occasions and different views
have been taken.
In some cases, courts have taken the view that an annulled award cannot be enforced in a foreign court. The
rationale behind this view is that an award once set aside by a competent Court becomes a nullity and there
remains nothing to enforce.1
1. The award in Belarus was set aside by the Court of Belarus on the grounds that one of the parties had
no capacity to sign the agreement under the local law and hence there was no arbitration agreement. It
was also set aside as the third arbitrator had not signed the award and this according to the Court
violated the rules governing the arbitration. The German Court refused enforcement following the
European Convention holding that when an award was set aside on grounds referred to in the
Convention, it could not be enforced in a foreign state.2 (“Belarus Case”)
2. An award was made and later annulled in Nigeria. A US Court declared the award to be
unenforceable.3
On the other hand some courts have also taken the view that they have jurisdiction to enforce annulled awards.
The underlying reasoning is that international awards are not rendered a nullity because they have been set
aside. Their existence in the eyes of law is not affected by the decision of an enforcing court, and it is solely
dependent on the will of the parties.4
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1. An award obtained in Singapore was allegedly annulled in Philippines. When the enforcement of such
an award was sought in USA, it was opposed on the grounds that it had already been annulled. The
Court held that the award had not been annulled and even if it had been annulled the US Court had the
discretion to enforce it.5
2. A contract governed by Swiss law was entered into in Algeria with the assistance of an intermediary
agency. As Algerian law prohibited use of middlemen to enter into contracts and contracts which were
contra bono mores (contracts against morality) were prohibited according to Swiss law, the Swiss
arbitral tribunal declared the contract to be one against morality as it was in violation of Algerian law
and hence held it to be void. This award was overturned by the Swiss Supreme Court and sent back to
the arbitrator to decide on merits. The arbitrator had been replaced by another person who ruled in
favour of the other side. There were hence two opposing arbitral awards. When enforcement was
sought in France, the former award was held to prevail even though it had overturned.6
3. An Egyptian award that was set aside by Egyptian Courts on the grounds that it did not take into
consideration the principles of Egyptian administrative law was enforced by French Courts.7
The latter view appears to be more in line with the NYC as well as the 1996 Act. This does not mean that
annulment of an award has no effect. While the annulment of the award by the courts of primary jurisdiction is
definitely a factor to be taken into consideration and in most cases such awards are not to be enforced, the
wording of the NYC and 1996 Act clearly suggest that the Court has a discretionary power to enforce an
annulled award.
The words used in Section 48 are “enforcement of a foreign award may be refused... (if) the award has not yet
become binding on the parties, or has been set aside or suspended by a competent authority of the country in
which. or under the law of which, that award was made.” This needs to be contrasted with the words used in the
Section 57(1),in the context of opposition to enforcement of Geneva Convention awards.
Which provides that enforcement of such an award “shall be refused if the Court is satisfied that the award has
been annulled in the country in which it was made.”
The use of “may” instead of “shall” under Section 48 clearly indicates that it is contemplated that in some
situations when NYC awards are set aside by Court at the seat of arbitration, the award may still be enforced by
Indian courts.8
There appear to be three broad scenarios where the Indian courts could use their discretion and enforce an
annulled award.
(1) Scenario 1-The public policy exception
The conception of public policy is different from country to country. Taking this to its logical conclusion would
mean that an award annulled in its country of origin on the grounds of violation of public policy need not
necessarily be unenforceable in another jurisdiction. This principle has been ingrained in the European
Convention and was also enunciated in the case of Buyer (Austria) v. Seller (Serbia and Montenegro)
9, a case involving disputes arising from a contract for sale of mushrooms. An arbitral award was passed in
favour of the Defendant who sought to enforce it. Enforcement was opposed on the grounds that the petitioners
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signature was forged and the witness statements were false and hence the award was against public policy.
The Defendant argued that the Plaintiff should have raised public policy objections at the country where the
award was rendered. The Austrian Supreme Court rejected this contention and held that annulment of an
award on the grounds of violation of public policy in the country where the award was made was not a ground
for non-enforcement of an award. Hence whether or not the Plaintiff had raised the argument before the courts
at the seat of arbitration was of no consequence. In the words of the court:
“Pursuant to Art. IX (1) European Convention, even the annulment of the award for violation of the public policy of the
country of origin – which is not argued here – is not one of the grounds for refusal exhaustively listed in the European
Convention, and is therefore not a ground for refusing enforcement in the enforcement state. [Hence], even if the buyer
obtained the annulment of the arbitral award in the state of the seat because the award was allegedly based on a false
witness statement, this would not be a ground for refusing recognition and enforcement in Austria pursuant to Art. IV
European Convention together with Art. V(1)(e) New York Convention.
Consequently, it would not be appropriate [to hold that the buyer should raise its] objection of violation of public policy
in proceedings for setting aside the award in the country of origin, and thus in proceedings that are irrelevant to
enforcement and execution in Austria.”
Thus one scenario in which the Court may use its discretion and enforce an award annulled in the country
where it was made is when the annulment was on the ground of public policy and this arises out of the fact that
every country sets its own threshold for ‘public policy’.
(2) Scenario 2- Annulment where the basis of the award remains valid
Logically, an award would no longer be enforceable once the very basis of the award has been overturned. This
would include cases ranging from lack of jurisdiction to denial of a fair hearing to one of the parties. However,
cases which involve a mere procedural formality of the local jurisdiction which even if recognized by Indian
Courts, would not have resulted in Indian Courts setting aside the award had they been in the same position as
the court that did, would qualify as cases where Indian Courts can exercise their discretion not to enforce the
foreign award.
The Belarus Case 10 is a good example of an award that has been set aside but ought to
be enforced if enforcement is sought before Indian Courts. One of the grounds for the award being set aside
was that the award had not been signed by the third arbitrator. When two of the arbitrators agreed on the
decision, the view of the third arbitrator is not material. Even if the third arbitrator had dissented, the majority
award would have remained the same. Cases like this, where the arbitral award is annulled for reasons which
would not have resulted in annulment in most countries, are the best examples of where the Indian courts can
use their discretion to enforce an award that has been set aside. However, in the Belarus case, the first ground
for setting aside the award is valid and hence Indian Courts would have refused to enforce the award as well.
Another hypothetical example of a case where Indian Courts might use their discretion to enforce a foreign
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award is based on the facts of International Bachtel Company Limited v. Department of Civil Aviation of the
Government of Dubai 11, where an award was set aside on the grounds that an oath was
not taken in the form prescribed by Dubai law. Given the pro-enforcement policy of the NYC, such an award
ought not to have been set aside for breach of a mere procedural formality. The setting aside order by the
Dubai Court is not a ruling on the substantive law and does not take away the substance of the award in any
way. If such an award is sought to be enforced in India, it is submitted that Indian Courts ought to enforce it.
When notice is dispatched but not received by the other side, Russian law deems the notice to have been
received whereas German law does not have any such legal fiction. Thus when one of the parties to an
arbitration agreement did not such a receive notice relating to the arbitral hearing, the Russian courts
considered the award to be final and unenforceable but the German Courts held it to be unenforceable due to a
violation of due process.12 In a scenario where the award was sought to be set aside in Germany, such an
application would have been successful. However, it is submitted that in the given fact scenario the award
would have been enforceable in Russia as from the point of view of the Russian Courts, the standard for “due
process” had been met.
(3) Scenario 3- Exercise of non-existent powers
The third scenario is when the Court of annulment has exercised powers that it possesses under its local law
but that are not recognized by the law of the country of enforcement. For instance, Egyptian Courts are
competent to go into the merits of the arbitral award and set the award aside on these grounds. However most
jurisdictions do not recognize the existence of such a power. This is best elucidated by the case of Chromalloy
Aeroservices, A Division Of Chromalloy Gas Turbine Corporation v. The Arab Republic of Egypt
13 .
An Egyptian arbitral tribunal passed an award in favour of the Petitioner. This award was set aside by the
Egyptian Court on the basis of mistake of law and this according to the US Court, was based on merits. While
Egyptian law permitted such a review, the US law did not permit the same. The difference between the two
legal systems on this issue was expressed as follows:
“In the United States, “[W]e are well past the time when judicial suspicion of the desirability of arbitration and of the
competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution.”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444
(1985). In Egypt, however, “[I]t is established that arbitration is an exceptional means for resolving disputes, requiring
departure from the normal means of litigation before the courts, and the guarantees they afford.”
The Court looked at the wording of Article VII of the NYC which stated “The provisions of the present
Convention shall not... deprive any interested party of any right he may have to avail himself of an arbitral
award in the manner and to the extent allowed by the law ... of the count[r]y where such award is sought to be
relied upon.” This was interpreted by the Court to mean:
“under the Convention, CAS maintains all rights to the enforcement of this Arbitral Award that it would have in the
absence of the Convention. Accordingly, the Court finds that, if the Convention did not exist, the Federal
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Arbitration Act (“FAA”) would provide CAS with a legitimate claim to enforcement of this
arbitral award.”
Since, “as a matter of U.S. law, the award is proper”, the non-enforcement of the award would go against the
above provision of the NYC. It was further observed that there was a strong pro-enforcement Government
policy and also a policy towards accepting the binding nature of arbitration. An award that was set aside based
on review of merits, when the parties had expressly stated that the arbitration be binding, would still be valid in
the eyes of US Courts and in this light enforcement of the award was permitted. Arguments that international
comity required the US Court to follow the decision of the Egyptian Court was rejected on the basis that
international comity did not require the enforcement of foreign judgments that was prejudicial to domestic law.
The focus of this case is thus on the fact that the grounds for setting aside the award in Egypt are not
recognized in USA. The same test could perhaps be used by the Indian Courts. To simplify this test, Indian
Courts would have to analyze the grounds on which the award was set aside and see if those grounds were
valid as per Indian law. If the grounds are not valid according to Indian law, the Court could choose to exercise
their discretion to enforce an annulled award.
Non-enforcement of an award in a different country has no bearing on enforcement of an

award
The Courts of every country apply their own standard while deciding on the enforceability of an award. Thus
non-enforcement of an award in one country does not lead to the non-enforcement in other countries as well.
1. Where an arbitral award in favour of the claimant was denied enforcement in Poland, it was argued before the
Hamburg Court of Appeal that the award should not be enforced in Germany as well in the light of the Polish decision.
The Hamburg Court of Appeal in Buyer (Poland) v. Seller (Poland) 14, however, deemed the
Polish Court decision to not have any impact on the present request for enforcement. The Court held that it would only
take into account the setting aside or suspension of the award in the state rendition as a possible ground for refusal of
enforcement under the 1958 New York Convention.
Binding
An award is binding when it can no longer be challenged on merits. Thus a petition for annulment does not take
away the ‘binding’ nature of an arbitral award.15
Statement by the Argentinean Court that attacks by the Defendants against the arbitral award had failed was
sufficient proof of finality of an award. 16
Other Grounds
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Sub-section (2) of Section 48 empowers the court to refuse enforcement on two grounds—
(a) the subject matter of difference is not capable of settlement by arbitration under law in India;
(b) contrary to public policy.
Even if these two grounds are not raised by the party resisting enforcement, the court, on its own consideration,
‘may’ refuse enforcement on these two grounds.
Arbitrability [S. 48 (2)]
Section 48(2) corresponds to Article V(2) of NYC and Section 7(2) of the FARE Act, 1961.17
Under Section 34(2)(b), a domestic award can be set aside if the dispute is not arbitrable under the law. A
foreign award under Geneva Convention also may not be enforced on the same ground.
The main thrust seems to be that the question of arbitrability of a dispute or a difference is to be determined in
accordance with the Indian law even if the award is a ‘foreign award’ under NYC or Geneva Convention in
terms of Part II of theact. Thus, if the award relates to a matter which cannot be settled under the Indian law,
the same cannot be enforced. The Act does not specify the disputes which are not arbitrable. Section 2(3)
merely declares that Part I relating to domestic arbitration and award shall not affect any other law for the time
being in force by virtue of which certain disputes may not submitted to arbitration. Reading the Act in totality, it
would appear that unless there is a statutory prohibition on settlement of certain disputes by arbitration, all
disputes are arbitrable. Certain disputes, though are capable of being settled by arbitration under the Act, but
are otherwise statutorily prohibited from being so settled, will be considered to be “a subject matter of difference
not capable of settlement by arbitration under the law of India”.
The issue of arbitrability does not come up too often due to the broad international policy to encourage arbitrate
on which results in very few express declarations of disputes that cannot be resolved by arbitration. However,
the following cases are a few rare ones on the issue of arbitrability.
When a claim before the Japanese arbitration involved issues of New York anti-trust law it was held that the
arbitrators had no jurisdiction as according to New York law it would be against public policy for an arbitrator to
adjudicate on issues pertaining to anti-trust law.18
The Apex Court of the British Virgin Islands was posed with the question as to whether a dispute relating to a
company owned by the Minister of the Russian Government would be a dispute relating to an Act of State and
hence not arbitrable. It was held in IPOC International growth Fund Limited v. LV Finance Group Limited
19, that when the dispute itself pertained to the validity of an options agreement entered into there was no
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question of that being an Act of State.
Securities claims have been held to be arbitrable in USA pursuant to the decision in First Eagle Sogen Funds,
Inc. v. Bank for International Settlements 20.
An interesting case involving a dispute arbitrable if applying the law of the contract (lex contractus) but not
arbitrable under the law of the forum (lex fori) was Colvi N.V. v. Interdica 21. The parties
entered into a distributorship agreement providing for arbitration in accordance with the provisions of the Swiss
Arbitration Convention and the law governing the contract was Swiss law.
However, there was a Belgian statute stating:
’Art. 4. The agent who has suffered damages as a result of the termination of a distributorship contract having effect in
the whole or part of Belgian territory, may always initiate court proceedings in Belgium against the principal, either
before the court of his own domicile, or before the court of the domicile or seat of the principal.
When the dispute is brought before a Belgian court, this court shall only apply Belgian law.‘
and
’Art. 6. The provisions of this law shall apply notwithstanding any agreement to the contrary concluded before the end
of the distributorship contract.‘
The question before the Belgium Supreme Court was whether to apply Belgian law and resolve the dispute or
whether to refer the dispute to an arbitrator as per Swiss law (which was the lex contractus).
The Court of Appeal decided that the New York Convention would prevail over the local law and lex contractus
has to be applied. It would thus follow that the arbitral panel would have to decide the issue unless the
Respondent could prove that the arbitration agreement was void under Swiss law.
The Supreme Court however considered the provisions of the New York Convention and held that Article II(3)
which states that the court of a Contracting State, when seized of an action in a matter in respect of which the
parties have made an agreement within the meaning of this article, shall, at the request of one of the parties,
refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable
of being performed, and held:
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“The obligation to refer [parties to arbitration] only applies to disputes that are arbitrable. Art. II(3) does not explicitly
indicate the law under which it must be determined whether the dispute is arbitrable. However, it allows the court to
which this issue is submitted to test it against its own legal system, thereby setting the limits within which private
jurisdiction over certain subject matters is compatible with the legal order...Where the parties have determined that the
arbitration clause is governed by a foreign law, the state court whose jurisdiction is objected to may hold that [the
dispute is not] arbitrable, if this affects the public policy of its own legal system.”
It is submitted that the Belgian Supreme Court correctly interpreted the provisions and applied the “lex fori”. The
principles of private international law provide for application of “lex fori” along with the private international law
provisions as applied by the courts of that country. In the present scenario, the express provisions of Belgian
law, restrict the normally applicable “proper law of contract theory” in the context of arbitration agreements by
stating that courts would always have jurisdiction to resolve certain kinds of disputes.
In another case before the Queens Bench Division, where it was argued that a dispute was not arbitrable as
such disputes, under the law governing the contract (Indian), were to be decided by a statutory tribunal, an
express mention of another countries law (English) as the law governing the arbitration agreement meant that
issues of arbitrability would be decided solely by applying the latter law and in that sense the proper law of
contract would be excluded.22
Further Reading(Arbitrability)
1. B Hanotiau, “What Law Governs the Issue of Arbitrability?” (1996) 12 Arbn. Intl. (No 4) 391, 394.
2. Kirry “Arbitrability: Current Trends in Europe” 12 Arbn. Intl., No. 4 at 373
3. J Paulsson, “Arbitrability, Still Through a Glass Darkly”, Arbitration in the Next Decade-Special
Supplement 1999, ICC CT Bull 95 at 102.
4. Zekos, “Court's Intervention in Commercial and Maritime Arbitration under US Law”, (1997) 14 J. Intn.
Arbn. 99.
Public Policy [ S. 48(2)(b)]
In Mukesh H. Mehta v. Harindra H. Mehta, 23 the Court observed that public policy is a
vague term and of uncertain import. It is necessary to invoke it in clear and incontestable cases of harm to the
public. It is necessary to construe it strictly. The court should be anxious in not defeating the foreign award by
finding out some defect and then equating it with the public policy of the country. The enforcement should not
be denied on the specious ground that the award is not acceptable to the party against whom enforcement is
sought; otherwise, this would be defeating the very object of the New York Convention, and the Act. In
Renusagar Power Co. Ltd. v. General Electric Co., 24 the apex court, held that the
enforcement of a foreign award would be refused on the ground that it is contrary to public policy if such
enforcement would be contrary to (i) fundamental policy of Indian law; or (ii) the interest of India; or (iii) justice
or morality.
In Mehta's case (supra), the enforcement of the award in India was challenged on the ground that it was against
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public policy of India because it involved violation of the

Income-tax Act (failure to obtain no objection certificate from the Income tax authorities
for transfer of flat). On the facts and circumstances of the case and applying the principles stated above, it was
held that there was no violation of the
Income-tax Act , and it could not be said that the award was against the public policy of
this country and, hence, unenforceable.
In this case, enforcement of the award was also challenged on the ground of violation of
FERA . The court held that the award could be made subject to obtaining the necessary
permission; and the necessary permission under
FERA could be secured before the execution of the award. As such, there was no
violation of
FERA . The award was held to be not against public policy.
In Renusagar Power Co. Ltd.’s, supra the original contract postulated payment of interest till payment.
However, interest was also awarded for delayed payment of installments. It was contended that payment of the
same was violative of
FERA and against public policy. Relying upon L.I.C. of India v. Escorts Ltd.,
25 and Wagh (M.G.) v. Jay Engineering Work Ltd. 26 , wherein it was
held that
FERA is a statute enacted for the national economic interest and the object of various
provisions in the said Act is to ensure that nation does not lose foreign exchange which is very much essential
for the economic survival of the nation, the Supreme Court in Renusagar's case (supra) observed :27
“Keeping in view the aforesaid objects underlying

FERA and the principles governing enforcement of exchange control laws followed in other
countries, we are of the view that the provisions contained in
FERA have been enacted to safeguard the economic interests of India and any violation of the
said provisions would be contrary to public policy of India”.
Public policy to be construed in the sense it is used in private international law
Since the Act is concerned with enforcement of foreign awards which are governed by the principles of private
international law, the expression ‘public policy’ must necessarily be construed in the sense the doctrine of
public policy is applied in the field of private international law.28 In the field of private international law, courts
refuse to apply a rule of foreign law or recognise a foreign judgment or a foreign arbitral award if it is found that
the same is contrary to the public policy of the country in which it is sought to be invoked or enforced.
Award of interest on interest, i.e., compound interest, is not against public policy of India. Non-compliance of a
court's order, on the other hand would adversely affect the administration of justice and would be destructive of
rule of law and contrary to public interest.29
Construction of the term ‘Public policy’
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The narrow construction of the public policy clause was first mandated by the Supreme Court in Renusagar
Power Co. Ltd. v. General Electric Co. 30
This test was further narrowed by the Delhi High Court in Glencore Grain Rotterdam B.V. v. Shivnath Rai
Harnarain (India) Co. 31, where the Court was posed with an argument that the impugned
award was opposed to public policy as under Indian law, the partner of a firm is not empowered to bind the
partnership firm into referring the disputes to arbitration and since the partner of the defendants had done so in
the present case, enforcement of an award made pursuant to such an arbitration could not be enforced.
The Court relied on Renusagar and held “the defence of public policy should be construed narrowly and that
‘the expression ‘public policy’ covers the field not covered by the words ‘and the law of India’ which follow the
said expression, contravention of law alone will not attract the bar of public policy and something more than
contravention of law is required”. It was thus held that even if the enforcement of the award was against the
mandate of the Partnership Act, that alone would not render it violative of public policy.
An additional standard was laid down:32
“The scope and ambit of the expression ‘public policy of India’ must necessarily be construed narrowly to mean the
fundamental policy of India and, as clarified by the Explanation to Section 48(2), conflict with the public policy must
involve the element of fraud or corruption.”
The construction of public policy in a restricted manner has also been espoused by a number of foreign courts.
1. Dispute arose pursuant to a shipbuilding contract between parties. The Plaintiff commenced arbitration in Oslo and
the arbitral award was in the Plaintiff's favour. The Defendant ran into financial difficulties and obtained an order from
Spanish Courts that it was liable to pay only 10% of what was due to the creditors. The Plaintiff tried to enforce its
award in Ireland on the grounds that an Irish company owed money to the Defendant and could be made a garnishee.
Defendant opposed this on the grounds that this was against public policy as it violated the Spanish court's orders. It
was held that Irish public policy was in favour of enforcing arbitral awards pursuant to NYC and there was not even a
suggestion of an illegality vis a vis Irish laws or policy and nothing against the basic notions of morality and justice. It
was observed that the concept of public policy must be given a narrow construction and should only mean that the
enforcement of the award should not affect basic principles of law. 33
However, the Indian Supreme Court in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd.34 gave the term
“public policy” a wider interpretation following which an arbitral ward could be set aside if it was contrary to the
fundamental policy of Indian law, interest of India, justice or morality, or was patently illegal or so unfair and
unreasonable that it shocks the conscience of the Court. However, trivial illegalities were to be excluded. This
interpretation, made in the context of Section 34 of the 1996 Act was applied by the Delhi High Court in the
context of Section 48 as well.35 Thus when the date of repudiation was fixed by the arbitral tribunal based on a
date of repudiation that was against the provisions of the contract, it was held that since the law of the land
mandated that the tribunal rule in accordance with the terms of the contract, the award should be set aside to
the extent to which it was not in consonance with the contract. Hence damages that would have been arrived at
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had the terms of the contract been followed, was awarded. 36
Scope of ‘public policy'—Foreign Jurisprudence
The term ‘public policy’ should be interpreted narrowly and would only include principles of the national
(Austrian) constitutional, criminal, private and procedural laws. 37
To define public policy to include cases of breach of such law would mean that the court would have to analyse
whether enforcement of an award would in any way be in furtherance of an act that violates that law and this
would inevitably require the courts to go into the merits of the case. In all cases where such an argument of
violation of public policy on the grounds of violation of a domestic law is raised, the domestic law involved is
likely to be the same law the breach of which would have been in question before the arbitrator. The Court, by
analyzing the same issue once more performs the role of an appellate court and performs functions it is not
empowered to perform.
The Canadian Federal Court in Attorney General of Canada v. S.D. Myers, Ire 38 came up
with a more apt definition. According to the Canadian Court, “public policy” refers to `fundamental notions and
principles of justice’ and not to the political position or an international position of Canada. The Court observed,
that
“Such a principle includes that a tribunal not exceed its jurisdiction in the course of an inquiry and that such a
jurisdictional error can be a decision which is patently unreasonable’, such as a complete disregard of the law so that
the decision constitutes an abuse of authority amounting to a flagrant injustice.”
Thus only an award that completely disregards the law would violate public policy.
The English Court of Appeal in Soleimany v. Soleimany 39 took the view that it was
against English public policy to enforce an award that relied on a contract which according to the arbitrator
himself was illegal.
1. The parties, the father and the son, entered into an agreement by which the son arranged for the export of carpets
from Iran. This agreement was in violation of the revenue laws and export controls of Iran. When a dispute arose
pertaining to the contract, the arbitral tribunal observed that even though the contract was illegal, according to Jewish
law, the illegality of a contract did not affect the rights flowing from it. The award passed was sought to be enforced.
The Court of Appeal held that according to English public policy a party could not conceal, through the procurement of
an arbitration, that the contract that was sought to be enforced was illegal. Thus, the Court refused to enforce the
award.
This case might perhaps have been decided differently if the arbitrator and the parties had not accepted that
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the contract was illegal. In such a scenario, the enforcement court could not have gone into the merits and
analyzed whether the contract was illegal.
A different standard was used by the Queens Bench40. Non disclosure of a deed of cession and the existence
of a conditional fee arrangement during the arbitration by the successful party and an alleged non-application of
the reasonableness test while awarding costs by the arbitral tribunal was held not to result in the enforcement
of the award violating public policy. In order to be contrary to public policy, the impugned conduct should
involve more than inadvertence and should, save very exceptionally, involve something that could be described
as unconscionable or reprehensible, and this standard had not been met in the present case.
Another important case on “public policy”, is the decision of the Brazilian Court in Thales Geosolutions Inc. (US)
v. Fonseca Almeida Representacoes e Comercio Ltda. – FARCO 41. The defendant, in
this case entered into contracts for performing bathymetric mapping of certain areas with two entities acting on
behalf of the Brazilian army and sub contracted the mapping to the plaintiff. Disputes arose and pursuant to
arbitration an award was passed in favour of the Plaintiff, which sought to enforce it in Brazil. The defendant
objected to this enforcement motion on the grounds that non-payment under the contract resulted in a violation
of public policy. While rejecting this contention outright, the Court laid down a number of propositions that would
be useful in understanding the term “public policy”.
“(a) public policy, in private international law, represents the spirit and thought of a people, the social-
juridical-moral philosophy of a nation;
(b) public policy is a body of private rights whose respect is mandated by the State so that there is
harmony between the state and the individuals, safeguarding the essential interests of society;
(c) ‘public policy’ is the body of norms that are essential for national society; presently it is not classified in
domestic and international public policy, only in [the public policy] of each state. However, there are
authors ... who distinguish three categories of public policy laws in all legislation:
(i) one including institutes and laws concerning the juridical and moral conscience of all civil peoples,
such as those concerning marriage and direct line parentage.
(ii) one comprising laws issued in application of real principles of morals and social organization:
(iii) one concerning imperative provisions at a regional level.”
Consonance with the following laws was held to fall within the ambit of the public policy test:
(a) constitutional laws; b) administrative laws; c) procedural laws; d) criminal laws, e) laws on the organization of the
judiciary; f) tax laws lois de police; g) laws on the protection of persons lacking legal capacity; h) laws concerning the
organization of the family; i) laws establishing conditions and formalities for certain acts; j) laws of economic
organization (concerning salaries, currency, regime of goods)
This explanation of what exactly “public policy” comprises of would be useful for the understanding of the same
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term in the Indian context.
It has however been held that matters of procedure are not included within the ambit of “public policy”. In
Licensee v. Licensor 42, the formal requirements of German law for agreements of a
certain nature (cartel agreements) was held not to form part of public policy.
Where an award contained reasons but they were not relied upon by the court in consideration of its
enforcement, it was held that this by itself would not render the award in conflict with the public policy of India.43
This section of the commentary needs to be read alongside the Indian jurisprudence on the definition of “public
policy”. For more details refer to commentary under Section 34, under the heading “Public Policy”.
National and International Public Policy
Clause (b)(ii) of Section 7 (1) of the 1961 Act, empowered the court to refuse the enforcement of a NYC award
if “the enforcement of the award will be contrary to public policy”. A similar provision in Section 7(1) of the 1937
Actrelating to the enforcement of a Geneva Convention award read that “the enforcement thereof must not be
contrary to be public policy or the law of India”. On the basis of the comparable provisions it was contended in
Renusagar Power Co. Ltd. v. General Electric Co., 44 that since the words “public policy” in the 1961 Act were
not qualified by the words “of India” as in the 1937 Act, they broadened the scope of enquiry as to public policy
of other countries. This was rejected by the Supreme Court which held that words “public policy” used in
Section 7(1)(b)(ii) of the 1961 Act referred to the public policy of India.45 Section 48(2)(b)
of the 1996 Act expressly provides so.
In France, a distinction is made between international public policy (“order public international”) and the national
public policy. Under the new French
Code of Civil Procedure , an international arbitral award can be set aside if the
recognition or execution is contrary to international public policy. In doing so it recognises the existence of two
levels of public policy—the national level, which may be concerned with purely domestic considerations, and
the international level, which is less restrictive in its approach.46 According to Redfern and Hunter, “if a workable
definition of “international public policy” could be found, it would be an effective way of preventing an award in
an international arbitration from being set aside for purely domestic policy considerations”. But in the absence
of such a definition “there are bound to be practices which some States will regard as contrary to international
public interest and other states will not”.47 After citing this authority, the Supreme Court observed48:
“In view of the absence of workable definition of “international public policy” we find it difficult to construe the
expression “public policy” in Article V(2)(b) of the New York Convention to mean international public policy. In our
opinion the said expression must be construed to mean the doctrine of public policy as applied by the Courts in which
the foreign award is sought to be enforced. Consequently, the expression ‘public policy’ in Section 7 (1)(b)(ii) of the
Foreign Awards Act means the doctrine of public policy as applied by the courts in India.”
Effect of decision of a “public policy issue” in an annulment proceeding on a proceeding

for opposition to enforcement 49
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When public policy defence is raised during enforcement, while one of the factors for determination of the issue
is whether such an argument was raised to annul the award in the country where the award was rendered,50 the
decision of the annulment proceedings does not in anyway bind the enforcement court.
The public policy test may differ from one country to another. Hence when it is argued before the arbitrator that
the arbitral award would violate public policy and was rejected, this does not preclude the party opposing
enforcement from raising the same issue when enforcement is sought by the other party in a different country.
1. The parties entered into a contract for performance of some activities in Pakistan. Disputes arose and an arbitral
award was passed in favour of Plaintiff. The defendant claimed that the award violated public policy in England and
Pakistan but the argument was dismissed. Enforcement was sought in Australia. The defendant argued that the award
violated public policy of Australia and Pakistan. The plaintiff's counter was that such an argument could not be raised at
this stage as it had already been decided by the arbitrators. He filed an application for the Court to go ahead with the
discovery process for enforcement. The Court in Corvetina Technology Limited v. Clough Engineering Limited
51 dismissed the Plaintiff's argument and held that such an arguable defence should not be rejected based on an
interlocutory application. The Court had the right to apply its own public policy considerations and would decide the
matter after looking into all the evidence.
The Court observed:
“On the one hand, it is necessary to ensure that the mechanism for enforcement of international arbitral awards under
the [1958] New York Convention is not frustrated. But, on the other hand, it is necessary for the court to be master of
its own processes and to apply its own public policy. The resolution of the conflict, in my judgment, should be
undertaken at a final hearing and not on an interlocutory application.”
This ratio, however does not hold good in cases of challenges on grounds other than violation of public policy.52
Not providing reasons for award
The arbitrators are not obliged to give reasons for dismissing the arguments of the losing party.53 When the
agreed procedure does not mandate the arbitrator providing reasons for the decision, the arbitrator not giving
reasons does not amount to a denial of fairness.54 In India, unless the parties agree to the contrary, an
arbitrator is required to give a reasoned award. [See commentary under S. 31 under the heading “Reasons for
award”]
When the arbitrator failed to give reasons for his decision inspite of an express term to that effect, not giving
these reasons was held to amount to a violation of international public policy as held in Smart Systems
Technologies v. Domitique Secant Inc. 55
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When interpreting the findings of a tribunal consisting of experienced commercial and professional men, as
opposed to lawyers, the substance of the findings rather than the form had to be considered.56
Bias as a ground for violation of public policy
It is an often raised argument that the arbitrator was biased towards the successful party and enforcing an
award rooted in such a bias would be against public policy.
For example, an objection was taken by the appellants that the arbitrator was a high ranking officer of the first
respondent, and that an award given by her could not be enforced in India because it would be against public
policy. The Supreme Court held that there was no violation of public policy. The parties had agreed to be
governed by the law of Ukraine as far as the arbitration proceedings were concerned. If the award given by the
arbitrator was valid under the law of Ukraine, then there was no violation of any public policy in enforcing it in
India. It was further observed that often parties appoint an officer of one of the parties to the arbitration
agreement as sole arbitrator. Sometimes the agreement in terms so provides. This does not ipso facto make
the arbitration or the award contrary to any public policy, especially if the officer had not personally handled
disputed transactions and was impartial.57
Where a party had vide a consent letter agreed to the appointment of a particular arbitrator, it cannot later claim
that the arbitrator by virtue of having acted as an advocate for the other party at some point of time, was biased
in his actions and that the award should be set aside on these grounds.58 The Madhya Pradesh High Court laid
down the standard for determining bias in the following words:
“It is well settled that there must be a real likelihood of bias and not mere suspicious of bias before the proceedings can
be quashed on the ground that the person conducting the proceedings is disqualified by interest....But there must be
reasonableness of the apprehension of bias in the mind of the party. The purity of administration requires that the party
to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party...it
is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing
the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of view
and not on mere apprehension of any whimsical person.”
There have also been a considerable number of foreign cases on the issue of bias.
1. An arbitrator had contacted witnesses during the arbitration. It was held that continuing with the
arbitration would cause substantial injustice.59
2. When one party failed to appoint an arbitrator, the fact that the arbitrator appointed by the other party
decided the matter on his own does not give rise to a presumption of bias.
a. In Shipowner (Netherlands) v. Cattle and Meat Dealer (Germany) 60, which involved the
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above contemplated fact scenario, the German Supreme Court held that the mere fact that a party-appointed arbitrator
decides the dispute as sole arbitrator is not a violation of the ‘public policy’. It observed that bias is primarily a question
of the procedural law according to which the arbitral award was rendered. It thus followed that “the objection of bias
must be raised first in the country of origin of the award”. Only if this objection was rejected or was impossible to raise
could it be raised at the time of enforcement. In the present case as the arbitration was in London, this argument
should have been raised during set-aside proceedings in London. The Supreme Court also stated that there should be
actual bias rather than appearance of bias.
The standard to prove bias has been quite high.
1. Merely because the arbitrator and one of the parties co-owned an airplane, that does not amount to a
presumption of bias on the part of the arbitrator as held in the case of Lucent Technologies Inc and
Lucent Technologies GRLLLC v. Tatung Co. 61. The reasons provided by the
Court were that one of the main attractions of arbitration is the expertise of arbitrators and that specific
professional areas “tend to breed tightly knit professional communities” where “key members” know
each other and may regularly work with, or for, one another.
2. When the arbitrator appointed by one party had said he would dissent and since then had not
responded to the Chairman's request to participate in deliberations on two instances, it cannot be later
argued that he was excluded from all deliberations and hence the award was not enforceable.62
3. In a case63 there was an allegation of bias against the arbitrator; the basis of this claim being his
personal ties with the claimants counsel. It was subsequently argued that such a bias rendered the
arbitral award unenforceable. The Court rejected this argument on the grounds that relations of a
private and economic nature between arbitrator and counsel for one party is not per se a ground for
disqualification nor are legal and procedural errors, per se, a ground for doubting an arbitration
impartiality. Bias can only be established through a combination of both these factors. The Court also
observed that an objection of bias could only be raised in the enforcement proceedings if it could no
longer be raised or has been denied in the state of rendition of the award.
4. Where it was claimed by the respondent that the arbitrator was a member of an association where two
related companies of the Petitioner were also members, giving rise to a presumption of bias and hence
enforcement of the award of the arbitrator would be against public policy, the argument was rejected in
Licensor v. Licensee 64 based on the narrow construction of public policy. It
was held that an objection relating to violation of public policy would be upheld only if it affected the
“basic principles of social and economic life”. Also, in case of bias the violation must be “totally
incompatible with the principles governing the performance of the judicial office”, which was not so in
the present case. The parties had in fact agreed on the arbitrator, who had listened to all the
arguments of the parties and reached separate conclusions for each argument. In such a case, the
award was enforceable.
Thus Courts have set the standards very high to grant opposition of enforcement on the grounds of bias. What
emerges from these above cases laws is :
1. Bias must be demonstrated on a standard which is more than a mere appearance of bias.
2. Bias can be proved only if relations of a private and economic nature between a party and the
arbitrator can be established along with the fact that there were legal and procedural errors committed
during the arbitration.
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3. Opposition to enforcement on the grounds of bias can only be raised in the enforcement proceedings if
it could no longer be raised or has been denied in the state of rendition of the award.
It may be seen that the test to prevent enforcement of an award on the grounds of bias is much higher than the
standards set for ordinary judicial review.
The Queens Bench division of the Commercial Court, however set a lower standard.65 Where it was alleged
that one of the arbitrators had close connections with the other party's solicitors, the arbitrator should have
recused himself on the basis:
(1) the applicable standard was real possibility of bias.66
(2) The court would intervene without the need to show that the bias had caused prejudice.67
(3) The mode of assessment was to use the fiction of an objective observer to determine whether or not
there was real possibility of bias.68
(4) In specialist arbitrations prior contact between parties and their lawyers and arbitrators was to be
expected and the mere fact of a prior connection between them would not lead to a presumption of
bias.
(5) However, this was a question of fact and using the objective observer test, in the present case there
was a real possibility of bias.
Given the wide interpretation given to public policy in India, and given that the right to an impartial hearing goes
to the very root of ensuring justice, it is more likely that the Indian Court would adopt the Queens Bench
approach.
Alleged breach of confidentiality by one of the arbitrators
An alleged breach of confidentiality by an arbitrator does not mean that the arbitrator is disqualified to handle
the case or that the award rendered is void.
1. A dispute arose between two parties, regarding the provision of a certain loan facility and transfer of risk, the matter
being referred for arbitration. The three-person tribunal, chaired by L issued an award on jurisdiction holding that it had
jurisdiction to deal with the dispute and that the arbitration agreement was valid. The Petitioner made the decision
available to Mealey's International Arbitration Report, and such reported decision was made available to L who passed
it on to a judge of the Swedish Supreme Court that had to decide on a similar issue. Although, the Respondent claimed
that the agreement had been cancelled due to the actions of AIT which breached the requirement of confidentiality and
also that L be disqualified on grounds that he affected the interests of Bulbank, the arbitral tribunal handed its final
award.
Such award was challenged in court. It was argued that the award was invalid due to L's disqualification (which was
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also a claim), and also that they were entitled to avoid the contract as the breach of confidentiality went to the root of
the agreement of arbitration. 69
The Court made the following observations regarding the duty of confidentiality–
(a) According to Swedish Law, there is no general requirement of confidentiality, such that it can only be excluded
if specifically or explicitly intended.
(b) The only provision dealing with confidentiality requires that proceedings take place in camera. The applicable
arbitration rules in general do not expressly govern the issue of duty of confidentiality as regards written
procedure and the making of arbitral awards and decisions.
(c) Yet, this does not mean that parties are free to neglect the application of discretion on matters concerning the
arbitration proceedings, this has another basis.
(d) As a matter of policy, what this entails is that unlike judicial proceedings, a third party cannot claim as a matter
of right an insight into arbitral proceedings, rather than that a party in arbitration proceedings has any duty of
confidentiality.
(e) It is likely, however, that the breach of confidentiality is a breach of the principle of good faith between the
parties. If this be the case, then it is important to note what type of information is being made public and its
effects on the operations of the parties to the arbitration. The sanction is such cases normally comprises
damages or compensation to the party that has been wronged.
(f) Having regard to the far reaching consequences involved if the party were allowed to avoid the arbitration
agreement the scope the right must be limited.
Furthermore, in relation to whether L was disqualified, the Court decided that an arbitrator could be disqualified
if his/her actions are likely to reduce confidence in his integrity or impartiality. In the present case it was
factually found that L had only passed on the reported judgment because of his interest in participating in legal
developments in the field in question. No justified reason was advanced to question L's impartial handling of the
case, even if it were appropriate for him to inform the Respondent about the transfer of the decision to the
Supreme Court. Since L was not disqualified in any way, there was no question of the award being set aside.
Non-participation by one of the arbitrators
Where an arbitrator, inspite of being given an opportunity to participate in the arbitral proceedings, refuses to
participate, the non-participation in the proceedings by that arbitrator does not vitiate the award passed by the
other arbitrators and the award is enforceable.
1. Company A and Company B had disputes relating to contract relating to import by Company A of
Company B's products. ICC Arbitration in Switzerland was provided for. Each party appointed an
arbitrator who appointed a Chairman. In the middle A's arbitrator had to leave and was replaced by Z,
subsequent to which A challenged the president of the arbitral tribunal. The arbitral tribunal hearings
continued. Z did not attend saying that the proceedings cannot go on before the decision came on the
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challenge of the President. Since A had not asked for a suspension of proceedings the other arbitrators
continued with the proceedings and issued a draft award on which Z did not comment. They went on to
issue a final award on which Z did not comment though asked. Z did not participate in the proceedings
in any way. When the award was sought to be enforced against the Appellant, Appellant claimed that it
was a violation of public policy to enforce an award when one arbitrator had not participated. Supreme
Court held that arbitrator had been given an opportunity to participate and had refused. In such a case
the award is valid so long as there is a majority of votes among the remaining arbitrators.70
2. When the arbitrator appointed by one party had said he would dissent and since then had not
responded to the Chairman's request to participate in deliberations on two instances, it cannot be later
argued that he was excluded from all deliberations and hence the award was not enforceable.71
The key test is whether all the arbitrators got an opportunity to participate. In the words of an expert,
“I find it very hard to imagine that, even in the absence of an express rule or agreement, a modern court in a state that
otherwise has a public policy of supporting international commercial arbitration would invalidate an award issued by a
majority of arbitrators because a party-appointed arbitrator, in an effort to frustrate the arbitration, chooses to absent
himself at a late stage of the proceedings, or refuses to sign an award. National laws that refer to participation by three
arbitrators should be interpreted to have been satisfied, as Professor Gillard suggests, when all three have had a fair
and equal opportunity to participate.”72
Exclusion of one arbitrator from majority decision
Where out of three arbitrators one was appointed by each party and they appointed a third, the Defendant could
not claim that an award was enforceable because the arbitrator appointed by the Defendant was excluded from
the majority's deliberations and gave a dissenting judgment.73 This did not render an award unenforceable and
does not result in the proceedings being unfair.
It was argued that the award was made in manifest disregard of the law. Based on a factual analysis it was held
that it might have been a misapplication of law, but was not in manifest disregard of it. A court cannot interfere
in such circumstances.
Fraud as a violation of public policy
The burden of proving fraud is on the party alleging that an award is not enforceable due to fraud.
1. Under a contract to be governed by Swiss law, a party was appointed as a consultant for procurement
of contracts for the sale of military equipment to Kuwait. The contract provided for settlement of
disputes in accordance with the arbitration rules of International Chamber of Commerce (ICC)74 which
provided that any arbitral award should be final. It was alleged against an award under the contract that
the arrangement was contrary to public policy because it was for procuring sales by fraud through
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bribery or alternatively by illicit personal influence of other kinds. This contention was rejected. In an
application made in England for enforcement of the award.75
2. The Claimant alleged that the respondent had concealed some documentary evidence and that this
resulted in the arbitral award being vitiated by fraud and hence unenforceable Without going into
whether such concealment constitutes fraud and resulted in the award being against public policy, the
Court in Elektrim SA v. Vivendi Universal SA 76 held that even assuming so,
the onus was on the party alleging violation of public policy to establish that the specific issues upon
which the award was based would have been decided differently if that documentary evidence had
been considered. In the present case this burden had not been discharged.
There is a presumption that the award was not vitiated by fraud. “To overcome that presumption and have an
award vacated on grounds of fraud or undue means, the party seeking a vacation order must: (1) establish the
existence of the alleged fraud or undue means by clear and convincing evidence, (2) demonstrate due diligence
in attempting to discover the fraud before entry of the award, and (3) demonstrate that the fraud was material to
the arbitrators’ decision.”77
1. A dispute arose between petitioner insurance company and respondent reinsurers regarding a reinsurance contract
that had been entered into between them. With the consent of the respondent, the petitioner delegated its claims
payment responsibilities to one of its insured. A dispute arose regarding these claims and an arbitral tribunal ruled in
favour of the petitioner who filed a petition seeking confirmation of the award. The respondents alleged that certain
software programs were used to fraudulently transform uncovered claims into covered claims and that the petitioner
had fraudulently concealed information from the arbitral panel. The Courts held that the presumption in favour of
enforcement had not been rebutted. The evidence submitted including a computer programmers report was not
sufficient in the present case.78
Forgery of a minor kind does not violate public policy. While holding, so the Japanese Court observed:
“It is true that the invoice the plaintiff submitted to the different figure as to the unit price of the product from the one
written on the invoice the sub-buyers received from the shipping company, but there is no evidence submitted to prove
that the figure was forged ... even if it was accepted that this was a forgery, forgery of this sort should not be regarded
as violating [the] public policy of Japan, because contravention in this context should be such that it falls foul of basic
principles or rules of the Japanese judicial order.”79
It is important to note that the above cases do not state a blanket rule that fraud and forgery do not violate
public policy. These are merely instances where the allegor could not discharge the burden of proving fraud/
forgery of a sufficient extent so as to violate public policy.
One case which involved a successful claim that an award was violative of public policy was Seller v. Buyer
80 where an arbitral award obtained by one party based on the concealment from the arbitrators of a settlement
agreement with the other was held to violate the basic principles of German law and hence fell foul of ‘public
policy’. In such a scenario it could not be argued that the defendant should have raised this argument before
the arbitrators and having not done so, he had waived his right to raise such an objection. It was observed that
the jurisprudence on estoppel does not apply to public policy objections.
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Adducing evidence at enforcement stage- when against public policy
It was held that on an application in England to enforce a foreign arbitration award under the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards a party would not normally be
permitted to adduce evidence that the award had been obtained by perjury unless that evidence was so cogent
and weighty as to be likely to have materially influenced the arbitrators’ conclusion, had it been adduced before
them but was not available or reasonably obtainable either at the time of the hearing of the arbitration or in time
to have been adduced in the relevant court of supervisory jurisdiction to support an application to reverse the
award and that, where such evidence had been deployed before the court of supervisory jurisdiction on an
unsuccessful application to set aside or remit the award the public policy of finality would normally require the
English court to decline to permit it to be adduced at the enforcement stage; and that since the defendants had
not established that the evidence on which they sought to rely could not have been obtained in time for the
arbitration or to challenge the award in the Swiss court, they should not be permitted to re-amend their
pleadings so as to reopen the issues of fact determined by the arbitrators, notwithstanding the apparent
strength of that evidence.81
On the point of the power of the arbitrator to decide the preliminary issue of validity as well as that of merits, it
was held that an arbitration agreement ancillary to an illegal contract could confer jurisdiction on arbitrators to
determine both disputes within the scope of the agreement and whether illegality rendered the contract
unenforceable, unless the nature of the particular illegality was such that public policy required that disputes
about the illegal contract should not be referred to arbitration or in the case of statutory illegality, the statute
impeached the arbitration agreement as well as the contract: that although for reasons for public policy the
court would not enforce an arbitration award for money due under a contract which was palpably and
indisputably illegal at common law, where the arbitration agreement had determined that the contract was not
illegal the court would prima facie enforce the resulting award; but that, where enforcement was resisted on the
basis that facts not placed before the arbitrators demonstrated that the contract was illegal, the court would
consider whether the public policy against the enforcement of illegal contracts outweighed the countervailing
public policy in support of finality of awards; that the arbitrators had jurisdiction to determine whether the
consultancy agreement was illegal and void by reason of a common or unilateral intention to bribe Kuwaiti
officials and, since that issue had been determined by high calibre I.C.C. arbitrators, it was inappropriate that
the court should retry that issue; that, in all the circumstances, the public policy of sustaining international
arbitration awards outweighed the public policy of discouraging international commercial corruption; that, even if
it were shown that the contract was contrary to public policy in Kuwait, enforcement of the award, which was
valid under the curial law, would not offend international comity so as to be contrary to English public policy;
and that, accordingly, the award was not exempt from enforcement under
Section 5(3)of the Arbitration Act 1975 and there was no defence to the action on the
award.82
Illegal contracts
An agreement between parties to smuggle carpets from Iran to England became the subject matter of
arbitration over a dispute as to the distribution of sale proceeds. The arbitrator, applying Jewish Law, awarded
the amount claimed by one party. This party applied for enforcement of the award in England. It was held that it
was apparent from the face of the award that the arbitrator was dealing with an illicit enterprise under which it
was the joint intention that carpets would be smuggled out of Iran illegally, but that he considered the illegality
to be of no relevance since he was applying Jewish law under which any purported illegality would have no
effect on the rights of the parties. The position of law is that the illegality of the main contract did not invalidate
the arbitration agreement and the arbitrator had jurisdiction to consider questions of illegality so far as they
might affect the rights of the parties. But an English court exercised control over the enforcement of arbitral
awards as part of the lex fori whatever the proper law of the arbitration agreement or the place where the
arbitration agreement was conducted, and if a claimant wished to enforce the award in his favour, he could only
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do so subject to English law. An award, whether domestic or foreign, would not be enforced by an English court
if enforcement would be contrary to public policy and the interposition of an arbitration award did not isolate the
successful party's claim from the illegality which gave rise to it. In the circumstances, the award would not be
enforced by the English courts.83
An arbitral award imposing re-imbursement of a sum paid as ransom was held to be not in violation of the
Canadian notions of public policy.84
Arbitration in violation of a judicial order
The case of Noy Vallesina Engineering Spa v. Jindal Drugs Limited 85, involved an
interesting issue regarding the validity of arbitration proceedings that were conducted in violation of an
injunction order.
The arbitration had to be conducted by a tribunal of two party appointed arbitrators and an umpire appointed by
the two arbitrators. The Respondent appointed its arbitrator late by which time the arbitration commenced and
the arbitral proceedings were conducted by the sole arbitrator. The Respondent made his submissions before
the tribunal. After the hearings were complete, but before the arbitral award was passed, the Respondent
sought an injunction from the civil court restraining the arbitral tribunal from proceeding with a sole arbitrator. An
injunction was granted. The arbitrator, however, passed an award in favour of the Appellant.
In the meantime the injunction was set aside by the higher court.
The Appellant source to enforce the arbitral award which was successfully opposed on the grounds primarily
that once there was an order of injunction the Arbitrator could not have proceeded to publish his award ignoring
the order of this Court, such act was contemptuous.
The Appellant argued that the injunction order was a nullity and even assuming it was valid and binding all it did
was restrain the appellant from acting upon the letter, which informed the Respondent about the nomination of
the Appellants arbitrator and inviting them to appoint theirs. There was no injunction order passed against the
arbitrator and hence the arbitrator did not act in violation of any injunction order.
The Respondent, however contended that at the time of the award, the injunction was valid and had not been
vacated. Violation of such an award amounts to contempt of court. In a contempt proceeding the Court in its
wisdom might condone the wrongful act of the contemnor but was not competent to allow the contemptuous act
to remain. Moreover, once the Court passed an order, there was a duty on everybody concerned to observe the
same.
The Court accepted the Appellants argument and held that the order of injunction was superfluous on the day
when it was passed. It was further held that:
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“So far as the appellant is concerned, the appellant came to enforce the award after it had been vacated by the learned
Single Judge. Hence, during the period when the order was subsisting we do not find any act done by the appellant
themselves which could be termed as a violation or disobedience of the order of the Court.”
It may be noted that once the injunction order was a nullity, the question of an award being in “contravention” of
that order does not arise, and there is no bar on enforcing it. Moreover, even if the arbitrator's actions in
passing the award amounted to a violation of the Court's dicta and hence to contempt of court, that does not
ipso facto render the award unenforceable. Enforcement of an award that does not violate any law or principle
of justice or order of the court is not against public policy merely because the award itself is rendered by an
arbitrator who acted in violation of public policy.
Violation of principles of indemnity law
Where the damages awarded by the arbitral tribunal were against the principles of indemnity law of India,
enforcement of such an award was held to violate public policy.86
Violation of competition laws
Courts have taken diverse views when it comes to setting aside awards based on the violation of public policy
arising out of breach of competition laws.
In Marketing Displays International Inc. v. VR Van Raalte Reclame B.V., Netherlands 87,
the parties had entered into an agreement for exclusive license to use the Plaintiff's intellectual property rights
for a period of 3 years.
Disputes relating to withholding information, failure to pay royalties and exercising the licensed rights outside
the specified territories marred the relationship between the parties and the Plaintiff terminated the agreement
and commenced arbitration proceedings. An award was passed in favour of the Plaintiff directing payment of
damages and for the Defendant to desist from continuing its breach. Enforcement of this award was sought in
Netherlands. The Court of Appeal upheld the decision of the Court of First Instance and held that the award
violated Article 81(1) of the Treaty establishing the EC which prohibits agreements restricting or distorting
competition within the common market, because it established a “territorial limitation in addition to the existence
of parallel networks”. Enforcement of such an award, it was held would be against Dutch public policy.88
This case needs to be contrasted with the case of Company A v. Company S and Company X
89, which involved an agreement by which S and X were permitted to use the technology of A for a given period
with restrictions in certain specified geographical territories. However even after the agreement expired they
continued to use the technology. Swiss arbitration was commenced and an interim award partially in favour of A
and partially in favour of S and X was granted. S and X appealed to Swiss Apex court, which dismissed the
appeal.
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A sought enforcement of the award in Germany. S and X argued that this award was not enforceable as it
violated EC Competition law. However, the Court held that there was a decision on this point by the arbitral
tribunal and that the Court would have to go into the merits of the case to decide the issue, which it was not
competent to do. Thus the Court held interim award enforceable as it was binding.
It appears that the latter approach is preferable. To define public policy to include cases of breach of any law
would mean that the court would have to analyse whether enforcement of an award would in anyway be in
furtherance of an act that violates that law and this would inevitably require the courts to go into the merits of
the case. In all cases where such an argument of violation of public policy on the grounds of violation of a
domestic law is raised, the domestic law involved is likely to be the same law the breach of which would have
been in question before the arbitrator. The Court, by analyzing the same issue once more performs the role of
an appellate court and performs functions it is not empowered to perform.
Conflicting court and arbitral decisions
Where an arbitrator exercises jurisdiction going against the judicial decision on the same issue, enforcement of
the award would result in violation of public policy and on this ground enforcement shall be denied.
1. Pending arbitration, the Arbitrazh (Commercial) Court of the Udmurtsk Republic declared the marketing and sale-
purchase agreements between the parties to be invalid as it was in violation of the Federal Law of the Russian
Federation on joint-stock companies. This decision was affirmed by the Apex Court as well. Subsequently, the
arbitrator held that it had jurisdiction and that pursuant to termination of the marketing and sale-purchase agreements
damages were payable to the Plaintiffs, who sought to enforce this award.
Enforcement of this award would have resulted in two judicial acts with contradictory holdings being in force in Russia
and this violated Russian public policy. In the words of the Court:
“In such a situation, the recognition and enforcement within the territory of the Russian Federation of the foreign
arbitration award would lead to the existence within the territory of the Russian Federation of judicial acts of equal legal
force that contain mutually exclusive holdings, and would contradict the principle that judicial acts of the Russian
Federation are mandatory in nature, which is an inalienable part of public policy of the Russian Federation.”
Thus the enforcement court in O & Y Investments Ltd. v. OAO Bummash 90 refused to enforce
the award.
Decision on merits to be avoided
Review cannot be on merits of the case and hence in order to prove irregularity, a party cannot base its
argument on fact but must prove that the tribunal had acted unfairly by failing to give a party a reasonable
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opportunity of putting its case or dealing with that of its opponent.91
The Court cannot intervene on the basis that in the view of the Court, the arbitrator should have considered an
issue differently or expressed its conclusions on the essential issues at greater length.
1. Hence an argument that
(a) the arbitrators had decided the case on a basis that was not argued and on which the objecting
party was not provided a reasonable opportunity to make representations;
(b) the award had failed to refer to an issue of Greek law which was critical to the case was rejected.92
2. Where the question was raised as to validity of the contract, it was said that the Court was not
adjudicating on the underlying contract; the decision was whether or not the arbitration award should
be enforced in England; and in this context (absent a finding of fact of corrupt practices which would
give rise to obvious public policy considerations) the fact that English law would or might have arrived
at a different result was irrelevant; the reason for the different result was that Swiss law was different
from English law and the parties chose Swiss law and Swiss arbitration; if anything this consideration
dictated (as a matter of policy of upholding of international arbitration awards) that the award should be
enforced on the arbitrator's unchallengeable finding of fact the element of corruption or illicit practice
was not present; there were no public policy grounds on which the enforcement of this award could be
refused and s.
Section 103 of the Arbitration Act, 1996 (English) did not apply.93
3. It was argued that the arbitral award applied Polish law as against the applicable Illinois law and
enforcement of the same would be against public policy. It was held in Stawski Distributing Co., Inc v.
Browary Zywiec S.A 94 that there were indications that only Illinois law was
applied and it was expressly stated to apply. Whether it was applied in the correct manner or not was
not something the Court could review. Since “public policy” should be given a narrow construction,
there was no violation of public policy that would occur by enforcing this award.
4. An argument was raised that enforcement of an arbitral award would be against public policy as the
award directed one of the parties to make a payment that had already been made. The Spanish
Supreme Court, however, was of the view that this would amount to changing the contents of the
award itself by reducing the amount payable which was not permissible.95
Government's external affairs policy as part of ‘public policy‘
The views on the issue of whether Government external affairs policy forms part of “public policy” have been
divergent.
One viewpoint is that a Government's external affairs policy does not have any role in determining the width of
the term “public policy”.
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1. A contract was entered into between a Chinese entity, two US entities and one Taiwan entity to set up a joint
operation in Iran to manufacture computer products. Disputes arose and the defendants did not want to proceed with
the arrangement. The plaintiffs obtained arbitral award in their favour and sought to enforce it in USA. The defendant
claimed that enforcing this would amount to a violation of public policy as it would go against USA's embargos on Iran.
The Court rejected this on the grounds that there was no legal entity being incorporated in Iran, and hence the
embargo did not apply. Moreover such embargoes do not come within the ambit of the public policy exception. Public
policy exception applies only with respect to violations of basic principles of morality and justice. 96
However, there exists authority to the contrary.
1. In Karen Maritime Limited v. Omar International Incorporated 97, there was a clause in the
charterparty between the parties that the ship was not owned by an Israeli and would not stop in Israel. A dispute
related to some other part of that contract arose and an arbitral award was made in favour of Plaintiff. The defendant
opposed enforcement on the basis of the anti-Israel clause stating that it was against USA's international policy.
However, it was held that the arbitral award did not in any way relate to that clause; if it did it may have been a factor.
Award of excessive costs as being violative of public policy
The award of disproportionate costs amounts to a violation of public policy; however the foreign courts have
taken a conservative stand while reaching such a conclusion.
1. The arbitrators, while determining costs had applied the principle that the costs follow the event i.e. the
losing party pays the successful party the costs incurred by it. This was a principle unknown to
Philippines law and violated the litigants’ right not to be penalized for exercising its right to litigate.
Moreover, the costs relating to attorney's fees had also been awarded and this was against the
mandate of the Philippines civil code. Hence enforcement of such an award was held to be against
public policy.98
2. In Epis S.A and Roche Diagnostics Gmbh v. Medibar Ltd. 99, an argument
was raised that the costs which exceeded the actual award were too high and hence enforcement of
the award was against public policy. However the Respondent had raised the issue of fairness only at
the end of the arbitral proceedings and the Swiss courts had also enforced the award. The Israeli Court
thus held the award to be enforceable.
3. The damages were equivalent to the rebates that ought to have been granted. In such a scenario an
argument that the quantum of damages violate the fundamental principles of fairness and against
public policy was rejected by the Ontario Court of Appeal in United Mexican States v. Marvin Roy
Feldman Karpa.1
Miscellaneous cases relating to the scope of public policy
The following propositions have been laid down by courts in various jurisdictions:
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a. An arbitrator's decision not to consider the defendants argument on a certain issue does not amount to
violation of public policy.2
b. When an award was passed ordering the issue of a particular number of shares by the Respondent to
the Petitioner, merely because such an issue required the permission of the stock exchange did not
deem the award against public policy. The Respondent would have to obtain such permission.3
c. Not granting a set-off to the defendant does not amount to a violation of public policy especially when:4
(1) the arbitrator after a thorough consideration was of the view that the counterclaim was factually
unfounded, and
(2) equity did not permit the grant of a set-off in the given factual scenario
d. In certain countries like Norway it has become customary that awards lack a clear judicial dictum. Such
awards have been held to be enforceable in Pulsarr Industrial Research B.V. v. Nils H. Nilsen A.S.
5 “if its conclusions are evident”.
e. Burden of proving that enforcement of the award would result in paying the claimant compensation for
corrupt activities was on the party alleging it. 6
f. A party who failed to appoint an arbitrator cannot object to the arbitrator appointed by the President of
the Moscow Chamber of Commerce on the grounds that the party had specified that the arbitrator
should speak German whereas the person appointed by the association did not do so. This does not
amount to violation of public policy.7
g. An argument that an arbitration agreement excludes the jurisdiction of the Court completely and that
any agreement that does so violated the public policy does not hold good. It was held in Korea
Technologies Co. Ltd. (Korea) v. Hon. Alberto A. Lerma, 8 that Philippines
followed the UNCITRAL Model Law, under which courts retain jurisdiction over reviewing and enforcing
foreign awards and setting aside arbitral awards based on certain listed grounds. Thus the jurisdiction
of the courts is not excluded in any way.
h. Since under Russian bankruptcy law the Arbitrazh Court has exclusive jurisdiction over the
determination of the amount and nature of a bankrupt's claims against a debtor, enforcement of a
Slovak arbitral award involving claims of a bankrupt company against a debtor was held to be against
public policy.9
i. Russian public policy stipulates that there can be “no judicial acts of equal legal force that contain
mutually exclusive holdings”. In this light, the Russian Court in O&Y Investments Ltd. v. OAO
Bummash 10 did not permit the enforcement of an arbitral award that
contradicted an already existing Court decision.
j. Procedural infringement in arbitral proceedings has no relevance to the notion of ‘public policy’.11
k. The doctrine of alter ego is recognized by Singaporean law. Thus where the second defendant was the
owner of the first defendant company and not a signatory to the arbitration agreement in his personal
capacity, his opposition to the enforcement of an arbitral award against him on the basis that
enforcement of the same would be against public policy was rejected. He argued that the enforcement
would violate public policy because the award had pierced the corporate veil without any supporting
evidence. The Court, however rejected this argument as the second defendant being the alter ego of
the first defendant company could be included as a party to the arbitration based on the doctrine of
alter ego.12
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l. When an arbitration clause specifies that the arbitration be completed within three months, in case it is
not completed within this three month period, enforcement of the award would be against public policy.
This is because there is a need expressed by the parties for speedy resolution of the dispute and
paying heed to such a need is in the interest of the contractual character of arbitration.13
m. An award granting penal damages does not violate US public policy.14
n. An award by the Beth Din while resolving a dispute between brothers where one brother had failed to
prove that his deceased father had shown sufficient intention that certain shares be transferred to his
name was enforceable and there was no public policy that required the Court not to enforce such an
award.15
o. When an award would not have been any different on the production of certain documents by one
party, it cannot be argued that there is a violation of public policy as the award was obtained by
concealing such documents.16
Further Suggested Reading (Public Policy-General)
1. R.A. Sharma, “Case of ONGC vs. Saw Pipes: No Need for Reconsideration”,
2007 (3) Arb LR 9 .
2. D.R. Dhanuka, “Critical Analysis of the Judgment ONGC Ltd. v. SAW Pipes”,
2003 (2) Arb LR 1 .
3. Apoorv Kurup, “Reposing Faith in the Arbitral Process: A Restrained Exercise of Judicial Discretion
when Construing the ‘Public Policy of India'”,
2003 (4) Comp LJ 141 .
4. Sidharth Shamra, “Public Policy under the Indian

Arbitration Act : In Defence of theIndian Supreme Court's Judgment in
ONGC v. Saw Pipes”, 26 (1) J Intl Arbn 133 (2009).
5. Mary Howarth Arden, “Arbitration and the Courts”, Handbook on Arbitration, Mediation and other ADR
Techniques- A Collection of Keynote Addresses, Articles and Cases, (TK Viswanathan ed., 1st ed.,
2008) at p.97.
6. Rajiv Sinha, “After All it is a Matter of Policy”,

2009 (1) Arb LR 17 .
7. V.K. Gupta, “In Defence of ONGC v. SAW Pipes”,

2004 (1) Arb LR 28 .
8. P.V. Kapur, “So What If We Have an Arbitration Law”, 4 JSLC (2004) 38.
9. O.P. Malhotra, “Scope of Public Policy under the Indian

2007 (1) MLJ 4 .
10. VK Gupta, “Concept of Public Policy in Relation to Arbitration Award under the
2003 (1) Arb LR 13 .
11. Dharmendra Rautray, “Case Comment India: Choice of Foreign Law & Public Policy In India”, 11 (4)
Int. ALR 59 (2008).
Further Suggested Reading (Public Policy In The Context Of International
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Arbitration)
1. Rogers and Kaley, “The Impact of Public Policy in International Commercial Arbitration”, 65 (4)
Arbitration 326 (1999).
2. Tweeddale, “Enforcing Arbitration Awards contrary to Public Policy in England”, [2000] ICLR 159.
3. Fali S Nariman, “Problems of Public Policy – The Indian Perspective”, ICCA Congress series no. 3
(New York/1986) 337.
4. Swati Singh, “International Commercial Arbitration and Public Policy”, [2000] 39 CLA (Mag.) 62.
5. Abhishek Kolay and Nilanjana Chatterjee, “Public Policy in International Commercial Arbitration:
Embracing a Global Standard?”,
2006 (2) Comp LJ 22 .
6. M.S. Rawat, “International Commercial Arbitration and Transnational Public Policy”, 49 JILI (2007) 60.
Opposition to enforcement on grounds not specified in the NYC/ Section 48
(a) Ambiguity of the award
Ambiguity of the award is not a ground for refusal of enforcement; however in case an award is
ambiguous the Court can remit it to the arbitrator for clarification. 17
(b) Bankruptcy does not affect enforcement of a foreign award.18
Discretion to refuse enforcement even when one of the grounds has been established
Refusal of enforcement inspite of establishment of one of the grounds in Section 48 is a discretionary power
courts enjoy. This was recognized by the Delhi High Court which stated:
“What emerges quite clearly from a conjoint reading of Sub-section (1) and Sub-section (2) of Section 48 of the Act is
the following:
(i) Sections 48(1) and (2) both use the expression ‘may’ in the context of refusing enforcement instead of the
mandatory ‘shall’ or ‘must’. In other words, the legislature has left it to the discretion of the Court to refuse
enforcement of a foreign award, depending upon the facts and circumstances of a particular case.
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...
(iii) The legislative intent regarding enforcement of a foreign award is writ large, in that, the conditions for refusing
enforcement are to be narrowly construed, and, as far as possible the Court may exercise its discretion in
favour of enforcement of the award as is clear from the use of the words:
Enforcement of a foreign award may be refused,...only if that party furnishes to the Court proof...”19
In Ajay Kanoria v. Tony Francis Guinness 20, when the Court had held that there was a
violation of due process as the Respondent had been denied its right to be heard, the Claimants argued that
the court had discretion to enforce the award even if the case within one of the grounds specified in the New
York Convention as the word “may” had been used and that since the award had not been challenged in India
(the seat of the arbitration), such discretion must be exercised. The Court doubted that it had such a broad
discretion and held that even if it did it could not exercise its discretion based on the given facts as enforcing
the award would give rise to grave injustice. It was observed that if the structural integrity of the award is
fundamentally unsound, the court is unlikely to exercise its discretion in favour of enforcing the award.
Sick Industrial Company
The jurisdiction of the court to enforce a foreign award is not ousted by the fact that proceedings against the
company are pending before the Board of Industrial Finance and Reconstruction under the Companies (Special
Provisions) Act, 1985.21
15. Suspension of enforcement [ Sec. 48(3)]
Section 48(3) provides that application for enforcement of a foreign award may be adjourned pending the
outcome of an application for setting it aside in the place where it was made. This power to adjourn is a
discretionary power that the court may exercise suo moto. In a case before the Court of Appeal22 an application
was filed for adjournment of the Court's decision on recognition and enforcement. It was a Swedish arbitral
award. Questions of existence of arbitration agreement and of security for costs arose. On the point of
agreement, the court said:
“All that is required by way of an arbitration agreement is apparently valid documentation containing an arbitration
clause by reference to which the arbitrators had accepted that the parties had agreed an arbitration or in which the
arbitrators had accepted that an agreement to arbitrate was recorded with the parties’ authority; any challenge to the
existence or validity of the arbitration agreement fell to be pursued simply and solely under the provisions relating to
setting aside. The Court has an overriding power to adjourn under s. 103(5), indeed a power which it could exercise of
its own motion; and once it was concluded that jurisdiction existed the Judge's exercise of it to adjourn was
unassailable.”
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On the point of security of costs, the court did not think it to be necessary any security because the court saw
no change of the party liable moving away funds which were then within the jurisdiction so as to make
enforcement of the award more difficult or that they would be make themselves less amenable to the
enforcement.
The conditions for grant of stay of enforcement proceedings pending adjudication by a competent authority in a
foreign country have been dealt with exhaustively by US Courts. The conditions to be taken into account for
grant of a stay have been elucidated in the following words:
“In ruling on a motion to stay confirmation of a foreign arbitral award a court considers, inter alia: (1) the general
objectives of arbitration--the expeditious resolution of disputes and the avoidance of protracted and expensive
litigation; (2) the status of the foreign proceedings and the estimated time for those proceedings to be resolved; and (3)
whether the award sought to be enforced will receive greater scrutiny in the foreign proceedings under a less
deferential standard of review. The first and second factors on the list should weigh more heavily in the district court's
decision. A court also considers, inter alia: (4) the characteristics of the foreign proceedings including (i) whether they
were brought to enforce an award (which would tend to weigh in favor of a stay) or to set the award aside (which would
tend to weigh in favor of enforcement); (ii) whether they were initiated before the underlying enforcement proceeding
so as to raise concerns of international comity; (iii) whether they were initiated by the party now seeking to enforce the
award in federal court; and (iv) whether they were initiated under circumstances indicating an intent to hinder or delay
resolution of the dispute; (5) a balance of the possible hardships to each of the parties, keeping in mind that if
enforcement is postponed under the Convention, art. 6, the party seeking enforcement may receive “suitable security”
and that, under the Convention, art. 5, an award should not be enforced if it is set aside or suspended in the originating
country; and (6) any other circumstances that could tend to shift the balance in favor of or against adjournment.”23
This provision for adjournment raises two important issues:
(1) The logical implication of this provision is that it is contemplated that a party aggrieved by an arbitral
award may seek to set it aside and at the same time try to resist enforcement in different places. In
such a scenario, is the decision in the annulment proceedings likely to preclude further action before
the court of enforcement? (Issue of res judicata)
(2) Under what circumstances will the enforcement court suspend enforcement? (Conditions for grant of
stay)
Issue of res judicata 24
In a case before the Hong Kong High Court,25 the court observed:
“However, we do not exclude the possibility that in appropriate cases, the doctrine of issue estoppel may be applicable.
If exactly the same grounds which were relied upon to set aside an award in the place where it was made are relied on
to resist enforcement in a foreign jurisdiction, we should think that an adjudication on those grounds in one competent
jurisdiction should be binding between the same parties in another jurisdiction. The doctrine is aimed at preventing an
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abuse of the process of the court and it would be difficult to argue that it is not an abuse for a party against whom the
adjudication was made to seek to argue over the same grounds again. The principles of the comity of nations and
finality of adjudication should not be easily overlooked. In this connection, we do not consider the case of Owens Bank
Ltd. v. Bracco 26 to be of assistance in the present case. In the Owens Bank case, the court
held that the doctrine of issue estoppel had no application in the enforcement of foreign arbitral awards since it dealt
with awards which were obtained by fraud. This is not a case involving fraud.”
“Similarly, if there are issues which could have been raised in the earlier proceedings but were for one reason or
another not raised, we should also think that in appropriate cases, the wider principle of res judicata in the Yat Tung
case may also apply. The position would be otherwise if, because of the differences between two jurisdictions, it was
not open to a party to raise these other points in the previous proceedings.”
***
“The concept of public policy in Hong Kong is something which is generally part of the common law and it is difficult to
see how it could be the same as that relating to the ‘social and public interest’ of the PRC. In our view, leading counsel
for the defendant is right in saying that it would be almost impossible for the defendant to argue before the Beijing court
in an application to set aside the award that it would be against public policy in Hong Kong to enforce the arbitral
award. That would not be open to the defendant. The Beijing court would not be concerned with enforcement in Hong
Kong. Nor would it be interested in the public policy of Hong Kong.”
“The rationale behind the doctrine of issue estoppel or res judicata is to prevent abuse of the process of the court. In
our view, there is no question of any abuse in this case. The defendant is entitled under the Convention and the
Ordinance to apply to set aside the award in Beijing where it was made and to apply to resist enforcement in Hong
Kong where it was sought to be enforced. The issue as to whether it is against public policy of Hong Kong to enforce
the award which was made under the circumstances as alleged by the defendant was not and could not have been
determined by the Beijing court. We do not think that issue estoppel or the Yat Tung principle applies in the present
case.”
This ratio, however would probably not hold good in cases of challenges on the ground of violation of public
policy.27
Conditions for grant of stay
The enforcement court should be very selective in staying enforcement proceedings. This approach is very
important to ensure that the main objectives of the New York Convention are not defeated. If the discretion to
grant a stay is not sparingly exercised, every person against whom an arbitral award is passed would start off
annulment proceedings and bring enforcement proceedings in other parts of the world to a halt.
There are a few pointers which may be used by an enforcement court while deciding on whether to grant a of
stay proceedings in the light of proceedings for annulment in the country where the award was rendered.
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(a) Merits of the annulment petition and whether the claim is frivolous.
Where the annulment proceedings are not frivolous and there is a chance that awarding
enforcement may be followed by an annulment of the award enforced, it could lead to an
anomalous situation with conflicting court decisions. It would also be the cause of more litigation
thereby defeating the very objective of arbitration. In such situations enforcement courts have
tended to suspend proceedings before them.
In cases when the annulment petition, in the opinion of the Court the proceedings before which are
sought to be stayed, is without any merit, a stay is not usually granted.
1. In Lars Hallen v. Sven- Olov Angledal 28, a Swedish arbitral award
was sought to be annulled in Sweden. Pending these proceedings, enforcement was sought by the
successful party in Australia. The Australian Court denied the grant of a stay as the application
filed in Sweden, in the view of the court, had no merit. There was no proof that the Swedish Court
where application was made was competent to set aside the award. There was no evidence
adduced by the Defendant after doubts had been raised on this issue by the Petitioner.
2. Jorf Lasfar Energy Company v. AMCI Export Corporation 29, is a case
where the Court decided to stay enforcement proceedings in the light of international comity. The
parties had entered into a contract for supply of coal. Dispute arose and pursuant to French
arbitration an award was obtained in favour of the Petitioners who sought to enforce it in USA.
However prior to enforcement proceedings the Respondent had sought to annul the award before
the French courts on the grounds :
(1) it was unable to present its case,
(2) the award was not yet binding,
(3) enforcement would violate public policy.
A stay of the enforcement proceedings was granted as the Court was under a duty to balance “the
Convention's policy in favour of confirming awards against the principle of international comity
embraced by the Convention.”
The Court was of the view that the arguments in the annulment petition were not frivolous and
hence there was a good chance of their being contradictory judgments. This may lead to more
expensive litigation at a later time if stay was not granted.
(b) Where the claim before the enforcement court involves issues under the law of the country where the
annulment proceedings are pending.
(1) When the claim for annulment before the US Court involved questions on American law, the
Canadian Court decided to adjourn proceedings for enforcement and the claim for adjournment did
not seem frivolous and the grounds of challenge were best handled by the US Court.30
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(c) The 3 step test set out by US Courts
This test was laid down in the case of Powerex Corp., & others v. Alcan, Inc. 31. In this
case the Respondent and Petitioner stipulated that the Respondent would supply certain amount of power to
British Columbia Hydro. The Respondent designated Enron Power Marketing Inc. (Enron) as a third party to
supply a portion of electricity. The Respondent remained liable for full and proper performance of obligations
and those of Enron, limited to US$ 100,000,000. The agreement between the Petitioner and Respondent
contained an arbitration clause.
Upon Enron's bankruptcy disputes arising and following arbitral proceedings, an award was passed in favour of
the Petitioners who sought to enforce the award in Canada; while the Respondent sought annulment of the
award in USA. The lower courts denied this application and the matter was before the Appellate Court.
The enforcement proceedings before the Canadian Courts had been stayed pending the decision of the US
district court and these proceedings resumed after the decision. The Respondent then sought a stay pending
the decision of the Court of Appeal.
The Court laid down the criteria to be followed while granting a stay namely:32
(1) there must a serious issue to be tried;
(2) the court must weigh the balance of probabilities and irreparable harm; and
(3) the applicant must show that the proceedings to set aside the award have been commenced in a
competent court.
It was held that in the present case a grant of stay was warranted but ordered that the Respondent pay the
amount of the award plus interest as security and leave it in trust with the Petitioners’ solicitors.
The conservative approach
On some occasions, courts have adopted a very conservative approach and refused to grant a stay.
1. A stay of enforcement proceedings in Spain was requested on the grounds that annulment
proceedings were pending in USA. The Court, in Fashion Ribbon Company, Inc. v. Iberband
33, held that since the award was final there was no reason to grant a stay. If a stay was granted based
on pending proceedings for annulment, this would be used as a tool to postpone enforcement in more
cases.
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2. The defendant started arbitration proceedings to resolve a dispute regarding pending dues. The award
was passed in Sweden in favour of Plaintiff and the defendant filed for setting it aside in Sweden.
When this set aside petition was pending, Plaintiff sought to enforce the award in Germany. The Court
held there is no reason to stay the proceedings as the award was final and binding. Merely because
the proceedings were pending for setting the award aside does not mean that the award is not final.34
3. An award was sought to be annulled in the country of the award i.e. Austria, and was simultaneously
sought to be enforced in another country (Germany). The German courts refused to stay the
proceedings as in their estimation the grounds raised in the annulment proceedings were likely to be
rejected.35
4. According to the more favourable nation provision in Belgium annulment of an award was not a ground
for not enforcing an award. In such a scenario there was no question of granting a stay of enforcement
proceedings because a petition for annulment of an award has been filed in the country where the
award was passed.36
It is submitted that while the last case seems reasonable, the view taken in the two cases prior to that could
potentially defeat the whole purpose of arbitration by potentially leading to conflicting court decisions. Factors a)
and b) and the 3 step test are useful pointers to whether or not stay must be granted and where exactly to draw
the line between allowing this provision from being misused as a tool to stall enforcement proceedings and
being saddled with opposing decisions of equal weightage.
Partial enforcement of awards
The dilemma surrounding the exercise of discretion to grant a stay of enforcement proceeding presents courts
with a conundrum wherein an erroneous exercise may defeat the basic objectives of the NYC and a flawed
restraint could cause grave injustice. The English Court of Appeal, by permitting partial enforcement of awards,
has helped identify a mid-way solution.
This innovative approach was adopted in IPCO (Nigeria) Limited v. Nigerian National Petroleum Corporation
37 where the claimant sought to enforce an award in its favour. Expectedly, this application was opposed in light
of pending proceedings before Nigerian Courts to set aside the award. After an initial grant of stay, on a second
enforcement application being filed by the claimant in the light of the change in circumstances in the Nigerian
proceedings which was likely to result in considerable delay, the Queen's Bench Division, the Court allowed the
enforcement of the award relating to two of the six claims that were not likely to be set aside by the Nigerian
Courts.38
The Court of Appeal affirmed this view as the reference to the word “award” should be construed to mean the
“award or part of it”. Since there was no prohibition to the partial enforcement of arbitral awards and such a
remedy in the present case would be in furtherance of the objective of the New York Convention which was to
ensure effective and swift enforcement of arbitral awards, it was implied that partial enforcement of awards
should be permitted. Lord Justice Tuckey, while delivering this landmark decision, also gave other instances
where such a partial enforcement could be granted. One such instance was where the interest payable was in
dispute before the Courts of the seat of arbitral awards, the enforcing Court could partially enforce payment of
the principal.
This novel approach by the Court is in keeping with the spirit of the New York Convention and sets a flexible
precedent that would be useful to ensure that Court proceedings in the home country are not used as a tool to
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render arbitral awards useless.
Enforcement of an arbitral award pending litigation on the same issue
Courts have to enforce arbitral awards even if there is pending litigation on the same issue as was decided in
the award. If this were not the case every party against whom/ which an award has been passed would
commence litigation in order to stall enforcement of the award thus rendering the whole process of arbitration
counterproductive.
The Spanish Supreme Court has ruled on this issue in the case of Angel v. Bernardo Alfageme, S.A.
39. A conflict was sought to be resolved by arbitration in Germany. Simultaneously the defendant commenced
proceedings in a Spanish Court to declare the contract void. In the meantime the arbitrator came out with an
award which was sought to be enforced before a Spanish court.
It was argued by the defendant that when there were pending court proceedings, enforcement of this award
would violate public policy.
While holding that the pending proceedings did not in any way affect the enforcement of the foreign award the
Court held:
“We should take into account, on the one hand, the possibility of conflicting decisions; that is, the possibility of having
two decisions that either in themselves or because of their effects cannot coexist in the forum. On the other hand, [we
should take into account] that it is not always and in all cases necessary to this aim that parties, subject matter and
cause of action be identical in both national and foreign proceedings, although if they are this is undoubtedly a weighty
argument to deny enforcement.
...
The present case is not properly a case of two pending proceedings, in respect of which we must decide in favor of the
one to the exclusion of the other. Rather, we have here a proceeding, the foreign proceeding, that was already
concluded by a non-appealable final award or decision, and we must decide what are that award's effect in the forum,
when proceedings [are pending] before the Spanish courts.
...
Consequently, domestic proceedings should not affect enforcement proceedings. If it were so, fraud would be allowed
and the breach of freely concluded agreements promoted. On the contrary, once its effects are recognized the arbitral
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award will affect the course of the other proceeding. ..”
This judgment appears to set a reasonable precedent to encourage international commercial arbitration.
Opposition to enforcement on same grounds as grounds for annulment
The Singapore High Court, in Newspeed International Limited v. Citus Trading Pte Ltd. 40,
laid down the proposition that when a party's petition for annulment is rejected by the court at the place of the
arbitration, that party cannot again rely on the same grounds to oppose enforcement in another country. In the
present case the Chinese court had rejected the claim of the Petitioners to annul the arbitral award against it on
the grounds of violation of due process. The Petitioners were not permitted to oppose enforcement in
Singapore on the same grounds. (See also commentary under Section 48 under the heading “Issue of res
judicata”)
This, however does not seem to hold good in cases of opposition on grounds of violation of public policy as
every country has its distinctive features that characterize that country's public policy. For more details refer to
commentary under Section 48 under heading “Effect of decision of a “public policy issue” in an annulment
proceeding on a proceeding for opposition to enforcement”
16. Jurisdiction of Courts
Reading Sections Section 7 and 12 of Bombay Civil Courts Act, 1869, it was held that Joint District Judge is a
District Judge having co-extensive and concurrent jurisdiction for discharging judicial functions. The Court of
Joint District Judge is a principal court of original civil jurisdiction and has jurisdiction to entertain execution of
awards.41
No need to file separate applications
It has been held that there is no need for resort to separate proceedings, namely one for deciding enforceability
of the award under S. 48 or to make it a rule of the court for passing a decree and the other to take up
execution thereafter.42 The Court explained the situation developing after the new Act as follows:
“Prior to the enforcement of the Act, the Law of Arbitration in this country was substantially contained in three
enactments namely: (1) The
Arbitration Act , 1940, (2) The Arbitration (Protocol and Convention)Act, 1937 and (3) The
Foreign Awards (Recognition and Enforcement)Act, 1961. A party holding a foreign award was required to take
recourse to these enactments. Preamble of the Actmakes it abundantly clear that it aims at to consolidate and amend
Indian laws relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral
awards. The object of the Actis to minimize supervisory role of Court and to give speedy justice. In this view, the stage
of approaching Court for making award a rule of Court as required in
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Arbitration Act , 1940 is dispensed with in the presentact. If the argument of the respondent is
accepted, one of the objects of theact will be frustrated and defeated. Under the old Act, after making award and prior
to execution, there was a procedure for filing and making an award a rule of Court, i.e. a decree. Since the object of the
Act is to provide speedy and alternative solution of the dispute, the same procedure cannot be insisted under the new
Act when it is advisedly eliminated. If separate proceedings are to be taken, one for deciding the enforceability of a
foreign award and the other thereafter for execution, it would only contribute to protracting the litigation and adding to
the sufferings of a litigant in terms of money, time and energy. Avoiding such difficulties is one of the objects of the Act
as can be gathered from the scheme of the Act and particularly looking to the provisions contained in Sections 46 to 49
in relation to enforcement of foreign award. It has been stated in43 that as a matter of fact, there is not much difference
between the provisions of the 1961 Act and the Act in the matter of enforcement of foreign award. The only difference
as found is that while under the Foreign Awards Act a decree follows, under the new Act the foreign award is already
stamped as the decree. Thus, in our view, a party holding foreign award can apply for enforcement of it but the Court
before taking further effective steps for the execution of the award has to proceed in accordance with Sections 47 to
49. In one proceeding there may be different stages. In the first stage the Court may have to decide about the
enforceability of the award having regard to the requirement of the said provisions. Once the Court decides that foreign
award is enforceable, it can proceed to take further effective steps for execution of the same. There arises no question
of making foreign award a rule of court/decree again. If the object and purpose can be served in the same
proceedings, in our view, there is no need to take two separate proceedings resulting in multiplicity of litigation. It is
also clear from objectives contained in para 4 of the Statement of Objects and Reasons, Sections 47 to 49 and
Scheme of the Act that every final arbitral award is to be enforced as if it were a decree of the Court. The submission
that the execution petition could not be permitted to convert as an application under Section 47 is technical and is of no
consequence in the view we have taken. In our opinion, for enforcement of foreign award there is no need to take
separate proceedings, one for deciding the enforceability of the award to make rule of the Court or decree and the
other to take up execution thereafter. In one proceeding, as already stated above, the Court enforcing a foreign award
can deal with the entire matter. Even otherwise, this does not prejudice the party.”
“Part II of the Act relates to enforcement of certain foreign awards. Chapter 1 of this Part deals with New York
Convention Awards. Section 46 of the Act speaks as to when a foreign award is binding. Section 47 states as to what
evidence the party applying for the enforcement of a foreign award should produce before the Court. Section 48 states
as to the conditions for enforcement of foreign awards. As per Section 49, if the Court is satisfied that a foreign award
is enforceable under this Chapter, the award shall be deemed to be a decree of that Court and that Court has to
proceed further to execute the foreign award as a decree of that Court. If the argument advanced on behalf of the
respondent is accepted, the very purpose of the Act in regard to speedy and effective execution of foreign awards will
be defeated. Thus none of the contentions urged on behalf of the respondent's merit acceptance so as to uphold the
impugned judgment and order.”
Enforcement in any part of country
A petition for enforcement of a foreign award can be filed in any part of the country where a party answerable in
claim of arbitration may have money or where a suit for recovery can be filed. A Single Judge, recognised the
foreign award as enforceable, and passed order for its execution. A notice was served by the award-debtor for
setting aside the order on the ground that the petition for enforcement was filed in Bombay because there was
no ceiling on Court fee in Delhi. Such a motive was held to be not affecting the validity of the order of
enforcement. Notice of petition was also found to have been properly served. The notice was served on a
company which was associated with the debtor company and received it by affixing the rubber-stamp of the
latter.44
An application for enforcement is maintainable at the place where the money is lying. The decree-debtor had a
branch office at Ahmedabad. It also had at that place a bank account for day-to-day commercial transactions.
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The City Civil Court of Ahmedabad was held to have jurisdiction in the matter of enforcement.45
Where an arbitration award was passed by a court at Singapore and a petition for execution was filed by the
petitioner in India, the court said that under S. 48, a foreign award could be suspended or enforced by the court
of the country in which or under whose law the award was passed. For an award passed by a court in
Singapore, the courts there had necessary jurisdiction. Even if the courts on India had jurisdiction, a court here
could pass an order directing security to be given by the party against whom the enforcement was sought.46
The respondent had filed an application for setting aside. The amount required to be deposited was not in fact
deposited or secured. The petitioner was allowed to maintain the execution petition. A prohibitory order was
against the bank with whom the respondent had account and deposits.47
17. Setting aside foreign awards in a country other than the country where the
award is rendered: A comparative study
The law laid down by the Indian Supreme Court in Venture Global Engineering v. Satyam Computer Services
Ltd. 48 is that a foreign award can be set aside by an Indian court under Section 34.
A host of foreign authorities on the subject take a contrary view. All these authorities are on the basis of the
corresponding provision of the NYC.
In the famous case of Gulf Petro Trading Company v. Nigerian National Petroleum Corporation
49, the Court observed: “It would seriously undermine the functioning of the Convention if the fact that the
opportunity for judicial review of an award in the primary jurisdiction has passed could open the door to
otherwise impermissible review in a secondary jurisdiction.” This view has been almost universally accepted.
1. In Empresa Colombiana de Vias Ferreas v. Drummond Ltd 50, a challenge to
a French ICC arbitral award before the Columbian Courts was turned down on the ground that only
Courts in the country where award is made have jurisdiction to set the award aside. In the words of the
Court:
“The New York Convention contains no provision granting general jurisdiction to national courts to hear a
recourse to set aside a foreign arbitral award. On the contrary, the Convention provides that one of the
grounds on which contracting States may deny recognition or enforcement of a foreign arbitral award is
the setting aside or suspension of the award by a competent authority of the country in which, or under
the law of which, that award was made.
Hence, this Council holds that in the present case, since the attacked award was rendered in Paris
pursuant to French law ... it would be illogical to deem that the Colombian Council of State has
jurisdiction over an action for setting aside this award, also taking into account that the Council's decision
to set aside the award would not prevent [Colombia's] Supreme Court from granting recognition and
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enforcement of the award in Colombia. This Council agrees here with Drummond's arguments.”
2. In another case51 the short issue before the Court was whether it should refuse to enforce a
Singaporean award that had been annulled in Philippines. The Court granted enforcement on the
basis:
(1) factually, the Singapore award had not been set aside by the Philippines court.
(2) Only the courts at the place of primary jurisdiction could set aside the award, namely Singapore
courts in the present case. It did not suffice to prove that Philippine procedural law applied to the
Singapore arbitration.
(3) Even if the Singapore award was under review or had been set aside, the US court had discretion
to enforce it.
3. London was the seat of arbitration. It was held that the arbitral award could not be set aside in USA
even though US law may provide for it. The English Court of Appeal, in C v. D
52 ordered an injunction restraining proceedings before the US Federal Court for setting aside an
English arbitral award. The reasoning given by the Court was that choosing London as the seat of
arbitration meant incorporating the framework of the English
Arbitration Act and that any challenges to the award could only be those
permitted by the Act. An agreement as to the seat of an arbitration was thus analogous to an exclusive
jurisdiction clause. Following Black-Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg
AG 53, it was observed that the law of the arbitration agreement would rarely
be different from the law of the seat of the arbitration and had a closer association with the seat of the
arbitration rather than with the proper law of the substantive contract. An anti-suit injunction was thus
ordered in the present case.
4. The Titan Corporation v. Alcatel CIT SA 54 was a case where the (Swedish)
Court of the seat of the arbitration declined to adjudicate on a set-aside motion against an arbitral
award as all the hearings were in other countries. The case involved a dispute between the Titan
Corporation and Titan Africa, Inc (Titan) on one hand and Alcatel CIT SA (Alcatel) with respect to an
agreement that contained an arbitration clause providing for ICC arbitration at Stockholm, Sweden.
Consequently an arbitral award was passed. The award stated that Stockholm was the place of
arbitration; however evidence was taken in Paris and rest of the work done by the arbitrator was in
England.
The Plaintiff filed an application with the Court of Appeal in Sweden to set aside the award. The
Court of Appeal held that Swedish courts would not have jurisdiction over this set aside petition as
the proceedings had no relation to Sweden. Unless there is some tangible connection with
Sweden, Swedish courts will not have jurisdiction to set-aside the award. Although the award
stated that the place of arbitration was Stockholm since the sole arbitrator was from the United
Kingdom, arbitration was governed by the ICC, and oral hearings had taken place in London and
Paris, the ‘tangible connection’ test was not satisfied. Thus it was held that the award could not be
deemed to have been rendered in Sweden. The Court however observed that had the Plaintiffs
been denied a remedy anywhere else the Swedish Courts would have exercised jurisdiction;
however since the Defendant was a French company and there was a substantial French
connection, there was no reason why the French courts would not exercise jurisdiction.
It was argued by the Plaintiffs that the parties had deliberately chosen Sweden as it was a neutral
country and choosing Sweden as the seat had had its effect as Swedish law of arbitration had
been applied. It also claimed that it would not get a remedy in any country as it was highly unlikely
that the courts of other countries would set aside a Swedish award. The connection to none of the
other countries was close enough for them to assume jurisdiction. It was however held that as a
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prerequisite for a Swedish court to deal with a dispute, there must be Swedish judicial interest,
which required some connection with Sweden. The burden of establishing this connection was on
the Plaintiffs and this burden had not been discharged. The Court analysed the provisions under
the Swedish
Arbitration Act and observed—
“According to Sect. 46 of the Swedish

Arbitration Act , the saidact shall apply to arbitral proceedings which take
place in Sweden notwithstanding that the dispute has an international connection. According to Sect.
52(2) of theact, the place of the arbitration determines the nationality of an Award and has, according to
Sect. 43(1) of the Act, relevance for the question regarding jurisdiction. If an Award has been rendered
abroad, an application to set aside the award may not be decided in Sweden and the Court of Appeal
has an obligation ex officio to dismiss such an application.
The place of arbitration shall, according to Sect. 22(1) of the Act, firstly be determined by the parties,
and secondly by the arbitrators. According to para 2 of the aforementioned section, the arbitrators may
hold hearings and other meetings elsewhere in Sweden or abroad. The provision thus admits that part of
a Swedish arbitration be conducted abroad. The connection of the arbitration to the place can be of a
more or less tangible nature. There must, however, be some connection to the place of the arbitral
proceedings.
According to Sect. 31(2) of the Act, the awards shall state the place of arbitration. It thus rests with the
arbitrators to state where the arbitral proceedings according to their opinion have taken place and their
opinion shall be deemed correct.
In the award (as amended) challenged by Titan Corporation, the sole arbitrator has – in compliance with
what the parties have agreed – stated that the place of arbitration was Stockholm. In accordance hereto
the starting point of the Court of Appeal's deliberation is therefore that this opinion is correct, if there is
nothing particular to suggest otherwise.”
These paragraphs suggest that the opinion of the arbitrator that Stockholm is the place of
arbitration is correct. Moreover the paragraph also states that primacy shall be given to the view of
the parties. In his case, the arbitration agreement which is an embodiment of the parties’ will states
that Stockholm would be the seat of arbitration. It is a globally followed rule that an award can be
set aside only by the Court of the place of arbitration. In such a scenario, it would be unlikely that
any other court would exercise jurisdiction over this matter, thereby leading to a denial of justice.
5. The English Courts (Queen's Bench Division) granted an anti-suit injunction restraining a party from
continuing with proceedings to set aside an award before the Indian Courts as the Court determined
England to be the seat of the arbitration. This decision was inspite of the fact that Indian law was the
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proper law of the contract. It was held that the Courts at the seat of the arbitration had exclusive
jurisdiction to set aside an award.55 It was held:
“the basis of the Convention (NYC) ...as applied in England in accordance with its own principles on the
conflict of laws, is that the courts of the seat of arbitration are the only courts where the award can be
challenged whilst, of course, under art V of the Convention there are limited grounds upon which other
contracting states can refuse to recognise or enforce the award once made.”
An exception to the rule in the global context
In most jurisdictions a domestic court cannot set aside a foreign award. However, France forms an exception
and French courts have jurisdiction to set aside foreign arbitral awards.56
When the local law of a country grants the courts of that country the power to set aside an arbitral award, such
a power can be exercised by the courts. In the case of Rupali Polyester Ltd. v. Bunni 57,
the issue at hand was the competence of the Pakistani Court to set aside an award which had its roots in
Pakistani law, rendered in London, on the basis that Pakistani law empowered the local courts the power to set
aside any “domestic award”, the term “domestic award” including within its ambit awards based on agreements
to which Pakistani law applied. The Pakistani Supreme Court upheld the jurisdiction of the local courts by
adopting the following reasoning:
Step 1- Private international law was applied by the courts of a country as part of its domestic law and
therefore differed from country to country. It could not claim primacy over the domestic law of a
particular country and was subject to the domestic laws of a country.
Step 2- If the Courts of Pakistan had jurisdiction as per their local law, they could not be denied the same
due to the fact that under the principles of private international law such a matter was triable in another
court.
Step 3- There was nothing in the local Act which restricted or confined its applicability only to awards made
in Pakistan or made in proceedings conducted there.
Step 4- The control over the arbitration agreement vested in the courts of the country where the seat of
arbitration was located as also in the country with which the contract had the closest connection.
Extra-territorial relief not possible in enforcement proceedings
In ABCI v. Banque Franco – Tunisienne 58, an arbitral award in favour of the Plaintiff was
confirmed as enforceable by a judgment of the Court by the French Court of First Instance and confirmed by
the higher Courts including the Supreme Court.
The Plaintiff claimed that it was then subjected to intimidation by the other side and the Ministry of Planning and
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Finance of the Republic of Tunisia and was forced to enter into a settlement agreement.
The Plaintiff then commenced proceedings in England seeking
(1) enforcement of the decision of the French Court of First Instance making the ICC award enforceable as
a court decision;
(2) enforcement of the ICC award itself;
(3) damages for fraudulent misrepresentations;
(4) damages for conspiracy to defraud;

(5) a declaration that the settlement agreement was procured by duress and hence void.
The High Court, held that when the objective behind the current proceeding was to enforce the ICC award in
England, it could not broaden the relief so as to help the Petitioner avoid difficulties that might be encountered
outside this jurisdiction.
An administrative panel decision is not an award and hence cannot be set aside
An administrative proceedings is not an arbitration as it does not have the effect of acing as “res judicata” for
other proceedings. Hence an administrative panel decision cannot be set aside in the manner an arbitral award
can be.
1. In the case of Michel Le Parmentier v. Sociètè Miss France 59, the
respondent commenced administrative proceedings before the Arbitration and Meditation Center of the
World Intellectual Property Organization (WIPO) against Michel Le Parmentier, alleging that Le
Parmentier illegally registered the domain names missfrance.tv, missfrance.biz, miss-france.org, miss-
france.net, missfrance.info, missfrance.ca and miss-france.ca. The WIPO Administrative Panel
rendered a decision in Geneva, in favour of the respondents. The Plaintiffs sought to set aside the
award in France.
While under French law, a foreign arbitral award can be set aside in France, the Court, in the
present case held that the administrative proceedings was different from an arbitration and there
was hence no arbitral award to be set aside. It was observed that the parties’ agreement could be
deemed an arbitration agreement only if the arbitrator “was entrusted with the jurisdictional task to
render a decision that could have res judicata effect on the parties”. The Court then analyzed the
WIPO administrative decision and held that while certain features of the administrative proceeding
like independence and impartiality of the administrative panel, equal treatment of the parties and
free evaluation of evidence were similar to that of an arbitration, the decision was to be
implemented in a different manner- namely using registration units and was not directly binding on
the parties. Moreover, the dispute settlement agreement provided that the parties could refer their
dispute to a court before, during and after the administrative procedure. The administrative
proceeding was thus not an arbitration and the decision could not be set aside like an arbitral
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award could be.
2. In the case of Societe Nationale des Petroles du Congo v. Total Fina Elf E & P Congo
60, the Plaintiff and the Republic of Congo entered into an Agreement with the defendant for the sale of
crude oil. The Agreement provided for the International Chamber of Commerce (ICC) Pre-arbitral
Refree Procedure and for arbitration. A referee procedure was commenced and an order was passed
by the referee which was sought to be set aside. The Court of Appeal held that such an order cannot
be set aside as the ICC referee procedure, was not an arbitration procedure and that, the referee's
order had the nature and authority of an agreement between the parties.
18. Comparison of provisions of S. 48 with S. 34
This appears from the following judgment of the Bombay High Court:61
“It appears from the reading of the Act that insofar as the challenge and enforceability is concerned, there are different
Schemes for a domestic award and a foreign award. The Act provides for a direct challenge to a domestic award
(Section 34). A domestic award is enforceable as a decree passed by a Civil Court, after the period provided for
challenging the same is over, and in case it is challenged, after the challenge fails (Section 36). Whereas, insofar as a
foreign award is concerned, it is not enforceable in India unless the Court finds that it is enforcement has to make an
application to the Court and has to satisfy the Court about its enforceability (Section 49). It is only after the party
satisfies the Court that a foreign award becomes enforceable as a decree passed by a Civil Court (Section 49). The
Act provides different remedies to persons against whom domestic award is made and person against whom foreign
award is made. A person against whom a domestic award is made has to immediately approach the Court for
challenging the same by making an application under Section 34 of the Act otherwise the person in whose favour the
award has been made can execute the same as a decree. On the other hand, a person against whom a foreign award
has been made, is not required to challenge the same, because it cannot be executed against him in India unless the
Court finds that it is enforceable. He can wait till the person in whose favour the foreign award has been made, makes
an application before the Court (Section 47). Rule 803E of Rules framed by this Court, provides for a notice to be
issued to the person who is likely to be adversely affected by the proceeding. After receiving the notice from the Court,
he can appear before the Court and submit his defence and resist the enforcement of the foreign award against him.
He can request the Court not to enforce the award and in case he succeeds in satisfying the Court on one or more of
the grounds mentioned in Section 48 of the Act, the Court has to refuse to enforce the award. As observed above,
comparison of the provision of Section 34 and Section 48 of the Act shows that a person against whom a foreign award
has been made can resist the enforcement of the foreign award against him on the same ground on which he could
have, had it been provided, challenged, the validity of the award under Section 34 of the Act. In other words, the
grounds on which a domestic award can be challenged and the grounds on which the enforcement of a foreign award
can be resisted are identical. Thus, though the Scheme of the Act provides different kind of remedies to the persons
aggrieved by a domestic award and a person aggrieved by a foreign award, both the remedies are equally efficacious
and adequate, it cannot be said that the Act does not provide an effective remedy to a person who is aggrieved by a
foreign award. Hence, there is no need to construe the provisions of Section 2(2) of the Act in any other manner.”
There exist certain practical differences between an application to prevent enforcement of an award and an
application to set aside an award. While the former is a defensive process, the latter is not. Hence measures
applicable to a party setting aside an award (like the other party depositing costs as security) are not available
in case the party opposed enforcement. It was observed that the New York Convention took a pro-enforcement
stand and tried to ensure that a creditor could enforce his award subject to narrowly defined exceptions. If the
award creditor was asked to provide security for costs this intention would be jeopardized. 62
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19. Effect of a decision in a Section 48 application on a Section 34 application
Following the decision in Venture Global63 , a foreign award can be set aside under
Section 34 unless there is an implied or express exclusion of Part I of the 1996 Act. Sections 34 and 48 lay
down the same grounds for non-enforcement or setting aside of an award. Thus “the disposal under one
section will conclude the issue under the other”.64
However, when valid grounds had been raised to challenge the enforceability of the award including a denial of
due process and the district court had summarily disposed off these issues, the Madras High Court ordered that
the lower Court reconsider the matter and hear the Section 34 application, Section 48 application and the
execution petitions that had been filed together.65
20. Effect of failure of party to challenge an award on the right of that party to
oppose the enforcement of it
A party's failure to challenge an award before competent Courts does not prevent it from challenging the
enforcement of the award. Thus merely because a party had not challenged an arbitral award in Denmark,
which was the seat of the arbitration, and such an action was then barred by limitation, it did not mean that that
party could not oppose the enforcement of the award in England.66
21. Notice of application for enforcement
Where a party applies seeking for enforcement of an award a notice has to go to the other party atleast to the
extent of intimating him that such an application has been filed in the court seeking enforcement of the award.
On service of notice, the court should proceed to hear the parties in order to determine its satisfaction on
enforceability. Execution petition cannot be filed straightaway construing as if the award has already become a
decree.67
Registration of application as an extraordinary case
Registration of an application for enforcement as an extraordinary case, permitting its transfer and granting an
interim relief were held to be permissble.68
Further Suggested Reading (Opposition To Enforcement Of Foreign Awards)
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1. Raghav Sharma, “Sanctity of Foreign Awards: Recent Developments in India”, 75 Arbitration 148
(2009).
2. J Paulsson, “Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment”, (LSA) 9 ICC CT
Bull No 1, 14 (1998).
3. E Gaillard, “The Enforcement of Awards Set Aside in the Country of Origin” 14 ICSID Review 16
(1999).
4. Summet Kachwaha, “Enforcement of Arbitration Awards In India”, 4(1) Asian Int Arb J 64 (2008).
5. H.C. Johari, “Difficulties in Enforcement of Foreign Awards under Indian Law and in Indian Court”,
1999 Arb LR 8 .
6. Fali S. Nariman, “Application of the New York Convention in India”, 25 (6) J Intl Arbn 893 (2008).
7. P. Ramaswamy, “Enforcement of Annulled Awards - An Indian Perspective”, 19 (5) J Intl Arbn 461
(2002).
8. Reichert and Murphy, “Enforceability of Foreign Arbitral Decisions”, 67(4) Arbitration 369 (2001).
9. Broches, “Recourse Against the Award: Enforcement of the Award”, UNCITRAL's Project for a Model
Law on International Commercial Arbitration, ICCA Congress Series No. 2 (1984) p. 208.
10. Natheline Meyer-Fabre, “Enforcement of Arbitral Awards Against Sovereign States, A New Milestone;
Signing ICC Arbitration Clause Entails Waiver of Immunity from Execution held French Court of
Cassation in Creighton v. Qatar, July 6, 2000”, Mealey's International Arbitration Report, Vol. 15, no. 9,
September 2000, pp. 48-52.
11. K.B. Dabke, “Law Regarding Foreign Arbitration Award under the
Arbitration and Conciliation Act, 1996 ”, Chartered Secretary, 1999, vol. 29,
p. 94.
12. H.C. Johari, “Enforcement of Arbitral Awards under

Arbitration Act, 1996 ”,
1999 Arb LR 8 .
13. Sanjay P. Gogia, “Need for a New International Court for Enforcement of International Commercial
Arbitral Award”, Indian Journal of International Law 1996, vol. 35, pp. 76-84.
14. H.C.Johari, “Enforcement of Arbitration agreement under
Arbitration and Conciliation Act, 1996 ”, in A.K. Bansal & O.P. Chadha,
“Cases & Materials on Arbitration &
Conciliation Act 1996 ”, 1st ed.1999, p. 804
Both parties can approach court
Both the parties can approach the concerned forum with their respective prayers. The award holder can apply
for execution. The other party can apply for setting aside.69
Interim Relief
The court is required, before taking up execution, to record its satisfaction as to the enforceability of the award.
However, during the pendency of the application, the court can pass an interim order to protect the interests of
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persons who apply for enforcement and execution of the award.70
1. Commentary to article 35, paras 1-3.
2. Commentary to article 34, paras. 10-11.
4. Brace Transport Corpn. of Monrovia, Bermuda v. Orient Middle East Lines Ltd., Saudi
Arabia,
(1994) 1 Arb LR 123 :
AIR 1994 SC 1715 : 1995 Supp (2) SCC 280. The 1996 Act refers to ‘enforcement’
only.
5.
(2001) 2 Arb LR 1 :
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]:
(2001) 2 RAJ 1 (SC) :
(2001) 6 SCC 356 [
LNIND 2001 SC 1180 ].
(2008) 1 Arb LR 344 :
AIR 2007 Mad 251 [
LNIND 2007 MAD 3772 ]:
(2007) 3 MLJ 1062 [
LNIND 2007 MAD 3772 ]; See also Austbulk Shipping SDNBHD v.
PEC Ltd.,
(2005) 1 RAJ 597 , 603 (Del).
7. Clarence Frere, Louise Frere, Joseph Mooibroek, and Marla Mooibroek v. Orthofix Inc.,
Orthofix International, N.V., Arthur Schwalm, Robert Gaines Cooper, James Gero, and John And Jane Does One (1)
Through Four, 2002 U.S. Dist. Lexis 12738.
8. Paul Wurth v. V/O Tyazhpromexport (Russ. Fed.), (1998) 23 Yearbook Commercial

Arbitration (Russ. Fed. No.6), P. 738.
9. M.A. Industries Inc. v. Maritime Battery Ltd., (1991), 118 N.B.R. (2d) 127 (Q.B.), aff'd
reflex (1991), 123 N.B.R. (2d) 305 (C.A.). See also : Schiff Food Products Inc. v. Naber Seed & Grain Co. Ltd.,[1996]
S.J. No. 565 (Q.B.), and also Kanto Yakin v. Can eng Manufacturing Ltd., (1992), 7 OR (3d) 779 (Gen. Div.), aff'd
(1992), 7 O.R. (3d) 779 (C.A.), Dunhill Personnel System, Inc. v. Dunhill Temps Edmonton Ltd., [1993] A.J. No. 716
(Q.B.), Food Services of America Inc. (c.o.b. Amerifresh) v. Pan Pacific,[1997] B.C.J. No. 1921 (S.C.), Corporation
Transnacional de Inversiones STET International, supra, and D.L.T. Holdings Inc. v. Grow Biz
International, Inc., [2001] P.E.I.J. NO. 29 (SC).
10. See Chromalloy Aeroservices Inc. (U.S.) v. Arab Republic of Egypt,

(1997) 22 Yearbook Commercial Arbitration (US No. 230), P. 1001, Polytek Engg. Co. Ltd. (Hong Kong) v. Hebei
Import & Export Corp. (PR China), (1998) 23 Yearbook Commercial Arbitration (Hong Kong No.12), P. 666 wherein the
Navneet Krishn
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role of court in exercising its discretion is discussed.; Steelex SA v. Dasil Corp, Yearbook of Commercial Arbitration,
Vol. XXXIII (2008), US No. 632, p. 1086; Bouvery International S.A v. Valex Exportadora de Café Ltd., Yearbook of
Commercial Arbitration, Vol. XXXIII (2008), Brazil No. 6, p. 387; Seung Woo Lee, as Co-Receiver for Medison Co. Ltd.
a Korean Corporation v. Imaging 3, Inc., f/k/a Imaging Services, Inc., Yearbook of Commercial Arbitration, Vol. XXXIII
(2008), p. 1180.
11. Yusuf Ahmed Alghanim & Sons W.L.L. (Kuwait) v. Toys “R” US Inc., (US), (1998) 23
Yearbook Commercial Arbitration (US No. 261), P. 1058.
12. Sovereign Participation International S.A. v. Chadmore Developments Ltd., Yearbook of

Commercial Arbitration, vol. XXIV (1999), Luxembourg No. 2, p. 714.
13. Liberty Re (Bermuda) Ltd. v. Transamerica Occidental Life Insurance Company, US

District Court (Southern district of New York), p. 1125.
14. Oh Young Industrial Co. Ltd. v. E & J Textile Group Inc., Yearbook of Commercial
15. Seller v. Buyer, Yearbook of Commercial Arbitration, Vol. XXIX (2004), Germany No. 66,
p. 742.
16. Curzon Maritime Ltd. v. PEC Ltd.,

2005 (2) Arb LR 288 (Bom); See also Encyclopaedia Universalis
S.A v. Encyclopaedia Britannica Inc., Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 520 p. 1136.
17. Rizalyn Bautista and others v. Star Cruises and others, Yearbook of Commercial
Arbitration, Vol. XXX (2005), US No. 513, p. 1070.
18. Bulgarian Foreign Trade Bank Ltd. v. A.L.Trade Finance Inc., Yearbook of Commercial
Arbitration, Vol. XXVI (2001), p. 291. See further Commentary under S. 9 under the heading “Implied duty of
Confidentiality in Abritration Proceedings.”
19. Europear Italia S.p.A. v. Alba Tours International I nc., Case 36 6, Canada, Ontario Court
of Justice, Yearbook of Commercial Arbitration, Vol. XXVI (2001), p. 312.
20. Yearbook of Commercial Arbitration, Vol. XXXI (2006), China PR No. 3, p. 624.
21. Yearbook of Commercial Arbitration, Vol. XXXII (2007), Austria No. 15, p. 254.
22. Tema-Frugoli Spaa (Italy) v. Hubei Space Quarry Industry Co. Ltd., Yearbook of
23. Consorcio Rive, S.A. De C.V. v. Briggs of Cancun, Inc., et al No. Civ.A. 99/ 2204. United
States District Court, E.D. Louisiana.
24.
(2006) 3 Arb LR 510 (Bom) :
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(2006) 5 Bom CR 155 [

LNIND 2006 BOM 536 ].
25. Overseas Cosmos Inc. v. N.R. Vessel Corpn., (1998) 23 Yearbook Commercial
Arbitration (U.S. No. 267) P. 1096.
26. In French practice, this term is subscribed by judicial authority upon a transcript of a judgment from a
foreign country, or from another part of France, and authorizes the execution of the judgment within the jurisdiction
where it is so indorsed. Black'S Law Dictionary, 6th Ed., P. 572.
27. Ministry of Public Works (Tunisia) v. Societe bec Freres (France), (1997) 22 Yearbook
Commercial Arbitration (France No. 25), P. 682 (CA-France).
28. Western Shipbreaking Corpn. v. Clare Haven Ltd. (UK),

(1998) 1 RAJ 367 , 380 : (1997) 3 Guj LR 1985 : 1998 (Supp) Arb LR 53 (Guj).
29. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), US Supreme Court, p. 258.
30. Rosseel N.V. v. Oriental Commercial and Shipping Co. (U.K.), (1991) 2 Lloyd's Rep 625 :
(1992) CLY 45.
31. Renusagar Power Co. Ltd. v. General Electric Co. Ltd.,

(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 881 : 1994 AIR SCW 252 : 1994 Supp 1 SCC 644, 664; Savoc,
S.p.A v. Sahece, S.A, Yearbook of Commercial Arbitration, Vol. XXXII (2007), Spain No 56, p. 571.
32. Baxter International, Incorporated, v. Abbott Laboratories, 315 F.3d 829; 2003 U.S. App.
LEXIS 590; 2003-1 Trade Cas. (CCH) P73,930.
(2008) 4 Arb LR 497 (Del).
(2008) 4 Arb LR 497 (Del).
35. Renusagar Power Co. Ltd. v. General Electric Co. Ltd.,

AIR 1994 SC 860 , 881 : 1994 AIR SCW 252 : 1994 Supp 1 SCC 664, p. 899.
36. Northwest Airlines Inc. v. Air Line Pilots Association, Int'l, 808 F.2d 76, (D.C. Cir.1987).
37. CTI Group Inc. v. Transclear SA (The Mary Nour), [2008] 1 Lloyd's Rep. 250 :
[2008] 1 All ER (Comm) 203 .
38. Toepfer International Asia Pvt. Ltd. v. Priyanka Overseas Pvt. Ltd.,
(2007) 4 Arb LR 499 (Del).
Navneet Krishn
Page 92 of 116
39. InterDigital Communications Corporation v. Nokia Corporation, Yearbook of Commercial

Arbitration, Vol. XXXI (2006), US No. 565, p. 1375; Joeseph Walker and Company, LLC v. Oceanic Fats and Oil (S)
Pte, Yearbook of Commercial Arbitration, Vol. XXIX (2004), US No. 449; International Cotton Trading Limited v. Odil
Pereira Campos Filho, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Brazil No. 7, p. 390; Bouvery
International S.A v. Valex Exportadora de Café Ltd., Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Brazil No.
6, p. 387; Licensor v. Licensee, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany No. 112, p. 524.
40. Dana Feed A/S v. OOO Arctic Salmon, Yearbook of Commercial Arbitration, Vol. XXXIII
(2008), p. 658.
41. K Trading Company (Syria) v. Bayerischen Motoren Werke AG (Germany), Yearbook of

Commercial Arbitration, Vol. XXX (2005), Germany No. 82, p. 568.
42. American Pacific Corporation (USA) v. Sydsvensk Produkutveekling AB, Yearbook of

Commercial Arbitration, Vol. XXVII (2002), Sweden No. 5, p. 551.
43. SNF SAS (France) v. Cytec Industries BV, Yearbook of Commercial Arbitration, Vol.
XXXII (2007), France No. 38, p. 282.
44. Manufacturer (Slovenia) v. Exclusive distributor (Germany), Yearbook of Commercial

Arbitration, Vol. XXIX (2004), Germany No. 58, p. 687.
46. Virgillo de Agostini v. Milloil, Yearbook of Commercial Arbitration, vol. XXV (2000), Italy
No. 153, p. 739.
47. Sections 5, 6 and 7. Enforcement of an award was not allowed because a copy of the claim was not
served upon the defendant either by the plaintiff or by the arbitrator, Ludwing Wunsche & Co. v. Raunaq International
Ltd.,
(1989) 2 Arb LR 122 Del.
48. Section 46.
49. Union Nationale des Co-operatives Agricoles de Cereales v. Robert Catterall & Co..
(1959) 2 QB 44 :
(1959) 1 All ER 721 :
(1959) 2 WLR 532 the award was held to be enforceable in the same way as an
English award.
50. Ludwig Wunsche & Co. v. Raunaq International Ltd.,

AIR 1983 Del 247 [
LNIND 1982 DEL 102 ].

AIR 1983 Del 247 [
LNIND 1982 DEL 102 ]. Section 48(3).
Navneet Krishn
Page 93 of 116

AIR 1983 Del 247 [
LNIND 1982 DEL 102 ]. Section 48(3).
53. Koch Navigation Inc. v. Hindustan Petroleum Corpn. Ltd.,

AIR 1989 SC 2198 [
LNIND 1989 SC 834 ]:
(1989) 4 SCC 259 [
LNIND 1989 SC 834 ].
54.
(1999) 3 Arb LR 532 :
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 RAJ 355 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ].
55.
(2001) 2 Arb LR 1 :
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]:
(2001) 2 RAJ 1 :
(2006) 6 SCC 356 :
2001 CLC 746 .
56. Videocon Power Limited, v. Tamil Nadu Electricity Board,

(2005) 3 Arb LR 399 :
(2004) 5 CTC 668 [
LNIND 2004 MAD 1529 ] (Mad).

(2005) 3 Arb LR 58 :
(2005) 4 Bom CR 225 [
LNIND 2005 BOM 216 ].
58. Marina World Shipping Corporation Ltd. v. Jindal Exports (P) Limited,
(2005) 4 RAJ 510 :
(2004) 2 Comp LJ 50 (Del) :
[2004] 54 SCL 312 (Del). See also Oil and Natural Gas
Commission v. Western Company of North America,
AIR 1987 SC 674 [
LNIND 1987 SC 55 ]:
(1987) 1 Arb LR 60 (SC) :
(1987) 1 SCC 496 [
LNIND 1987 SC 55 ] :
[1987] 1 SCR 1024 , per contra Dalhousic Jute Co. Ltd. v.
Mulchand Laxmi Chand,
[1983] 53 Comp Cas 607 (Cal).
59. Vinayak Oil and Fats Private Ltd. v. Andre (Cayman Islands) Trading Co. Ltd.,
(2005) 2 Arb LR 551 :
(2005) 2 CHN 29 : (2004) 3 Cal LT 380.
Navneet Krishn
Page 94 of 116
60. Vinayak Oil and Fats Private Ltd. v. Andre (Cayman Islands) Trading Co. Ltd.,
(2005) 2 Arb LR 551 :
(2005) 2 CHN 29 : (2004) 3 Cal LT 380.
61. Videocon Power Limited v. Tamil Nadu Electricity Board,

(2005) 3 Arb LR 399 (Mad) :
(2004) 5 CTC 668 [
LNIND 2004 MAD 1529 ].
62. Noy Vallesina Engineering Spa v. Jindal Drugs Limited,

(2006) 3 Arb LR 510 :
(2006) 5 Bom CR 155 [
LNIND 2006 BOM 536 ].
63. Noy Vallesina Engineering Spa v. Jindal Drugs Limited, (2006) 3 Arb LR 510 :
(2006) 5 Bom CR 155 [
LNIND 2006 BOM 536 ].
64. Fuerst Day Lawson Ltd. v. Jindal Export,

AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ].
65. Austbulk Shipping SDN BHD v. P.E.C. Limited,

(2005) 2 Arb LR 6 (Del).
66. Brace Transport Corporation of Monrovia, Bermuda v. Orient Middle East Lines Limited,
Saudi Arabia,
AIR 1994 SC 1715 : (1993) 4 SCALE 207 : 1995 Supp (2) SCC 280. See also
Marina World Shipping Corporation Ltd. v. Jindal Exports (P) Limited,
(2005) 4 RAJ 510 :
(2004) 2 Comp LJ 50 (Del) :
[2004] 54 SCL 312 (Del).
67. Brace Transport Corporation of Monrovia, Bermuda v. Orient Middle East Lines Limited,
Saudi Arabia,
(1994) 1 Arb LR 123 :
AIR 1994 SC 1715 : (1993) 4 Scale 207 : 1995 Supp (2) SCC 280.
(2008) 1 Arb LR 344 :
AIR 2007 Mad 251 [
LNIND 2007 MAD 3772 ]:
(2007) 3 MLJ 1062 [
LNIND 2007 MAD 3772 ] (Mad).
69. Lanificio Mario Zegna Spa v. Ermenegildo Zegna Corporation, Yearbook of Commercial
Arbitration, Vol. XXXI (2006), Italy No. 167, p. 798.
70. The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran
v. Cubic Defense Systems, Inc., Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 502, p. 930.
Navneet Krishn
Page 95 of 116
71. Walder, Einfuhrung in das Internationale Zivilprozessrecht der Schweiz (Zurich 1989), referred in (1998)
23 Yearbook Commercial Arbitration [Switzerland No. 30] at p. 754.
72. 1981 (1) Lloyds’ LR 302.
73. Renusagar Power Co. Ltd. v. General Electric Company,

1984 Arb LR 240 :
AIR 1985 SC 1156 [
LNIND 1984 SC 384 ], 1186 :
(1984) 4 SCC 679 [
LNIND 1984 SC 384 ] . The court considered the decision in Becker Auto Radio
case, (1978) 585 Fed Rep 2nd series 39 where a US court had expressed the view that the question of arbitrability of a
dispute is for the court to decide. Followed in Raunaq International Ltd. v. Ludwig Wunsche,
(1986) 1 Arb LR 460 (Del), Suit to contest validity of the agreement barred but the
matter can be raised under S.
Section 32 of Arbitration Act . The court referred to Mithailal Gupta v. Inland Auto Finance,
AIR 1968 MP 33 [
LNIND 1967 MP 65 ]where it was held that an affidavit in support of an application is
no evidence. International Investors KCSC (Kuwait) v. Sanghi Polysters Ltd.,
(2003) 1 RAJ 359 :
(2003) 1 ALT 364 : 2002 Supp Arb LR 417 (AP), the respondent could not prove
the agreement to be unlawful. The court cited Dicey & Morris, The Conflict Of Laws, 221 (13th Edn) and Ascherberg v.
Caja Musical,
(1971) 1 WLR 173 , 1128 (CA), the principle enunciated herein is embodied in S.
48. Jindal Drugs Ltd. v. Noy Vallesina Engg. Spa,
(2002) 3 RAJ 46 :
(2002) 2 Bom LR 888 (Bom), parties to an international commercial contract have
freedom to select the law which is to govern their contract.
74. Per Devlin J. in Christopher Brown Ltd. v. Genossenschaft Oesterreichischer

Waldbesitzer Holzwirtschaftsbetriebe Registrierte Genossenschaft Mit Bescbranker Haftung,
(1954) 1 QB 8 , at p. 10.
75. Alam Redfern, International Commercial Arbitration, 15.
76. Court of Appeal of Paris, Decision of July 12, 1984, in Arab Republic of Egypt v. Southern Pacific
Properties Limited and Southern Pacific Properties (Middle East) Limited. For facts see S.P.P. (Middle East) Limited
and Southern Pacific Properties Limited v. The Arab Republic of Egypt and The Egyptian General Company for
Tourism and Hotels; the Award was published in full in ILM, No. 4 (July 1983), P. 752.
77. Dallah Real Estate and Tourism Holding Co. v. Ministry of Religious Affairs, Government
of Pakistan,
[2008] All ER (D) 32 (Aug).
78. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), US No. 624, p. 985.
79. Seller v. Buyer, Yearbook of Commercial Arbitration, Vol. XXXII (2007), Germany No. 96,
p. 303.
80. Shaanxi Provincial Medical Health Products I/E Corporation v. Olpesa, S.A, Yearbook of
Commercial Arbitration, Vol. XXX (2005), Spain No. 40, p. 617, Kil Management A/S (Denmark) v. J.Garcia Carrion,
SA, Yearbook of Commercial Arbitration, Vol. XXVI (2001), Spain No. 49, p. 518.
Navneet Krishn
Page 96 of 116
81. Claimant v. Defendant, Yearbook of Commercial Arbitration, Vol. XXXI (2006), Germany
No. 88, p. 673.
82. L’ Aiglon SA v. Textil Uniao SA, Yearbook of Commercial Arbitration, Vol. XXX (2005),
Brazil No. 1, p. 437; See also Wizhou Port Foreign Trade Development Corp. v. New Chemic Ltd.,
Yearbook of Commercial Arbitration, Vol. XXX (2005), High Court of Hong Kong, p. 163.
83. L’ Aiglon SA v. Textil Uniao SA, Yearbook of Commercial Arbitration, Vol. XXX (2005),
Brazil No. 1, p. 437.
84. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Germany No. 90, p. 685.
85. It was also argued that a) the real intention of the fee was to bribe officials and hence it violated public
policy; b) a witness was not heard and hence due process not followed. These arguments were dismissed due to lack
of proof.
86. Oltchim, S.A v. Velco Chemicals, Inc., Yearbook of Commercial Arbitration, Vol. XXXI
(2006), US No. 528, p. 992.
87. Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 553, p. 1285.
88. Shipowner v. Time Charterer, Yearbook of Commercial Arbitration, vol. XXV (2000),
Germany No.50., p. 714.
89. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany No. 114, p. 541.
90. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Brazil No.4, p. 371.
91. Ark Shipping Co. Ltd. v. GRT Shipmanagement Pvt. Ltd.,

2008 (1) Arb LR 317 :
(2007) 6 Bom CR 311 [
LNIND 2007 BOM 962 ].
92. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Hong Kong No. 19, p. 729.
93. The State of Iraq v. GJV, Oberlandesgericht, [Court of Appeal], Frankfurt, Yearbook of
Commercial Arbitration, vol. XXV (2000), p. 461.
94. Joeseph Walker and Company, LLC v. Oceanic Fats and Oil(S) Pte, Yearbook of
Commercial Arbitration, Vol. XXIX (2004), US No. 449, p. 464.
95. 364 F.3d 260 (5th Cir. 2004).
96. Barconoya, S.A v. Lavinia Corporation, S.A., Yearbook of Commercial Arbitration, Vol.
XXX (2005), Spain No. 39, p. 610.
Navneet Krishn
Page 97 of 116
1. Four Seasons Hotels and Resorts v. Consorcio Barr, SA, Yearbook of Commercial
Arbitration, Vol. XXXIII (2008), US No. 646, p. 1183.
2. China Minmetals Materials Import And Export Co., Ltd. v. Chi Mei Corporation, No. 02–
2897, 02–3542., United States Court of Appeals, Third Circuit. See also Czarina, L.L.C., as assignee
of Halvanon Insurance Co. Ltd., v. W.F. Poe Syndicate, United States Court of Appeals, Eleventh Circuit, No. 03–
10518.
3. Marina World Shipping Corporation Ltd. v. Jindal Exports (P) Limited,

(2005) 4 RAJ 510 :
(2004) 2 Comp LJ 50 (Del) :
[2004] 54 SCL 312 (Del).
p. 771.
5. Thyssen Canada Ltd. v. Mariana Maritime SA, [2005] 1 Lloyd's Rep. 640.
6. IMP Group (Cyprus) Ltd. (Cyprus) v. Aeroimp (Russ. Fed.), (1998) 23 Yearbook
Commercial Arbitration (Russian Fedn. No. 8), P. 745.
8. SA SDMS International v. Cameroon Telecommunications – Camtel, Yearbook of

Commercial Arbitration, Vol. XXXIII (2008), France No. 45, p. 484; Company A v. Company S and Company X,
Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany No. 113, p. 534; Budejovicky Budvar v. Czech Beer
Importers, Inc., Yearbook of Commercial Arbitration, Vol. XXXII (2007), US No. 588, p. 780; Gerling Global
Reinsurance Corporation v. Sompo Japan Insurance Company, Yearbook of Commercial Arbitration, Vol. XXXI (2006),
US No. 527, p. 983; R.M.F Global Inc. v. Elio D cattan, US District Court, US No. 1439.
9. Overseas Cosmos Inc. v. NR Vessel Corp., (1998) 23 Yearbook Commercial Arbitration

(U.S. No. 267), p. 1096.
10. R. Corporation Transnacional de Inversiones, S.A. de C.V. et al. v. STET International,

S.p.A. et al., Case 391, Superior Court of Justice, Yearbook of Commercial Arbitration, Vol. XXVI (2001), p. 322.
p. 742.
12. National Ability S.A. v. Tinna Oil and Chemicals Ltd. and
Ors.,
(2008) 3 Arb LR 37 (Del) :
(2008) 105 DRJ 446 [
LNIND 2008 DEL 1237 ]; Glencore Ltd. v. Agrogen S.A. de C.V., Yearbook of
Commercial Arbitration, Vol. XXX (2005), US No. 406, p. 967.
13. Case 375, Germany : Bayerisches Oberstes Lanesgericht, Yearbook of Commercial Arbitration, Vol. XXVI
(2001), p. 330.
Navneet Krishn
Page 98 of 116
14. National Ability S.A. v. Tinna Oil and Chemicals Ltd. and Ors.,
2008 (3) Arb LR 37 (Del).
15. Rice Trading (Guyana) Ltd. v. Nidera Handelscompagnie B.V., (1998) 23 Yearbook
Commercial Arbitration (Netherlands No. 24), p. 731.
16. Ajay Kanoria, eSOLS Worldwide Limited and Indekka Software Pvt Limited v. Tony
Francis Guinness, Yearbook of Commercial Arbitration, Vol. XXXI (2006), UK No. 74, p. 943.
17. OOO Inko Food v. OOO Myasokombinat Gvardeiskii plius, Yearbook of Commercial
Arbitration, Vol. XXXIII (2008), p. 695.
18. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), Case 457, Germany, 14 May 1999, p. 265.
19. R. Corporation Transnacional de Inversiones, S.A. de C.V. et al. v. STET International,

S.p.A. et al., Case 391, Superior Court of Justice, Yearbook of Commercial Arbitration, Vol. XXVI (2001), p. 322.
(2008) 4 Arb LR 497 :
(2008) 155 DLT 457 (Del).
21. CONSORCIO RIVE, S.A. DE C.V. v. BRIGGS OF CANCUN, INC., et al No. Civ.A. 99
2204. United States District Court, E.D. Louisiana.
22. Holdings Inc. v. Grow Biz International, Inc., Prince Edward Island Supreme Court – Trial
division (Canada), Yearbook of Commercial Arbitration, Vol. XXX (2005), p. 149. See also Grow Biz
International Inc. v. D.L.T. Holdings Inc. and Debbie Tnaton, Yearbook of Commercial Arbitration, Vol. XXX (2005),
Canada No. 16, p. 450.
23. Case 375, Germany : Bayerisches Oberstes Lanesgericht, Yearbook of Commercial Arbitration, Vol. XXVI
(2001), p. 330.
24. Court of Appeal for Ontario, p. 99.
25. C v. Dr Vladimir Z, Yearbook of Commercial Arbitration, Vol. XXXI (2006), Austria No. 14,
p. 583.
26. Justice Tarun Chaterjee in Centrotrade Minerals and Metal Inc. v. Hindustan Copper
Limited,
(2006) 3 Arb LR 201 :
(2006) 11 SCC 245 [
LNIND 2006 SC 375 ] :
(2006) 5 JT 507 .
27. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Austria No. 18, p. 354.
Navneet Krishn
Page 99 of 116
28. Seller v. Buyer, Yearbook of Commercial Arbitration, Vol. XXXII (2007), Germany No. 96,
p. 303.
29. Rosso e Nero Gaststattenbetriebsgmbh v. Almendrera Industrial Catalan, SA, Yearbook

of Commercial Arbitration, Vol. XXXII (2007), Spain No. 59, p. 597.
31. Kanoria v. Guinness,

[2006] 2 All ER (Comm) 413 .
32. Kil Management A/S (Denmark) v. J.Garcia Carrion, SA, Yearbook of Commercial
33. Renusagar Power Co. Ltd. v. General Electric Co.,

(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 882 : 1994 Supp (1) SCC 644.
35. Bernuth Lines Ltd. v. High Seas Shipping Ltd. (The “Eastern Navigator”),
[2005] EWHC 3020 (COMM).
36. Bulk Trading Sa v. Moeller,2006 WL 4017726 (CA) (Civ Div).
37. Licensor v. Licensee, Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Germany
No. 112, p. 524.
39. Section 7(1)(a)(ii).
40. Metal Distributors (UK) Ltd. v. ZCCM Investment Holdings Plc, [2005] 2 Lloyd's Rep. 37;
See also Aectra Refining & Marketing Inc. v. Exmar NV (The New Vanguard and The Pacifica), [1994]
1 W.L.R. 1634 CA (Civ Div); Ronly Holdings Ltd. v. JSC Zestafoni G Nikoladze Ferroalloy Plant,
[2004] EWHC 1354 .
41. Film Finance Inc. v. Royal Bank of Scotland, [2007] 1 Lloyd's Rep. 382.
42. Bank A v. Bank B, Yearbook of Commercial Arbitration, vol. XXV (2000), Germany No.
49, p. 710.
43. Kianta Osakeyheim v. Britain and Overseas Trading Co. Ltd., (1954) 1
Lloyd's Rep 247.
Navneet Krishn
Page 100 of 116
44. Danisco A/S and JXRN Borsch SXE v. Novo Nordisk A/S and Novozymes A/S,2003 U.S.
Dist. LEXIS 1842.
45. J.J. Ryan & Son Inc. v. Rhone Poulenc, 863 F. 2d 315 (4th Cir. 1988).
46. Kaverit Steel & Crane Ltd. v. Kone Corpqoration, 87 DLR 129.
47. Renusagar v. General Electric,

(1984) 4 SCC 679 [
LNIND 1984 SC 384 ] ; Olympus Superstructures, Pvt. Ltd. v. Meena Vijay Khetan,
(1999) 2 Arb LR 695 :
AIR 1999 SC 2102 [
LNIND 1999 SC 525 ]:
(1999) 5 SCC 651 [
LNIND 1999 SC 525 ].
48. Tracer Research Corp. v. Nat'I Envtl. Servs. Co., 42 E3d 1292. See also
Ace Capital Re Overseas Ltd. v. Central United Life Insurance Company, 307 F.3d 24; 2002 U.S. App. LEXIS 21715.
49. Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 529, 997.
50. In re Kinoshita, 287 F.2d 951 (2d Cir. 1961).
51. 745 F.2d 190.
52. 307 F.3d 24 (2d Cir. 2002).
53. Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 529, 997.
55. Pan Australia Shipping Pty v. The Ship COMANDATE (NO), Yearbook of Commercial
Arbitration, Vol. XXXII (2007), Australia No. 30, p. 24.
57. See also Howard Electrical & Mechanical Co. v. Frank Briscoe Co., 754
F2d 857; Commerce Parks of Eu Freeport v. Marian Construction Co., 729 F2d 334, 338; Pacific Carriers Ltd. v. BNP
Paribas, (2004) 208 ALR; Francis Travel Marketing Pty Ltd” v. Virgin Atlantic Airways Ltd.; IBM Australia Ltd. v.
National Distribution Services Ltd., (1991) 22 NSWLR 466; Samick Lines Co. Ltd. v. Owners of the Àntonis P Lemos’
(The Àntonis P Lemos'),
[1985] AC 711 .
Navneet Krishn
Page 101 of 116
59.
[1985] AC 711 .
60.
[2007] UKHL 40 . See also Fiona Trust & Holding Corp v. Privalov,
[2007] EWCA Civ 20 . (allegations of bribery against one party arose out of the
contract and would hence be decided by the arbitrator).
61.
[2002] EWCA Civ 135 . See also Heyman v. Darwins Ltd.,
[1942] AC 356 ; Government of Gibraltar v. Kenney,
[1956] 2 QB 410 ; Empresa Exportadora De Azucar v. Industria Azucarera
Nacional SA (The Playa Larga and Marble Islands), [1983] 2 Lloyd's Rep 171; Ashville Investments Ltd. v. Elmer
Contractors Ltd.,
(1987) 37 BLR 55 ; Ethiopian Oilseeds & Pulses Export Corporation v. Rio del Mar
Foods Inc., [1990] 1 Lloyd's Rep 86; Dowell Australia Ltd. v. Triden Contractors Pty Ltd., [1982] 1 NSWLR 508;
Kathmer Investments (Pty) Ltd. v. Woolworths (Pty) Ltd., [1970] 2 SA 498; Roose Industries Ltd. v. Ready Mixed
Concrete Ltd., [1974] 2 NZLR 246; Drennan v. Pickett, [1983] 1 Qd R 445; Harbour Assurance Co. (UK) Ltd. v. Kansa
General Insurance Co. Ltd., [1992] 1 Lloyd's Rep 81; IBM Australia Ltd. v. National Distribution Services Ltd., (1991) 22
NSWLR 466, especially pages 475 to 477; Francis Travel Marketing Pty Ltd. v. Virgin Atlantic Airways Ltd., (1996) 39
NSWLR 160, especially pages 165, 166 and 168; and Ferris v. Plaister, (1994) 34 NSWLR 474 per contra Crane v.
Hegeman-Harris Co. Inc.,
[1939] 4 All ER 68 and Printing Machinery Co. Ltd. v. Linotype & Machinery Ltd.,
[1912] 1 Ch 566
62.
[1989] QB 488 .
63. [1993] 1 Lloyd's Rep 455.
64. RUSSELL ON ARBITRATION, 23rd Ed.(2007), p. 74-75, para 2-078.
65. In Heyman v. Darwins Ltd.,

[1942] AC 356 both Lord Wright (at 385) and Lord Porter (at 399) indicated that
“arising out of” had a wider meaning than “arising under” see also Government of Gibraltar v. Kenney,
[1956] 2 QB 410 at 421; Chimimport v. D’ Alesio, [1994] 1 Lloyd's Rep 366. Cf.
Union of India v. EB aaby's Rederi A/S (The “Evje”),
[1975] AC 797 at 814 and 817; Ulysses Compania Naveira SA v. Huntingdon
Petroleum Services Ltd. (The “Ermoupolis), [1990] 1 Lloyd's Rep 160.
66. See also Mabey and Johnson Ltd. v. Danos and others,
[2007] EWHC 1094 .
67. Heyman v. Darwins,

[1942] AC 356 ; Government of Gibraltar v. Kenney,
[1956] 2 QB 410 ; Kruse v. Questier & Co. Ltd.,
[1953] 1 QB 669 ; Mantovani v. Carapelli Spa, [1978] 2 Lloyd's Rep 63;
Empresa Exportadora de Azucar v. Industria Azucarera Nacional SA (The “Playa Larga” and The “Marble Islands”),
[1983] 2 Lloyd's Rep 171; Ethiopian Oilseeds & Pulses Export Corp v. Rio Del Mar Foods Inc., [1990] 1 Lloyd's Rep.
86. For a recent example see Capital Trust Investments Ltd. v. Radio Design TJ AB,
[2002] 2 All ER 159 .
Navneet Krishn
Page 102 of 116
68. D.G. Jewelry Inc. v. Cyberdiam Canada Ltd., Yearbook of Commercial Arbitration, Vol.
XXX (2005), Ontario Superior Court of Justice, p. 152. Claim that there was no arbitration agreement also rejected on
the grounds this is for the arbitrator to decide.
69. Metal Distributors (UK) Ltd. v. ZCCM Investment Holdings Plc, [2005] 2 Lloyd's Rep. 37.
70. Et Plus SA v. Welter, [2006] 1 Lloyd's Rep. 251.
71. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Italy No. 174, p. 596.
73. Samick Lines Co. Ltd. v. Owners of the Antonis P Lemos, [1985] 1 Lloyd's Rep 283.
74. See also Commentary under Section 7 under the heading “Construction of particular agreements.
75. Czech Republic v. European Media Ventures SA,

[2008] 1 All ER (Comm) 531 .
76.
[2008] EWHC 1843 (Comm).
77. Yearbook of Commercial Arbitration, Vol. XXVII (2002), US No. 401, p. 948.
78. Yearbook of Commercial Arbitration, Vol. XXX (2005),ICC Case No. 10596, p. 66. See also
Trust C and others v. Latvian Group, ICC Case No. 10973, p. 77; Energy Company (Belgium) v. Steel Company A
(India) and others, ICC Case No. 11443, p. 85.
79. Attorney General of Belize v. Carlisle Holdings Limited, Yearbook of Commercial

Arbitration, Vol. XXXIII (2008), Belize No. 1, p. 360
80. Sea Trade Maritime Corp v. Hellenic Mutual War Risks Association (Bermuda) Ltd. (The
Athena), [2006] 2 Lloyd's Rep. 147.
Rep. 389.
83. Transocean Shipping Agency P. Ltd. v. Black Sea Shipping,

(1998) 1 Arb LR 228 :
AIR 1998 SC 707 [
LNIND 1998 SC 54 ](1998) 1 RAJ 231 :
(1998) 2 SCC 241 .
Navneet Krishn
Page 103 of 116
84. Inter-Arab Investment Guarantee Corp. (Kuwait) v. Banque Arab et Internationale d’

Investissements (France), (1997) 22 Yearbook Commercial Arbitration (Belgium No. 10), p. 643.
85. China National Metal Products Import/Export Company, Petitioner-Appellee v. Apex

Digital, Inc., Respondent-Appellant, 379 F.3d 796 : 2004 U.S. App. LEXIS 16741.
86. US No. 500, US District Court, p. 915.
87. 500 F.3d 157.
88. Court of Appeal, Yearbook of Commercial Arbitration, vol. XXIV (1999), p. 281.
89. Yearbook of Commercial Arbitration, Vol. XXXI (2006), p. 49, (AD HOC UNCITRAL AWARD).
90. Yearbook of Commercial Arbitration, Vol. XXXII (2007), Italy No. 170, p. 390.
91. Inter-Arab Investment Guarantee corporation (IAIGC) v. Banque Arabe et Internationale

d'Investissements (BAII), Yearbook of Commercial Arbitration, vol. XXIV (1999), ...No... p. 603.
92. Econerg v. National Electricity, Yearbook of Commercial Arbitration, vol. XXV (2000),
Bulgaria No. 1, p. 679.
93. White Knight ISA v. Nu-Swift, per Clarke J on 14-7-1995, cited in Russell On Arbitration,
21st Ed., p. 408.
1. Prof Albert Jan van den Berg and Eric Schwartz, “International Arbitration”, Journal of Arbitration, 1997, p.
125.
2. Supplier v. State Enterprise, Yearbook of Commercial Arbitration, Vol. XXXIII (2008),

3. Baker marine (Nig) v. Chevron (Nig), 191 F 3d 194 (1999).
4. View of Prof. Philippe Fouchard, as reported in O.P.Malhotra and Indu Malhotra, “The Law and Practice of
Arbitration and Conciliation, 2nd ed. 2006, p. 1412.
5. Philippines v. International Steel Services, Inc., Yearbook of Commercial Arbitration, Vol.

XXXIII (2008), p. 1125.
6. Omnium de Traitement et de Volorisation Ltd. v. Hilmarton Ltd., As reported in O.P.

Malhotra and Indu Malhotra, “The Law and Practice of Arbitration and Conciliation, 2nd ed. 2006, pp. 1409- 1410.
Navneet Krishn
Page 104 of 116
7. Republique Arabe d'Egypte v. Societe Chromalloy Aero Services,[1997] Rev. Arb 395.
8. Europear Italia S.p.A. v. Alba Tours International Inc., Case 366, Canada, Ontario Court
of Justice., Yearbook of Commercial Arbitration, Vol. XXVI (2001), p. 312 (It has been observed by the Canadian Court
that even when one of the grounds under the NYC for opposition for enforcement of a foreign award has been
established, the Court has the discretion to enforce the award.)
9. Yearbook of Commercial Arbitration, Vol. XXX (2005), Austria No. 13, p. 421.
10. Supplier v. State Enterprise, Yearbook of Commercial Arbitration, Vol. XXXIII (2008),
11. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), US No. 517, p. 1113 (2005 volume).
13. 939 F Supp 907 (1996).
14. Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No. 73, p. 509.
15. Societe Nationale d’ Operations Petrolieres de la Cote d'Ivoire – Holding v. Keen Lloyd
Resources Limited, Yearbook of Commercial Arbitration, Vol. XXIX (2004), Hong Kong No. 18, p. 776.
16. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Chile No. 1, p. 473.
18. Licensee v. Licensor, Yearbook of Commercial Arbitration, Vol. XXVII (2002),

International Chamber of Commerce Case No. 7893, p. 139.
19. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), British Virgin Islands No. 1, p. 408.
20. Yearbook of Commercial Arbitration, Vol. XXVII (2002), US No. 381, p. 759. See also
Shearson/ American Express Inc. v. Mcmahon, 482 U.S. 220.
21. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Belgium No. 13, p. 587.
22. Tamil Nadu Electricity Board v. St-CMS Electric Co. Private Ltd.,
[2007] 2 All ER (Comm) 701 .
23.
(1995) 5 Comp LJ 517 (Bom).
Navneet Krishn
Page 105 of 116
24.
(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 888 : 1994 Supp (1) SCC 644. See also
Parsons & Whittemore v. Rakta, 508 F. 2d 969; Paklito Investment Ltd. v. Klockner East Asia Ltd.,
(1993) HKLR 39 .
25.
AIR 1986 SC 1370 [
LNIND 1985 SC 362 ]:
(1986) 1 SCC 264 [
LNIND 1985 SC 362 ].
26.
AIR 1987 SC 670 [
LNIND 1987 SC 44 ]:
(1987) 1 SCC 542 [
LNIND 1987 SC 44 ].
27. At p. 891.

(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 885, 888 : 1994 Supp (1) SCC 644.

(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 885, 888, 894 : 1994 Supp (1) SCC 644.
30.
(1994) 2 Arb LR 405 :
(1993) HKLR 39 .
(2008) 4 Arb LR 497 :
(2008) 155 DLT 457 (Del).

(1994) 2 Arb LR 405 :
(1993) HKLR 39 .
33. Brostrom Tankers AB (Sweden) v. Factorias Vulcano SA (Spain), Yearbook of

Commercial Arbitration, Vol. XXX (2005), Ireland No. 1, p. 591, See also Seller v. Buyer, Yearbook of
Commercial Arbitration, Vol. XXIX (2004), Germany No. 59, p. 697; Exclusive Distributor v. Seller, Yearbook of
Commercial Arbitration, Vol. XXIX (2004), Germany No. 61, p. 715; Fotochrome, Inc. v. Copal Company, Limited (2nd
Cir. 1975) 517 F.2d 512.
34.
(2003) 2 Arb LR 5 :
AIR 2003 SC 2629 [
Navneet Krishn
Page 106 of 116
LNIND 2003 SC 444 ]:

(2003) 2 RAJ 1 :
(2003) 5 SCC 705 [
LNIND 2003 SC 444 ]
2007 (4) Arb LR 499 (Del).
2007 (4) Arb LR 499 (Del).
37. Buyer (Austria) v. Seller (Serbia and Montenegro), Yearbook of Commercial Arbitration,
Vol. XXX (2005), Austria No. 13, p. 421.
38. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Canada Federal Court, 13 January 2004, p. 183.
See also Navigation Sonamar Inc. v. Algoma Steamships Ltd., [1987] R.J.Q.1346.
39.
[1998] 3 WLR 811 .
40. Protech Projects Construction (Pty) Ltd. v. Al-Kharafi & Sons

Mohammed Abdulmohsin Al-Kharafi & Sons WLL v. Big Dig Construction (Proprietary) Ltd. (In Liquidation), [2005] 2
Lloyd's Rep. 779; See also Cuflet Chartering v. Carousel Shipping Co. Ltd.,
[2001] 1 All ER (Comm) 398 and Profilati Italia Srl v. Painewebber Inc.,
[2001] 1 All ER (Comm) 1065 .
41. Yearbook of Commercial Arbitration, Vol. XXXII (2007), Brazil No. 2, p. 271.
42. Yearbook of Commercial Arbitration, Vol. XXXII (2007), Germany No. 98, p. 315.
43. Force Shipping Ltd. v. Ashapura Minechem Ltd.,

(2003) 3 RAJ 418 (Bom) :
(2003) 3 Bom LR 948 :
(2003) 3 Arb LR 432
44.
(1994) 2 Arb LR 405 :
AIR 1994 SC 860 : (1994) Supp (1) SCC 644.
45.
(1994) 2 Arb LR 405 :
AIR 1994 SC 860 , 884 : (1994) Supp (1) SCC 644.
46. See Redfern And Hunter, Law And Practice of International Commercial Arbitration 2nd
Ed. p. 445.
47. See : Redfern And Hunter, Law And Practice Of International Commercial Arbitration 2nd
Ed. pp. 445-446.
Navneet Krishn
Page 107 of 116

AIR 1994 SC 860 , 887-88 : 1994 Supp (1) SCC 644. It may be noted that the
analogous provision now contained in clause (b) of Section 48(2) of the 1996 Act specifically uses the expression
“public policy of India”.
49. For related commentary see commentary under Section 48(3), under the heading “Issue of res judicata”.
50. Shanghai City Foundation Works Corp. v. Sun Link Ltd., Yearbook of Commercial
Arbitration, Vol. XXX (2005), High Court of Hong Kong, p. 163.
51. Yearbook of Commercial Arbitration, Vol. XXX (2005), Supreme Court of New South Wales, Australia No.
25, p. 409.
52. For more details see commentary under Section 48 infra under the heading “Opposition to enforcement on
same grounds as grounds for annulment”. For commentary on the effect of annulment proceedings in India on
opposition to enforcement within India, see commentary under Section 48infra under the heading “Effect of a decision
in a Section 48 application on a Section 34 application”.
p. 742; Montana Power Company v. Federal Power Commission, 445 F.2d 739 (D.C.Cir.1970); United Steelworkers v.
Enterprise Wheel & Car Corp., 363 U.S. 593.
54. Food Services of America, Inc. v. Pan Pacific Specialities Ltd., Yearbook of Commercial
Arbitration, Vol. XXIX (2004), Canada No. 10, p. 581; Buyer v. China, Yearbook of Commercial Arbitration, Vol. XXXIII
(2008), Germany No. 105, p. 495; Shipowner v. Contractor, Yearbook of Commercial Arbitration, Vol. XXXIII (2008),
Greece No. 18, p. 565.
55. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Canada No. 25, p. 464.
56. Bottiglieri di Navigazione Spa v. Cosco Qingdao Ocean Shipping Co. (The Bunga Saga
Lima), [2005] 2 Lloyd's Rep. 1.
57. Transocean Shipping Agency (P.) Ltd. v. Black Sea Shipping,

(1998) 1 Arb LR 228 :
AIR 1998 SC 707 [
LNIND 1998 SC 54 ]:
(1998) 1 RAJ 231 :
(1998) 2 SCC 281 [
LNIND 1998 SC 54 ]
58. G..S. Gyani and Company v. Oriental Electric and Engineering Co.,2006 (1) MPHT 354.
See also Queen v. Rand,
(1866) 1 QB 230 ; Queen v. Meyer,
(1875) 1 QBD 173 and Eckersley v. Mersey Docksand Harbour Board,
(1894) 2 QB 667 .
59. Norbrook Laboratories Ltd. v. Tank, [2006] 2 Lloyd's Rep. 485.
60. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Germany No. 60, p. 700; See also
Shipowner (Netherlands) v. Cattle and meat dealer (Germany), Yearbook of Commercial Arbitration, Vol. XXIX (2004),
Navneet Krishn
Page 108 of 116
Germany No. 60, p. 700. It was also held that giving the defendant a time limit of seven days as against the fourteen
days provided in the charterparty violated public policy. It was however held that the purpose of this was to expedite the
process and was permissible.
62. Robert Fayez Mouawad v. Henco Heneine Construction and Development Co. SARL,
Yearbook of Commercial Arbitration, Vol. XXXIII (2008), France No. 44, p. 480
63. T Gmbh v. NH Gmbh, Yearbook of Commercial Arbitration, Vol. XXXII (2007), Germany
No. 97, p. 309.
65. ASM Shipping Ltd. of India v. TTMI Ltd. of England, [2007] 2 Lloyd's Rep. 155.
66. See also Porter v. Magill,

[2001] UKHL 67 :
[2002] 2 AC 357 .
67. Per contra Groundshire v. VHE Construction,

[2001] BLR 395 QBD (TCC).
68. Lawal v. Northern Spirit Ltd.,

[2003] UKHL 35 .
69. A.I. Trade Finance Inc. (AIT) v. Bulgarian Foreign Trade Bank Ltd. (BULBANK),
Yearbook of Commercial Arbitration, Vol. XXIV (1999), Sweden, p. 321.

Greece No. 19, p. 570
71. Robert Fayez Mouawad v. Henco Heneine Construction and Development Co. SARL,
Yearbook of Commercial Arbitration, Vol. XXXIII (2008), France No. 44, p. 480.
72. See Hotzmann, “Lessons of the Stockholm Congress”, ICCA Congress Series No. 5
(Kluwer, 1991), p. 28.
73. Deiulemar Compagnia di Navigazione, S.p.A v. Transocean Coal Company, Inc.,

Yearbook of Commercial Arbitration, Vol. XXX (2005), US No. 507, p. 991.
75. Westacre Investments Inc. v. Jeegoimport-SDPR Holding Ltd.,

(1998) 3 WLR 770 : (1998) 2 Lloyd's LR 111 (QB).
Navneet Krishn
Page 109 of 116
76.
[2007] All ER (D) 122 (Jan).
77. Houston General Insurance Company v. Certain Underwriters at Lloyd's London And
Other Insurers Subscribing To Reinsurance Agreements, F96/2992/00 and F97/2992/00 2003 U.S. Dist. LEXIS 19516.
78. Houston General Insurance Company v. Certain Underwriters at Lloyd's London And
Other Insurers Subscribing To Reinsurance Agreements, F96/2992/00 and F97/2992/00 2003 U.S. Dist. LEXIS 19516.
79. Seller v. Buyer, Yearbook of Commercial Arbitration, Vol. XXVII (2002), Japan No. 8, P.
515.
80. Germany No. 71, p. 771.
81. The court distinguished Abouloff v. Oppenheimer & Co.,

(1882) 10 QBD 295 , (CA).
82. In Westacre Investments’ case (Supra), the court applied the decision in Henderson v. Henderson,(1843)
3 Hare 100; E.D. & F. Man (Sugar) Ltd. v. Yani Haryanto (No. 2) (1991) 1 Lloyd's Rep. 429 (CA) and Hurbour
Assurance Co. (U.K.) Ltd. v. Kansa General International Insurance Co. Ltd.,
(1993) QB 701 (CA) and distinguished Lemenda Trading Co.
Ltd. v. African Middle East Petroleum Co. Ltd.,
(1988) QB 448 . See also Saci v. Novokuznetsk Aluminium
Plant (No. 1), Current Law August Digest, 1997, p 9. The point of illegality was not allowed to be raised at the stage of
enforcement of the award because it has already been considered by the arbitrators.
83. Soleimany v. Soleimany,

(1998) 3 WLR 811 (CA). The court applied David Taylor & Son Ltd. v. Barnett
Trading Co.,
(1953) 1 WLR 562 (CA) and Harbour Assurance Co. (U.K.) Ltd. v. Kansa
General International Insurance Co. Ltd.,
(1993) QB 701 (CA).
84. Transport de Cargaison (Cargo Carriers) v. Industrial Bulk Carriers, Case Law on
UNCITRAL Texts (CLOOT) (Canada Case 185), (1998) 23 Yearbook Commercial Arbitration p. 228.
85.
(2006) 3 Arb LR 510 :
(2005) 5 Bom CR 155 [
LNIND 2005 BOM 632 ].
86. Noy Vallesina Engineering Spa A Corporation Organized and Existing Under the Laws of
Italy v. Jindal Drugs Limited, a Company Incorporated under the
Companies Act, 1956 , (2006) 3 Arb LR 510 :
(2006) 5 Bom CR 155 [
LNIND 2006 BOM 536 ].
87. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Netherlands No. 29, p. 808.
Navneet Krishn
Page 110 of 116
88. See also Eco-Swiss China Time v. Benetton International, Hoge Raad,
Supreme Court, Netherlands, Yearbook of Commercial Arbitration, vol. XXV (2000), p. 475. See also
Eco Swiss China Time v. Benetton International N.V., European Court of Justice, Yearbook of Commercial Arbitration,
vol. XXIV (1999), p. 629.
90. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Russia No. 21, p. 687.
91. Bandwidth Shipping Corp v. Intaari (A Firm) (The Magdalena Oldendorff), [2008] 1
Lloyd's Rep. 7 :
[2008] 1 All ER (Comm) 1015 ; Lesotho Highlands Development Authority v.
Impregilo Spa,
[2005] UKHL 43 :
[2006] 1 AC 221 (Court cannot interpret the terms of the contract and go into
whether the arbitrator has wrongfully awarded interest. When the arbitrator per se has the power to grant the interest,
interference by the Court on merits is not permissible) and ABB AG v. Hochtief Airport Gmbh,
[2006] EWHC 388 (Comm),
[2006] 1 All ER (Comm) 529 .
92. ABB AG v. Hochtief Airport Gmbh, [2006] 2 Lloyd's Rep. 1; Applied by Bandwidth
Shipping Corp v. Intaari (A Firm) (The Magdalena Oldendorff), [2008] 1 Lloyd's Rep. 7; Van der Giessen-de Noord
Shipbuilding Division BV v. Imtech Marine & Offshore BV,
[2008] EWHC 2904 (Comm); [2009] 1 Lloyd's Rep. 273 (QBD (Comm)).
93. Ominium De traitment E.T. DE v. Hilmarton Ltd.,

(1999) 2 All ER (Comm) 146 : (1999) 2 Lloyd's Rep 222. The Court applied on this
point the decision in Westacre Investments Inc. v. Jugoimport SDPR Holding Co. Ltd., (1999) 2 Lloyd's Rep 65 applied
and also considered Soleimany v. Soleimany,
(1998) 3 WLR 811 .
95. Savoc, S.p.A v. Sahece, S.A, Yearbook of Commercial Arbitration, Vol. XXXII (2007),
Spain No 56, p. 571.
96. Mir Kazem Kashani v. Tsann Kuen China Enterprise Co. Ltd., Yearbook of Commercial
Arbitration, Vol. XXX (2005), US No. 489, p. 805; See also August Aasma v. American Steamship
Owners Mutual Protection And Indemnity, 238 F. Supp. 2d 918; 2003 U.S. Dist. LEXIS 936; 2003 AMC 476.
98. Luzon Hydro Corporation v. Hon. Rommel O. Baybay, Yearbook of Commercial

Arbitration, Vol. XXXII (2007), Philippines No. 2, p. 456.
99. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Israel No. 1, p. 786.
1. Yearbook of Commercial Arbitration, Vol. XXX (2005), Court of Appeal for Ontario, p. 99.
Navneet Krishn
Page 111 of 116
2. Construction Company (UK) v. Painting Contractors, Yearbook of Commercial

Arbitration, Vol. XXXI (2006), Germany No. 95, p. 722.
3. Adamas Management & Services Inc. v. Aurado Energy Inc., Yearbook of Commercial
Arbitration, Vol. XXX (2005), Canada No. 18, p. 479.
4. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), Case 456, Germany, 4 November 1998, p. 264.
5. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), Norway No. 2, p. 821.
8. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Philippines No. 5, p. 632.
9. AO Slovenska Konsolidachna, A.S. v. KBSR Yakimanka, Yearbook of Commercial

Arbitration, Vol. XXXIII (2008), p. 654.
10. Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Russia No. 21, p. 687.
11. (1997) 22. Yearbook Commercial Arbitration (Case 146 : Russ. Fed.) p. 293. Open Sea Maritimes Inc. v.
R. Pyarelal International P. Ltd.,
(1999) 4 RAJ 477 :
(1999) Bom LR 12 :
(1999) 2 Arb LR 383 (Bom), the question of public policy need not be considered in
a suit filed to secure payment of money which may probably be awarded in a pending arbitration proceeding. Fargo
Freight Ltd. v. Commodities Exchange Corpn.,
(2004) 2 RAJ 636 (SC) :
AIR 2004 SC 4109 [
LNIND 2004 SC 741 ]:
(2004) 7 SCC 203 [
LNIND 2004 SC 741 ] :
(2004) 2 Arb LR 548 enforcement of bank guarantee and encashment of letters of
credit not to be stayed.
12. Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd. (Singapore), Yearbook of
Commercial Arbitration, Vol. XXXII (2007), Singapore No. 5.
13. Dubois and Vanderwalle v. Boots Frites BV, Yearbook of Commercial Arbitration, vol.
XXIV (1999), France No. 29, p. 640
14. Dandong Shuguang Axel Corporation Ltd. v. Brilliance Machinery Company; Yong Wang;
Yei Jun Wang; and Weh Lin Luo, 2001 U.S. Dist. LEXIS 7493.
15. Kohn v. Wagschal,

[2007] EWCA Civ 1022 .
Navneet Krishn
Page 112 of 116
16. Gater Assets Ltd. v. Nak Naftogaz Ukrainiy, [2008] 1 Lloyd's Rep. 479.
17. Liberty Re (Bermuda) Ltd. v. Transamerica Occidental Life Insurance Company,

Yearbook of Commercial Arbitration, Vol. XXXI (2006), US No. 540, p. 1125.
p. 697 :
(2008) 155 DLT 457
(2008) 4 Arb LR 497 (Del).
20. Yearbook of Commercial Arbitration, Vol. XXXI (2006), UK No. 74, p. 943. See also
Dallah Real Estate and Tourism Holding Co. v. Ministry of Religious Affairs, Government of Pakistan,
[2008] All ER (D) 32 (Aug) (the discretion to enforce an award even if one of the
grounds mentioned in the NYC has been satisfied, is not an open discretion and must be restrictively exercised),
Kanoria v. Guinness,
[2006] 2 All ER (Comm) 413 (the discretion to enforce an award when one of the
grounds for refusal of an arbitral award under the New York Convention is not a wide discretion; hence when a case
was made out that the party opposing enforcement had been unable to present its case before the tribunal and had
never been informed about the proceedings, the Court of Appeal refused to enforce the arbitral award.)
21. Tropic Shipping Co. Ltd. (UK) v. Kothari Global Ltd.,

(2002) 3 RAJ 189 :
(2002) 3 Bomlr 44 (Bom). This decision was relied on in Alcatel (India) Ltd. v.
Koshika Telecom Ltd.,
(2004) 3 RAJ 496 (Del), the award found to be foreign within the meaning S. 47 and
no ground for setting aside was made out under S. 48, hence it was an enforceable decree inspite of the initiation of
SICA proceedings.
22. Dardana Ltd. v. Yokos Oil Co., (2002) 2 Lloyd's Rep 326 (CA).
23. MGM Productions Group, Inc. v. Aeroflot Russian Airlines, 573 F. Supp. 2d 772; 2003
U.S. Dist. LEXIS 8174.
24. For more details refer to commentary under S. 48supra under the heading “Effect of decision of a “public
policy issue” in an annulment proceeding on a proceeding for opposition to enforcement”.
25. Polytek Engg. Co. Ltd. (Hong Kong) v. Hebei Import & Export Corp. (PR China), (1998)
23 Yearbook Commercial Arbitration (Hong Kong No. 12) at p. 666.
26.
(1992) 2 WLR 621 .
27. For more details see commentary under S. 48infra under the heading “Opposition to enforcement on
same grounds as grounds for annulment”.
28. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Australia No. 22, p. 520
Navneet Krishn
Page 113 of 116
30. Powerex Corpn. v. Alcan Inc., Yearbook of Commercial Arbitration, Vol. XXIX (2004),
Canada No. 13, p. 603.
31. Yearbook of Commercial Arbitration, Vol. XXX (2005),Canada No. 17, p. 466.
32. See also Europcar Italia S.p.A. v. Alba Tours International Inc., [1997]
O.J. No. 133; Soleh Baneh International Ltd. v. Government of the Republic of Uganda, [1993] 2 Lloyd's L.R.208; Toyo
Engineering Corp. and John Holland Pty. Ltd.[2000] VSC 553; Hebei Import & Export Corp. v. Plytek Engineering Co.
Ltd.,
[1996] 3 KHC 725 .
33. Yearbook of Commercial Arbitration, Vol. XXX (2005), Spain No. 42, p. 627.
34. Supplier v. Shipper, Yearbook of Commercial Arbitration, Vol. XXX (2005), Germany No.
78, p. 547.

36. Yearbook of Commercial Arbitration, Vol. XXX (2005); Bargus Agro Industrie SA v. Young Pecan
Company, French Court of Appeal, p. 499.
37.
[2008] EWHC 797 (Comm) :
[2008] All ER (D) 197 (Oct).
38. IPCO (Nigeria) Ltd. v. Nigerian National Petroleum Corporation,

[2008] All ER (D) 249 (Apr)
[2008] EWHC 797 (Comm).
39. Yearbook of Commercial Arbitration, Vol. XXXI (2006), Spain No. 43, p. 821.
40. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), Singapore No. 2, p. 829.
41. Western Shipbreaking Corpn. v. Clare Haven Ltd. (U.K.),

(1998) 1 RAJ 367 , 381 (Guj): (1997) 3 Guj LR 1985 : (1998) Supp Arb LR 53.
42. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,

AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ], at pp. 2302-2303 :
(2000) 4 RAJ 1 :
(2001) 6 SCC 356 [
LNIND 2001 SC 1180 ] :
(2001) Lab IC 2073 . See also the decision of the Delhi High Court in Fuerst Day
Lawson Ltd. v. Jindal Exports Ltd.,
(2000) 1 RAJ 266 :
(1999) 78 DLT 228 . Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
Navneet Krishn
Page 114 of 116
(2000) 4 RAJ 1 (Del) : (1999) 2 AD (Del) 265 :

1999 RLR 81 (N) (Del), a suit was also filed for recovery of the same amount which
was under adjudication in the arbitration. The Court said that the award remained valid and enforceable and was not to
be considered against public policy by reason of the parallel suit. Videocon Power Ltd. v. Tamil Nadu Electricity Board,
(2005) 1 RAJ 77 (Mad), two separate proceedings, one for enforcement and one for
execution are not necessary. Enforcement and execution are one and the same thing. They are used interchangeably.
The same court can decide upon enforcement and execution.
43. Thyssen Stahhunion Gmbh v. Steel Authority of India Ltd.,

AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]: AIR SCW 406 :
2000 CLC 139 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] :
(1999) 3 RAJ 355 :
(1999) 3 Arb LR 532 It was held in this case that a foreign award given after the
commencement of the new Act of 1996 could be enforced under the new Act of 1996 albeit the fact that arbitral
proceedings had commenced in U.K. prior to the commencement of the new Act. S. 85(2)(a) of the new Act could not
save operation of the Foreign Awards Act, 1961, the Arbitration (Protocol and Convention) Act, 1937, the only
difference is that while under the Foreign Awards Act a decree follows, under the new Act foreign award is already
stamped as the decree. Thus if provisions of the Foreign Awards Act and the new Act relating to enforcement of the
foreign award are juxtaposed there would appear to be hardly any difference.

(2003) 4 RAJ 320 Bom :
(2003) 2 Arb LR 459 ABB Lummus Global Ltd. v. Keppel Pels Ltd.,
(1999) 2 Lloyd's Rep 24, decision as to jurisdiction for seat of arbitration.
45. Trusuns Chemical Industry Ltd. v. Tata International Ltd.,

(2004) 2 RAJ 552 (Guj).
46. Videcon Power Ltd. v. Tamil Nadu Electricity Board,

(2005) 1 RAJ 77 (Mad).
47. Ibid. Also to the same effect Harendra H. Mehta v. Mukesh H. Mehta,
AIR 1999 SC 2054 [
LNIND 1999 SC 545 ],
(1999) 5 SCC 108 [
LNIND 1999 SC 545 ] :
(1999) 2 RAJ 547 ; National Agricultural Co-op. Mktg Fedn. of India Ltd. v. Alimenta
SA,
(1989) 2 Arb LR 22 :
AIR 1989 SC 818 [
LNIND 1988 SC 520 ]: 1989 Supp 1 SCC 308, a foreign award is not a lifeless
document. It can be enforced in accordance with the law in India.
48.
(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ]
50. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Colombia No.4, p. 643.
Navneet Krishn
Page 115 of 116
51. Steel Corporation of the Philippines v. International Steel Services, Inc., Yearbook of
Commercial Arbitration, Vol. XXXIII (2008), p. 1125.
52.
[2007] 2 All ER (Comm) 557 .
53.
[1975] 1 All ER 810 .
54. Yearbook of Commercial Arbitration, Vol. XXX (2005), Svea Court of Appeal, Division 2, 28 February
2005, p. 139.

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .
56. Yearbook of Commercial Arbitration, Vol. XXX (2005); Michel Le Parmentier and others v. Sociètè Miss
France and others, French Court of Appeal, no. 2002/20314.
57.
[1995] 3 LRC 617 .
58. Yearbook of Commercial Arbitration, Vol. XXVIII (2003), UK No. 62, p. 859.
59. Yearbook of Commercial Arbitration, Vol. XXX (2005), French Court of Appeal, no. 2002/20314.
60. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Court d’ Appel, p. 203.
61. Jindal Drugs Ltd. v. Noy Vallesina Engg. Spa,

(2002) 3 RAJ 46 :
(2002) 2 Bom LR 888 :
(2002) 2 Arb LR 323 (Bom).
62. Gater Assets Ltd. v. Nak Naftogaz Ukrainy,

[2008] All ER (D) 223 (Feb).
63. Ventrue Global Engineering v. Satyam Computer Services Ltd.,

(2008) 1 Arb LR 137 :
AIR 2008 SC 1061 [
LNIND 2008 SC 48 ]:
(2008) 4 SCC 190 [
LNIND 2008 SC 48 ]
64. Alagar Exports v. Islamic Republic of Iran Shipping Lines of Tehran; (2) David Farrington
Fair Wind Shipping Limited, 2008 INDLAW MAD 3022.
Navneet Krishn
Page 116 of 116
65. Alagar Exports v. Islamic Republic of Iran Shipping Lines of Tehran ; (2) David Farrington
Fair Wind Shipping Limited, 2008 INDLAW MAD 3022.
66.
[2006] All ER (D) 156 (Nov).

(2001) 1 RAJ 266 (Del) : Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2000) 4 RAJ 1 (Del).
68. Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd.,

(2004) 2 RAJ 530 (Cal).

(2004) 2 RAJ 530 (Cal).

(2004) 3 RAJ 530 (Cal). See also Korea Technologies Co. Ltd.
(Korea) v. Hon. Alberto A. Lerma, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of
Muntinlupa City (Philippines), Yearbook of Commercial Arbitration, Vol. XXXIII (2008), Philippines No.5, p. 632.
End of Document
Navneet Krishn
CONVENTION AWARDS > ENFORCEMENT
S. 49.
Enforcement of foreign awards
Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be
deemed to be a decree of that Court.
Scope
Keeping in mind the meaning of the word “enforcement”, enforcement under this section is nothing else but the
execution as contemplated under order 21 of
CPC . The procedure set out in this section ensures legality, validity and existence of an
award so that it can be executed as a decree of the court.71
The court cannot acting under this section directly enforce a foreign award. Under this section the court only
declares that the award is enforceable. It would then be enforced as a decree under the
Civil Procedure Code .72 Section 49 only confers power on the
Court to satisfy itself whether the award should be enforced. Those are limited powers conferred. Nature of this
power apart from other aspects is a matter of national sovereignty.73 In order to arrive at and to express the
explicit satisfaction by the Court the parties are to be heard even on the issue of Section 48(2) and also on
objections if any filed by the aggrieved party seeking for refusing enforcement. It is only when the parties are
heard that the Court could arrive at a reasonable and sound satisfaction.74
The satisfaction of the Court as contemplated under Section 49 can be arrived at only after the Court is
satisfied that none of the grounds as mentioned in Section 48(2) of the Act exists and that if an objection is filed
as contemplated under Section 48(1) of the Act by the party is dismissed. It is only after that satisfaction which
was required to be arrived at by the Court under Section 48 that the foreign award is enforceable is reached
and recorded then only the award becomes a deemed decree of that Court. The aforesaid provisions postulate
and/or pre-suppose that in order to arrive at the aforesaid satisfaction the Court itself has the responsibility to
scrutinise the award even in absence of an objection by a party to come to a satisfaction that the award does
not suffer from any of the vices as mentioned in Section 48(2) of the Act. When it is found that none of the
conditions as mentioned in the said provision is attracted the Court would explicitly record its satisfaction that
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the award is enforceable and then only and thereupon the award becomes deemed decree of that Court.75 The
court itself is under the responsibility to scrutinise the award even in the absence of any objection by a party.76
Both parties can approach the appropriate forum with their respective prayers. It is not tenable to say that only
the person against whom an award has gone can approach the court. The court is required to record its
satisfaction to the effect that the award is enforceable. But the court can pass an interim order wherever
necessary for protecting the interest of the party making the application.77
Where an award is certified and attested as the final award, it can be directly put into execution. A separate
proceedings for determination of enforceability of the award are not necessary in such circumstances.78 A
separate proceeding would only contribute to protracted litigation and suffering of litigants in terms of money,
time and energy.79
1. Leave under clause 12 of Letters Patent Act
The Bombay High Court held in a case that a leave under clause 12 would be necessary. The Court said that
once the power has been conferred on the court to entertain an application either under Part I or Part II of the
ACA, 1996, clause 12 was attracted which includes the power to grant leave to a party. In this case the
application for leave was filed after filing of the arbitration petition under S. 47. The application was rejected,
because an application for leave had to be filed before the petition for enforcement.80
2. Disclosure of assets
There was refusal by the court below to direct the respondent to disclose its assets. The Court said that such a
refusal was plainly contrary to Order 21. Rule 41 of
CPC . By virtue of these provisions the court may on application of decreeholder order
requiring the judgment debtor to make an affidavit stating the particulars of his assets. The court below should
have issued the requisite direction.81
3. Merits not to be considered at the stage of enforcement
It was contended in a case at the stage of enforcement that the respondent had not signed the Charterpart and
that being the case, contract would not be binding on the respondent. The Court said that if the contract was
not binding on the respondent, the Award itself was a nullity at law and hence; against public policy. Having
gone through the Award itself, it was clear that this issue again was in issue before the learned Arbitrator. The
award dealt with this issue. The issue could not be said to be an issue involving public policy and at any rate it
being in issue and having been answered, it was not open to the respondent to raise it before the Court. This
Court in considering the enforcement would not consider the merits of the disputes more so in the case where it
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was in issue and had been heard and concluded.82
The court is not to investigate into the merits of the case so as to reassess and decide the question of
adequacy or quality of evidence adduced by the parties before the arbitrator. The principle that the court should
not interfere with the award of the arbitral tribunal merely because another view was possible on the
interpretation of the contract was equally applicable to foreign awards.83
4. Claim of interest
The Bombay High Courthas held that the court enforcing a foreign award could not grant interest beyond the
date of the award. The court suggested that this was lacuna in the Act which needed to be cured either by
legislation or by the High Court.84
Similar provisions
The provisions of the section are similar to those of S. 58 relating to enforcement of Geneva Convention award.
See Notes unders. 58 (infra).
Making a comparison of the provisions of the 1996 Act with those of the Foreign Awards Act, 1961, the Delhi
High Court said that the provisions of the two Act are almost pari materia, except for the provisions of S. 5.85
5. New Act
Foreign award given after the commencement of the new Act can be enforced only under the new Act but not
under the Foreign Awards Act. It is irrespective of the fact when the arbitral proceedings commenced in a
foreign jurisdiction. Where no right accrued
Section 6 of the Foreign Awards (Recognition and Enforcement) Act, 1961 , the
General Clauses Act would not apply.86
Stay of enforcement and application for removal of stay
It has been held that:87
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Having elected to convert an award into an English judgment the plaintiff ought in principle to be subject to the
same procedural rules and conditions as generally applied to the enforcement of such judgments and the
wording of the
Arbitration Act , 1975 did not dictate a different conclusion. Section 3 of the 1975 Act
provided for enforcement of an award either by action or in the same manner as the award of an arbitrator was
enforceable by virtue of S.
Section 26 of the Arbitration Act , 1950; there was nothing in the text of either of those
sections to suggest that once judgment had been entered in the terms of the award, it should for purposes of
enforcement be treated differently from any other judgment or order. Accordingly the Court has in principle
jurisdiction to entertain an application for a stay. It would rarely if ever be appropriate to order a stay in respect
of a Convention award when, by definition under the Convention, the time for enforcement had arrived. On the
facts and the evidence in this case there were no special circumstances which rendered it inexpedient to
enforce the plaintiffs’ judgment. The stay of execution imposed by the order of the court was removed. (See p.
524, col. 2; p. 525).
71. Western Shipbreaking Corpn. v. Clare Haven Ltd. (U.K.),

(1998) 1 RAJ 367 , 377-380 : 1998 (Supp) Arb LR 53 (Guj). Trusuns Chemical
Industry Ltd. v. Tata International Ltd.,
(2004) 2 RAJ 552 (Guj) when the court is satisfied that the award is enforceable
only then it can be treated as a decree of the court.

AIR 1999 Bom 417 [
LNIND 1999 BOM 363 ]; Force Shipping Ltd. v. Ashapura Minechem Ltd.,
(2003) 3 RAJ 418 (Bom) :
(2003) 3 Bom LR 948 , along with the application for enforcement, the party can
also apply for execution so that the court declaring the award to be enforceable can proceed to execute the decree
without further procedural requirement, otherwise it is open to the party to move for execution.
73. Tropic Shipping Co. Ltd., London, U.K. v. Kothari Global Ltd.,
Mumbai,
2002 (3) RAJ 189 :
2002 (3) BLR 44 :
2002 (2) Arb LR 560 (Bom). The Court relied upon Renusagar Power Co. Ltd. v.
General Electric Co.,
AIR 1994 SC 860 : 1994 Supp (1) SCC 644, Relied.

2000 (1) RAJ 266 :
1999 (78) DLT 228 : 1999 (2) AD (Del) 244 :
1999 (50) DRJ 374 :
1999 (2) CLT 1 (Del).
75. Ibid.
76. Ibid.
Navneet Krishn
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AIR 2004 Cal 142 [
LNIND 2003 CAL 480 ]. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2000) 1 RAJ 266 :
(1999) 78 DLT 228 :
(1999) 2 CLT 1 (Del), before foreign award can be enforced there is a necessity for
a party to obtain a foreign award which is defined under the provisions of Section 44. Foreign award becomes binding
between the persons as against whom the same is made for all practical purposes when the same is enforceable under
the provisions of Sections 46 to 49. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2000) 4 RAJ 1 :
(1999) RLR 81 (N) (Del), to the same effect. International Investor KCSC (Kuwait)
v. Sanghi Polysters Ltd.,
(2003) 1 RAJ 359 :
(2003) 1 ALT 364 : 2003 Supp Arb LR 417 (AP), following the above case, no need
to take separate proceedings, one for deciding of enforceability and the other for taking up execution. Moolchand
Exports P. Ltd. v. Man-Production Rotterdam BV,
(2004) 3 RAJ 404 (Mad), an award delivered before the 1996 Act came to be
enforced, enforced under the 1961 Act.

(2003) 1 RAJ 7 :
AIR 2002 Bom 447 [
LNIND 2002 BOM 485 ]:
(2002) 3 Arb LR 468 (Bom).
79. Alcatel India Ltd. v. Koshika Telecom Ltd.,

(2004) 3 RAJ 496 (Del).
80. Tata International Ltd. v. Trisuns Chemical Industry Ltd.,

(2002) 4 RAJ 488 :
(2002) 2 Arb LR 432 (Bom).
81. International Investor KCSC (Kuwait) v. Sanghi Polysters Ltd.,

(2003) 1 RAJ 359 :
(2003) 1 ALT 364 : 2002 Supp Arb LR 417 (AP).
82. Tropic Shipping Co. Ltd. v. Kothari Global Ltd.,

(2002) 3 RAJ 189 :
(2002) 3 Bomlr 44 :
(2002) 2 Arb LR 560 (Bom). General Electric Canada Inc. v. National Hydroelectric
Power Corpn. Ltd.,
(2003) 2 RAJ 383 (Del—DB) : (2003) 3 AD (Del) 465, the parties having already
agreed on the question of applicable law, the court was not to consider this question also.
83. Alcatel India Ltd. v. Koshika Telecom Ltd.,

(2004) 3 RAJ 496 (Del). There was no allegation of anything like fraud or contrary
to public policy.
84. Toepfer International Asia P. Ltd. v. Thappar Ispat Ltd.,

AIR 1999 Bom 417 [
LNIND 1999 BOM 363 ]at pp. 423-424 :
(2002) 3 RAJ 189 (Bom).
Navneet Krishn
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(2000) 4 RAJ 1 (Del).
86. Thyssen Stahlunion GMBH v. Steel Authority of India Ltd.,

(1999) 3 Arb LR 532 :
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 RAJ 355 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ]
87. Far Eastern Shipping Co. v. AKP Sovcomplot, (1995) 1 Lloyd's Rep 520 (QBD, Comm).
End of Document
Navneet Krishn
CONVENTION AWARDS > APPEALS
S. 50.
Appealable orders
(1) An appeal shall lie from the order refusing to—
(a) refer the parties to arbitration under Section 45;

(b) enforce a foreign award under Section 48,
to the Court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section
shall affect or take away any right to appeal to the Supreme Court.
Since, the word ‘court’ is qualified by the wording ‘authorized by law to hear appeals from such order’, the
appeal would lie to the forum which ordinarily hears appeals from the court that passed an order pursuant to
Sections 45 and 48.88 The forum to hear the appeal is not determined as if the subject-matter is a suit where
jurisdiction is determined in accordance with the provisions of Ss. 16- 20 of Civil P. C. Where an order under
Section 45 is passed by the Company Law Board, an appeal under Section 50 lies before that forum which
ordinarily hears appeals from the CLB, i.e. the High Court within the jurisdiction of which the Registered Office
of the company in issue is situated.89
Issues relating to wrong finding of fact by the arbitrator cannot give rise to an appeal.90 In this context, it is also
important to notice the distinction between an “order” and an “award”. The scheme of the
Arbitration Act , both in Part I and II, is that an award, whether interim or final, may be
challenged through an application, whereas an order is challenged through an appeal. It is not difficult to
distinguish between the two- “orders” do not determine the rights and liabilities of the parties, whereas “awards”
or “decrees” (in civil court) do so. However, “interim award” does not as a term correspond to “preliminary
decree”, for in arbitration law the term normally refers to findings of the Tribunal on its jurisdiction.91 Both Swiss
and Dutch law, based on the MAL, provide that the tribunal may render ‘preliminary/interim awards’ determining
its own jurisdiction,92 ‘partial awards’,93 determining some issues but not others, and final awards, determining
all issues.94 Thus, possible borderline cases may pose some difficulty in classification. One example is the case
of an interim injunction. The Queensland Supreme Court found that interim measures under Art. 17 of the
Navneet Krishn
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Model Law do not determine substantive rights, and are hence not enforceable ‘awards’ but merely orders.95
This is in consonance with the principle that an interim injunction can never constitute a preliminary decree in
civil court. However, two decisions have held that an injunction can constitute an “interim award”,1 and the
position may therefore be an effect based test rather than a test based on the nature of the order.
Letter Patent Appeal
A petition seeking execution of an award was dismissed. No appeal was maintainable under the Act. The Court
said that the impugned order had to be treated as one passed in exercise of inherent powers and, therefore,
dehors the provisions of the Act. The decision affected valuable rights of the parties. It amounted to a judgment
which was subject to the Letter Patent Appeal. Clause 10 of the LPA and S. Section 10 of the Delhi High Court
Act applied.2
1. Letters Patent Appeal [clause 10]
Section 49 of the A&C Act, 1996 provides that only where the Court is satisfied that foreign award is
enforceable under Chapter I of Part II, being New York Convention Awards that the said award shall be
deemed to be a decree of that Court. Therefore, it would not be permissible to straight away file execution
application in the Court and in order to enforce the award, it would be necessary, for a person seeking
enforcement, to first approach the Court and seek appropriate adjudication, as envisaged under Section 48 of
the A&C Act. Such an adjudication was not sought and only execution application was filed, which by the
impugned order has been held to be not maintainable. Learned Single Judge observing that since the petition
substantially complies with the requirement of an application under Section 47 of the A&C Act, 1996, ordered
that it be treated as an application under Section 47 of the said Act. Admittedly, the impugned order is such
against which an appeal would not lie under Section 50 of the Act. The question, which was raised by the
appellant before learned Single Judge in EA. 346/98 was about the very maintainability of execution petition.
The objection is such, which if allowed, would have the effect of terminating the main proceedings. Learned
counsel for the respondent is perfectly justified in placing reliance upon the decision of this Court in East India
Hotels Ltd. case (supra) that Section 10 of the Delhi High Court Act does not confer any right of appeal but
provides only for a forum of appeal. As such appeal would not lie under Section 10 of the Delhi High Court Act
unless there is any other provision under which it will be permissible for the appellant to file appeal against the
impugned order to a Division Bench of this Court.
Now the question is whether the appeal would be maintainable under Clause 10 of the Letters Patent or not?
Reliance placed by learned counsel for the respondent in M/s. Gourangalal Chatterjee's case (supra) is
misconceived in as much as the impugned order is not.
An appeal under Section 15 of the Letters Patent Act is not taken away by Section 50 according to the ruling of
the Calcutta High Court in LMJ International Ltd. v. SEA Stream Navigation Ltd. 3. Letters
Patent Act not being a mere enactment made by the Parliament and having come into force in order to
constitute the courts prior to the
Constitution and later incorporated into the
Constitution by virtue of Article 225 and
Article 372 of the Constitution of India , the provisions cannot be taken away unless a
special legislation clearly and expressly abridges and takes away the provision of appeal. In order to take away
the right under Clause 15, it was held that there must be express statutory provision like in Section 16 of City
Session Court Act, 1953 (Calcutta). This line of reasoning however, seems contradictory. The first part of the
judgment relied on the fact that the Letters Patent Act was a special kind of legislation that was built in the
Navneet Krishn
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Constitution . However, the Court itself concedes that the applicability of Clause 15 can
be excluded by an express provision in an ordinary statute like the City Session Court Act, 1953 (Calcutta).
The Madras High Courthas taken the view that an appeal under Section 15 of the Letters Patent Act would not
lie against an order of a single judge of the High Court on an issue relating to challenge to enforcement
proceedings under Section 48 of the Act.4
Appeal by special leave to the Supreme Court
While second appeals are barred by Section 50,appeal under

Article 136 of the Constitution of India to theSupreme Court has not been taken away.
However, Article 136 does not provide a party a right to an appeal, it is a discretion which the Supreme
Courtmay choose to exercise. Thus, where there existed an alternative remedy in the form of a revision under
Section 115 of the Civil Procedure Code or under
Article 227 of the Constitution before the High Court, theSupreme Court refused to hear
an appeal under Article 136 even though special leave had initially been granted.5
88. Sumitomo Corporation v. CDC Financial Services (Mauritius) Ltd.,

(2008) 1 Arb LR 452 (SC) :
AIR 2008 SC 1594 [
LNIND 2008 SC 456 ]:
(2008) 2 RAJ 1 :
(2008) 4 SCC 91 [
LNIND 2008 SC 456 ]
89. Sumitomo Corporation v. CDC Financial Services (Mauritius) Ltd.,

(2008) 1 Arb LR 452 (SC) :
AIR 2008 SC 1594 [
LNIND 2008 SC 456 ]:
(2008) 2 RAJ 1 :
(2008) 4 SCC 91 [
LNIND 2008 SC 456 ]
90. Demco Investments & Commercial SA v. SE Banken Forsakring Holding AB, [2005] 2
Lloyd's Rep. 650,
[2005] EWHC 1398 .
91. Redfern and Hunter 351 (4th edn., 2004).
92. S. 12, Art. 186 (2), Swiss Private International Law Act.
93. S. 12 Art. 188, Swiss Private International Law Act.
94. Art. 1049, Netherlands

Navneet Krishn
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95. Resort Condominiums International Inc. v. Bolwell, 118 ALR 655.
1. Publicis v. North, 206 F. 3d. 725; Braspetro v. GMRP, Redfern and Hunter 351 (4th edn.,
2004).
2. Jindal Exports Ltd. v. Fuerst Day Lawson Ltd.,

(2000) 4 RAJ 227 (Del—DB). OrmaImpex P. Ltd. v. Nissai Ash Pte Ltd.,
(1999) 3 RAJ 406 :
AIR 1999 SC 2871 : (1999) 2 SCC 541 :
(1999) 2 Arb LR 117 , single judge order under S. 45 refusing to refer parties to
arbitration, appeal filed against it, conflict of opinion on maintainability of such appeal. The matter was referred to a
larger Bench. Delhi High Court Act, S. 10, Letters Patent Appeal, Clause 10.
3.
(2008) 1 Arb LR 83 :
AIR 2007 Cal 260 [
LNIND 2007 CAL 309 ]: (2007) 3 Cal LT 424. See also National
Agricultural Co-operative Marketing Federation of India Ltd. v. Aliments S.A., MANU/DE/1042/2009 FAO (os) No. 205
of 2000 (10.7.09) (the substantive right of appeal vested by Clause 10 of the Letters Patent (Lahore) read with Section
10 of the Delhi High Court Act cannot be taken away by the Foreign Awards Act and a letters patent appeal would lie
against an order passed pursuant to an application challenging enforcement of a foreign award);Sureka Steel Limited v.
Union of India,
1998 CWN 287 and Keventer Agro Ltd. v. Seagram Company Ltd., C.S. No. 592 of
1997.

(2009) (4) MLJ 633 [
LNIND 2009 MAD 304 ].
5. Shin-Etsu Chemical Co. Ltd. v. Vindhya Telelinks Ltd., 2008 Supp (1) Arb LR 55 :
(2009) 2 RAJ 519 (SC).
End of Document
Navneet Krishn
CONVENTION AWARDS > SAVING
S. 51. Saving
Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any
award or of availing himself in India of any award if this Chapter had not been enacted.
This is based on Article VII (1) of the NYC. While interpreting this provision it was held that when German law
provides for less stringent requirements as regards presentation of arbitral awards and arbitration agreement,
pursuant to the more favourable rights provision, it is enough if the parties meet these requirements.6
End of Document
Navneet Krishn
CONVENTION AWARDS > APPLICATION
S. 52. Chapter
II not to apply
Chapter II of this Part shall not apply in relation to foreign awards to which this Chapter applies.
This section gives effect to Art. VII (2) of the New York Convention which reads as follows:
“The Geneva Protocol on Arbitration Clause s of 1923 and the Geneva Convention on the Execution of Foreign Arbitral
Awards of 1927 shall cease to have effect between Contracting States on their becoming bound and to the extent that
they become bound by this Convention.”
If a country is a signatory to both the Conventions, it is the NYC which is applicable. Some countries may have
signed only the Geneva Convention . Hence the need for separate provisions dealing with enforcement of
award under the Geneva Convention.
End of Document
Navneet Krishn
PART II ENFORCEMENT OF CERTAIN FOREIGN AWARDS > CHAPTER II GENEVA CONVENTION
AWARDS
CHAPTER II
GENEVA CONVENTION AWARDS
Sections 53 to
60 of the
Arbitration and Conciliation Act, 1996 deal with enforcement of Geneva Convention
awards. These sections substantially incorporate the provisions of the Arbitration (Protocol and Convention)
Act, 19371.
1. For text of the 1937 Act, see Appendix 5.
End of Document
Navneet Krishn
AWARDS > APPLICATION
S. 53.
Interpretation
In this Chapter “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.—
(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule
applies, and
(b) between persons of whom one is subject to the jurisdiction of some one of such powers as the Central
Government, being satisfied that reciprocal provisions have been made, may, by notification in the
Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom
the other is subject to the jurisdiction of some other of the powers aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have
been made, may, by like notification, declare to be territories to which the said Convention applies,
and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the
purpose of contesting the validity of the award are pending in the country in which it was made.
1. Scope
Section 53 corresponds to sec. 2 of the 1937 Act.
The Bombay High Court 2 considered the question whether Arbitration (Protocol and
Convention) Act, 1937 had any force in India after 26th of January, 1950 when India was divided into two
States—India and Pakistan. It held that India, before partition being a State signatory to the protocol on
arbitration clauses set forth in the First Schedule to the Arbitration (Protocol and Convention) Act, 1937 and the
Convention on the Execution of Foreign Arbitral Awards set forth in the Second Schedule to that Act, the
obligations undertaken thereunder continue to bind India after India was constituted a Dominion and they
continue to bind India thereafter. In that case the Court had relied upon the Indian Independence (International
Arrangements) Order, 1947.
Navneet Krishn
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An award was given and signed by the arbitrator in Karachi after the partition of India, pursuant to an
agreement between the parties when India was not partitioned. The award was held to be a foreign award.3 An
award qualifies a Convention award when a State becomes a party to the Geneva Convention after the award
was made.4
Where the parties were carrying on a joint venture business in India and USA and also owned properties jointly
in both countries and they appointed an arbitrator in terms of their agreement made in USA for distributing the
property and business between them and the proceedings were held in USA and the award also passed in
USA, it was held that the award was a foreign award. The differences had arisen out of legal relationship of
commercial nature between the parties. The mere fact that they were brothers did not have the effect of taking
the award outside the
Foreign Awards (Recognition and Enforcement) Act, 1961 .5
In view of
Section 47 of the Arbitration Act , 1940, the provisions of the Acts of 1937 and 1961
prevail to the extent of inconsistency with the provisions of the Act of 1940.6 A provision of the Act of 1940
cannot be introduced in the Act of 19377 or the Act of 1961 to regulate the procedure under those Acts. The Act
of 1940 does not provide that a foreign award shall be deemed to be an award made under the Act of 1940.8
2. Notified territories under Section 2 of 1937 Act corresponding to sec. 53 of the

1996 Act 9
Party to the Convention Territories to which the Convention applies

His Britannic Majesty British India
United Kingdom of Great Britain & Northern Ireland, New

Foundland
Dominion of New Zealand including the mandated territory of

Western Samoa
Bahamas
British Guiana
British Honduras
Falkland Islands
Gibraltar
Gold Coast
(a) Colony
(b) Ashanti
(c) Northern Territories
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(d) Togoland under British Mandate
Jamaica (including Turks and Caicos Islands and Caman

Islands)
Kenya
Leeward Islands (Antigua, Dominica, Montserrat, St.

Christopper, Nevis and Virgin Islands)
Territories of Malta (Malta and its dependencies)
Mauritius
Northern Rhodesia
Palestine (excluding Trans-Jordan)
Tanganyika Territory
Uganda Protectorate
Windward Islands
Grenada
St. Lucia
St. Vincent
Zanzibar
Federal President of the Austrian Republic Austria
His Majesty the King of Belgium Belgium
Belgium Congo
Mandated Territory of Ruanda-Urundi
President of the Czechoslovak Republic Czechoslovakia
His Majesty the King of Denmark Denmark
President of the Estonian Republic Estonia
President of the Finnish Republic Finland
President of the French Republic France
President of the German Reich Germany
His Majesty the King of Greece Greece
His Majesty the King of Italy Italy
Her Royal Highness the Grand Douchess of Luxembourg Luxembourg
Her Majesty the Queen of the Netherlands The Netherlands
Navneet Krishn
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The Netherlands Indies
Surinam
Curaco
President of the Portuguese Republic Portugal
His Majesty the King of Romania Romania
His Majesty the King of Siam Siam
President of the Spanish Republic Spain
His Majesty the King of Sweden Sweden
President and Federal Council of the Polish Republic The Free City of Danzig
His Britannic Majesty Burma excluding the Karenni States
President of Irish Republic Ireland
See also Notes under Section 45.
An award qualifies a Convention award when a State becomes a party to the Geneva Convention after the
award was made.10
The significance of the Geneva Convention has decreased greatly given that the New York Convention has
been adopted by 144 nations (as of January 2010) and only a miniscule minority of the contracting states of the
Geneva Convention have not become signatories to the New York Convention. Once these countries become
signatories of the NYC, Chapter II of Part II would become redundant.11
JUDICIAL AUTHORITY'S POWER TO REFER PARTIES TO ARBITRATION
Section 54 is a redrafted version of Section 3 of the 1937 Act [repealed] and conforms to the provisions of
Article 4 of Geneva Protocol (See Second Schedule). The power of the Court to order stay of proceedings in
respect of matters to be referred to arbitration under Section 3 of the 1937 Act12 has been withdrawn. The court
is now mandated under Section 54 to refer the parties to the decision of arbitrators.
2. Francesco Corsi v. Gorakhram, Gokalchand,

AIR 1960 Bom 91 [
LNIND 1958 BOM 180 ]: 61 Bom LR 1195.
Navneet Krishn
Page 5 of 5
3. Lachhman Das Sat Lal v. Parmeshwari Devi,

AIR 1958 Punj 258 , 260.
4. Minister of Public Health of the State of Kuwait v. Sir Frederick Smith & Partners,
(1983) 71 WLR 819 .
5. Harendra H. Mehta v. Mukesh H. Mehta,

AIR 1999 SC 2054 [
LNIND 1999 SC 545 ]at p. 2061 :
(1995) 5 SCC 108 :
(1999) 2 RAJ 547 .
6. Ludwing Wunsche & Co. v. Raunaq International Ltd.,

AIR 1983 Del 247 [
LNIND 1982 DEL 102 ]: 61 Bom LR 1195.
7. Mury Exportation v. D. Khaitan & Sons Ltd.,

AIR 1956 Cal 644 [
LNIND 1956 CAL 109 ].
8. Fransesco. Corsi M.S. v. Gorakhram Gokalchand,

AIR 1960 Bom 91 [
LNIND 1958 BOM 180 ]L : (1983) 4 Del Rep J 8.
9. The notifications issued under the 1937 Act remain valid for the purposes of the 1996 Act by virtue of
Section 85(2)(b).
10. Minister of Public Health of the State of Kuwait v. Sir Fredrick Smith & Partners,
(1983) 71 WLR 819 .

(2006) 3 Arb LR 201 :
(2006) 11 SCC 245 [
LNIND 2006 SC 375 ] :
(2006) 5 JT 507 .
End of Document
Navneet Krishn
AWARDS > APPLICATION
S. 54. Power of
judicial authority to refer parties to arbitration
Notwithstanding anything contained in Part I or in the

Code of Civil Procedure, 1908 (V of 1908), a judicial authority, on being seized of a
dispute regarding a contract made between persons to whom Section 53 applies and including an arbitration
agreement, whether referring to present or future differences, which is valid under that section and capable of
being carried into effect, shall refer the parties on the application of either of them or any person claiming
through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of
the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
A foreign company's shipment to Bombay brought a short delivery for which the buyer's insurers had to pay
damages. The bill of lading contained a clause that disputes would be decided in Denmark according to Danish
law. The insurers filed a suit for indemnity against damages paid by them. A stay of the suit was demanded.
The suit was for a very small amount and the balance of convenience lay in permitting the suit to proceed rather
than in staying it. Section 3 of the Arbitration (Protocol and Convention) Act 1937 was held to be not
applicable13.
Section 3 of the 1937 Act contained the expression “if any party to a submission made in pursuance of an
agreement...commences legal proceedings”. This expression was held to mean that unless there was a
submission made in pursuance of an agreement, Section 3 could not be invoked.14 With reference to Section 3
of the 1937 Act, the Calcutta High Court had held that, if the conditions of the section are satisfied, the court
was bound to stay the legal proceedings.15 But the Bombay High Court had held that “shall” means “may” and
that the court was not bound to stay the proceedings.16 Under Section 54 (of the 1996 Act) as redrafted, the
judicial authority “on being seized of a dispute” regarding a contract/arbitration agreement is mandatorily
required to refer the parties to arbitration if it is satisfied about validity and effectivity of the agreement, i.e.
(i) the agreement is an agreement valid under Section 53; and

(ii) the agreement is capable of being carried into effect.
Validity
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The court is to be satisfied that the agreement for arbitration—
— relates to matters considered as commercial17 under the law in force in India;
— is one to which the Geneva Protocol (Second Schedule) applies, and

— is between parties who are subject to the jurisdiction of countries which have acceded to the
Convention with reciprocal declarations.
An award made pursuant to such an agreement is a ‘foreign award’ under Section 53 of the Act.
Effectivity
The agreement must be free of any legal disability in giving effect to its terms and conditions. For instance, the
court may have to be satisfied that the dispute is capable of settlement by arbitration.
Written statement
It includes a counter-claim.18 A claim for unliquidated damages under a contract of sale is no defence to a claim
under a bill of exchange accepted by the buyer nor is such claim for damages available as a set-off or counter-
claim.19
Readiness and Willingness
Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 unlike
Section 34 of the Arbitration Act 1940, did not require readiness and willingness of the
applicant to go to arbitration.20
Submission
The section is attracted only if there is an actual reference to the arbitration. An arbitration agreement is not
enough.21
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13. New Great Ins. Co. of India Ltd. v. Atkisekalect S.A. Kampagni,
AIR 1964 Bom 71 [
LNIND 1962 BOM 83 ]: 65 Bom LR 487.
14. Ramji Dayawala & Sons v. Invest Import,

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ], 2101 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ].
15. W. Wood & Sons Ltd. v. Bengal Corporation,

AIR 1959 Cal 8 [
AIR 1956 Cal 238 ; Societe Anonyme Hersent v. United Towing Co. Ltd., (161) 2
Lloyd's Rep 183 :
(1962) 1 WLR 61 :
(1961) 3 All ER 661 , where the action was stayed it being a protocol arbitration and
the court had no discretion. The underlying agreement was not shown to be void.
16. Kamani Engineering Corporation v. Societe De Traction,

AIR 1965 Bom 114 [
LNIND 1963 BOM 31 ]: 66 Bom LR 758.
17. See under NYC awards.
18. Kamani Engineering Corporation v. Societe De Traction,

AIR 1965 Bom 114 [
LNIND 1963 BOM 31 ]: 66 Bom LR 758.
19. Nova (Jersey) Knit v. Kamngam Spinnerei Gmbh,

(1977) 2 All ER 463 : (1977) 1 Lloyd's Rep 463, arbitration was in Germany and
action brought in England.
20. W. Wood & Sons Ltd. v. Bengal Corporation,

AIR 1959 Cal 8 [
AIR 1956 Cal 238 .
21. Societe De Traction v. Kamani Engineering

Co.,
AIR 1964 SC 558 [
LNIND 1963 SC 116 ]:
(1964) 3 SCR 116 [
LNIND 1963 SC 116 ]; Kamani Engineering Corporation v. Societe De Traction,
AIR 1965 Bom 114 [
LNIND 1963 BOM 31 ]: 66 Bom LR 358; W. Wood & Sons Ltd. v. Bengal
Corporation
AIR 1959 Cal 8 [
End of Document
Navneet Krishn
AWARDS > BINDING FORCE OF FOREIGN AWARDS
S. 55. Foreign
awards when binding
Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes
on the persons as between whom it was made, and may accordingly be relied on by any of those persons by
way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to
enforcing a foreign award shall be construed as including references to relying on an award.
An award which satisfies the conditions of enforceability as prescribed by this Chapter is enforceable and is to
be treated as binding for all purposes and also on persons as between whom it was made. It may be relied on
by any of those parties by way of defence, set off or otherwise in any legal proceedings in India. Any references
in Chapter II of this Part to enforcing a foreign award is to be construed as including references to relying on the
award.
End of Document
Navneet Krishn
AWARDS > MATTERS OF EVIDENCE
S. 56. Evidence
(1) The party applying for the enforcement of a foreign award shall, at the time of application produce before the
Court—
(a) the original award or a copy thereof duly authenticated in the manner required by the law of the country
in which it was made;
(b) evidence proving that the award has become final; and
(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of
sub-section (1) of Section 57 are satisfied.
(2) Where any document requiring to be produced under sub-section (1) is in a foreign language, the party
seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or
consular agent of the country to which that party belongs or certified as correct in such other manner as may be
sufficient according to the law in force in India.
Explanation.—In this section and all the following sections of this Chapter, “Court” means
the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the
subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or
any Court of Small Causes.
An applicant for the enforcement of a foreign award has to produce the following documents before the court:
1. the original award or its copy authenticated in the manner required by the law of the country in which it
was made;
2. any evidence showing that the award has become final;
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3. any evidence showing that the conditions mentioned in S. 57(1)(a) [validity of the submission] and (c)
(validity of the
constitution of the tribunal) are satisfied.
Where the document required to be produced is in a foreign language, its English translation has to be
produced which should be certified as correct by a diplomatic or consular agent of the country to which party
producing the document belongs. Alternatively, the copy should be certified as correct in such manner as may
be considered sufficient according to the law in force in India.
1. Jurisdiction
The Explanation to the section says that for the purposes of all the sections of the part, the term “court” means
the principal Civil Court of original jurisdiction in a district, and includes the High Court in the exercise of its
ordinary civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the
subject-matter of a suit. It does not include any Civil Court of a grade inferior to such principal Civil Court or any
Court of Small Causes.
The provision being similar to that in S. 2(1)(a), for comments see Notes under that section.
CONDITIONS FOR ENFORCEMENT OF GENEVA CONVENTION AWARDS
A foreign award could not be filed under the

Arbitration Act , 1940. Merely because a foreign award is enforceable in India as if it were
an award on a matter referred to arbitration in India under Section 4(1) of the 1937 Act, it does not make the
foreign award an award under the
Arbitration Act , 1940.22 Under the 1996 Act, filing of the award is not required. The
references to enforcement of a foreign award “as if it were an award made on a matter referred to arbitration in
India” contained in Section 4(1) and to filing of foreign award in court in Section 5 of the 1937 Act have been
omitted in the 1996 Act.
A foreign award under the Geneva Convention is not enforceable if the conditions specified in Section 57 (1) of
the 1996 Act are not existent or if the conditions specified in Section 57 (2) are existent. If there are other
grounds for contesting the validity of the award, the court may either refuse to enforce the award or adjourn the
hearing until after the expiration of the time reasonably sufficient to enable the party resisting the enforcement
of the award to take necessary steps to have it annulled by the competent tribunal. If the award does not deal
with all questions referred, the court may either postpone the enforcement of the award or order its
enforcement, subject to the giving of such security by the person seeking to enforce it as it thinks fit.23 If the
court is satisfied that the foreign award is enforceable, the court must enforce the award as if it were its
decree.24
Section 57 (1) sets out five conditions which “shall be necessary” to enforce an award. Even if these conditions
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are fulfilled, enforcement “shall” be refused if the court is satisfied that the three conditions laid down in Section
57(2) exist. Thus, if any of the conditions of Section 57(1) is not initially satisfied, the court will refuse
enforcement; and it is not incumbent upon the court to ascertain whether the conditions of Section 57(2) also
exist to strengthen such rejection. The court will proceed to consider the enforceability of the award in terms of
the conditions of Section 57(2) only when all the five conditions set out in Section 57(1) are satisfied in the first
instance.
22. Francesco Corsi v. Gorakhram Gokalchand,

AIR 1960 Bom 91 [
LNIND 1958 BOM 180 ].
23. Section 57(2) proviso.
24. Section 58.
End of Document
Navneet Krishn
S. 57.
Conditions for enforcement of foreign awards
(1) In order that a foreign award may be enforceable under this Chapter, it shall be necessary that—
(a) the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;
(c) 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 and in conformity with the law governing the
arbitration procedure;
(d) the award has become final in the country in which it has been made, in the sense that it will not be
considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the
purpose of contesting the validity of the award are pending;
(e) the enforcement of the award is not contrary to the public policy or the law of India.
Explanation.—Without prejudice to the generality of clause (e), it is hereby declared, for

the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award
was induced or affected by fraud or corruption.
(2) Even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the award shall be refused if
the Court is satisfied that—
(a) the award has been annulled in the country in which it was made;
(b) the party against whom it is sought to use the award was not given notice of the arbitration
proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity,
he was not properly represented;
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(c) the award does not deal with the differences contemplated by or falling within the terms of the
submission to arbitration or that it contains decisions on matters beyond the scope of the submission to
arbitration;
Provided that if the award has not covered all the differences submitted to the arbitral
tribunal, the Court may, if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the
Court may decide.
(3) If the party against whom the award has been made proves that under the law governing the arbitration
procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-section (1) and
clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the Court may, if it thinks
fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable
time within which to have the award annulled by the competent tribunal.
1. Initial Conditions [Sub-sec. (1)]
The five conditions which are necessary to be established initially are :—
(i) validity of the submission [clause (a)]
(ii) arbitrability of the disputes according to Indian law [clause (b)]
(iii) validity of the

constitution of the arbitral tribunal [clause (c)]
(iv) finality of the award [clause (d)]

(v) conformity with public policy or law of India [clause (e)].
Validity of Submission [Clause (a)]
The award must have been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto. A dispute was referred to foreign arbitration on the basis of the arbitration clause which
formed an integral part of the contract. The contract itself was found to be illegal. The submission made
pursuant to the illegal contract cannot be a valid submission. Award was held to be illegal and could not be
enforced in India.25 It is submitted that this proposition no longer holds good based on the doctrine of
separability. Based on this doctrine, which has been incorporated in Section ... of the 1996 Act, the arbitration
clause is deemed to be separate from the main contract itself. For more details refer to ...
The party applying for enforcement of the award is required to produce before the court, at the time of the
application, necessary evidence to prove the validity of the submission under the applicable law [ Section
56(1)(c)].
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Arbitrability of Dispute under Indian Law [Clause (b)]
The award will not be enforced if the subject matter of the award is not capable of settlement by arbitration
under Indian law.
Validity of
Constitution of Arbitral Tribunal [Clause (c)]
The arbitral tribunal which made the award must have been validly constituted either (a) as per the submission
to arbitration (arbitration agreement); or (b) in the manner agreed between the parties. The award must be in
conformity with the law governing the arbitration procedure.
In S. Mohd. Naim v. Rouraffic & Far Eastern Ltd., 26 it was contended that the expression “arbitration
procedure” in cl. (c) should be limited only to the procedure prescribed by statutory enactment and it has no
reference to procedure which has its basis on principles of natural justice. Rejecting this contention the Calcutta
High Courtheld that “apart from the law which is codified in Statutes, principles of equity and justice have
always guided the Courts in the matter of administration of justice, in all civilised countries of the world. That the
law laid down by judicial decisions is as much a part of the law of the land as the law embodied in Statutes, is a
fact recognised in all authoritative works of Jurisprudence and the argument that an award made in violation of
the first principles of justice or in disregard of the fundamentals of fairplay is a good enforceable award, does
not merit any serious consideration at all.” In this case, the court found that the umpire, by receiving information
separately from both parties and hearing them separately and by inspecting the goods (the quality of which was
in dispute) in the absence of the parties, had not acted in conformity with the arbitration procedure. The
arbitrators must function together and act judicially. They must give notice to parties and opportunity for
representation after they have commenced to function together. If they fail to do so the arbitral procedure is
void as not conforming to the principles of natural justice.27 They are not the agents of the parties.28
The party applying for enforcement is required to produce necessary evidence in proof of compliance of the
condition at clause (c), at the time of the application.
Finality of Award [Clause (d)]
It was held that an award would be final within the meaning of Section 7(1)(d) of the 1937 Act even if it was not
made a rule of the court. When the time for setting aside award had long expired before the filing of the suit, the
award is final.29 The corresponding provision of Section 57(1)(d) of the 1996 Act now specifically lays down that
the award will not be considered as final “if it is open to opposition or appeal or if it is proved that any
proceedings for the purpose of contesting the validity of the award are pending.” The party seeking
enforcement of the award is required to produce before the court, inter alia, evidence proving that the award
has become final [ Section 56(1)(b)]. The award shall not be deemed to be final if any proceedings for
contesting the validity of the award are pending in the country in which it was made. For the purpose of
enforcement of the award, one of the conditions is that the award has become final in the country in which it
was made [ Section 57(1)(d)]. Clause (d) of Section 57(1) further declares that an award will not be considered
as final in the country in which it was made if it is open to opposition or appeal ; or if it is proved that any
proceedings contesting the validity of the award are pending.
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The deemed non-finality of the award under Section 53 is rebuttable by the parties applying for enforcement of
the award on the proof of the fact that, as at the date of the application, it was no more open to opposition or
appeal, (e.g., the time limit, if any to oppose or appeal under the relevant law has expired, or that the opposition
or “appeal has been decided finally against the appellant, etc.,) or that no proceedings for contesting the validity
of the award are pending. On the other hand, the opposing party can rely on the deeming provisions of Section
57 to resist the enforcement of the award on providing proof to the contrary, e.g., that the time limit for appeal
has not lapsed or that his challenge to the validity of the award has not been finally decided by the competent
authority of that country.
An interim award granting payment of costs from one party to another pending a decision on merits, is not final
for the purposes of enforcement. In Hall Steel Company v. Metalloyd Ltd.
30 it was held that an interim award is enforceable if it finally disposes off a dispute between the parties or
conclusively disposes of a separate individual claim.
Public Policy [Clause (e)]
Enforcement of foreign award may be refused if it is contrary to the public policy or the law of India.
Since the expression ‘public policy’ covers the field not covered by the words ‘the law of India’ which follow the
said expression, contravention of law alone will not attract the law of public policy and something more than
contravention of laws is required.
By Indian Independence (Adaptation of Central Acts and Ordinances) Order 1948, the words “British India”
were substituted by the words “the Provinces”, which words were substituted by the word “the States” by the
Adaptation of Laws Order, 1950. By
Part B States (Laws) Act, 1951 , the words “the States” were substituted by the word
“India”. The aforesaid amendments introduced from time to time indicate that the words “public policy’ and “the
law of India” are independent of each other and the words “public policy” are not qualified by the words “of
India” which follow the word “law” because there was no separate public policy for each Province or State in
India. TheSupreme Court accordingly held that in the 1937 Act, the legislature had used the words “public
policy” only and by the said words it was intended to mean “the public policy of India”.
Where the parties agreed that law of the forum will regulate the decision of the arbitrators, the foreign award is
not contrary to the public policy or the law of India merely because it does not give effect to the Indian Law of
Limitation.31
A forward contract for vegetable oil with a foreign buyer which was prohibited by Section 7(1) of the Vegetable
Oils and Oil Cakes Forward Contracts Prohibition Order, 1944 is illegal and an arbitration clause which is an
integral part of the contract is illegal and unenforceable. An award made under it cannot be enforced in India.32
In Shiva Jute Baling Ltd. v. Hindley & Co. Ltd. 33, a clause of the contract provided for
liquidated damages that consisted of two things, namely, (i) the difference between the contract price and the
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market price on the date of default, and (ii) an addition of 10s. per ton above that. The Supreme Courtheld that
there was nothing in Section 73 or Section 74 of the Contract Act, which made the award of such liquidated
damages illegal. Assuming that the case is covered by S. 74, it is provided therein that reasonable
compensation may be awarded for breach of contract subject to the maximum amount named in the contract.
What the arbitrators awarded was the maximum amount named in the contract. Rejecting the contention that
the clause which provided for a further sum of 10s. per ton over and above the difference between the contract
price and the market price on the date of the default was per se unreasonable and was therefore bad according
to the law of India as laid down in Sections 73 and 74 of the Contract Act, the Supreme Courtobserved that
both these sections provided for reasonable compensation and Section 74 contemplated that the maximum
reasonable compensation may be the amount which may be named in the contract. In this case the arbitrators
awarded the maximum amount so named and nothing more. Their award in the circumstances could not be
said to be bad on the face of it, nor can it be said to be against the law of India as contained in these sections of
the Contract Act, so as to attract Section 7(1)(e) of the 1937 Act [corresponding to Section 57(1)(e) of the 1996
Act] to refuse enforcement.
2. Conditions for refusal [sub-sec. 2]
The court is bound to refuse the enforcement of the award, even if the conditions set out in Section 57(1) are
satisfied, in the following circumstances [ Section 57(2)] :
(i) the award has been annulled in the country in which it was made [Clause (a)];
(ii) notice of the arbitration proceedings was not given in sufficient time to enable the party resisting
enforcement to present his case [Clause (b)];
(iii) the party resisting enforcement was not properly represented due to legal incapacity [Clause (b)];
(iv) the award does not deal with differences as per the terms of the submission [Clause (c)];
(v) the award is beyond the scope of the submission [Clause (c)];
If some of the differences submitted for arbitration are not covered by the award, the court may not refuse
enforcement. Instead it has the discretion either to postpone the enforcement or to grant it subject to such
guarantee as may be decided by it. Court has the discretion either to refuse enforcement, or to adjourn
consideration of enforcement, of the award, if the validity of the award is challenged on the grounds other than
the following [ Section 57 (3)]:
(a) the award has been made in pursuance of a submission to arbitration which is not valid under the law
applicable thereto [Clause (a) of Section 57(1)].
(b) the award has been made by the arbitral tribunal not as provided for in the submission to arbitration or
constituted in the manner agreed upon by the parties and in conformity with the law governing
arbitration procedure.
(c) the grounds indicated at (ii) to (v) above.
The opposing party has to prove that under the law governing the arbitration procedure certain grounds other
than those mentioned above exist entitling him to contest the validity of the award. If the court is satisfied, it
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may give the party a reasonable time within which the award is to be annulled by the competent authority.
ENFORCEMENT
Where the requirements of enforcement as laid down in this Part dealing with enforcement of awards under
Geneva Convention are satisfied, the award becomes enforceable in the manner of a court decree.
25. Societa Ammonia v. S. Gorakhram Gokalchand,

AIR 1964 Mad 532 [
LNIND 1963 MAD 267 ].
26.
AIR 1960 Cal 146 [
LNIND 1959 CAL 164 ](DB).
27. Sociate Anonmina Lucchesse Olii E Vini Lucca v. Gorakhram Gokulchand,

AIR 1964 Mad 532 [
LNIND 1963 MAD 267 ]:
ILR (1964) 2 Mad 90 .
28. Sociate Anonmina Lucchesse Olii E Vini Lucca v. Gorakhram Gokulchand,

AIR 1964 Mad 532 [
LNIND 1963 MAD 267 ]:
ILR (1964) 2 Mad 90 .
29. De Se Oil v. Gorakhram Gokulchand, 64 Bom LR 113.
31. Mury Exportation v. D. Khaitan & Sons,

AIR 1956 Cal 644 [
LNIND 1956 CAL 109 ].
32. Mury Exportation v. D. Khaitan & Sons,

AIR 1956 Cal 644 [
LNIND 1956 CAL 109 ].
33.
AIR 1959 SC 1357 [
LNIND 1959 SC 144 ], 1362 :
(1960) 1 SCR 569 [
LNIND 1959 SC 144 ].
End of Document
Navneet Krishn
S. 58.
Enforcement of foreign awards
Where the Court is satisfied that the foreign award in enforceable under this Chapter, the award shall be
deemed to be a decree of the Court.
Where a court is asked to enforce an award, it must recognise not only the legal effect of the award, but must
also use legal sanctions to ensure that it is carried out.34 In the Law And Practice Of International Commercial
Arbitration by Redfern and Hunter,35 it is said:
“A party seeking to enforce an award in an international commercial arbitration may have a choice of country in which
to do so, as it is sometimes expressed, the party may be able to go forum shopping. This depends upon the location of
the assets of the losing party. Since the purpose of enforcement proceedings is to try to ensure compliance with an
award by the legal attachment or seizure of the defaulting party's assets, legal proceedings of some kind are necessary
to obtain title to the assets seized or their proceeds of sale. These legal proceedings must be taken in the State or
States in which the property or other assets of the losing party are located.
***
In other words, the place of arbitration will have been chosen as a neutral forum. It will be rare for the parties to have
assets situated within this neutral country; and the award, if it has to be enforced, must generally be enforced in a
country other than that in which it was made. This is why, it is so important that international awards should be
recognisable and enforceable internationally, and not merely in the country in which they are made; moreover, unlike
the place of arbitration, the place of recognition and enforcement will not be chosen by or on behalf of the parties. It will
depend upon the circumstances of each particular case.
So for as recognition of an international award is concerned, the successful party only needs to seek recognition if
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proceedings are brought against him in respect of a matter which has already been dealt with and made the subject of
an award. The party who is sued will then wish to rely on the award by way of defence, or set off, or in some other way
in the court proceedings. For this purpose, he will ask the court concerned to recognise the award as binding on the
persons between whom it was made. It is impossible to know in what court or in what country such proceedings are
likely to be brought and this fact emphasises once again how important it is that international awards should be truly
international in their validity and effect.
Where it becomes necessary to enforce an international award, the position is different. The first step is to determine
the country or countries in which enforcement is to be sought. In order to reach this decision, the party seeking
enforcement needs to locate the State or States in which the loosing party has (or is likely to have) assets available to
meet the award.”
An award cannot be executed against a party who does not own any assets in India.36
If an award is for money, its subject-matter may be said to be money, just as the subject matter of money
decree may be said to be money.37 The appropriate court for initiating legal proceedings will be that court in
whose jurisdiction the money is held.38 In this case (which related to sale of ship), the ship was docked at a port
in Gujarat falling within the jurisdiction of Bhavnagar Court. However, it was not known where a part of the
purchase price deposited by the Indian acquirer company as per directions of the Supreme Court was held.
[From records, it was noticed that it had its registered office at Calcutta and its regional office at Bombay]. The
Supreme Court observed that it was for the appellant to ascertain where the moneys were so held and if they
were held within the jurisdiction of Bhavnagar Court, to apply to that court. The decision of the Bombay High
Court in Mukesh H. Mehta v. Harendra H. Mehta, 39 deserves to be noted in extenso:
“It is next urged that the award has merged in foreign judgment. This court in Northern Sales Co. Ltd. v. Reliable
Extraction Industries (P) Ltd. 40 Pendse J relying on Russell On Arbitration, [East India Trading
Co., New York v. Badat and Co., Bombay] and [Badat and Co. v. East India Trading Co., New York] 42 negatived this
41
point. It was under Section 5(1) of 1961 Act. Award was dated 10.6.1980 and order dated 10.6.1981 was passed by
the Master in Chambers merely for enforcement of the award in the same manner as the judgment or order pursuant to
Section 26. In view of the contentions, the first question arose whether it was a judgment or merely enforcement order
and, secondly, even if it is a judgment, does the award stand merged in the judgment. The learned judge first held that
it is only an enforcement order and not a judgment. Then he considered the second submission and came to the
conclusion that the award does not merge. The learned judge quoted the following passage from Russell On
Arbitration, 43 in support:
“Merger of an award in judgment: In English law, any cause of action, whether a right of action
under a contract or in respect of a tort or in respect of any other cause of action, is merged in and effaced by an
English civil judgment pronounced thereon.”
This proposition is only another way of stating the well known rule as to res judicata and is of course an
illustration of that rule of public policy which holds that interest reipublicae ut sit finis litium. Indeed, if the
proposition were not a sound one, there could never be an end to any litigation. The proposition is indeed so
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elementary that it is impossible to find high and direct judicial authority for it. It is so ingrained in English law and
that the only judicial pronouncements thereon are in cases where a possible exception to the rule is being
discussed. For example, questions sometimes arise as to whether and, if so, to what extent, strangers are
bound by a judgment; or whether a judgment creditor need be content with the rate of interest applicable to a
judgment debt when the deed creating the debt stipulated for a higher rate of interest until payment was
actually effected. In particular, English law makes this exception to the generality of the rule, that a foreign
judgment is not accorded the power of merging and effacing the cause of action on which it was given. This is
an insular quirk probably peculiar to English law, and is so anomalous that even the most learned writers
sometimes forget it. But the doctrine of merger of a cause of action is an English judgment (and) has never
been doubted and it follows that after judgment, it is no longer open for a claimant in any jurisdiction governed
by English law to sue upon the award. Though, indeed, a successful action was brought on an award after a
judgment had been obtained to enforce it in England in the case of Oppenheim & Co. v. Mahomed Haneef,
44 the Privy Council felt it necessary to explain that in order to prevent misconception, it appeared desirable to
add that it was not pleaded or contended at any stage of the proceedings that the award had merged in the
English judgment. Quite plainly, it had, and if the parties had raised the point, the Privy Council would have
been obliged to so hold. As the parties had not raised the point, the Privy Council had to add their rider by way
of self-exculpation. Then it was held:
“The passage unmistakably establishes that a foreign judgment is not accorded the power of merging and effacing the
cause of action on which, it was given under the English law. Therefore, even assuming that the order passed by the
Master in Chambers is a judgment, still it being a foreign judgment, as far as this court is concerned, it will not have the
effect of effacing the cause of action, that is the award secured by the petitioners in their favor.”
In East India Trading Co., New York v. Badat and Co., Bombay, 45 one of the contentions
raised was whether foreign award no longer survives after the judgment was passed in terms of the award by
the Supreme Court of New York. It came to be observed,—
“If it is open to a party suing on a foreign judgment to rely in the alternative on the original cause of action, we should
have thought that it would be equally competent to a party who has obtained foreign judgment on the award to rely on
the original cause of action which in this case happens to be the award. Therefore, the award is as much a cause of
action qua the foreign judgment as a contract or any other right which the party has litigated and which has resulted in
a foreign judgment. Instead of going to court on the contracts which were entered into between the parties and
obtaining a decree, the parties here first went to the domestic tribunal, obtained the award and then proceeded to
complete the award and make it enforceable by obtaining a judgment. Therefore, in this case, the cause of action was
constituted by the award and the judgment was obtained because the plaintiffs had the award in their favour.
Therefore, it would seem to us that on principle, there is no reason why the plaintiffs should be debarred from relying
on the award as the original cause of action which resulted in the foreign judgment being obtained.”
Against this an appeal was preferred to the Apex Court. Judgment of the Apex Court is reported in Badat and
Co. v. East India Trading Co., New York. 46 The majority judgment did not touch this
aspect, though it was set aside on the ground of jurisdiction. In fact, minority judgment delivered by Mr. Justice
Subba Rao accepted the said conclusion of the Division Bench that the award does not merge in the foreign
judgment and can be made a cause of action for enforcement. The learned advocate for the petitioners
contended that in the case of Northern Sales Co. Ltd. v. Reliable Extraction Industries (P) Ltd.,
47 should not have considered this point as it was not necessary in view of finding on the first point. It is not
possible to accede to this submission. Alternate submissions were advanced and, hence, considered in detail
Navneet Krishn
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and decided.
“In view of this, I hold that obtaining of judgment from USA Court by petitioners would not have the effect of effacing
the cause of action for enforcement of the award or that the award has merged in the judgment. The petitioners have
correctly instituted these proceedings.
It is lastly submitted that the petitioners cannot enforce the award as they are only seeking to enforce the part—Indian
part. This is not correct. The petitioners have pointed out that they are dealing with Indian part of the award that
involves Indian businesses and properties. It has been confirmed by USA court already and USA businesses and
properties have already been dealt with. They have expressed their readiness to implement the award fully by
executing the necessary documents. Respondents Nos. 1 and 2 are not cooperating and raising objections since
beginning to delay the proceedings. The award is implemented to a large extent as businesses and properties are in
possession of the parties as provided by the award. Indian part of the award has to be implemented here. It is
contended that the award is composite and the petitioners committed breach of the obligation under it, and it cannot be
enforced fully. It is all vague and baseless. The petitioners have expressed their readiness and willingness for
implementation and only respondents are objecting. In any case, this cannot be an objection under Section 7 of 1961 [
sec. 48 of 1996 Act]. Act to hold that the award is unenforceable.”
1. Registration
A foreign award does not require registration for its enforcement. The award in question did not have the effect
of a transfer. It only directed the parties in terms of their settlement for division of business properties to
execute necessary transfers and closing documents after the division had been effectuated. The award only
created a right to obtain transfer and closing documents.48
2. Application of compulsory purchase provisions of

Income-tax Act
It has been held that in the case of a foreign award the provisions of the
Income-tax Act in Chapter XXC relating to pre-emptive purchase by the Central
Government do not apply. Though the Chapter creates wide net to cover all kinds of immovable property, that
net is not wide enough to cover a foreign award relating to businesses and properties both in India and in a
foreign country.49
3. Judgment on award on country of origin
Enforcement in India of a foreign award does not become barred by the fact that a judgment on the basis of the
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award has been obtained in the country of its origin.50
34. Brace Transport Corpn. of Monrovia v. Orient Middle East Lines,

AIR 1994 SC 175 : (1994) 4 Comp LJ 214, 221 (SC) : 1995 Supp (2) SCC 280.
35. 1986 Edition 337-338, cited by the Supreme Court in Brace Transport's case (supra).
36. Brace Transport Corpn. of Monrovia v. Orient Middle East Lines Ltd., (supra).
39.
(1995) 5 Comp LJ 517 , 531.
40.
AIR 1985 Bom 332 [
LNIND 1984 BOM 375 ]:
ILR 1985 Bom 1945 [
LNIND 1984 BOM 375 ].
41.
AIR 1959 Bom 414 [
LNIND 1958 BOM 130 ]: 61 Bom LR 333.
42.
AIR 1964 SC 538 [
LNIND 1963 SC 170 ]:
1964 4 SCR 19 [
LNIND 1963 SC 170 ].
43. 12th edn., p. 267 (20th edn., p. 367).
44.
(1922) 1 AC 482 (PC) : 91 LJ PC 295 : 127 LT 196.
45.
AIR 1959 Bom 414 [
LNIND 1958 BOM 130 ]: 61 Bom LR 333.
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46.
AIR 1964 SC 538 [
LNIND 1963 SC 170 ]:
(1964) 4 SCR 19 [
LNIND 1963 SC 170 ].
47.
AIR 1985 Bom 332 [
LNIND 1984 BOM 375 ]:
ILR 1985 Bom 1945 [
LNIND 1984 BOM 375 ].

(1999) 3 Arb LR 1 :
AIR 1999 SC 2054 [
LNIND 1999 SC 545 ]at pp. 2068- 2071 :
(1999) 2 RAJ 547 :
(1999) 3 SCC 562 .

(1999) 3 Arb LR 1 :
AIR 1999 SC 2054 [
LNIND 1999 SC 545 ]: (1999) 2 RAJ 547 :
(1999) 3 SCC 562 .

(1999) 3 Arb LR 1 :
AIR 1999 SC 2054 [
LNIND 1999 SC 545 ]at 2065 : (1999) 2 RAJ 547 :
(1999) 3 SCC 562 .
End of Document
Navneet Krishn
AWARDS > APPEALS
S. 59.
Appealable orders
(1) An appeal shall lie from the order refusing—
(a) to refer the parties to arbitration under Section 54; and

(b) to enforce a foreign award under Section 57,
to the court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this section but nothing in this section shall
affect or take away any right to appeal to the Supreme Court.
An appeal lies against the following orders :
(a) to refer the parties to arbitration under S. 54, and

(b) to enforce a foreign award under S. 57.
No second appeal lies against orders passed under this section. But an appeal to the Supreme Court is not
barred.
End of Document
Navneet Krishn
AWARDS > SAVING
S. 60. Saving
Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any
award or of availing himself in India of any award if this Chapter had not been enacted.
1. GAFTA Arbitration Rules 1
A cargo of wheat was rejected by the buyers because of radio-active contamination. Sellers claimed arbitration
according to GAFTA Arbitration Rules. The rules provided for the claim to lapse if the parties failed to submit
documentary evidence within one year after the appointment of the arbitrator. This was, however, subject to the
discretion of the arbitrator. The sellers defaulted. The arbitrator treated the claim as lapsed and refused any
discretion in favour of the sellers. The sellers appealed to the GAFTA Board of Appeal. The Board ordered the
arbitration to proceed. The House of Lords refused to interfere in the exercise by the Board of its discretion
under the rules.2
ENFORCEMENT OF FOREIGN AWARDS APART FROM ACTS OF 1937, 1961 AND

1996
Apart from statutory provisions, foreign awards and foreign judgments are enforceable in India on the same
grounds and in the same circumstances in which they are enforceable in England under the common law.3 The
plaintiff can recover a sum found to be due by an award in an action upon the original contract.4
A foreign award creates an obligation on the part of a party towards the other to do what the award directs him
to do. The other party may bring an action on the award without recourse to the original cause of action5
provided it does not suffer from any defects mentioned in
Section 13 of the Code of Civil Procedure 6 and it may be enforced
by suit, but the court may refuse to enforce the foreign judgment on grounds of expediency7 within three years
of the judgment.8 The suit on the judgment must be instituted in a court within whose jurisdiction the defendant
resides, works for gain or carries on business, or the breach of the obligation to pay the judgment debt takes
place, but not in a court having jurisdiction over the original cause of action.9 When a foreign award is
recognized by a foreign Court, the award merges in the judgment pronounced on the award.10
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However, while decrees of superior courts in reciprocating foreign countries are enforceable like a decree of a
District Court by virtue of
Section 44A of the Civil Procedure Code , this rule does not apply to foreign awards that
are deemed to be decrees of foreign courts.11 This is because of the Explanation 2 which exempts “ an
arbitration award, even if such an award is enforceable as a decree or judgment”. The reason for this exception
is that foreign awards ought not to be enforced without following the procedure specified in Part II of the
Arbitration and Conciliation Act, 1996 (or the Foreign Awardsact, 1961 before the
enactment of the 1996 Act).12
2. Enforceability of non-convention awards
In the Indian context, pursuant to the ratio of Bhatia International 13 Part I of the
Arbitration and Conciliation Act 1996 is applicable to arbitrations conducted outside India
unless it is expressly or impliedly excluded.Section 2(7) states that an arbitral award “made under this Part (i.e.
Part I) shall be considered as a domestic award”. Thus if an arbitration is conducted in a country that is not a
signatory to the NYC or the Geneva Convention, the award which will not be a “foreign award” under Part II, will
still be enforceable as a ‘domestic award’ under Part I. The following observations in Bhatia International
14 are apposite:
“Admittedly Part II only applies to arbitrations which take place in a convention country. Mr. Sen fairly admitted that
Part II would not apply to an international commercial arbitration which takes place in a non-convention country. He
also fairly admitted that there would be countries which are not signatories either to the New York Convention or to the
Geneva Convention . It is not possible to accept submission that the said Act makes no provision for international
commercial arbitrations which take place in a non-convention country.
...
There would thus be no need to define an award as a “domestic award” unless the intention was to cover awards
which would otherwise not be covered by this definition. Strictly speaking an award passed in an arbitration which
takes place in a non-convention country would not be a “domestic awards”. Thus the necessity is to define a “domestic
award” as including all awards made under Part I. The definition indicates that an award made in an international
commercial arbitration held in a non-convention country is also considered to be a “domestic award”.”
It is thus clear that Part I would cover enforcement of non-convention awards in certain circumstances.
However, the question arises as to how such awards are enforceable when Part I has been expressly or
impliedly excluded.
In such a situation, two different approaches can be followed for enforcement of arbitral awards that do not fall
under either the NYC or the Geneva Convention . One view is that they should be treated as judgments of a
foreign court and be enforced following the principles of comity and the other is that they be treated as ordinary
contracts (as an award is a decision reached based on a procedure mutually agreed upon by the parties), and
enforcement of the award would merely be treated as a claim for specific performance.
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The former view has more judicial authority than the latter. The Indian law has been held to be the same as the
English law on the subject. 15
The common law on the subject is enunciated by Dicey And Morris as follows:
“Rule 198(1) : A foreign arbitration award which has been rendered enforceable by a judgment in the country where it
was given may be enforced by an action as a foreign judgment.
(2) A foreign arbitration award which has not been rendered enforceable by a judgment in the country where it was
given may be enforced by an action at the discretion of the court if the award is, —
(a) in accordions with the terms of the submission agreement; and
(b) valid according to the law governing the arbitration proceedings; and
(c) (semble) final according to the law governing the submission agreement.”16
Dicey And Morris, however further state:
“Others believe that enforcement in England must depend upon the nature of the award in the country where it was
given. Thus, if the award must be, and has been, reduced to a judgment abroad, the judgment and not the award must
be enforced in England. If the award give rise to a claim in contract abroad, it must be enforced as a contract in
England. However, as will be shown, this is not the view generally adopted by the courts, for the award is treated as a
contract in England, no matter whether foreign law so regards it or not. Still others assert that the enforcement of an
award in England is based not on the award, but on the contractual agreement to submit to arbitration all differences
arising out of the original contract, on the ground that the submission to arbitration itself implies a contractual
agreement to abide by the award, thereby extinguishing the original cause of action.”17
Based on an analysis of foreign authorities, the Supreme Court in Badat & Co. came to the conclusion that
“...commercial arbitration awards, though based on a contract to arbitrate are not contracts and although they are
decisions they are not judgments. Even though that is so, it has been held in several cases in England that even where
an award has not been reduced to a judgment in a foreign country it can be enforced in England provided, of course,
the award answers mutatis mutandis the tests for determining the enforceability of foreign judgments.” 18
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However, the Supreme Court also accepts Dicey And Morris‘ conclusion for enforcement of an award in
England, in the following passage—
“He has then dealt with various decisions in England and also the opinions of certain writers. The conclusions stated in
so far as they are relevant to this case are:—
1. In all enforcement proceedings in England the plaintiff must first obtain an enforceable title in England i.e., he
must either apply for leave to enforce the award or must bring an action on the award.
2. In an enforcement proceeding in England the action on the award must take the form of a claim in contract.
This rule is based upon the assumption that the agreement to perform the award is implied in the submission
and that the submission is the contract on which the action is based.
3. In order to be enforceable in England, the foreign award need not first be pronounced enforceable in the
country of its origin.19 If, however, the foreign award is followed by judicial proceedings in the foreign country
resulting in a judgment of the foreign court which is not merely a formal order giving leave to enforce the
award, enforcement proceedings in England must be brought on the foreign judgment or possibly on the
original cause of action but probably not on the award. If the foreign judgment has the character of a formal
order giving leave to enforce the award it is doubtful whether the foreign award or the foreign order is to be
enforced in England. If the distinction between foreign judgments on the award and foreign formal
enforcement orders can be maintained in practice, them, it is believed that the foreign award and not the
foreign order, will be enforced in England, if the enforcement order is purely formal.
4. For the purpose of enforcing a foreign award plaintiff must prove only (1) submission, (2) compliance with the
submission in the conduct of an arbitration and (3) the validity of the award according to the law of the
country where it was made. This is also laid down in Norske Atlas Insurance Co. Ltd. v. London General
Insurance Co. Ltd., 20 and according to the learned author this decision correctly indicates the conditions
which must be fulfilled if a foreign award is to be enforced in England.” 21
Foreign Courts have largely interpreted non-convention awards to be judgments of Courts.
The Supreme Court of British Columbia in Food Services of America, Inc. v. Pan Pacific Specialities Ltd.
22, took the view that an arbitral award was not a contract. It was argued that the Defendants not being a
registered corporation, a claim arising out a contract cannot be filed against them. Hence it was argued that an
arbitral award being in the nature of a contract cannot be enforced. It was however laid down emphatically by
the Supreme Court of British Columbia that an arbitral award is not a contract.
In Weizmann Institute of Science v. Janet C Neschis 23, an award by a tribunal in
Liechtenstein was not enforceable in USA as Liechtenstein was not a party to the New York Convention. The
Court held that in such cases foreign awards would be enforceable as if they were foreign judgments.
It is submitted that a foreign award is more in the nature of a contract between the parties rather than a foreign
judgment. A foreign judgment has the sanction of a court. An arbitral award gets the sanction of a court decree
only when it is recognized and enforced based on the procedure followed under the 1996 Act. In the absence of
a prescribed procedure to recognise and enforce non-convention awards, an arbitral award does not obtain the
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sanction of a court decree.
3. Awards under English

Arbitration Act
Any objection to an award made under the English

Arbitration Act on the ground of misconduct or irregularity on the part of the arbitrator is
to be taken in England within the prescribed time24 and if not so taken cannot be pleaded as a defence to an
action on the award in India, but a defence going to the root of the award, e.g., that there was no arbitration
agreement or that the arbitrator had no jurisdiction to make the award can be taken in an action for the
enforcement of the award in India.25 A foreign award under an arbitration agreement governed by the English
law to which the English
Arbitration Act applies cannot be filed under Section 14 and a decree cannot be obtained
thereon under Section 17.26
INJUNCTIONS
4. Injunction restraining Indian arbitration 27
The court has jurisdiction to restrain an arbitration in this country where an action by the applicant in respect of
the subject-matter is pending in a foreign country. The applicant must satisfy the court that the grant of
injunction would not cause injustice to claimant for arbitration and that the continuance of the arbitration would
be vexatious and oppressive to him and an abuse of the process of the court, in short, that it would be unjust.28
An English court refused to grant an interlocutory injunction against arbitration in London at the instance of the
charterers who had commenced an action in France for a declaration that the charterparty was not an effective
bargain.29 In another case, an English court refused to grant an injunction against arbitration started by the
salvage company in London on the application of the owner of the vessel who commenced an action in Turkey
to set aside the salvage contract containing the arbitration clause on the ground that it was obtained by
duress.30 The court will refuse to grant the injunction when there is no likelihood of conflict of jurisdiction
between the two tribunals.31
In no case, the court has stayed the publication of an award which has already been made.32 The general
principle is that the court can and will interfere whenever there is vexation and oppression to prevent the
administration of justice being perverted for an unjust end.33 But the court will not restrain the proceeding if it is
not vexatious or oppressive or an abuse of the process of the court.34
5. Injunction restraining foreign actions
When there exists a valid arbitration agreement, the Court of competent jurisdiction can grant an injunction
restraining the party commencing the litigation from proceeding with it35, provided the application is made
before taking any steps in the foreign action and thereby submitting to the jurisdiction of the foreign court.36
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The injunction granted is against the litigant and not against the foreign Court.
Grant of an anti-suit injunction to prevent proceedings in breach of an arbitration clause has been held to be
analogous to grant of such a relief in the context of an exclusive jurisdiction clause.37
The power to grant anti-suit injunctions must be exercised with restraint. The reasons for this were elucidated in
Laker Airways Limited v. Sabena, Belgian World Airlines 38, in the following words:
“However, the fundamental corollary to concurrent jurisdiction must ordinarily be respected: Parallel proceedings on
the same in personam claim should ordinarily be allowed to proceed simultaneously, at least until a judgment is
reached in one which can be pled as res judicata in the other. The mere filing of a suit in one forum does not cut off the
preexisting right of an independent forum to regulate matters subject to its prescriptive jurisdiction. For this reason,
injunctions restraining litigants from proceeding in courts of independent countries are rarely issued. .. .. .. A second
reason cautioning against exercise of the power is avoiding the impedance of the foreign jurisdiction. Injunctions
operate only on the parties within the personal jurisdiction of the courts. However, they effectively restrict the foreign
courts ability to exercise its jurisdiction. If the foreign court reacts with a similar injunction, no party may be able to
obtain any remedy. Thus, only in the most compelling circumstances does a court have discretion to issue an anti-suit
injunction. There are no precise rules governing the appropriateness of antisuit injunctions. The equitable
circumstances surrounding each request for an injunction must be carefully examined to determine whether, in light of
the principles outlined above, the injunction is required to prevent an irreparable miscarriage of justice. Injunctions are
most often necessary to protect the jurisdiction of the enjoining court, or to prevent the litigant's evasion of the
important public policies of the forum.”
This quote was referred to by the United States Court of Appeal in Hans A. Quaak Et AL, v. Klynveld Peat
Marwick Goerdeler Bedri Jfsrevisoren 39, where the Court upheld the restricted use of the
discretionary power to grant anti-suit injunctions. The Court observed:
“We reject the liberal approach. We deem international comity an important integer in the decisional calculus and the
liberal approach assigns too low a priority to that interest. In the bargain, it undermines the age-old presumption in
favor of concurrent parallel proceedings a value judgment that leaves us uneasy and presumes that pubic policy
always favors allowing a suit pending in an American court to go forward without any substantial impediment. To cinch
matters, this approach gives far too easy passage to international antisuit injunctions. We understand that the judicial
process is a cornerstone of the American way of life but in an area that raises significant separation of powers
concerns and implicates international relations. We believe that the law calls for a more cautious and measured
approach. The conservative approach has more to commend it. First, it recognizes the rebuttable presumption against
issuing international antisuit injunctions (and, thus, honors the presumption favoring the maintenance of parallel
proceedings). Second, it is more respectful of principles of international comity. Third, it compels an inquiring court to
balance competing policy considerations. Last but far from least it fits snugly with the logic of Canadian Filters, in which
we said that issuing an international antisuit injunction is a step that should “be taken only with care and great restraint”
and with the recognition that international comity is a fundamental principle deserving of substantial defence”
Only courts of competent jurisdiction to grant anti-suit injunction
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Anti-suit injunctions can only be granted by the Courts of competent jurisdiction. According to English law, the
Courts of competent jurisdiction are the Courts at the seat of arbitration.
1. To justify the grant of an injunction restraining an action in court within American jurisdiction, it has to
be shown that the court of USA was a forum to which the defendants were amenable, in which justice
could be done at less inconvenience and expense, and that an injunction would not deprive the plaintiff
of a personal or judicial advantage available to him in the American jurisdiction. Since the defendants
were Texan based with an office and substantial assets in Texas where the plaintiff would enjoy the
prospect of a higher damage, that solved in his favour the critical equation between advantage to him
and disadvantage to the defendant, the injunction will not be granted.40
2. In Weissfisch v. Julius 41 the claimant and the second defendant were
brothers who controlled a group of companies. Some of those companies were owned by a trust of
which the third defendant was trustee. The first defendant was a solicitor who acted for the group and
who had acted personally for both the claimant and second defendant.
The claimant and second defendant had a dispute and pursued mediation, with the defendant as
the mediator, which failed. Arbitration was then resorted to with the first defendant as the arbitrator,
with the arbitrator being given a wide mandate to make final binding awards with respect to all
disputes involved. The arbitration agreement was to be governed by Swiss law and seat of
arbitration was Geneva.
Under the agreement, the claimant and second defendant expressly waived any rights they might
have had to challenge the appointment of the first defendant as arbitrator on any ground, including
his previous association with the parties in his capacity as mediator as well as solicitor.
The Claimant subsequently challenged the validity of the arbitration agreement before the English
courts on the ground that it had been procured by misrepresentation. He had also sought an
injunction restraining the first defendant from acting as arbitrator as he owed the claimant fiduciary
duties, some of which could not be waived and that he was bound by a duty to observe the rules of
professional conduct for a solicitor. The defendants argued that the English courts did not have
jurisdiction and that the seat of the arbitration was Switzerland and only Swiss Courts possessed
jurisdiction over these issues.
In the meantime the first defendant sought to hold a hearing in Geneva. The claimant then filed an
application to restrain such a hearing till the stay proceedings was decided finally. This application
was rejected for want of jurisdiction. The claimant appealed on the basis that the application was
for breach of fiduciary duty of the first defendant and did not deal with the arbitration clause.
The English Court of Appeal dismissed the appeal on the grounds of the consensual appointment
of the arbitrator and the express waiver of the right to challenge the appointment of the arbitrator
by the parties. Moreover, under the New York Convention it was the Courts of Switzerland, the
country of the seat of arbitration, who had competence to rule on the validity of the arbitration
agreement. English courts would not have jurisdiction to decide on such issues except in
exceptional circumstances. No exceptional circumstance had been proved before the Court of
Appeal during the interim appeal. The lower Court could rule on whether there was such an
exceptional circumstance when it came out with the final judgment.
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3. An insurance contract with an arbitration clause was entered into between the parties, with a provision
for London based arbitration and English law as the governing law. In such a scenario, the English
Court (Queen's Bench division) assumed jurisdiction and stayed proceedings in Philippines that had
been started.42
4. Proceedings were commenced in China relating to a dispute relating to a charter party regardless of
the arbitration clause present in the charter party. Since the law governing the contract was English
law, it was held that English law would also govern the arbitration agreement and in this light an
argument that the arbitration agreement was void as per Chinese law was of no relevance. The
Queen's Bench Division (Commercial Court) granted an injunction restraining the parties from
continuing with the proceedings in China43
5. London was the seat of arbitration. It was held that the arbitral award could not be set aside in USA
even though US law may provide for it. The English Court of Appeal, in C v. D
44 ordered an injunction restraining proceedings before the US Federal Court for setting aside an
English arbitral award. The reasoning given by the Court was that choosing London as the seat of
arbitration meant incorporating the framework of the English
Arbitration Act and that any challenges to the award could only be those
permitted by the Act. An agreement as to the seat of an arbitration was thus analogous to an exclusive
jurisdiction clause.
The court has jurisdiction to restrain a foreigner who is not resident in a country and who has no assets in this
country if there was a sufficient connection with the country to justify the grant of the injunction. It was held that
the existence of a contract may provide the connection.45
Conditions for grant of anti-suit injunction
Anti-suit injunctions are granted to meet the ends of justice. Such injunctions, in the context of arbitrations, are
thus granted when the foreign proceedings—are either vexatious, oppressive or violate a binding contract.
(a) Foreign proceedings are vexatious or oppressive
1. In Karaha Bodas Company, LLC v. Perusahaan Pertambangan Minyak Dan gas Bumi Negara
46, the defendant, the State controlled oil company and the Plaintiff entered into a Joint Operation
Contract relating to a project in Indonesia. The Plaintiff and defendant also entered into an Energy
Sales Contract with Perusahaan Listruik, an Indonesian state-owned electrical utility company, with
respect to the electricity generated under the project. Both agreements provided for application of
Indonesian law with arbitration under UNCITRAL rules in Switzerland.
Pursuant to a dispute, the project was suspended and the Plaintiff initiated arbitration in
Switzerland, the arbitral ruling being in the Plaintiffs favour. A petition for annulment was
rejected on procedural grounds by the Swiss Supreme court.
The Plaintiffs sought to enforce the award in USA where opposition from the Defendant was
rejected (Proceeding 1).
During the time the above mentioned enforcement proceedings were pending the Defendant
sought to set aside the award in Indonesia. Both the Indonesian and US Courts granted anti-
suit injunctions against the proceedings in the other court.
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The Indonesian court then annulled the award on the ground that the parties had chosen
Indonesian law to govern the contract and this would include Indonesian procedural law as
well. This also meant that the Indonesian Court would have jurisdiction. The Indonesian Court
also passed an order for permanent injunction against the Plaintiff.
The US district court issued a preliminary injunction prohibiting the defendant from enforcing
the injunction granted by the Indonesian court. This was then set aside in appeal based on the
reasoning that the US courts were courts of secondary jurisdiction and it was not appropriate
for them to protect the legal hardships the Plaintiff would undergo in foreign countries.
The Plaintiffs in the meanwhile commenced proceedings before the New York court to enforce
the Court decision in Proceeding 1 and this was decided in the Plaintiffs favour.
Meanwhile, the defendant commenced litigation in the Cayman Islands seeking restitution of
the sum it had paid under the award and damages, on the grounds that the award was
obtained by fraud. The defendant claimed to have newly discovered documents in support of
its allegation.
The Plaintiffs filed an anti-suit injunction against the Cayman islands judicial proceedings in the
district court at New York, the decision of which was appealed against.
The US court of Appeal upheld the grant of an anti-suit injunction and held that while courts
should not protect a party seeking enforcement of an award under the New York Convention
from all the “legal hardships” associated with foreign litigation over the award, it did not follow
that a federal court cannot protect a party who has obtained enforcement of a foreign award
from any of the legal hardships that the losing party might seek to impose. The US courts
possessed inherent jurisdiction and had the power to grant an anti-suit injunction in the present
case as there was no basis for the courts in the Cayman Islands assuming jurisdiction.
In the words of the Court:
“Here, an injunction is necessary because Caymen Islands action threatens to undermine the
federal judgments confirming and enforcing the Award against Pertamina, and may also undermine
federal jurisdiction to determine whether prior federal judgments should be invalidated on the basis
of the fraud alleged by Pertamina.
The injunction is also supported by strong public policy considerations we have noted `the strong
public policy in favour of International arbitration’, and the need for proceedings under the New York
Convention `to avoid undermining the twin goals of arbitration, namely, settling disputes efficiently
and avoiding vexatious and expensive litigation’.”
This case is a perfect example of where the straightforward enforcement of an arbitral award
was delayed by way of vexatious proceedings initiated by the unsuccessful party in different
jurisdictions. Since the award was rendered in Switzerland, only the Swiss courts would have
jurisdiction to set it aside. The wrongful assumption of jurisdiction by the Indonesian Courts
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followed by vexatious proceedings in the Cayman islands resulted in an avoidable delay.
2. In Storm LLC (Ulkaraine) v. Telenor Mobile Communications AS 47,
the Petitioner and the Respondent entered into a joint venture (by entering into a Shareholders
Agreement) in the Ukrainian telecommunications sector. The Petitioner was merely a holding
company holding shares on behalf of its parent. The Shareholders Agreement contained a clause
providing for arbitration of disputes in New York in accordance with UNCITRAL rules. A dispute
arose between the parties relating to the Petitioner's alleged breach of the agreement. The
Respondent commenced arbitration in New York. The Petitioner participated in the arbitration.
The Petitioners’ holding company(“Holding Co”) then commenced proceedings in Ukraine

against the respondent seeking a declaration that the Shareholders Agreement was invalid.
The Respondent was neither named as a defendant nor informed about the suit. The Ukrainian
court granted a declaration that the Shareholders Agreement including the arbitration clause
was invalid.
However, the arbitrator issued a partial award holding that the arbitration agreement was valid
and that the tribunal had jurisdiction to decide the dispute.
The Petitioner then filed a petition in New York challenging the arbitral partial award which was
denied on the basis that the district court could not review an interlocutory order of an arbitral
panel.
Following this, Holding Co. commenced new proceedings before the Courts at Ukraine barring
the Managing Director of the Petitioner from participating in the arbitration. The Court enjoined
the Petitioner and Defendant as parties.
The Respondent then went before the US district court seeking an anti-suit injunction against
the litigation in Ukraine. The district court granted the anti-suit injunction based on the following
factors:
a. the parties were the same in both matters as the Respondent was likely to establish that the
Petitioner and Holding Co. were alter ego's of each other. Even in case they were not alter
ego's the standard required to grant an anti-suit injunction i.e. sufficient similarity between
parties in the two proceedings had been met.
b. resolution of the case before the district court would be dispositive of the Ukrainian action as
the issue before the US Court was whether the dispute before the Ukrainian court should be
referred to arbitration.
c. The factors to be taken into account before granting an injunction were: “(1) the potential
frustration of a policy in the enjoing forum; (2) the vexatiousness of the foreign litigation; (3) a
threat to the issuing court's jurisdiction; 4) any prejudice caused by the foreign litigation to
other equitable considerations and (5) any delay, inconvenience, expense, inconsistency or
unseemly race to judgment created by adjudication of the same issues in separate actions”.
The Court took the view that based on a consideration of the above factors an anti-suit injunction
has to be granted. The litigation in Ukraine was delaying the arbitration process and hence was
against the pro-arbitration policy of USA. Since the Respondent had not even been given notice of
the proceedings and had not been made a party, it was clear that the Ukranian proceedings were
vexatious. The Ukranian Courts had also ignored the ruling of the US district court. The Court
concluded that in the light of the collusion between Holding Co. and the Petitioner, an anti-suit
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injunction had to be granted in the present case. The Court explained its reasons for granting this
injunction in the following words:
“Moreover, continued litigation in Ukraine raises the distinct specter of delay, inconvenience, expense,
inconsistency and an unseemly race to judgment. Arbitration is intended to be an expeditious and
efficient means of resolving commercial disputes. Being forced to litigate in both American and Ukrainian
courts not merely to enforce an arbitration agreement but to defend the existence of an arbitration already
under way, has already created extensive delays in the arbitration proceeding and added considerable
expense to the proceedings. The risk of inconsistent adjudications is acute...”
3. The Bermudean Court laid down a similar standard where it awarded an anti-suit injunction in a
case where it was of the view that the foreign proceeding were vexatious.48 The Petitioners were
reinsurers of the Respondent in respect of certain property insured for a certain Alghanim. This
property suffered extensive damage during the Iraq-Kuwait conflict. Disputes arose with respect to
whether Alghanim's losses were excluded by virtue of War Risks Exclusion Clause contained in
the reinsurance agreements between Respondent and Petitioner and other plaintiffs. Alghanim
initiated proceedings in Kuwait. The Petitioners invoked the arbitration clauses in the reinsurance
agreements with the Respondent and argued that the Kuwaiti Court lacked jurisdiction to hear the
matter. They also instituted arbitral proceedings and filed a suit for injunction in the Supreme Court
of Bermuda requesting an injunction against Respondent from pursuing legal proceedings against
them in Kuwait.
The primary question thus was whether the Supreme Court of Bermuda could pass an
injunction against a party preventing it pursuing proceedings before another Court in another
jurisdiction. Although the principle of comity would entail the Petitioner from pursuing the
matter in the Kuwaiti Courts, yet justice might demand that the Bermudan Court issue the
injunction. This however must be applied with caution and normally confined to cases where
the foreign proceedings are either vexatious or oppressive.
The Court took the view that the mere continuance of proceedings in a foreign court, in
violation of the arbitration agreement might amount to vexatious and oppressive proceedings.
On facts, the Court found the existence of the arbitration agreement and found that the
pursuance of proceedings in the foreign court were in breach of the agreement. The defence of
the Respondent, that Jordan was the natural forum was rejected on the ground that Kuwait
was the defendant's commercial seat was negatived by the Court on factual grounds, holding
that in fact, Bermuda was the natural forum. Thus the Court issued an injunction against
Respondent.
4. A petition for setting aside an award relating to costs rendered in England before an Indian Court
was stayed by the English Queen's bench Division on the ground that India was not the seat of the
arbitration and London being the seat was tantamount to English Courts having exclusive
jurisdiction. While it was impermissible for a Court to restrain a person from commencing
proceedings before the courts of an EU member state on the ground that such proceedings would
be contrary to an arbitration agreement, no such prohibition existed with respect to non-EU
countries. Since the claimants had sought the injunction promptly and before the foreign
proceedings were too advanced and the defendant had not established a plausible reason as to
why the injunction ought not to be granted, the Courts awarded an anti-suit injunction.49
(b) Foreign proceedings violating a binding contract.
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1. In Sheffield United Football Club Ltd. v. West Ham United Football Club plc
50 the court had to consider whether an interim anti-suit injunction could be granted pending a
claim of permanent injunction, prohibiting the defendant from proceeding with an appeal against an
interim order of the arbitral tribunal which was in this case the Court of Arbitration for Sport (CAS)
The facts leading to this claim were as follows: The Plaintiff football club had been relegated to
a lower division of the Premier League and claimed that this was due to the (unrelegated)
Defendant engaging Carlos Tevez in breach of the rules of the Premier League. Under the
Rules of the Football Association, the dispute was submitted to arbitration in England. The
arbitrator passed an interim award awarding the Plaintiff damages, the final figure of which was
to be determined in the final award. The Defendant then filed an appeal to the CAS.
It was argued by the Plaintiff that CAS would not have jurisdiction as :
(1) The Rules provided that disputes submitted to arbitration, were to be finally resolved by
arbitration.
(2) In case Courts would have jurisdiction, the choice of England for arbitration meant that it was
implied that England would be the forum for challenging the award. 51
The Plaintiff on the above grounds claimed that an interim anti-suit injunction should be granted
restraining proceedings before the CAS.
The court granted the interim injunction without deciding on the applicability of the American
Cyanamid 52 test since the Plaintiff had a sufficiently strong case to
satisfy the test.
The Defendants argument that CAS, rather than the court, should determine its own jurisdiction
was rejected on the basis that
(a) a valid arbitration agreement existed
(b) the seat of arbitration was England implying that English courts had supervisory jurisdiction
over the arbitration.
Even though there may be an overlap between the powers of the CAS and the Court in determining
the jurisdiction of CAS, based on the above grounds the Court decided to grant an anti-suit
injunction.
2. In another case53, the Court granted an anti-suit injunction restraining proceedings in USA when
there was a valid arbitration clause. The existence of a “service of suit” clause would not restrict
the scope of the arbitration clause, it was held.54
3. An insurance contract with an arbitration clause was entered into between the parties, with a
provision for London based arbitration and English law as the governing law. In such a scenario,
the English Court (Queen's Bench division) assumed jurisdiction and stayed proceedings in
Philippines that had been started.55
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Other guidelines evolved in USA
In USA, Courts have laid down certain other guidelines for grant of an anti-suit injunction.
These were summarized in Northwest Airlines, Inc. v. R&S Company S.A 56, as follows—
“A foreign action should be enjoined when it would (1) frustrate a policy of the forum issuing the injunction; (2) be
vexatious or oppressive; (3) threaten the issuing court's in rem or quasi-in-rem jurisdiction; or (4) where the
proceedings prejudice other equitable considerations. Similarly, an injunction is appropriate if adjudication of the same
issue in separate action would result in ùnnecessary delay, substantial inconvenience and expense to the parties and
witnesses, and where separate adjudications could result in inconsistent rulings or a race to a judgment’.”
1. The Plaintiffs, in this case, entered into a Passenger General Agency Agreement (PGAA) agreement
with the defendant which contained a choice of law clause providing for the application of US law and
an arbitration clause providing for AAA arbitration. The Plaintiff gave a notice to terminate the PGAA
and filed for arbitration first seeking a declaration that it owed no amounts to the Defendant and later
claiming a compensatory payment from the defendant for past performance under the PGAA.
The defendant commenced proceedings in Lebanon claiming damages based on wrongful

termination of contract. The defendant claimed that the arbitration agreement and choice of law
provisions was not enforceable under the local law which according to the Defendant also gave the
courts exclusive jurisdiction to deal with the termination issue arising under the present case.
The Plaintiff sought an injunction from the US District Court to restrain the judicial proceedings in
Lebanon and to compel AAA arbitration.
The balance of convenience suggested that the Plaintiffs would face much more harm if an
injunction was not granted as compared with what the defendant would suffer if it was granted.
Moreover, the Plaintiff had a very good chance of succeeding in its claim as it had satisfied all the
criteria required to pursue arbitration. There would not be much interference with the proceedings
in the Lebanese court as the proceedings had just commenced. Thus, the Court went ahead and
granted an anti-suit injunction against the proceedings in Lebanon and ordered AAA arbitration. 57
Position in EU
The position within the EU, is governed by the landmark ruling in Allianz Spa (formerly Riunione Adriatica Di
Sicurta Spa) v. West Tankers Inc 58. The central issue for determination by the European
Court of Justice in this case was whether a court of one EC Member State could restrain judicial proceedings in
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another Member State on the grounds of breach of a valid arbitration agreement.59
One side of the argument was that once parties have agreed that disputes should be settled exclusively by
arbitration, all national courts except the courts of the seat of arbitration, do not have jurisdiction. It is only the
courts of the seat of the arbitration, which have jurisdiction to decide on the validity and scope of an arbitration
agreement. Thus an anti-suit injunction can be ordered preventing the Courts of other member States from
passing orders when there was a valid arbitration agreement.
The counter to this was that if the subject matter falls within the scope of the Brussels Regulation, any court
which is given jurisdiction under the Regulation has jurisdiction to rule on whether the dispute must be
submitted to arbitration and hence anti-suit injunctions should be ordered in a restrained manner.
The ECJ held that an anti-suit injunction order by the court of one Member State restraining a party from
commencing judicial proceedings in the court of another member state amounted to an “inadmissible
interference” with the jurisdiction of that court, and violated the principles of mutual trust that underlie the
Brussels Regulation.
6. Injunction restraining arbitration before foreign tribunal (Anti-arbitration

injunction)
The court in which a legal proceeding upon the subject-matter of a reference is pending before a foreign
tribunal may grant an injunction restraining the arbitrator from deciding the matter before him.60
Anti-arbitration injunctions need to be granted with great caution. As explained in Halsbury's Laws Of
England61:
“This is a similar jurisdiction to that under which foreign proceedings may be restrained by an anti-suit injunction, but in
ordinary cases the caution exercised by the court relating to anti-suit injunctions should be increased or even re-
doubled in the case of an anti-arbitration injunction”
The premise behind this relief is that
“..courts cannot override the intent of the parties by compelling them to arbitrate where they have not agreed to do so.
An order to arbitrate should not, however, be denied unless it may be said with positive assurance that the arbitration
clause is not susceptible of an interpretation that covers the asserted dispute.
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...
Notwithstanding the arbitrability of the parties’ dispute, the court has the authority to grant preliminary injunctive relief to
preserve the status quo pending arbitration provided the prerequisites for injunctive relief are met. The principle
underlying the authority of a district court to preserve the status quo pending arbitration is the moving party's right to
retain its remedies during such proceedings. A party seeking preliminary injunctive relief must prove (1) a likelihood of
success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) that such harm
outweighs any harm which granting injunctive relief would inflict on the defendant, and (4) that the public interest will
not be adversely affected by the granting of the injunction.”62
An anti-arbitration injunction is granted in very rare cases and the standard for grant of anti-arbitration
agreement is much higher than that for grant of an anti-suit injunction.
1. In Elektrim SA v. Vivendi Universal (No 2) 63 a dispute arose between the
parties relating to an investment agreement that was sought to be resolved through arbitration in
London pursuant to the arbitration agreement. The Defendant commenced arbitration proceedings in
London. Subsequently, a draft settlement agreement, covering all the outstanding disputes between
the parties, was drafted and this provided for ICC arbitration in Geneva. The Claimant claimed that this
was intended by both parties to be legally binding even though it was not signed and commenced ICC
arbitration in Geneva. It applied to the London arbitrators to stay the proceedings in light of the second
arbitration but the application was denied. Consequently it applied to the English Courts to restrain the
arbitration proceedings in London while the Geneva proceedings were in progress.
The Court turned down the application and held that the intention of the
Arbitration Act of England that the court's power to intervene in an
arbitration by way of injunction should be extremely limited. Once matters had been referred to
arbitration, it should be for the arbitral tribunal to deal with questions of jurisdiction and procedure.
The Court thus did not have the power to consolidate arbitration proceedings or to order
concurrent hearings. It would thus not be permissible to obtain the same result by way of an
injunction.
Moreover the parties had expressly agreed to both arbitrations and these were also on different
subject matters.
Aikens J also clarified that the normal test applicable for anti-suit injunctions would not apply for
anti-arbitration agreements and that the standards were much higher. 64
2. The Court, in A v. B 65 denied grant of anti-arbitration injunction and held the
following grounds to be relevant to this decision:
(a) The relief sought included restraining arbitral proceedings.
(b) The seat of the arbitration was Switzerland and Swiss law was applicable. It was held that an
agreement as to the seat of arbitration is analogous to an exclusive jurisdiction clause. English law
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did not recognize “de-localized” arbitration with “arbitral procedures floating in the transnational
firmament unconnected with any municipal system of law”.66
(c) Anything done by any party which was contrary to this second consequence of the agreement
whereby supervisory jurisdiction was vested exclusively in the Swiss courts would in substance
equally amount to a breach of the agreement to arbitrate
(d) The claims before the Court had been brought many months after the arbitration commenced.
It was held that:
“In such a case where the arbitral tribunal has kompetenz-kompetenz, this court should be slow to
displace the regime which the parties have agreed for the determination of such matters of jurisdiction.
The emphasis in modern international arbitration law is to maximise the arbitrators’ opportunity to
determine their own jurisdiction”67
Anti-arbitration injunctions can however be ordered if the arbitration is oppressive, vexatious and
unconscionable.
1. In Kazakhstan v. Istil Group 68, the Defendants predecessor Metalsrussia had
entered into contracts for purchase of steel with a Steel Mill K, which the Defendant claimed was the
alter ego of the Plaintiff Government. Disputes were to be resolved by arbitration in London. However,
when a dispute arose, Metalsrussia commenced proceedings before French Courts which held that
there was no arbitration agreement between it and the state of Kazakhstan and that the state was
entitled to claim sovereign immunity. When Metalsrussia commenced arbitration proceedings in
London, a partial award stating that the arbitrators had jurisdiction was passed. However Metalsrussia
had merged many times and finally into the Defendants and the arbitrators were not aware of this and
hence they rendered the earlier partial award a nullity. They considered the whole matter again,
declared that they had jurisdiction and passed an award on merits in favour of the Defendant.
The Plaintiffs brought proceedings to set aside the arbitral award claiming that there was no
arbitration agreement between the parties. It was also alleged that as a result of the position taken
in the French proceedings, the Defendant was estopped from claiming that the state had become a
party to the arbitration agreement. These arguments were accepted and the arbitral award was set
aside.
The Defendants wrote to the arbitrators requesting them to reconvene. The reasoning of the
Defendants was that the setting aside of the arbitral award resulted in the revival of the earlier
nullified partial award claiming that the arbitrators had jurisdiction. The Plaintiffs then claimed on
the basis of an anti-arbitration agreement which was granted by the Court.
The Court rejected the Defendants argument as the earlier award passed by the Court setting
aside the arbitral award on grounds of lack of arbitration agreement meant that the tribunal lacked
jurisdiction to pass any award including the earlier partial award.
Tomlinson J also ruled on whether the Court could restrain arbitration proceedings or whether it
should leave it to arbitrators to decide on this. It held that while arbitrators should by and large
decide on this issue it would not be correct “to leave it to the arbitrators to decide whether they
should give preference to their own earlier decision over that of the supervisory court on precisely
the same subject matter.” An award by the arbitrator in such a scenario would definitely be
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followed by proceedings to set aside the award. Thus it was held that arbitral proceedings
continuing would be oppressive, vexatious and unconscionable. An anti-arbitration injunction was
thus ordered.
2. When an arbitration was commenced pursuant to a joint venture agreement but the validity of the
agreement was in question and this issue had specifically been taken away from the jurisdiction of the
arbitrator by an agreement between the parties, an injunction granted by the lower Court was upheld
by the Court of Appeal on the grounds where there was a good arguable case that the agreement was
forged; and where the English court was to be the final judge on the question of authenticity of the
agreement, the concurrent arbitration proceedings was unconscionable and oppressive.69
7. Anti-suit and anti-arbitration injunctions—Law in India
Indian Courts have not drawn a distinction between the standards used to grant an anti-suit injunction and an
anti-arbitration injunction. 70
Power to grant anti-suit injunctions/ anti-arbitration injunctions
Section 41(b) of the Specific Relief Act which states that an “injunction cannot be granted
to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from
which the injunction is sought” has been held to apply only to anti-suit injunctions restraining commencement of
judicial proceedings before Indian Courts.71
However, Indian Courts have in the past granted anti-suit injunctions without getting the opportunity to
enumerate the conditions precedent for grant of such an injunction.72
This power of the civil court has subsequently been read into
Section 151 of the Code of Civil Procedure which authorizes Courts to take such
measures that are necessary in the interests of “justice, equity and good conscience”. The equivalent power of
the Company Law Board (“CLB”) arises from
Section 402(g) of the Companies Act which provides the CLB the inherent power to meet
the ends of justice.73
Principles governing grant of anti-suit injunctions/ anti-arbitration injunctions
One of the criteria used by foreign Courts to grant anti-suit injunctions, namely prevention of oppressive
proceedings, was recognized by the Indian Supreme Court in V/O Tractoroexport, Moscow v. Tarapore &
Company 74 where an injunction was ordered restraining a party from proceeding with an
arbitration proceedings in Russia on the ground that such an arbitration would be oppressive. It is to be noted
that this case was under the
Arbitration Act 1940 under which the Court would refer the parties to arbitration only in
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case of submission of the parties to the jurisdiction of the arbitrator. However, the principle that an anti-
arbitration injunction may be ordered to prevent proceedings that are oppressive holds good even under the
1996 Act.
In another case based on the 1940 Act, the Indian Supreme Court, in Oil and Natural Gas Commission v.
Western Co. of North America 75, restrained an American company from commencing
proceedings in New York to confirm and enforce an award governed by Indian law. This was because, under
the 1940 Act which was applicable to the dispute, the award would be without life till it was confirmed by the
Court and made a rule of the Court. Indian Courts would have exclusive jurisdiction to make the award a rule of
the Court. It was only subsequent to this stage could an award be enforced in India or abroad. When the award
had not been made a rule of the Court in India as yet, confirming and enforcing the award in USA would be
oppressive. Had Indian Courts subsequently set aside the award, the ruling of the Indian Courts would be
rendered redundant if the award had already been enforced in USA.
Prevention of multiple proceedings has been another objective behind grant of anti-suit/ anti-arbitration
injunctions by Indian Courts. In this regard, the Delhi High Court 76 ordered an injunction
staying arbitration proceedings against the guarantor in England while the proceedings against the principal
debtor were still pending before the Supreme Court of India. Since the guarantee was not an unconditional one
and a result in favour of the principal debtor before the Supreme Court could absolve the guarantor of all
liability, the Court decided that simultaneous arbitral proceedings and the possibility of an award being rendered
before the Supreme Court decided on the liability of the principal debtor would result in multiplicity of
proceedings.
The Supreme Court, in Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd. 77, in a
non-arbitration context laid down some important principles governing grant of anti-suit injunctions in India.
Some of these principles may also be useful in the context of grant of anti-suit injunction in the arbitration
context. These principles are:
”(1) In exercising discretion to grant an anti-suit injunction the court must be satisfied of the following
aspects:
(a) the defendant, against whom, injunction is sought, is amendable to the personal jurisdiction of the
court;
(b) If the injunction is declined, the ends of justice will be defeated and injustice will be perpetuated;
and
(c) the principle of comity - respect for the court in which the commencement or continuance of
action/proceeding is sought to be restrained - must be borne in mind.
...
(3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals
therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not
determinative but are relevant factors and when a question arises as to the nature of jurisdiction
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agreed to between the parties the court has to decide the same on a true interpretation of the contract
on the facts and in the circumstances of each case.
(4) A court of natural jurisdiction will not normally grant anti-suit injunction against a defendant before it
where parties have agreed to submit to the exclusive jurisdiction of a court including a foreign court, a
forum of their choice in regard to the commencement or continuance of proceedings in the court of
choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in
circumstances such as which permit a contracting party to be relieved of the burden of the contract; or
since the date of the contract the circumstances or subsequent events have made it impossible for the
party seeking injunction to prosecute the case in the court of choice because the essence of the
jurisdiction of the court does not exist or because of a vis major or force majeure and the like.
(5) Where parties have agreed, under a non-exclusive jurisdiction clause, to approach a neutral foreign
forum and be governed by the law applicable to it for the resolution of their disputes arising under the
contract, ordinarily no anti-suit injunction will be granted in regard to proceedings in such a forum
conveniens and favoured forum as it shall be presumed that the parties have thought over their
convenience and all other relevant factors before submitting to the non-exclusive jurisdiction of the
court of their choice which cannot be treated just as an alternative forum.
(6) A party to the contract containing jurisdiction clause cannot normally be prevented from approaching
the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of
the parties to the jurisdiction clause approaches the court of choice in which exclusive or non-exclusive
jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or
oppressive nor can the court be said to be forum non-conveniens.
(7) The burden of establishing that the forum of choice is a forum non-conveniens or the proceedings
therein are oppression or vexatious would be on the party so contending to aver and prove the same.”
Subsequently, the Madras High Court has laid down guidelines to be followed by Courts while granting anti-
arbitration injunctions. It was held in PPN Power 78 —
”(Anti-suit injunction) is not defined or dealt with in the

Code of Civil Procedure . (i)When a court restrains a party to a suit/proceedings before it from
instituting or prosecuting a case in another court, including a foreign court, it is called “anti-suit injunction”. (ii) Anti-suit
injunction can be issued on the ground of “equity and good conscience”. (iii) Anti-suit injunction can be granted “to
avoid injustice”. (iv) If foreign proceedings are “oppressive or vexatious”. such anti-suit injunction can be granted. (v)
To prevent the administration of justice being prevented for unjust ends of justice, anti-suit injunction can be granted
with respect to foreign proceedings. (vi) There must be an equity which entitles one party as against the other, to an
injunction to restrain the other from proceeding in the foreign court. (vii) To protect the courts’ own proceedings and
process, anti suit injunction can be granted. (viii) If the bringing of the legal proceedings involved unconscionable
conduct or unconscientious exercise of legal right, such anti suit injunction may be granted. (ix) Though the
international anti-suit injunction operates only against the parties, it effectively restricts the jurisdiction of a foreign
sovereign's courts. (x) International anti-suit injunction can be granted whenever there is a duplication of parties and
issues and the court determines with the prosecution of simultaneous proceedings would frustrate the speedy and
effective determination of the case. (xi) There is no precious Rules governing the anti-suit injunction. (xii) Only in the
most compelling circumstances, a court should exercise its discretion to issue an anti-suit injunction. (xiii) Such
injunction is required to prevent irreparable and miscarriage of justice and to prevent the litigants’ evasion of the
important public policies of the forum. (xiv) The Court should exercise such a power granting anti-suit injunction to
enjoin foreign suits sparingly and only in very special circumstances.”
Applying some of these principles the Madras High Court in PPN Power Generating Co. Ltd. v. PPN (Mauritius)
Co 79, upheld the Company Law Board's refusal to grant an injunction restraining ICC
arbitration on the grounds that—
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(a) the parties had chosen the ICC arbitral tribunal as the natural and exclusive forum for the resolution of
their disputes, and specifically excluded the jurisdiction of Indian courts in this regard,
(b) since the proceedings sought to be restrained was one before the forum chosen by the parties to be
the forum competent to decide the dispute, such proceedings were not vexatious/ oppressive, and
(c) the proceedings before the Company Law Board before which the application for such injunction was
filed was between different parties and pertaining to a distinct subject matter as compared to the
proceedings before the ICC arbitral tribunal.
The approach of the Indian Courts suggests that the position in India is derived from the position of law in UK
and other common law countries. In this regard, in a relatively unexplored area like exercise of the discretion to
grant anti-suit/ anti-arbitration injunctions, foreign case law is likely to be of great persuasive value before the
Indian Courts.
Enforcement of an anti-suit injunction
If a person acts in breach of an anti-suit in injunction the Court issuing the anti-suit injunction cannot enforce it
in the country in whose courts the person is restrained from initiating proceedings. However, the issuing Court
can proceed against the person breaching the order by way of its contempt jurisdiction contempt.80
8. Other injunctions
Where under a Government contract, the authority invoked the bank guarantee because of the contractor's
breaches and the latter applied for reference to arbitration, the court ordered reference of the dispute and also
issued an order directing the authority to refund the guarantee amount to the contractor, it was held that the
issue of the mandatory injunction was not proper. The court said that the jurisdiction to grant mandatory
injunctions should be sparingly exercised and also in exceptional circumstances. No exceptional circumstances
were disclosed on the facts of the case. Where a guarantee is encashed in normal circumstances, refund of the
encashment may cause substantial injury while the respective rights of the parties were still to decide.81
FOREIGN CURRENCY
9. Award in foreign currency
An award of a sum of money may be made in foreign currency. An award of a sum of money in pounds sterling
without specifying the rate of exchange for conversion in rupees is valid.82 An award of a sum of money in
pounds sterling, the rate of exchange to be calculated on the date of payment, is not uncertain.83 There is no
error of law on the face of the award if it does not appear from the award or a document incorporated in it that
the rate of exchange should be calculated on the date when the bills were submitted and not on the date of
payment.84
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The judgment of an English judge must be in sterling.85 This is the only currency which is known to the court
and to the sheriffs and their officers.86 There is no reason why the rule about judgment should not be extended
to awards by arbitrators. The arbitrators have jurisdiction to make an award in foreign currency in which
payments under the contract should be made.87 The making of an award in foreign currency is not misconduct.
Where under a contract, a foreign currency is the currency of account and payment, it is just and convenient
that the award should be made in that currency.88 Where it was contended that the award for payment of
demurrage should have been made in the currency of payment and not of account, the court said that as a
general rule the judgment or award should be in the money of account but a different solution was appropriate
where the contract provided, as was the case here, an agreed exchange rate between the money of account
and the money of payment. In such cases the judgment or award should prima facie be in the money of
payment. That was what the creditor had lost if payment had not been made; that was what the debtor might
have tendered and the creditor would have been bound to accept at any time at least up to the commencement
of proceedings, and there was no suggestion or finding in the award which would displace that prima facie rule
here. The currency which expressed the owners’ loss or in which their loss had been felt was pounds sterling.
The umpire had erred in considering that he was bound by law to make his award in the currency of account.89
Leave may be given to enforce an award in foreign currency.90 The sum awarded is converted into sterling at
the rate of exchange on the date of the award.91
In contractual and other cases in England, a judgment or an award can be given in a currency other than
sterling. To give a judgment or to make an award in foreign currency may produce juster results.92 To fix a
plaintiff with sterling commits him to the risk of changes in the value of the currency with which he may have no
connection; to award him a sum in the currency of the expenditure or loss or that in which he bears the
expenditure or loss gives him exactly what he has lost and commits him only to the risk of changes of the
currency or those currencies which are either his currency or those he has chosen to use.93 In cases of
damages for tort, the choice of currency may be solved by applying the normal principles of assessment of
damages in tort, those of restitution in integrum and the reasonable foreseeability of the damage sustained.
Where a plaintiff who normally conducts his business through a particular currency and uses that currency to
obtain other currencies where other currencies are involved, it is reasonable to say that the loss he sustains is
to be measured not by the immediate currencies but by the amount of his currency which in the normal course
of operation he uses to obtain those currencies. This is the currency in which his loss is felt and which it is
reasonable to foresee that he will have to spend.94 Where the currency of payment agreed between the parties
was Libyan Dinar, but the award was made in Indian currency, it was held that because the claim was filed in
Indian currency, the award in Indian currency could not be regarded as a defect apparent on the face of the
award.1
In cases of damages for breach of contract, the first step is to see if the contract expressly or by implication
accepts a currency as the currency of account and of payment in respect of all transactions arising under the
contract, and if it does so it would be proper to give damages in that currency.2 If the contract fails to provide a
decisive interpretation, the damage should be calculated in the currency in which the loss was felt by the
plaintiff or which most truly expresses the loss.3
The same rule as to currency applies in the case of debt.4
If there is a gold clause in a contract, the arbitrator may make an award in accordance with it.5
Where the currency of contract is foreign currency in a charterparty between foreign parties containing a
London Arbitration Clause, an award by the London arbitrators in foreign currency is valid.6
Navneet Krishn
Page 22 of 36
There was no error of law on the face of an award directing payment of a certain sum of money in pounds
sterling, the rate of exchange to be calculated at the telegraphic rate on the date of payment. It did not appear
from the face of the award, or from any paper so connected with the award as to form part of it, that the
arbitrator's conclusion that the rate of exchange should be calculated on the date of payment and not when the
bills were submitted was wrong in point of law.7 The award was not bad for uncertainty for not specifying the
amount to be paid in rupees, as the arbitrator had given the rate for calculating the amounts to be paid; nor on
the ground that the telegraphic rate of exchange varied from day to day as there was no difficulty in
ascertaining the telegraphic rate of exchange if the seller had wished to carry out the award.8 An award of a
sum of money in pounds sterling without specifying the rate of exchange for conversion into rupees is valid.9
The foreign currency in which an award is made has to be converted into Indian currency at the rate of
exchange prevailing on the date of the decree of the court passed on the award and not on an earlier date, e.g.,
the date of the breach of the contract or the date when the award was made.10
The plaintiff, against whom an arbitral award had been made, applied to have the award set aside on the
ground that the award was in conflict with the public policy of the Russian Federation, since it obliged the
plaintiff (respondent in the arbitral proceedings) to pay the defendant (claimant in the arbitral proceedings) a
sum of money in foreign currency whereas the plaintiff did not have a foreign currency account. The Moscow
City Court did not agree that the award made by the arbitral tribunal ordering the Russian plaintiff (respondent)
to make the payment in foreign currency was in conflict with the public policy of the Russian Federation, even if
the plaintiff did not have foreign currency at its disposal. In that connection, the court noted that, in the
enforcement of the award, the competent court had the option of modifying the arrangements and procedures
for enforcement.11
An award is enforced by a judgment and decree passed on the award under

Section 17 of the Arbitration Act , 1940, (repealed). Form 2 in Appendix D of the
Code of Civil Procedure requires that the money awarded by the judgment must be
expressed in foreign currency. When passing a decree or an award for the payment of money in foreign
currency it is converted into Indian currency at the rate of exchange ruling on the date of the award.12
AGREEMENT TO REFER DISPUTE TO A FOREIGN COURT OR TRIBUNAL AND

STAY OF SUITS
Agreements to submit disputes to the decision of a foreign court have been held to be submission to
arbitrations, and suits instituted in England have been stayed under Section 4 of the English
Arbitration Act , 1889 corresponding to Section 34 of the 1940 Indian [ S. 8 of the 1996
Act] Act.13 The English decisions have been followed in India14 and in the exercise of discretion the court has
sometimes refused to stay the suit.15 But in truth this power and duty to stay the suit in such a case arises
under a wider general principle, namely, that the court makes people abide by their contract and will restrain a
plaintiff from bringing an action in breach of his agreement with the defendant.16 The courts have stayed suits in
the exercise of inherent powers independently of Section 34 though the defendants had filed their written
statements.17
The court has power to stay a suit pending in this country in the exercise of its inherent power when the
disputes are covered by an arbitration agreement to refer them to a foreign arbitral tribunal.18 The prima facie
leaning of the court is to stay the suit19 but the court has refused to stay the suit if sufficient cause is shown,
Navneet Krishn
Page 23 of 36
e.g., where the law applicable to the dispute was Indian law, all evidence was in India and the difficulties in
foreign exchange practically made it impossible for the Indian plaintiff to take their witnesses to the foreign
country,20 and where difficult questions of law or mixed questions of law and fact were involved and refusal of
stay was necessary to avoid multiplicity of legal proceedings.21 In exercising its discretion whether or not to
grant a stay of a suit in England in view of an agreement to refer disputes to a foreign court, the English court
has taken into consideration the circumstances of the particular case and in particular (a) in what particular
country the evidence on the issues of fact are available and the effect of that on the relative convenience and
expenses of trial in the English and foreign countries, (b) whether the law of the foreign court applies and if so
whether it differs from the English law in any manner, (c) with what country either party is connected and how
closely, (d) whether the defendants genuinely desire trial in the foreign country or are only seeking procedural
advantages, (e) whether the plaintiff would be prejudiced by having to sue in the foreign court because they
would (i) be deprived of security of their claim, (ii) be unable to enforce any judgment obtained, (iii) be faced
with a time bar not applicable in England, or (iv) for political, racial, religious and other reasons would be unable
to get a fair trial in the foreign court. In general, and other things being equal, it is more satisfactory that the law
of the foreign country is to be decided by the courts of that country.22 A clause in a commercial transaction
between merchants residing in different countries to go to arbitration is an integral part of the transaction on the
faith of which the contract is entered into. The court insists, unless sufficient reason is made out, upon
compelling the parties to abide by the entire bargain, but it may refuse to stay and decline to hold a party to his
bargain when for special reasons it would be inequitable to do so.23
The
Arbitration Act , 1940 (repealed),Sections 2 to 46 did not apply to foreign arbitrations and
foreign awards24 or to agreements to submit to the decisions of foreign courts.25 Part-I of the
Arbitration and Conciliation Act, 1996 does not apply to foreign arbitrations and foreign
awards. In the exercise of its inherent jurisdiction, the court may but is not bound to grant a stay. The court has
a discretion whether to do so or not. The discretion should be exercised by granting a stay unless a strong
cause for not doing so is shown. The burden of proving such strong cause is on the plaintiffs.26
When the parties had agreed to refer the disputes to a foreign court or a foreign arbitration tribunal, the court
had inherent power to stay27 or not to stay28 the suit and might refuse to file the arbitration agreement under
Section 20, 1940 Act(repealed). This section has been dropped from the
Arbitration and Conciliation Act, 1996 .29
The court refused to stay an action brought in England by the English owner of a cargo of goods against the
German owners of a ship for damages for short delivery due to contamination of goods shipped in England
under a bill of lading which provided that all claims and disputes arising under it should be judged in the USSR.
The reasons for the refusal of stay were that the dispute was more closely connected with England than with
Russia, the Russian element in the dispute was comparatively small, the dispute depended on evidence in
England as to the condition of the goods which arrived there and on evidence of the ship which was a frequent
visitor to England and the real object of the defendant to apply for stay was to avoid giving security for costs.30
The court refused to stay an action instituted in England for damage to cargo brought from Alexandria to Hall in
England in view of the fact that the plaintiff would lose the substantial advantage of arrest of the ship by
proceeding in rem in England and the fact that the evidence in respect of the proof of loss obtained by the
inspection of the vessel was in England.31
The fact that all the evidence was in India and no part of it could be produced in America without considerable
loss of time and money and the fact that difficult questions of Indian law arose were relevant considerations for
which the court refused to stay a suit brought in India.32
Navneet Krishn
Page 24 of 36
Foreign exchange is scarce and controlled commodity and can be obtained only for prescribed purposes.
Restriction on the availability of foreign exchange is a relevant consideration which should enter into the judicial
verdict for exercising the discretion as to the stay of a suit in India.33
The court may refuse to stay the suit in view of the fact that the plaintiff's residence, the place of contract and
the inspections of the ship are all within the jurisdiction of the court where the suit is instituted.34
The court declined to stay a suit instituted in India by a labour contractor for erection of two radiator type steam
boilers as a part of the thermal power station at Barauni in view of the fact that the entire contract was executed
and the entire claim arose in India, the plaintiff was a company incorporated in India, and the defendant had an
office in India at the time when the suit was instituted and in view of the difficulties of obtaining foreign
exchange, the comparatively huge cost of the foreign arbitration and the fact that the principal object of the
defendant was to make it difficult, if not impossible for the plaintiff to enforce his claim.35 The court is required to
consider the situation as on the date of the institution of the suit. On that date the defendants had their office in
India though it was alleged that subsequently the defendants had removed their office and all their documents
to Yugoslovia.36
When the arbitration agreement is for reference to a foreign court or to a foreign arbitration tribunal, an
application for stay of a suit may have to be made either under Section 34 of the 1940 Act(repealed) or
Section 151 of the Code of Civil Procedure or under Section 3 of the Arbitration (Protocol
and Convention) Act, 1937 [now S. Section 54 of Part II of the
Arbitration and Conciliation Act, 1996 dealing with enforcement of certain foreign awards]
or under the Foreign Awards (Recognition and Convention) Act, 1961 (repealed). Both these Acts [1937 and
1961 Acts] have been repealed and brought into Part II of the
Arbitration and Conciliation Act, 1996 . Different considerations arise when the jurisdiction
of the court is invoked under one or the other of these provisions of law. Section 34 of 1940 Act (repealed) did
not apply as the
Arbitration Act is not attracted to such an arbitration agreement.37 If the inherent
jurisdiction of the court under
Section 151 of the Code of Civil Procedure is invoked, the burden will be on the party
seeking stay to establish facts for the exercise of the court's discretion in favour of such a party.38 If the
jurisdiction of court under Section 3 of the Arbitration (Protocol and Convention) Act was invoked, the existence
of the arbitration agreement was not sufficient and it must be established that there was a submission pursuant
to the agreement.39 When the jurisdiction of the court under the
Foreign Awards (Recognition and Enforcement) Act was invoked, it must be established
that the Act applied to the arbitration. The defendant could not maintain the application for stay under the latter
Act where the arbitration would be in Yugoslavia as Yugoslavia had not ratified the protocol pursuant to which
the Act was enacted.40
10. Duty in conduct of proceedings
The court thought it very important that when a commercial arbitrator acts as sole arbitrator he should be very
careful in the case of foreigners to see that they have abundant notice of his proceedings. Nothing is more likely
to bring English justice into contempt abroad than that proceedings should be carried on by an English
arbitrator acting alone without the fullest notice to the foreigner of what was going on. The court thought it
desirable to say that the English arbitrator should be very careful to observe that practice when dealing with
foreigners.41
Navneet Krishn
Page 25 of 36
1. For text of GAFTA Rules, see Appendix 61.
2. Cargil Sri Milan v. P. Kadinopoulos SA, (1992) 1 Lloyd's Rep. 1 (HL). See also
Krohn & Co. (Import Export Gmbh & Co. v. P.T. Tulung Agung Indah, (1992) 1 Lloyd's Rep. 377 where the award was
remitted by the GAFTA Board of Appeal because it was based upon a matter raised towards the end of the hearing
which the aggrieved party did not understand. Al Hadha Trading Co. v. Tradegrain SA, (2002) 2 Lloyd's Rep 512, on
the requirement of statement of reasons, the Court finding that no prejudice was caused by reason of failure to state
reasons even if it be conceded that a statement of reasons was mandatory. Agrimex Ltd. v. Tradigrin SA,
2003 EWHC 1656 (Comm—QBD) : (2003) 2 Lloyd's Rep 537, on the matter of fees
under GAFTA reference. Ceval Alimontos SA v. Agrimix Trading Co. Ltd., (1995) 2 Lloyd's Rep 380 (QBD—Comm), on
the points remission of awards and costs.
3. Badat & Co. v. West India Trading

Co.,
(1964) 4 SCR 19 [
LNIND 1963 SC 170 ] :
AIR 1964 SC 536 ; Sanjihil Lal Brij Kishore v. Parsen Koer,
AIR 1917 Pat 241 ; Merrifield, Zeigler & Co. v. Liverpool Cotton Association,
(1911) 105 LT 97 .
4. Bremer Oeltransport Gmbh v. Drewry,

(1933) 1 KB 753 : 45 Lloyd's Rep. 133.
5. Lachman Das Sat Lal v. Parmeswari Das,

AIR 1958 Punj 258 ; Popat v. Damodar, 36 Bom LR 844 :
AIR 1934 Bom 890 .
6. L. Oppenhein & Co. v. Hajee Mohomed Haneef, ILR 46 Mad 496 (PC) :
AIR 1922 PC 120 .
7. Mallappa v. Raghavendra,
AIR 1938 Bom 173 ILR (1938) Bom 16 : 174 IC 615; Chormal Balchand v.
Kasturichand,
AIR 1938 Cal 511 ; ILR
(1938) 63 Cal 1033 : 176 IC 380 :
(1938) AC 511 .
8. Article 101;
Limitation Act, 1963 .
9. East India Trading Co. v. Badat & Co.,

AIR 1959 Bom 414 [
LNIND 1958 BOM 130 ]: 61 Bom LR 333.
10. East India Trading Co. v. Carmel Exporters and Importers,

(1952) 2 QB 439 , 442 :
(1952) 1 All ER 1053 : (1952) 1 Lloyd's Rep 456.
Navneet Krishn
Page 26 of 36
11. Marina World Shipping Coporation Limited v. Jindal Exports Private Limited,
(2007) 3 Arb LR 46 : AIR 2008 SC NOC 326 :
2007 CLC 606 (Del).
12. Marina World Shipping Coporation Limited v. Jindal Exports Private Limited,
(2007) 3 Arb LR 46 : AIR 2008 SC NOC 326 :
2007 CLC 606 (Del).

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].

(2002) 1 Arb LR 675 :
AIR 2002 SC 1432 [
LNIND 2002 SC 1441 ]:
(2002) 1 RAJ 469 :
(2002) 4 SCC 105 [
LNIND 2002 SC 1441 ].
15. Badat & Co. v. West India Trading Co.,

(1964) 4 SCR 19 [
LNIND 1963 SC 170 ] :
AIR 1964 SC 536 .
16. Dicey and Morris, “Conflict of Laws”, 7th edn.,p. 1056.
17. Dicey and Morris, “Conflict of Laws”, 7th edn.,p. 1056.

(1964) 4 SCR 19 [
LNIND 1963 SC 170 ] :
AIR 1964 SC 536 .
19. See Union National des Cooperatives Agricoles de Cereales v. Robert Catterall & Co. Ltd., (1959) 2 Q.B.
44 though there the award was being enforced under the
20.
ILR (1927) 43 541 .

(1964) 4 SCR 19 [
LNIND 1963 SC 170 ] :
AIR 1964 SC 536 .
22. Yearbook of Commercial Arbitration, Vol. XXIX (2004), Canada No. 10, p. 581.
Navneet Krishn
Page 27 of 36
24. L. Oppenhein & Co. v. Hajee Mahomed Haneef, ILR 46 Mad 496 :
AIR 1922 PC 120 : (1922) 1 AC 482.
25. L. Oppenhein & Co. v. Hajee Mahomed Haneef, ILR 46 Mad 496 :
AIR 1922 PC 120 : (1922) 1 AC 482; John Batt & Co. v. Kanoolal & Co., ILR 53 Cal
65 :
AIR 1926 Cal 938 .
26. Ibid; Lachhman Das Sat Lal v. Parmeshwari Devi,

AIR 1958 Punj 258 .
27. See also Notes under Sec. 9 of the 1996 Act.
28. The Oranie and The Tunisie, (1966) 1 Lloyd's Rep. 477.
29. The Oranie and The Tunisie, (1966) 1 Lloyd's Rep. 477.
30. Turk Gemi Kurtama v. Ithaka (Owners), The Ithaka

(1939) 3 All ER 630 .
31. Prota Nationals Petroleum v. Skibsaktiesel Kapel Thorsholm, (1957) 2 Lloyd's Rep. 1.
32. The Oranie and The Tunisie, 1 Lloyd's Rep. 477.
33. McHenry v. Lewis,

(1882) 22 Ch D 397 .
34. Thornton v. Thornton,

(1886) 11 PD 176 .
35. Pena Copper Mines Ltd. v. Rio Tinto Co. Ltd.,

(1912) 105 LT 846 .
36. Gorthon Invest AB v. Ford Motor Co., The Maria Gorthon, (1976) 2 Lloyd's Rep 720.
37. Bankers Trust Co. v. P.T. Jakarta International Hotels & Development, (1998) 1 Lloyd's
Rep 910 :
(1999) 1 All ER (Comm) 785 .
38. 1984 U.S. App. LEXIS 24811.
Navneet Krishn
Page 28 of 36
39. 2004 US App.LES 4352.
40. MacShannon Rockwaer Glass Ltd.,

(1978) AC 795 , 810; The Atlantic Star,
(1974) AC 436 , followed in Roussel-Uclaf v. G.D. Searle & Co.
Ltd., (1978) 1 Lloyd's Rep. 225 :
(1978) RPC 747 where also the court carried out the balancing process and said
that there was no justification in allowing the action to be continued against one of the defendants separately but not
against the other; Castanto v. Brown & Root,
(1981) AC 557 .
41.
[2006] 2 All ER (Comm) 504 ,
42. Steamship Mutual Underwriting Association (Bermuda) Ltd. v. Sulpicio Lines Inc., [2008]
2 Lloyd's Rep. 269.
43. Starlight Shipping Co. v. Tai Ping Insurance Co. Ltd. (Hubei Branch), [2008] 1 Lloyd's
Rep. 230,
[2008] 1 All ER (Comm) 593 .
44.
[2007] 2 All ER (Comm) 557 .
45. Tropatoforos, The (1962) 1 Lloyd's Rep. 410; Castanto v. Brown & Root,
(1981) AC 557 .
47. Yearbook of Commercial Arbitration, Vol. XXXII (2007), US No. 608, p. 943.
48. Skandia International Insurance Company v. Al Amana Insurance and Reinsurance

Company, Yearbook of Commercial Arbitration, vol. XXIV (1999), Bermuda No... p. 615.

[2009] EWHC 957 (Comm) :
[2009] 2 All ER (Comm) 477 .
50.
[2008] All ER (D) 293 (Nov).
51. See also C v. D,

[2007] EWHC 1541 (Comm),
[2007] 2 All ER (Comm) 557 - an agreement as to the seat of the arbitration was
analogous to an exclusive jurisdiction clause and hence any challenge to the award could only be made in the courts of
the place chosen as the seat.
52. American Cyanamid v. Ethicom Ltd.,[1975] Al 396 (HL), laying down the tests for grant of
injunction.
Navneet Krishn
Page 29 of 36
53. Ace Capital Ltd. v. CMS Energy Corporation,

[2008] EWHC 1843 (Comm).
54. For more details refer to commentary under Section 48 under the heading “Interpretation of clauses
conflicting with arbitration clause.”
55. Steamship Mutual Underwriting Association (Bermuda) Ltd. v. Sulpicio Lines Inc., [2008]
2 Lloyd's Rep. 269.
56. Yearbook of Commercial Arbitration, Vol. XXVII (2002), Us No. 389, P. 849.
57. Northwest Airlines, Inc. v. R&S Company S.A., Yearbook of Commercial Arbitration, Vol.
XXVII (2002), Us No. 389, P. 849.
58.
[2009] 1 All ER (Comm) 435 :
[2009] All ER (EC) 491 : [2009] 1 Lloyd's Rep 413.
59. See also Turner v. Grovit

[2004] All ER (Comm) 381 .
60. V.O. Tractoroexport v. Tarapore & Co.,

(1969) 3 SCC 562 [
LNIND 1969 SC 438 ] :
AIR 1971 SC 1 [
LNIND 1969 SC 438 ], 12.
61. Halsbury's Laws of England, Vol. 2, 5th ed. 2008, para 1256.
62. Danieli & C. Officine Meccaniche S.p.A. v. Morgan Construction Company, 190 F. Supp.
2d 148; 2002 U.S. Dist. LEXIS 3741.
63.
[2007] EWHC 571 (Comm).
64. See also Intermet FZCO v. Ansol Ltd.,

[2007] All ER (D) 221 (Feb) (The defendants’ application to restrain arbitration
proceedings on the ground that the claimants had also brought High Court proceedings out of the same subject matter
was refused. There was no risk of overlap in the light of undertakings by the claimant and the fact that issue estoppel
would preclude the same issues being litigated twice).
65.
[2007] 1 All ER (Comm) 591 .
66. See also Naviera Amazonica Peruana SA v. Cia Internacional de

Seguros del Peru [1988] 1 Lloyd's Rep 116.
Navneet Krishn
Page 30 of 36
67. See also Vale Do Rio Doce Navegacao SA v. Shanghai Bao Steel
Ocean Shipping Co. Ltd. (t/a Baosteel Ocean Shipping Co),
[2000] 2 All ER (Comm) 70 ].
68.
[2007] All ER (D) 313 (Nov).
69. Albon v. Naza Motor Trading Sdn Bhd,

[2008] 1 All ER (Comm) 351 .
70. PPN Power Generating Co. Ltd. v. PPN (Mauritius) Co.,

(2005) 3 Arb LR 354 :
(2004) 4 MLJ 434 [
LNIND 2004 MAD 1176 ] :
(2006) 129 Com Cases 849 (Mad).
71. Cotton Corporation of India v. United Industrial Bank,

AIR 1983 SC 1272 [
LNIND 1983 SC 258 ]:
(1983) 4 SCC 625 [
LNIND 1983 SC 258 ].
72. Vanichand Rajpal v. Lakhmichand Maneckchand,

(1919) 21 Bom LR 955 [
LNIND 1919 BOM 88 ] (an order denying an anti-suit injunction was held to be not
amenable to appeal by way of a letters patent).
73. PPN Power Generating Co. Ltd. v. PPN (Mauritius) Co., (2005) 3 Arb LR 354 :
(2004) 4 MLJ 434 [
LNIND 2004 MAD 1176 ] :
(2006) 129 Com Cases 849 (Mad).
74.
AIR 1971 SC 1 [
LNIND 1969 SC 438 ]:
(1969) 3 SCC 562 [
LNIND 1969 SC 438 ] :
[1970] 3 SCR 53 [
LNIND 1969 SC 438 ].
75.
AIR 1987 SC 674 [
LNIND 1987 SC 55 ]:
(1987) 1 Arb LR 60 (SC) :
(1987) 1 SCC 496 [
LNIND 1987 SC 55 ].
76. Union of India (UOI) v. Dabhol Power Company, I.A. No. 6663/2003 in Suit No.
1268/2003 (5.5.04).
77.
[2003]1 SCR 480 [
LNIND 2003 SC 74 ] :
Navneet Krishn
Page 31 of 36
AIR 2003 SC 1177 [

LNIND 2003 SC 74 ]:
(2003) 1 Arb LR 533 :
(2003) 4 SCC 341 [
LNIND 2003 SC 74 ].
(2004) 4 MLJ 434 [
LNIND 2004 MAD 1176 ] :
(2006) 129 Com Cases 849 (Mad).
(2004) 4 MLJ 434 [
LNIND 2004 MAD 1176 ] :
(2006) 129 Com Cases 849 (Mad).
80. Lakhmiram Kevalram Bhatt v. Poonamchand Pitamber,

(1921) ILR 45 Bom 550.
81. Union of India v. Shanker Sharan,

AIR 1994 NOC 238 (Raj).
82. Beith Stevenson & Co. v. Naroomal Khemchand,

AIR 1924 Sind 117 : 17 SLR 87.
83. U.M. Chowdhury v. Jiban Krishna Ghosh,

AIR 1922 Cal 447 : ILR 49 Cal 646; Dutton Massey & Co. v. Jamnadas Harprasad,
AIR 1924 Sind 51 , 54 : 74 IC 84.
84. U.M. Chowdhury v. Jiban Krishna Ghosh,

AIR 1922 Cal 447 : ILR 49 Cal 644.
85. United Railways of Havana and Regla Warehouses, Re,

(1961) AC 1007 at pp. 1043, 1052 :
(1960) 2 All ER 332 :
(1960) 2 WLR 969 .
86. Services Europe Atlantique Sud (SEAS) v. Stockholms Rederiaktiebolag Svea : The
Folias, (1977) 1 Lloyd's Rep 39, 70 : (1978) 1 Lloyd's Rep 535 CA :
(1978) 3 WLR 887 :
(1978) 2 All ER 764 ; Jugoslavenska Oceanska Plovidba v. Castle Investment Co.
Inc.,
(1974) QB 292 :
(1973) 3 WLR 847 .
87. Teh Hu, The, (1969) 2 Lloyd's Law Rep. 7; (1969) 2 Lloyd's Law Rep. 365.
88. The Kozara, (1973) 2 Lloyd's Rep 1.
Navneet Krishn
Page 32 of 36
89. President of India v. Tay Getos Shipping C.O.S.A., (1985) 1 Lloyd's Rep 155. The court
considered the decision in Despina R & Folios (1979) 1 Lloyd's Rep. 1.
90. Techno-Impex v. Gebr, Van Weedle Scheepvaartkantoor B.V.,

(1981) 2 WLR 821 at p. 831.
91. Kozara, The (1973) 2 Lloyd's Rep. 1.
92. The Miliangos v. George Frank (Textiles) Ltd.,

(1976) AC 443 :
(1975) 3 All ER 801 .
93. Services Europe-Atlantique Sud (SEAS) v. Stockholms Rederiaktiebolag Svea; The

Folias,
(1979) 1 All ER 421 (HL) affirming
(1977) 1 All ER 421 at pp. 426- 428 affirming
(1977) 1 All ER 874 at pp. 901, 902.
94. Services Europe-Atlantique Sud (SEAS) v. Stockholms Rederiaktiebolag Svea; The

Folias, (1979) 1 All ER 421 (HL) affirming
(1977) 1 All ER 874 at pp. 901, 902.
1. Kerala State Construction Corpn. Ltd. v. National Building Constn Ltd.,

(1998) 3 RAJ 458 Del : 1998 (Supp) Arb LR 95.
2. Services Europe Atlantique Sud (SEAS) v. Stockholms Rederiaktiebolag Svea; The

Folias, (1979) 1 All ER 421 (HL) affirming
(1977) 1 All ER 874 at pp. 901, 902. Jugoslavenska Oceanska Plovidba v. Castle
Investment Co. Inc.,
(1973) 3 All ER 498 :
(1974) QB 202 ; Kraut (Jean) A.G. v. Albany Fabrics Ltd.,
(1977) 2 All ER 116 : (1976) 2 Lloyd's Rep 350.
3. Services Europe Atlantique Sud (SEAS) v. Stockholm Rederiaktiebolag Svea; The

Folias,
(1979) 1 All ER 421 , (1977) 1 Lloyd's Rep 70; Kozara, The (1973) 2 Lloyd's Rep 1;
W.J. Alan & Co. Ltd. v. El Nasr Export and Import Co., (1971) 1 Lloyd's Rep 401.
4. United Railways of Havana and Regla Warehouses, Re

(1961) AC 1007 : 2 All ER 382.
5. Teh Hu, The (1969) 2 Lloyd's Law Rep. 7 : (1969) 2 Lloyd's Law Rep. 365.
6. Jugoslavenska Oceanska Plovidba v. Castle Investment Co. Inc.,

(1974) QB 292 : (1974) 3 WCR 847; Services Europe Atlantique Sud (SEAS) v.
Stockholms Rederiaktiebolag Svea; Folias The,
(1978) 2 WLR 887 ; Oil & Natural Gas Commission v. Forasol,
AIR 1982 Del 184 [
LNIND 1979 DEL 250 ].
Navneet Krishn
Page 33 of 36
7. U.M. Chowdhury v. Jiban Krishan Ghosh,

AIR 1922 Cal 447 : ILR 46 Cal 646.

AIR 1924 Sind 51 , 54.
9. Beith Stevenson & Co. v. Naroomal Khemchand,

AIR 1924 Sind 117 .
10. Forasol v. Oil and Natural Gas Commission,

(1978) 48 Comp Cas 508 ; Miliangos v. George Frank (Textiles) Ltd.,
(1975) 3 WLR 758 : (1976) Lloyd's Rep 201 (HL).
11. Case No. 148 : Russ. Fed., (1997) 22, Yearbook Commercial Arbitration, p. 296.
12. Jugoslavenska Oceanska Ploidba v. Castle Investment Co. Inc.,

(1974) QB 298 ;
(1973) All ER 498 : (1973) 2 Lloyd's Rep 1.
13. Law v. Garret,

(1878) 8 Ch D 26 ; Austrian-Lloyd Steamship Co. v. Gresham Life Assurance
Society,
(1903) 1 KB 249 ; Kirchner & Co. v. Gurban,
(1909) 1 Ch 413 ; The Cap Blanco, (1913) P 130.
14. Haji Abdulla Haji Cassum v. George Reginald Stamp,

AIR 1924 Bom 381 : 26 Bom LR 224; Burjor Framroze Rustomji Joshi v. Ellerman
City Lines Ltd.,
AIR 1925 Bom 449 : 27 Bom LR 1098 : ILR 49 Bom 854; Martittima Italiana
Steamship Co. v. Burjor Framroze Rustomji Joshi, 32 Bom LR 43 : ILR 54 Bom 278 :
AIR 1930 Bom 185 .
15. Kureshi & Sons v. Soomar Haji,

AIR 1921 Sind 202 ; William Jacks & Co. v. Harrowing Steamship Co. Ltd.,
AIR 1932 Sind 111 .
16. Racecourse Betting Control Board v. Secretary of State for Air,

(1944) Ch 114 ; Motabhai Gulabdas & Co. v. Mahaluxmi Cotton Mills Ltd.,
(1953) 91 Cal LJ 1 at p. 10.
17. St. Pierre v. South American Stores,

(1936) 1 KB 382 ; Abdul Shakur v. Ibrahim Shakur,
ILR (1940) 1 Cal 497 :
AIR 1941 Cal 236 .
18. Pena Copper Mines Ltd. v. Rio Tinto Co. Ltd.,

(1912) 105 LT 146 .
Navneet Krishn
Page 34 of 36
19. Rungta Sons Private Ltd. v. Jugometal Trg. Republike, 63 : CWN 527
AIR 1959 Cal 423 [
LNIND 1959 CAL 11 ]; Lakshminarayan Ramniwas v. Compagnia Genovese D’
Exportazione,
AIR 1960 Cal 545 [
LNIND 1959 CAL 128 ]; Metal Forgings (Pvt.) Ltd. v. Centrala Handlu
Zaranizzneggo,
AIR 1979 Del 167 [
LNIND 1979 DEL 3 ].
20. Michael Golodetz v. Serajuddin & Co.,

AIR 1963 SC 1044 [
LNIND 1962 SC 423 ]:
(1964) 1 SCR 19 [
LNIND 1962 SC 423 ] affirming Serajuddin v. Michael Golodetz,
AIR 1960 Cal 47 [
LNIND 1959 CAL 80 ]; Swedish East India v. B.P. Herman & Mohatta (India) Private
Ltd., 66 CWN 538 :
AIR 1962 Cal 601 [
21. The Eschersheim, (1974) 2 Lloyd's Rep 188 : (1976) 1 Lloyd's Rep 81.
22. The Owners of Cargo Lately Landen on Board The Ship or Vessel Eleftheria v. Eleftheria,
The (Owners); Eleftheria,(1970) P. 94 at pp. 99, 100; Ramji Dayawala & Sons (P) Ltd. v. Invest Import,
AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at pp. 2098, 2099 Para 28 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ].

AIR 1963 SC 1044 [
LNIND 1962 SC 423 ]:
(1964) 1 SCR 19 [
LNIND 1962 SC 423 ]; Radio Publicity (Universal) Ltd. v. Compagnie
Luxembourgeoise de Radio-defusion,
(1936) 2 All ER 721 .

AIR 1963 SC 1044 [
LNIND 1962 SC 423 ]at pp. 1045, 1046 :
(1964) 1 SCR 19 [
LNIND 1962 SC 423 ] ; Lachhman Das Sat Lal v. Parameswari Das,
AIR 1958 Punj 258 ; Serajuddin & Co. v. Michael Golodetz,
AIR 1960 Cal 47 [
LNIND 1959 CAL 80 ]; Metal Forgings Pvt. Ltd. v. Centrala Handlu Zaranizzneggo,
AIR 1979 Del 167 [
LNIND 1979 DEL 3 ]:
1979 RLR 278 .
25. Race Course Betting Control Board v. Secretary of State for Air,
(1944) Ch 114 .
26. Owners of Cargo Lately Laden on Board The Ship or Vessel Eleftheria v. Eleftheria,
(Owners) Eleftheria,; (1970) P 94 at p. 99.
Navneet Krishn
Page 35 of 36
27. Rungta Sons (Private) Ltd. v. Jugometal Trg. Republike,

: 63 CWN 527
AIR 1959 Cal 423 [
LNIND 1959 CAL 11 ]; Lakshminarayan Ramniwas v. Compagnia Genovese D’
Exportazione,
AIR 1960 Cal 545 [
LNIND 1959 CAL 128 ].

AIR 1963 SC 1044 [
LNIND 1962 SC 423 ]:
(1964) 1 SCR 19 [
LNIND 1962 SC 423 ].
29. Metals Forginga Pvt. Ltd. v. Centrala Handlu Zaranizzneggo,

AIR 1979 Del 167 [
LNIND 1979 DEL 3 ]:
1979 RLR 278 . See also S.C. Malik v. Union of India,
AIR 1972 Del 211 [
LNIND 1971 DEL 311 ].
30. The Fehmarn,

(1958) 1 All ER 333 : 2 Lloyd's Rep 551.
31. The Athenee, (1922) 11 Lloyd's Rep 6.
32. Michael Golodetz v. Serajuddin &

Co.,
AIR 1963 SC 1044 [
LNIND 1962 SC 423 ]:
(1964) 1 SCR 19 [
LNIND 1962 SC 423 ]; Serajuddin & Co. v. Michael Golodetz,
AIR 1960 Cal 47 [
LNIND 1959 CAL 80 ]: 63 CWN 717.
33. V.O. Tractoroexport Moscow v. Tarapore & Co.,

(1970) 3 SCR 53 [
LNIND 1969 SC 438 ] :
AIR 1971 SC 1 [
LNIND 1969 SC 438 ]:
(1969) 3 SCC 562 [
LNIND 1969 SC 438 ].
34. Kureshi & Sons v. Soomar Haji, 15 SLR 88 :

AIR 1921 Sind 202 .
35. Ramji Dayawala & Sons (P.) Ltd. v. Invest Import,

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at p. 2099 para 29 reversing 70 CWN 1.
36. Ramji Dayawala & Sons (P.) Ltd. Import,v. Invest

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at p. 2099 para 29 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ]reversing 70 CWN 1, at p. 2096 para 23.
Navneet Krishn
Page 36 of 36

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at pp. 2096, 2099 para 29 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ]reversing 70 CWN 1.

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at pp. 2096, 2099 para 29 :
(1981) 1 SCC 80 [
39. Ramji Dayawala & Sons (P) Ltd. v. Invest Import,

AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at p. 2099 para 29 :
(1981) 1 SCC 80 [
40. V.O. Tractoroexport Moscow v. Tarapore & Co.,

(1970) 3 SCR 53 [
LNIND 1969 SC 438 ] :
AIR 1971 SC 1 [
LNIND 1969 SC 438 ]:
(1969) 3 SCC 562 [
LNIND 1969 SC 438 ]; Ramji Dayawala & Sons (P.) Ltd. v. Investment Import,
AIR 1981 SC 2085 [
LNIND 1980 SC 422 ]at p. 2101 para 33 :
(1981) 1 SCC 80 [
LNIND 1980 SC 422 ].
41. Scrimaglio v. Thornett & Fehr, 17 Lloyd's, Rep 34, (CA) : 18 Lloyd's Rep 148.
End of Document
Navneet Krishn
CONCILIATION
PART III CONCILIATION
#1
ALTERNATIVE DISPUTE RESOLUTION–AN OVERVIEW
Alternative dispute resolution (“ADR”) has evolved as a measure to provide an alternative route to speedy justice
and to reduce the number of cases before traditional courts with a hope that this would assuage the problems of
backlog. However, it is of paramount importance to note that ADR only serves to supplement and not supplant the
traditional Court system.1
ADR had been followed in India in ancient times where a guild or sreni or kula which would settle disputes.2 ADR
has been successful because it derives its credibility from the knowledge of the parties and the issues to be
resolved.3
Understanding ADR
In simple words ADR can be understood to be “a range of procedures that serve as alternatives to litigation through
the Courts for the resolution of disputes, generally involving the intercession and assistance of a neutral and
impartial third party.”4
Advantages of ADR
Several advantages have been found in the adoption of ADR mechanisms. Some of them are:
1. Flexibility, as it is not subject to rigid and complex procedures. The principle of party autonomy is recognized
as both sides have the freedom to identify the procedure for dispute resolution.
2. Privacy of the proceedings can be maintained unlike that of court litigation which is open to the public.
3. Resort to the mechanism(s) can be made at any time, as per the convenience and choice of the parties.
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CONCILIATION
4. Effective and satisfactory as the ultimate solution is in the control of the parties and the personal relations
between them is also preserved as they do not view each other as adversaries contesting against each
other. This in turn, helps in resolving the underlying conflict and not merely the dispute at hand.5
5. Services of specialist arbitrators can be utilized for assistance and decision-making.
6. Use of lawyers may be avoided resulting in a cutting down of costs.
7. Helps in reducing the workload of the Courts.

8. ADR proceedings help the parties understand the strengths and weaknesses of their case better and
therefore engaging in such a process would help them at the stage of litigation in case the dispute is not
resolved.6
Primary Ingredients Constituting ADR
While there are many forms of ADR, there are some underlying characteristics that form a common thread and are
applicable to all these categories.
(i) The ADR process is intended and designed to be expeditious and economical
(ii) There is no rigid pre-decided procedure and the matter is usually under the control of the neutral third
party. The disclosure of documents is not governed by any set of rules. Also, anything said or produced
during the resolution is ‘without prejudice’ and cannot be used in a later proceeding, arbitral or judicial.
(iii) The parties must enter into the ADR mechanism for an informal resolution of the dispute. The success of
the ADR procedure depends upon the trust reposed on the intermediary and the procedures adopted
based on mutual consent. At the same time the parties are free to withdraw from the process at any given
point of time.
(iv) The ultimate purpose of the process is to arrive at a compromise which helps achieve a win-win situation
for both sides.
(v) The outcome is a non-binding one that is, the parties are not obliged to follow the settlement and the
interference by the neutral third party in terms of making recommendations may not be very well
appreciated.7
Scope of ADR
ADR mechanisms may be employed where issues involved are in the nature of civil, commercial, family and
industrial law. On the other hand, ADR is inapplicable with regard to criminal and constitutional law. ADR has been
found to be the best method of settling disputes in respect of commercial disputes that have an international
character.8
Types of ADR
To illustrate, some systems of ADR include negotiation, mediation, conciliation and certain other hybrid procedures
involving elements of more than one of the primary methods such as mini trial, MEDOLA, etc. Each of these
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CONCILIATION
categories is discussed below:
Negotiation: Negotiation is a process by which the parties to the dispute attempt to arrive at a
compromise which results in a solution not as favourable to one of them as enforcing their legal rights. Such a
solution, is however, often reached in order to benefit from the advantages of ADR. On many occasions with a view
to preserve their relationships and derive economic benefits in the future, parties may decide to compromise after
discussing amongst themselves without the assistance of a neutral third party.9
The success or failure of such negotiated settlements depends on the willingness and genuine intentions of the
parties. As such, parties are free to enter into negotiations at any stage, even after dispute resolution mechanisms
have been initiated.10
Mediation: Mediation is a process of facilitated negotiation11 in which parties attempt to resolve the
dispute by involving a neutral third party, called the mediator.12
As a part of the facilitation process the mediator seeks to establish joint communication, identifying the agenda,
moderating or reframing the statements of the parties without undermining the intended significance, ensuring that
the views of the parties are mutually acknowledged, if not agreed to. The outcome of the process is based on
concurrence and therefore results in a win-win situation for both sides. The same is ensured because the process
entails confidentiality, joint participation and flexibility.13
Though in certain jurisdictions the terms conciliation and mediation are used interchangeably, the Indian law refers
to them as two separate forms of ADR.
Section 89 of the Code of Civil Procedure, 1908 mentions the concepts of both mediation and
conciliation while the
Arbitration and Conciliation Act, 1996 lays down the statutory framework for conciliation. Mediation on
the other hand, is governed by Civil Procedure Mediation Rules, 2003. For text of Mediation Rules issued by
different States, refer Appendices.
The role of the Mediator is unlike that of an arbitrator or a Judge as he is not permitted to impose an outcome on
the parties. He is supposed to assist in the identifying issues, ironing out differences, sorting priorities, exploring
possible compromises and generating options to resolve the dispute (Rule 16). The proceedings are held in private
and third persons may attend only after obtaining permission (Rule 21). Once the parties arrive at a settlement
which is signed by the parties, their Counsels, the mediator(s) the Court records it (Rules 24 and 25).
Though individuals may be apprehensive about using mediation due to fear of being subject to exploitation and
unfamiliarity with private proceedings, such fears are unfounded. Mediation affords a very good opportunity to
parties to appreciate the stance of the opposite side and negotiate with them to reach an amicable solution. They
are not under any pressure as they are themselves in control of the process.14
Conciliation: While initially, conciliation was statutorily recognized by the

Code of Civil Procedure, 1908 , the
Industrial Disputes Act, 1947 (Section 12) and the
Hindu Marriage Act, 1955 (Section 23), it was unable to gain popularity mainly due to the lack of a
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CONCILIATION
proper structure and statutory backing as it was more in the nature of a court annexed conciliation. The concept of
pre-trial conciliation was put into practice by theHigh Court of Himachal Pradesh in 1984 based on the Michigan
Mediation in the USA, which was widely appreciated by the Law of Commission of India in their 77th and 131
reports.15 This was again a court induced model of conciliation which was to be attempted by parties prior to
litigating.16 However, with the enactment of Part III to the
Arbitration and Conciliation Act, 1996 there is in place, a legislative framework for the regulation of
voluntary conciliation.
The term “conciliation” is not defined in the 1996 Act. Article 1 of UNCITRAL Conciliation Rules [Appendix 49]
corresponding to Section 61(1), refers to “the parties seeking an amicable settlement of their dispute.” Section 67 of
the Act relating to role of conciliator requires the conciliator to assist the parties in an independent and impartial
manner in their attempt to reach an amicable settlement of their dispute. Conciliation may be defined “as a method
used by parties to a dispute to reach an amicable settlement with the assistance of an independent third person or
institution.”17 Parties may wish to reach a settlement “in the spirit of conciliation, i.e., a settlement which is not
necessarily based on strict legal grounds but more on what they perceive as a just and a reasonable settlement
based on mutual concessions. Although legal rules cannot be fully disregarded, allowance should be made for the
attempt of parties to find an acceptable compromise that need not necessarily coincide with the terms of a “legally
correct” decision.18 This does not mean that relevant legal rules will not be taken into account by the conciliator;
they may well have their impact on the settlement proposals which he will make.19
The procedure laid down in Part III (Ss. 61 to 81) reflects certain broad principles:
— Non-adversary nature of conciliation proceedings.—There is no ‘claimant’ or ‘plaintiff’ in’ conciliation

procedure;
— Voluntary nature of proceedings.—Any party can commence and discontinue the proceedings and avoid
further expenses in this regard;
— Flexible procedure.—Discretion of the conciliator as to the adoption of procedural laws so as to ensure

speedy and inexpensive conduct of the proceedings;
— Decisions are recommendatory.—Dispute is to be settled by mutual agreement and not by any imposed
decisions.
Parties can opt for conciliation prior to resorting to arbitration or litigation.
Fast Track Arbitration: This is a kind of arbitration where the decision is rendered in a particularly
expeditious manner and at reduced expenses to the parties.20
Final Offer Arbitration: As a part of this type of arbitration each disputing party submits monetary
claims to the arbitrator who then decides which award to decree.21
MEDOLA: This procedure (also known as Mediation and Last Offer Arbitration) is adopted when the
parties are unable to amicably resolve the dispute using Mediation. Following which, the mediator himself or
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CONCILIATION
another arbitrator chooses between the negotiated offers of both parties and decides which one will be binding.22
Michigan Mediation: This is a process governed by the Court where the litigants appoint mediators
and then summary arguments are heard. Decisions or awards are given immediately and if either of the parties
rejects the award then the trial will proceed as usual. The name is derived from the fact that this method was first
adopted by law courts from Michigan.23 This procedure is essentially different from mediation in that the latter is
completely controlled by the parties. Michigan mediation is court annexed.
Mini-Trial: This mechanism was developed in North America primarily to resolve commercial disputes.
This involves a neutral third party and a senior representative of either of the side forming the panel for the mini trial
before which both parties make a presentation of the case in secrecy. As a next step, the parties make an effort to
negotiate the dispute. The disputing parties present summaries of their case to assess the strengths and weakness
of their case and then the panel pronounces judgment on the same.24
Neutral Listener Agreement: This is a formal mediation process as a part of which each party
submits what it considers to be the best settlement offer in confidence to the neutral third party who then tries to
negotiate the gap and arrive at a mutually agreeable solution.25
Summary Jury Trial: The lawyers acting as representatives for the disputing parties present summary
arguments on the basis of which a panel of jurors arrive at a verdict. Subsequently, the lawyers and the jury indulge
in a discussion regarding the verdict and the appreciation of evidence. The parties who are mandated to attend the
proceedings will then attempt to settle the dispute through bilateral negotiations, failing which, the case goes up for
trial. It is pertinent to note that the summary jury's verdict shall not be admissible in court.26
Multi-Tier Arbitration: A multi-tiered dispute resolution clause in a contract provides for distinct
stages, for dealing with and resolving disputes. Typically, in the case of a multi-tier arbitral clause, the parties first
agree to resolve the dispute through mediation/conciliation. If there is no resolution forthcoming from this process,
the parties then approach an arbitral tribunal. This ensures that parties first attempt to come to an agreement by a
non-adversarial process, before resorting to arbitration. Having said that, the jurisprudence of the ICC reveals
several instances where all the stages of this process are not enforceable.27 Vagueness of the clause, and the
subjectivity necessarily associated with determining the parties have adequately attempted an amicable settlement
makes the process fraught with complexities.
Further, there are often instances when the relation between the parties are so or the nature of dispute is such that
no amicable mediated settlement can be arrived at. In such cases, the parties may, by mutual consent, agree to
proceed straight to arbitration, bypassing the first stage of amicable dispute resolution. The issue that arises here is
whether this is permissible. If the mediation and arbitration are considered to be a combined dispute resolution
clause, with mediation being a condition precedent to commence arbitration, then it may be argued that if the
process of mediation is not complied with, the arbitral clause lapses and the parties should approach courts.
However, if the two are considered independent clauses, the failure of mediation would not affect the validity of the
arbitral clause. A case in point is Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd.,28 decided by the
House of Lords. Speaking for the Court, Lord Mustill held that “having promised to take their complaints to the
experts and if necessary to the arbitrators, that is where the appellants should go”. Thus, the Court stated that the
mere failure of the first stage of the dispute resolution process could not defeat the next stage in the process.29
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CONCILIATION
Pre-requisites for the success of ADR in India
The success of the ADR movement in India is contingent on the following pre-requisites:
1. Good law
2. Good infrastructure
3. Professionally trained ADR practitioners.
While the enactment of the

Arbitration and Conciliation Act, 1996 satisfies the first criteria we still have a long way to go in respect
of good : infrastructure and professionally trained ADR practitioners. The ICADR (International Centre for Alternate
Dispute Resolution) was set up to oversee the very development of ADR in India. The objectives of ICADR include
undertaking teaching and training of ADR personnel, development of infrastructure etc.30
ADR in England
In a recent trend the English Courts are fostering the use of ADR mechanisms as against traditional adversarial
litigation. Earlier this was thought as being antagonistic to the common law principle that agreements to negotiate
are unenforceable owing to their uncertainty and the practical difficulties in monitoring them. A reflection of the
approach can be found in Walford v Miles 31 where the House of Lords invalidated an agreement to
negotiate.
The shift in the Court's approach can be seen in the landmark judgment of Channel Tunnel Group Ltd v Balfour
Beatty Construction Ltd. 32. It was opined per Lord Mustill that the Court has an inherent power to stay proceedings
that were brought in breach of an agreement to decide disputes via other means. This principle has been
incorporated in the
Arbitration Act, 1996 in the form ofsec. 9(1).
The judicial pronouncement has found favour with the Legislature as under the Civil Procedure Rules, 1998 [”CPR”]
parties are encouraged to use ADR procedures and the Court has been directed to help parties settle their case.
Even in the case of Dunnett v Railtrack plc 33 the Court has reiterated its pro-ADR stance.
In Cable and Wireless Plc v. IBM UK Ltd 34 it was observed that if Courts were to decline enforcing
clauses containing references to ADR they would be acting against public policy as has been crystallized through
the enactment of CPR and the judgment rendered in Dunnett v Railtrack 35.
However, the one caveat that has been expressed is against compelling unwilling parties to undergo ADR36
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CONCILIATION
“It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest terms. It is another
to order them to do so. It seems to us that to oblige truly unwilling parties to refer their disputes to mediation would be to
impose an unacceptable obstruction on their right of access to the Court. [And] even if (contrary to our view) the Court does
have jurisdiction to order unwilling parties to refer their disputes to mediation, we find it difficult to conceive of
circumstances in which it would be appropriate to exercise it.”37
Further Reading(General Concept of Adr )
1. Donaldson, “ADR”, (1992) 58 JCI Arb. 102.
2. Kendall, “Expert Determination”, (2nd ed., FT Law & Tax, 1996).
3. OP MOTIWAL, “Alternative Dispute Resolution”, Handbook on Arbitration, Mediation and other ADR Techniques-
A Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.272.
4. YK SABHARWAL, “Dispute Resolution”, Handbook on Arbitration, Mediation and other ADR Techniques- A
Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.51.
5. HALE, “ADR- Alternative or Appropriate Dispute Resolution?”, Handbook on Arbitration, Mediation and other
ADR Techniques- A Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.151.
6. Goda Raghuram, “Alternative Dispute Resolution”, Nyaya Deep, 2007, vol.8(2), p.17.
7. MB Shah, “Dispute Resolution”, Handbook on Arbitration, Mediation and other ADR Techniques- A Collection of
Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.60.
8. SB Sinha, “Alternative Dispute Resolution”, Handbook on Arbitration, Mediation and other ADR Techniques- A
Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.208.
9. SB Sinha, “ADR Vision 2025”, Nyaya Kiran, 2008, vol. 2(1), p.1.
10. AR Lakshmanan, “Alternative Dispute Resolution, Arbitration, Lok Adalat and Mediation”, Handbook on
Arbitration, Mediation and other ADR Techniques- A Collection of Keynote Addresses, Articles and Cases, (ed.) TK
Viswanathan, 1 ed. 2008, p. 222.
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CONCILIATION
11. Ashok Bhan, “Arbitration-Alternative Disputes Resolution”, Handbook on Arbitration, Mediation and other ADR
Techniques- A Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.232.
12. Dalveer Bhandari, “Effective Role of Alternative Methods of Dispute Resolution in Settlement of Commercial
and Other Disputes - An Overview”, Handbook on Arbitration, Mediation and other ADR Techniques- A Collection of
Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1st ed. 2008, p. 235.
13. D.M. Popat, “ADR and India: An Overview”, Chartered Accountant, 2004, vol. 53(6), p. 749.
14. Carroll and Dixon, “Alternative Dispute Resolution Developments in London”, The International Construction
Law Review, [1990 Pt 4] 436.
15. RC Lahoti, “Envisioning ADR in 21 Century”, Handbook on Arbitration, Mediation and other ADR Techniques- A
Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p. 265.
16. Sadhana Pande, “Alternative Dispute Resolution System vis-a-vis Judiciary: Some Fads and Foibles”, Academy
Law Review, 2006, vol. 30(1-2), p. 141.
17. MOHD. Asad Malik, “Concept of Alternative Dispute Resolution vis-a-vis Lok Adalat”, All India High Court Cases
2007, vol.13(9), p.129.
18. Ghanshyam Singh, “Alternative Dispute Resolution: A Mechanism for Settlement of Commercial Disputes”,
XVIII DLR (1996) p.229.
19. S.N.P. Sinha and P.N. Mishra, “Dire Need of Alternative Dispute Resolution System in a Developing Country
like India”, Indian Bar Review 2004, vol.31 p.297.
20. Shyam Sundar Lal, “Arbitration: An Analysis of its Expanding Horizons in the Settlement of Domestic and
International Disputes”, Journal of Legal Studies, 1999, vol.29, p.112.
21. Harpeet Kaur, “Alternative Disputes Redressal”, Labour Law Journal, 2006, vol.1, p.49.
22. A.P.J. Abdul Kalam, “Innovations in Justice Delivery”,

2006 MLJ 1 .
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CONCILIATION
23. Nomita Aggarwal, “Alternative Dispute Resolution: Concept and Concerns”, Nyaya Deep, 2006, Vol. 7(1), p.68.
24. A.R. Lakshmanan, “Settlement of Disputes Outside the Court under Section 89 (1) Read with Order X Rule
s 1-A ,
1-B and
1-C of the
CPC ”,
2007 (1) MLJ 22 .
25. TK Viswanathan, “Online Dispute Resolution” Handbook on Arbitration, Mediation and other ADR Techniques-
A Collection of Keynote Addresses, Articles and Cases, (ed.) TK Viswanathan, 1 ed.2008, p.387.
26. Dilip B. Bhosale, “Assessment in ADR in India”, Nyaya Deep, 2005, vol.6(4), p.57.
27. Ravi Singhania, “India: Arbitration - Settlement And Conciliation”. I.C.C.L.R. 2003, 14(6), N65-67
28. Javed Gaya, “Judicial Ambush Of Arbitration In India”, L.Q.R. 2004, 120(OCT), 571-574
FURTHER READING(MEDIATION)
1. SB Sinha, “Mediation: Constituents, Process and Merit”, Nyaya Deep, 2006, vol.7(4), p.31.
2. Madan B Lokur, “Mediation: Uniting Parties Riven Asunder”, Handbook on Arbitration, Mediation and other ADR
3. Ghanshyam Singh, “Mediation: A Choice of Dispute Settlement in India”, M.D.U. Law Journal, 2005, vol.10(1),
p.41.
4. Krihsna R Malhotra, “Implementing Mediation in India”, Handbook on Arbitration, Mediation and other ADR
5. K. Srinivasan, “New Law on Conciliation”,

[1996] 21 CLA 37 .
6. Burton, “Combining Conciliation with Arbitration of International Commercial Disputes”, (1995) 18 Hastings
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CONCILIATION
International & Comparative Law Review 636.
7. K.G. Balakrishnan, “Mediation and Conflict Resolution”, Nyaya Deep, 2008, vol. 9(2) p.11.
8. Vikas R. Koteshwar and Umesh Patil, “Constitutionality of Negotiation and Mediation – Questioned”, All India
High Court Cases 2006, vol.12(10), p.129.
9. A.K. Bansal, “Conciliation: Quick Settlement of Disputes”,

1999 Arb LR 22 .
10. Hariharan Nair, “Mediation and Conciliation”,

2008 (1) KLT 50 .
11. P.M. Bakshi, “The Obligation of Secrecy in Mediation”, in P.C.Rao & William Sheffield(Ed.), “Alternate dispute
Resolution- What it is and How it works”, 1st ed. 1997, reprint 2008, p. 292
12. Hiram E. Chodosh, “The Eighteenth Camel: Mediating Mediation Reform In India”, 9 German L.J. 251
13. Anil Xavier, Mediation: its origin and growth in India”, 25 Hamline J. Pub. L. &bPol'y 275
14. Vyankatesh Singh, “ Legislative Intent And Judicial Interpretation Of ‘Conciliation Proceedings’ Under The
Arbitration And Conciliation Act Of India”, 12 VJ 103
#2
UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL CONCILIATION, 2002*
The drafting of a model law to serve as a point of guidance for International Conciliation was suggested in the note
of the Secretariat of UNCITRAL of 6th April, 1999. The Working Group met for three sessions to complete the
drafting of the Model Law. It was then adopted by the Commission on 28th June 2002 and subsequently passed by
the United Nations General Assembly on 19th November, 2002.
The United Nations General Assembly Resolution noted that the methods of conciliation and mediation are being
increasingly adopted for the resolution of international and domestic commercial disputes. Thus, the drafting of a
Model Law acceptable to States with diverse legal, social and economic systems would pave the way for the
development of harmonious international economic relations. It was also hoped that such Model Law would help
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nations in upgrading their extant conciliation law or be of assistance in framing legislation where none exists.1
In total, there are 14 Articles contained in the Model Law on International Commercial Conciliation.
According to Article 1 the Model Law is applicable to international commercial conciliation. States may choose to
adopt the Model Law with respect to domestic conciliation in addition to international conciliation.2
Conciliation has been defined as a process whereby parties request a third person or persons ('the conciliator') to
assist them in reaching an amicable settlement of their dispute stemming from a contractual or other legal
relationship. Importantly, the conciliator does not have the authority to impose a solution upon the disputing parties.
It has been provided that the law cannot be made applicable in cases where a judge or arbitrator attempts to
facilitate a settlement.
As per Article 4 of the Model Law conciliation proceedings are said to commence when the parties agree to
conciliate the dispute in connection with a dispute that has arisen. The Indian law however, emphasizes on the
need for a written acceptance to mark the commencement of the proceedings. In the absence of an agreement
between the parties on the aspect of number of conciliators, there shall be one conciliator.
Article 8 touches upon the issue of disclosure of information. It states that when the conciliator receives information
concerning the dispute from a party the conciliator may disclose the substance of that information to other parties to
the conciliation proceeding. The analogous provision under Indian law is Section 70. However, the conciliator is not
bestowed with any discretion as he is obliged to reveal the information to the other sides. The departure made by
the Indian law affords the opposite side the opportunity to present any defence in connection with such information.
Matters that form a part of the conciliation proceedings cannot be relied upon or introduced as evidence in any
arbitral or judicial proceedings (Article 10). While the Indian law (Section 81 ) makes no exception to such principle,
the UNCITRAL Model Law recognises that disclosure may be made when necessary for the purposes of
implementation or enforcement.
Article 14 which talks of enforceability of settlement agreements provides that the settlement agreement arrived at
is binding and enforceable as between the parties. Enacting States have been given the option of inserting a
description of the method of enforcing settlement agreements or referring to provisions governing such
enforcement.
The Indian law has provisions that pertain to the cost of conciliation and its apportionment (Section 78 ) as well as
the deposits that may be required to be made to serve as advance for the costs of conciliation (Section 79 ). Also,
there is no provision under the UNCITRAL Law which explicitly mentions the power of the conciliator to ask for the
submission of written statements. (Section 65).
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Further, the power given to the conciliator to determine the place of conciliation in the absence of an agreement
between the parties is not contained in the Model Law (Section 69). Another point is that the Indian law mandates
the parties to the dispute to co-operate with the conciliator in good faith and comply with his requests relating to
submission of written materials, evidence and attendance in meetings.(Section 71)
#3
MEDIATION, CONCILIATION AND ARBITRATION - A COMPARATIVE ANALYSIS
Arbitration vis-a-vis Conciliation
Some may confuse the mechanism of arbitration with conciliation. The distinction between the two processes has
been brought out in the Halsbury's Laws of England1:
“The term ‘arbitration’ is used in several senses. It may refer either to a judicial process or to a non-judicial process. A
judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in
accordance with some recognised system of law. An industrial arbitration may well have for its function to ascertain and
declare, but not to enforce, what in the arbitrator's opinion ought to be the respective rights and liabilities of the parties, and
such a function is non-judicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not
arbitration; nor is the chairman of a conciliation board an arbitrator.”
Properly used, arbitration is an amicable and relatively informal method of resolving disputes. However, arbitration
is not like conciliation or mediation.2 Its aim is not to persuade the parties to come to a settlement of the dispute
between them. The aim of arbitration, like that of proceedings in court, is to produce a final and binding decision;
and this decision, expressed in the form of an award, is capable of being enforced through courts of law, both
nationally and internationally, if the losing party is not prepared to carry it out voluntarily. Unlike conciliation or
mediation, arbitration needs the support of national systems of law if it is to work effectively.
Fundamentally, a conciliation proceeding is evaluative or facilitative in contrast to arbitration which is adjudicatory in

nature. While arbitration can guarantee a solution that is binding on the parties, on the contrary, by the very
consensual nature of the proceedings and the solution, conciliation cannot assure the parties of any binding result
to the dispute. Another consequence of the consensual nature of conciliation proceedings is that either party may
unilaterally terminate the proceedings. However, in arbitration proceedings a unilateral termination of proceedings is
not possible, although by mutual consent the proceeding may be terminated.3
Conciliation vis-a-vis Mediation
While in most countries no distinction is made between conciliation and mediation, in India however, the
introduction of the term mediation while amending Section 89 seems to have implied that the two processes are
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different.4 In theory, the difference lies in the role of the neutral third party who is attempting to resolve the dispute.
The traditional understanding among jurists is that in conciliation the conciliator plays a passive role and his
involvement is limited to ensuring that the parties understand each other clearly.5 Often the conciliator will intervene
only in case of an impasse.6 In contrast, a mediator is expected to take a proactive approach and attempt to resolve
the dispute by providing his opinions and advice, including proposals for settlement.7
However, the Alternative Dispute Resolution Rules discussed by the Indian Supreme Court Salem
Advocate Bar Association, TN v. Union of India 8 in 2005 seems to indicate clearly that the neutral third
party plays a more pro-active role in conciliation and not mediation. On the other hand mediation, according to the
Civil Procedure Mediation Rules, 2003 mentioned in the same judgment, requires the mediator to only ensure clear
communication between the parties and is limited to a mere facilitative role instead of an evaluative one.
Therefore, despite the differences in opinion regarding mediation and conciliation, it is agreed that the difference is
limited to the matter of the degree of involvement of the neutral third party in the proceedings. In the light of the
Rules discussed by the Supreme Court and the role of the mediator as enunciated in the Mediation Rules, it can be
concluded that as far as India is concerned the conciliator is expected to play a proactive role and the mediator is to
restrict himself to a conservative or passive role in the dispute resolution process.
Civil Procedure Mediation Rules
Different High Courts have issued Rules framed under

S. 122 of CPC (5 of 1908) These rules have been included in the Appendices.
Techniques of Mediation and Conciliation
The practice of mediation and conciliation involve the implementation of different techniques.
Three techniques of Mediation that have been identified are as follows: Interest-based, Position-based and
Integrative.
Position-based technique is where parties determine an initial claim position which is then tempered
by a recognition of the weakness in their stance, an understanding of the uncertainty of the process, the monetary
costs (legal fees, etc.) and non-monetary expenses (stress, etc.). It is said to be a realistic method of dispute
resolution which succeeds in bringing the parties closer.9
Interest based technique: In any dispute the parties usually have different interests at stake. For
example, in the case of a marital discord the spouses are interested in the welfare of their offspring or in the case of
a contractual difference the concern of resuming business relations might play on the minds of parties. The
existence of such interests gives the scope for arriving at a settlement which is mutually beneficial. In fact, the
recognition and appreciation of the interests of the parties brings parties a step closer to a durable reconciliation.10
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Integrative bargaining: The discord between the parties may also be settled through the utilization of
external resources to provide a creative and unique solution. To illustrate, if there is a dispute between the landlord
and his tenant one means of getting the parties together may be by way of getting the landlord to agree to rebuild
the house to suit his changing needs while simultaneously accommodating his tenant.11
There are two commonly accepted techniques of Conciliation : the facilitative method and the evaluative method.
Techniques of Conciliation: There are two methods of conciliation namely the facilitative method
and the evaluative method. The difference lies in the role adopted by the conciliator during the course of the
proceedings. In a facilitative mode, the conciliator will refrain from providing his opinions or advice and will merely
ensure that the parties do not misunderstand each other. In an evaluative mode, the conciliator take a more
proactive approach and attempts to get the parties to accept the merits and demerits in their cases thereby leading
them to a mutually acceptable solution.12
#4
LOK ADALAT
The conception of Lok Adalats emanates from the constitutional mandate in Art.39A that no person must be denied
justice due to economic barriers. The Committee for Implementing Legal Aid Schemes (CILAS) was established by
way of a Resolution dated 26th September, 1980 for fulfilling this very objective. The model of Lok Adalats intends
to provide quick, inexpensive justice especially to the economically weaker sections of society.1
A significant point to be noted in the case of the Lok Adalat mechanism is that judges play an active and evaluative
role through the proceedings and the parties do not negotiate for themselves as they are represented through
advocates.2
Until 1987 the Lok Adalats were operating as voluntary conciliatory agencies without any statutory framework. With
its growing popularity a strong need was felt to supply the requisite statutory backing which led to the passing of the
Legal Services Authorities Act, 1987 .3
Chapter VI of the 1987 Act exclusively deals with Lok Adalats. Under the provisions, State and District Legal
Services Authorities are empowered to organise Lok Adalat at such intervals and places as they deem fit. Every
Lok Adalat shall consist of serving or retired Judicial Officers and other persons of the area, as may be specified by
the State Authority, District Authority, the High Court Legal Services Committee, Supreme Court Legal Services
Committee or the Taluk Legal Services Committee, organising such Lok Adalat. The jurisdiction of a Lok Adalat
extends to any case pending before or any matter which is falling within the jurisdiction of, and is not brought
before, any court for which the Lok Adalat is organised with the exception of matters or offences that are not
compoundable under any law (Section 19).
Every award passed by the Lok Adalat shall be deemed to be a decree of the Civil Court and the disputing parties
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can then claim refund of the court fees paid as is provided for under the
Court Fees Act, 1870 . The award being final and binding, no further appeal to the Court is permitted
(Section 20). The powers exercised by the Lok Adalat while hearing a matter are akin to that of a Civil Court under
the
Code of Civil Procedure, 1908 (Section 21 ).
As a further step in 2002 Permanent Lok Adalats were set up to provide for “compulsory pre-litigative mechanism
for conciliation and settlement of cases relating to public utility services”.4 Under the erstwhile system if the parties
failed to reach a compromise the case was invariably returned to the Court or the parties were advised to approach
the Court which resulted in unwarranted delay. Hence, now the Permanent Lok Adalats have been bestowed with
the authority to decide the dispute if the parties fail to reach a settlement. [ Section 22C (8)]. Also, prior to the
litigation of a dispute any party can apply to the Permanent Lok Adalat for the settlement of the dispute [ Section 22
C(1)].
The composition of a Permanent Lok Adalat is discussed under Section 22B. It shall consist of a Chairman who is
or has been a District Judge or Additional District Judge or has held judicial office higher in rank than that of the
District Judge and two others having adequate experience in public utility services.
A Permanent Lok Adalat is prohibited from assuming jurisdiction over disputes that are not compoundable under
any law. The pecuniary jurisdiction, which may be increased by the Central Government via a notification, is ten
lakh rupees [ Section 22C (1)]. The definition of a public utility services includes any transport service, postal or
telegraph or telephone service, insurance service, services in a hospital or dispensary, system of public
conservancy or sanitation and services involving supply of power, light or water to the public. [ Section 22A(b)].
Once an application is made to the Permanent Lok Adalat the parties are directed to file a written statement
subsequent to which conciliation proceedings are conducted. If the Lok Adalat is satisfied that there exist elements
of settlement which may be acceptable to the parties, it may formulate the terms of settlement for the observations
of the parties. If the parties fail to reach an agreement the Permanent Lok Adalat shall go ahead and decide the
dispute [ Section 22C(3)].
The Lok Adalat shall observe principles of natural justice, objectivity, equity and fair play [ Section 22D]. Every
award made by the Lok Adalat shall be final and binding on the parties and shall be deemed to be a decree of a
civil Court (Section 22E).
The Central Government has passed the Permanent Lok Adalat (Other Terms and Conditions of Appointment of
Chairman and Other Persons) Rules, 2003 which came into effect on 2nd January, 2003 by virtue of Section 27(2)
of the LSA, 1987. These Rules govern among other matters, the Sitting Fees and Other Allowances [ Rule 3],
Terms and Conditions of Service [ Rule 4], Resignation and Removal of the Chairman and Other Persons of
Permanent Lok Adalat [ Rule 5].
Lok Adalats were initially used for settling civil, revenue and compoundable criminal cases. Encouraged by the
success CILAS requested them to also take up motor accident claims.5 Thus, in practice it has been found that Lok
Adalats are usually adopted for settling motor accident claims and money suits of the banks. 6 It has thus, been
opined that despite their relative success they have failed to attract cases with high stakes including those brought
to the Court by State instrumentalities.7 Another factor that adversely affects the popularity of Lok Adalats is the
lack of trained personnel specialized in the areas of conflict that are generally brought to Court in case of high
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stakes cases.
#5
COURT ANNEXED ADR – THE INDIAN LEGISLATIVE ATTITUDE TO CONCILIATION
Since the introduction of Conciliation into Part III of the 1996 Act, there have not been any major legislative changes
to the regulatory framework for ADR. One provision that has the potential of being used dynamically by the judiciary
to promote ADR is
Section 89 of the Code of Civil Procedure [”
CPC ”]. Before going into the efficacy of this provision in promoting the use of ADR, it is relevant to
clarify the relationship between Section 89 and the Arbitration &
Conciliation Act .
1.
Section 89 CPC and the
Arbitration and Conciliation Act
Section 89 and Order X, Rule

s 1A ,
1B &
1C of the
CPC , envisage reference of the parties by courts to various forms of ADR. Under these provisions, if it
appears to the court that there exist elements of a settlement in any suit or proceeding before it, the Court is
required to formulate the terms of settlement and give them to the parties for their observations. Upon receiving the
observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for any
of the following modes of dispute settlement (i) arbitration (ii) conciliation (iii) judicial settlement through Lok Adalat
or (iv) mediation.
Section 89 (2)(a) of the CPC further provides that where a dispute has been referred for arbitration or
conciliation, the provisions of the Arbitration &
Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for
settlement under the provisions of that Act.
S. 89 of the CPC along with Order X, Rules 1A, 1B & 1C were considered by the Supreme Court in
Salem Advocate Bar Association, TN v. Union of India 1 which clarified various aspects of the scheme
of reference to ADR mechanisms provided for under the

CPC . The first question which was considered was whether it is mandatory for the courts to refer the
matter to the alternative modes upon a determination that there exists elements of a settlement in the case, or
whether the same was a discretionary power vested in the courts. In this regard, it was held that
S. 89 of the CPC casts an obligation upon the courts and leaves them with no discretion once the
initial determination has been made that there exists a possibility of a settlement. The second aspect which the
court considered was the interplay between the provisions of the
Civil Procedure Code and the
Arbitration and Conciliation Act, 1996 in cases of references to arbitration under
S. 89 of the CPC .
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The Court observed:
“ Section 89 (2)provides that where a dispute has been referred for arbitration or conciliation, the provisions of the
Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation
were referred for settlement under the provisions of the 1996 Act. Section 8 of the 1996 Act deals with the power to
refer parties to arbitration where there is arbitration agreement. As held in P Anand Gajapathi Raju v. PVG Raju
2, the 1996 Act governs a case where arbitration is agreed upon before or pending a suit by all the parties. The
1996 Act however, does not contemplate a situation as in Section 89 of the Code where the Court asks the parties
to choose one or other ADRS including arbitration and the parties choose arbitration as their option. Of course, the
parties have to agree for arbitration. Section 82 of the 1996 Act enables the High Court to make rules consistent
with this Act as to all proceedings before the Court under the 1996 Act. Section 84 enables the Central Government
to make rules for carrying out the provisions of the Act. The procedure for option to arbitration among four ADRS is
not contemplated by the 1996 Act and, therefore, Section 82 or 84 has no applicability where parties agree to go for
arbitration under Section 89 of the Code. As already noticed, for the purposes of S. 89 and Order 10, Rules 1A, 1B,
and 1C, the relevant sections in Part X of the Code enable the High Court to frame rules. If reference is made to
arbitration under S. 89 of the Code, the 1996 Act would apply only from the stage after reference and not before the
stage of reference when options under Section 89 are given by the Court and chosen by the parties. On the same
analogy, the 1996 Act in relation to conciliation would apply only after the stage of reference to conciliation. The
1996 Act does not deal with a situation where after the suit is filed, the Court requires a party to choose one or the
other ADRS including conciliation. Thus, for conciliation also rules can be made after Part X of the Code for the
purposes of procedure for opting for ‘conciliation’ and up to the stage of reference to conciliation. Thus there is no
impediment in the ADR Rules being framed in relation to the Civil Court as contemplated in Section 89 up to the
stage of reference to ADR. The 1996 Act comes into play only after the stage of reference up to the award.”
Thus it appears that the applicability of the

Arbitration and Conciliation Act, 1996 to arbitration or conciliation proceedings having their genesis in
the scheme under
S. 89 of the CPC , is restricted to the period subsequent to the reference being made.
2. Section 89 and Mandatory ADR – The US Experience
While Section 89 may be considered a step in the right direction, it merely gives the option of adopting ADR, and
cannot be considered binding on the parties. Also, the Indian Courts have used ADR rather restrictively. It is in this
context that developments in jurisdictions like the United States may be considered of relevance in India. Even
apart from approaching arbitrators under contractual claims, the prevalent judicial attitude in the US is to allow the
use of the alternate mechanisms of dispute resolution, even for statutory claims. The development of this
jurisprudence, and the arguments for and against it would be of immense relevance in the Indian context.
The issue in the United States arises out of the ambiguous language of the Federal
Arbitration Act . Section 3 of the Act reads—
“If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under
an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue
involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the
parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement,
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providing the applicant for the stay is not in default in proceeding with such arbitration.”
The question that arises here is what happens if a particular arbitration clause provides for the arbitration of a
statutory claim. The question was first considered by the United States Supreme Court in Alexander v. Gardner-
Denver Co. 3 The Court there held that that an individual does not forfeit his private cause of action if
he first pursues his grievance to final arbitration under the non-discrimination clause of a collective-bargaining
agreement.4 Further holding that the prospective waiver of statutory claims cannot be allowed, the Court decided
the matter in favour of the employee. This decision, though not expressly overruled, was gradually watered down by
three decisions Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 5 which held that in the case of clauses
providing for the arbitration of statutory claims, “having made the bargain to arbitrate, the party should be held to it
unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at
issue”.6 This was followed by the decisions in Shearson/American Express, Inc. v. Mcmahon 7 and
Rodriguez de Quijas v. Shearson/American Express, Inc., 8 at the end of which the accepted test was in order to
circumvent an agreement to arbitrate, the party opposing arbitration had to prove that “Congress intended to
preclude a waiver”.9 The final blow10 to the Garden-Denver position was delivered soon after in Gilmer v. Interstate
Johnson Lane Corp. 11 The issue here was whether a security broker's age discrimination claim was
subject to compulsory arbitration. There was an arbitration agreement contained in his New York Stock Exchange
securities registration application, which the employer relied on to contend that the individual had thus waived
access to a judicial forum with respect to his allegation of discrimination. The text of Section 1 of the Federal
Arbitration Act was critical to this decision. The last clause of the section reads—
“nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of
workers engaged in foreign or interstate commerce.”
Two issues arose out of this language: (a) whether this clause excluded all contracts of employment, or only those
mentioned in the clause; (b) whether the contract in question would be a contract of employment (since it was a
contract with the securities exchange and not the employer). The Court answered the second question by holding
that it could not considered a contract of employment, as a result of which the first was rendered moot and left
unanswered.12 Having determined the scope of the provision, the Court reasoned that any clauses that fell outside
the excluding clause, and under the scope of the Federal
Arbitration Act would be binding.13 For the longest time, this issue was not resolved by the Supreme
Court, and ambiguous precedent laid down by the Courts of Appeal led to an unsatisfactory result. Another decision
of the Supreme Court in Wright v. Universal Maritime Service Corp.,14 declined to reach the question whether a
“clear and unmistakable waiver” in a collective bargaining agreement of a judicial forum for federal statutory
discrimination claims was enforceable, because there was no such waiver in that case. In this context, particularly
troublesome was the fact that Gilmer had not overruled Garden-Denver, while there was a clear tension between
the two decisions. This tension was finally looked at by the Supreme Court in April 2009 in 14 Penn Plaza LLC v.
Pyett, 15 and resolved in favour of Gilmer v. Interstate Johnson Lane Corp. 16. In 14 Penn Plaza the
CBA clearly and unmistakably committed the union's members to submit statutory discrimination claims to the
grievance and arbitration procedure of the CBA. The Court held there was no real basis to distinguish between an
individual arbitration agreement and a collectively bargained waiver of a civil action for federal statutory
discrimination claims. An agreement for mandatory arbitration was considered as being squarely within the parties’
freedom of contract. As to Garden-Denver, the Court again chose to distinguish it, holding that Gardner-Denver did
not involve a clear and unmistakable agreement to arbitrate.
Thus, the position that emerges today in the United States is that a collective bargaining agreement to arbitrate a
dispute, particularly in the case of age discrimination claims cannot be taken to Court by an individual, if the
agreement contains a mandatory arbitration clause. The Court in 14 Penn Plaza held that it was for the Legislature
to exempt some areas from this position of law, but until this happened, the individual could not exercise the option
of going to Court. It is interesting to note, however, that a bill introduced in Congress, the Arbitration Fairness Act of
2009, would, if passed, make pre-dispute arbitration agreements unenforceable in employment, consumer, and
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franchise agreements. Thus, the position resulting from 14 Penn Plaza, while of great interest, may live a short life.
The above discussion while dealing with mandatory arbitration, especially in the context of collective bargaining
agreements, though not directly applicable to the current Indian context, is highly relevant in terms of the academic
literature that has followed, discussing the pros and cons of mandatory ADR. The primary argument that is put forth
is the public policy defence, that something like an arbitration proceeding cannot be imposed on parties, especially
it is involuntary in nature.17 This is especially true when a legislature has created statutory rights benefiting one
party, which arguably limit the ability to arbitrate disputes relating to those rights.18 On this ground, some Circuit
Courts did depart from Gilmer, by holding that unlike the statute in question in Gilmer, other legislations like the Civil
Rights Act, 1991, showed a clear legislative preference for judicial proceedings over arbitration, and this preference
should be reflected in determining the validity of the mandatory arbitration clause.19 Also, others have argued that
such mandatory pre-dispute contractual clause and unconscionable and brought on by duress. On this basis, it may
be argued that under traditional contract principles, a distinction should be made between mandatory arbitration
policies that are contained in the initial employment contract signed by an employee at the commencement of his or
her employment, and those which are implemented at some later time.20
A preferable system seems to be one that more closely mirrors

Section 89 of the Civil Procedure Code , known as Court-annexed ADR in the United States.21 Unlike
the system of mandatory arbitration, where there is a pre-dispute contractual agreement to refer the dispute to
arbitration, court-annexed ADR means that the Court refers the parties to ADR without there being any contractual
relationship between them.22 Many have argued in favour of this system. It allows parties that are reluctant to
initiate settlement discussions to consider the possibility on being mandated to do so by the Court.23 It also creates
a body of ADR practitioners,24 assisting in the creation of a legal system amenable to ADR, which is of great
necessity in a country like India. Thus, the American experience, though not directly applicable in large parts, does
provide a good point of comparison when evaluating the Indian system, and the changes that can, and should be
made, while not crossing the line of public policy, by subrogating individual rights to the imperatives of ADR.
CONCILIATION
Parts I and II of the

Arbitration and Conciliation Act, 1996 deal with the law and procedure governing settlement of
disputes through arbitration. Part III relates to conciliation which is an alternative mechanism for settlement of
disputes—an alternative to arbitration and court litigation [Alternative Disputes Redressal/Resolution (ADR)]. The
law relating to conciliation process has been codified for the first time in Part III, following the UNCITRAL
Conciliation Rules.1 While the Rules are followed to a large extent, there are two significant additions to the
contents of the Rules:
1. Section 66 provides that the conciliator has a free reign over procedural matters and is not bound by the
Code of Civil Procedure, 1908 , or the
Indian Evidence Act, 1872 .
2. Section 74 states that a settlement agreement arrived at after conciliation shall be treated as if it is an arbitral
award on agreed terms on the substance of disputes rendered by an arbitral tribunal under Section 30.
Barring these two departures, Part III mirrors the UNCITRAL Conciliation Rules, 1980. However, after the Indian
Act, a Model Law on International Commercial Conciliation has been drafted by the UNCITRAL. Though based on
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CONCILIATION
the Conciliation Rules, it departs from them in some significant aspects. Thus, the Indian law, while earlier in tune
with the international regime, now needs to be updated to the evolution of conciliation rules and procedures around
the world.
1. PC Rao, “Alternatives to Litigation in India”, PC Rao and William Sheffield (eds.), Alternative Dispute
Resolution What it is and How it Works, 1st ed. 2007, rep.2008, pp. 24-25; Lecture delivered by Hon'ble Justice YK
Sabharwal, Judge, Supreme Court of India at the Second Conference on Dispute Resolution on 13 September 2003.
2. K.K. Venugopal, “Alternate Dispute Resolution in India: New Horizons”, Seminar on ADR: Inauguration of
International Centre for ADR, Vigyan Bhavan, New Delhi 6th Oct 1995, p. 20.
International Centre for ADR, Vigyan Bhavan, New Delhi 6th Oct 1995, p.20.
4. Brown And Mariott, ADR Principles and Practice, 2nd ed.1999, pp.12-13; OP Malhotra, “Alternate Dispute
Resolution”, All India Arbitration Law Reporter 2005 (1), vol.57, p.11.
5. Sarvesh Chandra, “ADR: Is Conciliation The Best choice?”, P.C.Rao & William Sheffield (Ed.) Alternate
dispute Resolution- What it is and How it works, 1st ed. 1997, p. 82.
6. P.C. Rao, “Alternatives to Litigation in India”, P.C. Rao and William Sheffield (Ed.), Alternate dispute
Resolution- What it is and How it works, 1st ed. 1997, reprint 2008, p. 24.
7. Robert Merkin, Arbitration Law, edn. 2004, p.167, para 6.4.
8. P.C. Rao, “Alternatives to Litigation in India”, P.C.Rao & William Sheffield (ed.s), Alternate dispute
9. O.P. Malhotra & Indu Malthotra, The Law and Practice of Arbitration and Conciliation, 2nd ed. 2006,
pp.1469-72.
10. Redfern And Hunter, Law and Practice of International Commercial Arbitration, 4th ed. 2004 p. 35
11. Hiram E Chodosh, “The Eighteenth Camel: Mediating Mediation Reform in India”, 9 German L. J. 251.
12. Brown And Marriott, ADR Principles and Practice, 2nd ed. 1999, p.127.
13. Anil Xavier, “Fall 2005 Dispute Resolution Institute Symposium: Mediation: Its Origin and Growth in India”,
27 Hamline J. Pub. L & Pol'y 275.
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15. Sarvesh Chandra, “ADR: Is Conciliation The Best choice?”, P.C.Rao & William Sheffield (Ed.) Alternate
dispute Resolution- What it is and How it works, 1st ed. 1997, reprint 2008, p. 82.
16. Sarvesh Chandra, “ADR: Is Conciliation The Best choice?”, P.C. Rao & William Sheffield (Ed.) Alternate
dispute Resolution- What it is and How it works, 1st ed. 1997, reprint 2008, p. 82.
17. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General. For text
see Appendix 50.
see Appendix 50.
see Appendix 50.
20. AK Bansal, “Fast Track Arbitration”, P.C.Rao & William Sheffield(Ed.), Alternate dispute Resolution- What
it is and How it works, 1st ed. 1997, reprint 2008, p. 312-5.
22. P.C. Rao, “Alternatives to Litigation in India”, P.C. Rao & William Sheffield (Ed.), Alternate dispute
24. Michael Palmer and Simon Roberts, “Dispute Processes ADR and the Primary Forms of Decision
Making”, 1st ed. 1998, p.226-7.
26. Goldberg, Sander And Rogers, “Dispute Resolution Negotiation, Mediation and Other Processes”, 2nd
ed.1992, p.235.
27. Dyala Jimenez Figueres, Multi-tiered Dispute Resolution Clauses in ICC Arbitration, 14(1) ICC INT'LCT.
ARB. Bull. 71, 71-72 (Spring 2003).
28. Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd., [1993] 2 W.L.R. 262.
29. House of Lords Upholds Stay of Channel Tunnel Group's Action, 8(2) Intl Arb. Rep. 1
(1993).
30. P.C. Rao, “Alternatives to Litigation in India”, P.C. Rao & William Sheffield (Ed.), Alternate dispute
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CONCILIATION
31.
[1992] 1 All ER 453 .
32.
[1993] 1 All ER 664 .
33.
[2002] 2 All ER 850 .
34.
[2002] 2 All ER (Comm) 1041 .
35.
[2002] 2 All ER 850
36. Halsaey v. Milton Keynes General NHS Trust,

[2004] EWCA Civ 576 .
37. Kent Dreadon, ‘Mediation: English Developments in an International Context’ 71(2) Arbitration 112 (2005)
* For text of the UNCITRAL Model Law on International Commercial Conciliation, 2002 see
Appendix 45.
1. Official Records of the General Assembly, fifty seventh session, Supplement No 17 (A/57/17), annex 1.
2. Leila Anglade and John Tackaberry, “International Dispute Resolution”, vol.1, 1st ed.2004, p.272.
1. Halsbury'S Law Of England, vol. 2, 4th ed., para 502.
2. On the difference between arbitration and conciliation, see Schmitthoff, “Extra-judicial Dispute
Settlement,” Forum Internationale, No. 6 (May 1985), p. 3.
3. O.P.Malhotra & Indu Malthotra, “The Law and Practice of Arbitration and Conciliation”, 2nd ed. 2006,
pp.1519-20.
5. O.P. Malhotra & Indu Malthotra, “The Law and Practice of Arbitration and Conciliation”, 2nd ed. 2006,
p.1516; Barbara A. Nagle Lechman,”Conflict and Resolution”, 1st ed. 1997, 129
6. O.P. Malhotra & Indu Malthotra, “The Law and Practice of Arbitration and Conciliation”, 2nd ed. 2006,
p.1516; Barbara A. Nagle Lechman,”Conflict and Resolution”, 1st ed. 1997, 129
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CONCILIATION
7. O.P. Malhotra & Indu Malthotra, “The Law and practice of Arbitration and Conciliation”, 2nd ed.
2006,p.1516; Barbara A. Nagle Lechman,”Conflict and Resolution”, 1st ed. 1997, 129
8.
(2005) 3 Arb LR 81 [
LNIND 2005 SC 573 ] :
(2005) 3 RAJ 161 (SN) :
AIR 2005 SC 3353 [
LNIND 2005 SC 573 ]:
(2005) 6 SCC 344 [
LNIND 2005 SC 573 ].
9. Hiram E Chodosh, “The Eighteenth Camel: Mediating Mediation Reform in India”, 9 German L. J. 251
10. Hiram E Chodosh, “The Eighteenth Camel: Mediating Mediation Reform in India”, 9 German L. J. 251
12. O.P.Malhotra & Indu Malthotra, “The Law and Practice of Arbitration and Conciliation”, 2nd ed. 2006,
pp.1521
1. P.C. Rao, “Alternatives to Litigation in India”, P.C.Rao & William Sheffield (ed.), Alternate dispute
2. Anil Xavier, Mediation: Its Origin and Growth in India”, 27 Hamline J. Pub. L & Pol'y 275.
3. Statement of Objects and Reasons,

Legal Services Authorities Act, 1987 (Act 39 of 1987).
4. Statement of Objects and Reasons,

Legal Services Authorities Act, 1987 (Act 37 of 2002).
5. K Ramaswamy, “Settlement of Disputes through Lok Adalat is one of the Effective Alternative Dispute
Resolution (ADR) on Statutory Basis”, P.C.Rao and William Sheffield (eds.), Alternate Dispute Resolution- What it is
and How it works, 1st ed. 1997, rep.2008, p. 97.
6. Justice DM Dharmadhakari, “Nature of Judicial Process”, (2002) 6 SCC (Jour) 1.
7. P.C. Rao, “Alternatives to Litigation in India”, P.C. Rao and William Sheffield (eds.), Alternate Dispute
Resolution- What it is and How it works, 1st ed. 1997, rep.2008, p. 24.
1.
2005 (3) Arb LR 81 [
LNIND 2005 SC 573 ] :
AIR 2005 SC 3353 [
LNIND 2005 SC 573 ]:
(2005) 3 RAJ 161 (NS) :
(2005) 6 SCC 344 [
LNIND 2005 SC 573 ].
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CONCILIATION
2.
(2000) 4 SCC 539 [
LNIND 2000 SC 530 ] :
2000 (2) Arb LR 204 [
LNIND 2000 SC 530 ] (SC).
3. 415 U.S. 36 (1974).
4. The Court explained (415 U.S. 36, at 49-52 (1974),

In submitting his grievance to arbitration, an employee seeks to vindicate his contractual right under a
collective-bargaining agreement. By contrast, in filing a lawsuit under Title VII, an employee asserts independent
statutory rights accorded by Congress. The distinctly separate nature of these contractual and statutory rights is not
vitiated merely because both were violated as a result of the same factual occurrence. And certainly no inconsistency
results from permitting both rights to be enforced in their respectively appropriate forums.
5. 473 U.S. 614 (1985).
6. 473 U.S. 614, 628 (1985).
7. 482 U.S. 220 (1987).
8. 482 U.S. 220, 227 (1987).
9. 490 U.S. 477 (1989).
10. However, the Court specifically did not overrule Garden-Denver, instead distinguishing it on several
grounds. See 500 U.S. 20, 35 (1991).
11. 500 U.S. 20 (1991).
12. For the discussion of this issue in the case, see 500 U.S. 20, at 25 (n.2) (1991).
13. The dissent in Gilmer is very interesting for its discussion of the legislative history of the provision. It
observed that the Act was originally drafted to overturn a common-law rule which precluded enforcement of
agreements to arbitrate in commercial contracts. They also relied on a statement of the chairman of the American Bar
Association Committee, responsible for drafting the bill, to the effect that the bill “is purely an act to give the merchants
the right or the privilege of sitting down and agreeing with each other as to what their damages are, if they want to do
it”. See Gilmer, 500 U.S. at 39 (Stevens, J., dissenting) (quoting Hearing on S4213 and S4214 before a
Subcommittee of the Senate Committee on the Judiciary, 67th Cong., 4th Sess. 9 (1923)).
14. 525 U.S. 70 (1998).
15. 000 U.S. 07-581 (2009)
16. 500 U.S. 20 (1991).
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CONCILIATION
17. Ian R. Macneil Et. Al., Federal Arbitration Law § 16.1.1 (Supp. 1994).
19. Prudential Ins. Co. of America v. Lai, 42 F.3d 1299 (9th Cir. 1994), cert. denied, 116
S.Ct. 61 (1995).
20. Hoffman S., Mandatory Arbitration: Alternative Dispute Resolution or Coercive Dispute Suppression?, 17
Berkeley J. Emp. & Lab. L. 131, 154 (1996).
21. The American version is based on Rule 16 of the Federal Rules of Civil Procedure, which provides in its
relevant part that-
Pretrial Conferences; Objectives. In any action, the court may in its discretion direct
the attorneys for the parties and any unrepresented parties to appear before it for a conference or conferences before
trial for such purposes as (1) expediting the disposition of the action ... and; (5) facilitating the settlement of the case.
22. Parrot M., Is Compulsory Court-annexed Medical Malpractice Arbitration Constitutional? How the Debate
Reflects a Trend towards Compulsion in Alternative Dispute Resolution, 75 Fordham L. Rev. 2685, 2702 (2007).
23. Hutchinson C.C., The Case for Mandatory Mediation, 42 Loy. L. Rev. 85, 89 (1996).
24. Hutchinson C.C., The Case for Mandatory Mediation, 42 Loy. L. Rev. 85, 90 (1996).
1. For text, see Appendix 49.
End of Document
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S. 61.
Application and scope
(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise
agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or
not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be
submitted to conciliation.
Unless the parties have specifically excluded conciliation procedure, they are free to take recourse to
conciliation even if they had agreed for arbitration [S. 61(1)]. Section 30 lays down that it is not incompatible
with an arbitration agreement for the arbitration tribunal to use mediation, conciliation or other procedures at
any time during arbitral proceedings to encourage settlement of the dispute with the consent of the parties.
Section 77, however, prohibits the parties from initiating arbitral or judi-cial proceedings during conciliation
proceedings, except for preserving their rights. “An agreement to conciliate or mediate is not to be likened . . .
to an agreement to agree, nor is it an agreement to negotiate, or negotiate in good faith, perhaps necessarily
lacking certainty and obliging a party to act contrary to its interest. Depending upon its express terms and any
terms to be implied, it may require of the parties participation in the process by conduct of sufficient certainty for
legal recognition of the agreement.”2
Unlike in the case of arbitration, a written conciliation agreement is not necessary. This reflects the voluntary
and non-binding nature of conciliation. This may also encourage parties for conciliation by oral agreement.
Section 62(1) and (2), however, require that the invitation to conciliate and acceptance thereof should be in
writing.
Once the parties agree for conciliation, the provisions of Part III will apply. The only permitted exclusion relates
to the prohibition under any law on reference of certain disputes to conciliation [S. 61(2)]. Like non-international
arbitration, the conciliation procedure is applicable to commercial as well as non-commercial disputes which are
capable of being settled by conciliation.
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INVITATION, ACCEPTANCE FOR CONCILIATION AND COMMENCEMENT
Conciliation proceedings commence with the acceptance of the invitation to conciliate a dispute in terms of
Section 62. After it is agreed to settle the dispute by conciliation, conciliators are appointed by mutual
agreement in accordance with Sections 63 and 64.
On the appointment of conciliators, each party will submit to them a brief written statement describing the
general nature of the dispute and the points at issue [S. 65(1)].
2. Hooper Bailie Associated Ltd. v. Nation Group Pty. Ltd.,(1992) 28 NSWLR 194.
End of Document
Navneet Krishn
S. 62.
Commencement of conciliation proceedings
(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part,
briefly identifying the subject of the dispute.
(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends
the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a
rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.
This section is modeled on Art. 2 of UNCITRAL Conciliation Rules,3 which has now been replaced by Art. 4 of
the UNCITRAL Model Law on Conciliation 2002.4
Either party can initiate conciliation proceedings. Conciliation proceedings are initiated when one party invites
the other in writing to conciliate, setting out in brief the subject of the dispute [S. 62(1)]. The proceedings
commence only when the other party accepts the invitation, also in writing. This is one significant departure
from the 1980 Conciliation Rules, which permitted acceptance to be oral, with a recommendation that oral
acceptances be confirmed in writing. In fact, the 2002 Model Law does not specifically require or even
recommend that the acceptance be in writing. In what is a trade-off between certainty and flexibility, the Indian
law seems to err on the side of certainty.
At the stage of invitation, there is no certainty that conciliation procedure will take place at all. It is, therefore,
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sufficient if only the subject of dispute is briefly identified, when extending invitation to conciliation.
On receipt of the invitation to conciliate, the other party can—
(i) accept the invitation; or
(ii) reject the invitation.
The acceptance or rejection is to be conveyed to initiating party in writing within 30 days of the date of the
invitation. The invitation itself may specify a time limit (a shorter or longer period than 30 days) for acceptance
or rejection of the invitation. If no reply is received from the other party within the specified time, it is open for
the inviting party to “elect to treat this as rejection of the invitation to conciliate.” If he so elects, he should inform
in writing the other party accordingly [S. 62]. Thus, “it is up to the inviting party either to treat the silence of the
other party as a rejection of the invitation or “to keep the door open” for some more time.” Though not expressly
so stated, it should be possible for the inviting party to indicate that decision in the invitation itself e.g., “If I do
not receive a reply from you within 30 days from the date of this letter, I will assume that you do not wish to
accept my invitation to conciliate.”5 These provisions mainly emphasize the voluntary nature of conciliation
proceedings and infuse an element of certainty as to the commencement of the proceedings on the basis of
mutual consent.
The proceedings commence when the other party accepts the invitation also by writing. As held by the Apex
Court in VISA International v. Continental Resources (USA) Ltd.,6 conciliation can only be initiated by an
agreement after the dispute arises. Thus, unlike in the case of an arbitration agreement, there cannot be an
agreement to refer future disputes to conciliation. If the invitation is rejected there cannot be any conciliation
proceedings. Refusal may also be inferred if no reply is received within 30 days from the date of the invitation.
However, in such cases, it is incumbent on the party which has initiated the invitation for conciliation, to
communicate to the other party that since there was no response, the invitation extended stood withdrawn.
3. For text of UNCITRAL Conciliation Rules, see Appendix 49.
4. For text of the UNCITRAL Model Law on Conciliation 2002, see Appendix 45 Art. 4 reads:
1. Conciliation proceedings in respect of a dispute that has arisen commence on the day on which the
parties to that dispute agree to engage in conciliation proceedings.
2. If a party that invited another party to conciliate does not receive an acceptance of the invitation within
thirty days from the day on which the invitation was sent, or within such other period of time as specified in the
invitation, the party may elect to treat this as a rejection of the invitation to conciliate.
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5. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General, Para 31,
see Appendix 50.
6.
(2008) 4 Arb LR 539 :
AIR 2009 SC 1366 [
LNIND 2008 SC 2343 ]:
(2009) 2 SCC 55 [
LNIND 2008 SC 2343 ] :
(2009) 1 RAJ 560 .
End of Document
Navneet Krishn
S. 63. Number
of conciliators
(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.
This section reproduces the provisions of Art. 3 of the UNCITRAL Conciliation Rules.
It should be noted that conciliation with two conciliators is conceived under the Rules to be as appropriate as
conciliation with three conciliators, despite the different composition and appointment procedures. It may be felt,
though, that the desirable independence and impartiality is only guaranteed by a conciliator who is chosen by
both parties, as is the case with the presiding conciliator in a panel of three, while in conciliation with two
conciliators each party appoints one of them. However, as stated in article 7 [corresponding to Sec. 67 of the
Act], every conciliator, irrespective of the manner in which he was appointed, is expected to conduct the
proceedings in an independent and impartial manner.
This expectation is supported by experience gathered in international conciliation proceedings where panels of
two conciliators are not uncommon. It serves to distinguish between conciliation and party negotiations which
are often conducted through counsel or agents. The notion is reinforced, in an indirect way, by article 10
[corresponding to Sec. 80 of the Act] which precludes a conciliator from acting as a counsel of a party in any
arbitral or judicial proceedings in respect of the same dispute. The probable effect of this provision may be that
a party might not wish to appoint his counsel as conciliator.
Finally, it may be pointed out that an uneven number of conciliators, while facilitating the internal decision-
making process, is not necessary in conciliation since the task of the conciliators is to make recommendations
for a settlement and not to render binding decisions.
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As to the internal decision-making process itself, the Rules contain no specific provisions as to how certain
decisions are arrived at in a panel of two or three conciliators. This means that the conciliators have discretion
to conduct the proceedings in such a manner as is appropriate in the case at issue. It is expected that the
conciliators will be able to reach agreement on how to proceed, possibly after consultations with the parties. In
conciliation with three conciliators, the view of the presiding conciliator should normally prevail.
In keeping with the objective of providing cheap and expeditious conciliatory proceedings, Section 63 envisages
the appointment of one conciliator. The nature of disputes may be such as to warrant the appointment of more
than one conciliator. The section accordingly permits the parties to appoint not more than three conciliators, by
mutual consent. Sub-section (2) sets out the general principle that the conciliators should act jointly.
APPOINTMENT OF CONCILIATORS
Section 64 lays down the manner of appointment of conciliators, and reflects the principle of party autonomy in
this regard.
End of Document
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S. 64.
Appointment of conciliators
(1) Subject to sub-section (2),—
(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole
conciliator;
(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the
parties may agree on the name of the third conciliator who shall act as the presiding conciliator.
(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of
conciliators, and in particular,—
(a) a party may request such an institution or person to recommend the names of suitable individuals to
act as conciliator; or
(b) the parties may agree that the appointment of one or more conciliators be made directly by such an
institution or person:
Provided that in recommending or appointing individuals to act as conciliator, the

institution or person shall have regard to such considerations as are likely to secure the appointment of an
independent and impartial conciliator and, with respect to a sole or third conciliator, shall take into account the
advisability of appointing a conciliator of a nationality other than the nationalities of the parties.
Conciliator(s) can be appointed by either of the parties or jointly. The sole conciliator is to be appointed by
mutual consent. If two conciliators are to be appointed, each party will choose one. In case the parties opt for
three conciliators, each party will appoint one conciliator and the third will be jointly named by the parties and
will act as the presiding conciliator [S. 64(1)]. Unlike in the case of arbitration where the third arbitrator is
appointed by the other two arbitrators [S. 11(3)], the parties who have agreed to conciliate have the right to
appoint all the three conciliators. Though not so specifically required, it is desirable that the presiding conciliator
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is appointed in consultation with the other two party-appointed conciliators.
Section 64 adopts the provisions of Article 4 of UNCITRAL Conciliation Rules,7 which has now been replaced
by Art. 5 of the UNCITRAL Model Law on Conciliation. In material particulars, it is the same as the 1980 Rules.
The only modification is found in the default mode of appointing more than one conciliator. Under the 1980
Rules and the Indian law, in cases where 2 conciliators are to be appointed, each party chooses one
conciliator; and if three are to be appointed, they agree on the third conciliator. Under the 2002 Model Law, the
parties are required to ‘reach agreement on a conciliator or conciliators’, unless a different procedure has been
agreed upon. This means that all the conciliators should be agreed on by the parties, suggesting that it is
advisable to have three bipartisan conciliators, rather than conciliators which are appointed by the two parties
independently.
1. Alternative mode of appointment
Sub-section (2) of Section 64 provides for an alternative mode of appointment of conciliators. Instead of the
parties themselves appointing the conciliators, they can entrust this to an institution or a third person. On the
request of a party, the institution or the third person can recommend the names of individuals who are suitable
to act as conciliators [Clause (a)]. Such assistance for recommendation can be sought without any prior
intimation to or consultation with the other party.8 In order to facilitate recommendations naming suitable
persons, it may be necessary for the party seeking the assistance to set forth in its request the nature of the
dispute and whether any specific expertise in any particular field is called for in regard to the dispute. The
recommendation of the institution or the third person may be accompanied by an indication of the qualifications
and experience of such individuals.
Alternatively, the parties can agree for the appointment of conciliators directly by the institution or the third
person [Clause (b)]. The parties may agree to enlist the assistance of an institution in the original conciliation
agreement itself setting out the circumstances under which such assistance could be sought. There is nothing
in this section which prohibits enlistment of assistance even if there was no prior agreement. For instance, if the
parties had agreed for conciliation by a sole arbitrator but had failed to agree on the name of the conciliator,
sub-section (2)(b) can be invoked, of course, by mutual consent.
By way of guidance, the Act requires the institution or the third person to secure the appointment of an
independent and impartial conciliator. Further, the nationality of the sole or third conciliator recommended or
directly appointed by the institution or third person could be other than that of the concerned parties. In
international commercial conciliation in particular, it may not be uncommon to require the sole or presiding
conciliator to be a neutral conciliator, i.e., of different nationality than the concerned parties.
STATEMENT OF DISPUTES
Section 65 empowers the appointed conciliator to request the parties to submit to him brief particulars of the
disputes.
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7. For text of UNCITRAL Conciliation Rules see Appendix 49.
8. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General see
Appendex 50.
End of Document
Navneet Krishn
S. 65.
Submission of statements to conciliator
(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement
describing the general nature of the dispute and the points at issue. Each party shall send a copy of such
statement to the other party.
(2) The conciliator may request each party to submit to him a further written statement of his position and the
facts and grounds in support thereof, supplemented by any documents and other evidence that such party
deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other
party.
(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such
additional information as he deems appropriate.
Explanation.—In this section and all the following sections of this Part, the term
“conciliator” applies to a sole conciliator, two or three conciliators, as the case may be.
Section 65 corresponds to Article 5 of UNCITRAL Conciliation Rules9 The corresponding article of the 2002
Model Law, Article 6 uses a much broader phraseology. Without referring specifically to the power of the
conciliator/s to ask for documents, it states that the parties may agree on a set of rules to govern the
conciliation proceedings, failing which the conciliator could conduct the conciliation in any manner the
conciliator thinks appropriate, subject to the wishes of the parties, the need for a speedy settlement of the
dispute and the fair treatment of the parties.
No elaborate ‘pleadings’ are required. In order to have a wider and proper perception of the matter, they may
call from each party for further or additional information specifying his position and the facts and grounds in
support thereof together with the requisite documents or other evidence. Each party should send to the other
copies of all particulars and documents furnished to the conciliators. Copies of the statements required to be
sent to the other party in terms of Section 65(1) and (2) are excluded from the prohibition of disclosure of
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information under Section 70. Section 71 enjoins on parties to comply with the requests of conciliators to submit
written materials, provide evidence and attend meetings.
CONCILIATOR NOT BOUND BY

CPC OR
EVIDENCE ACT
Section 66 is the first significant difference between the 1980 Conciliation Rules and the Indian law on
conciliation, It is drafted on the same lines as Section 19(1), relating to conduct of arbitration proceedings. A
conciliator is not bound by the procedure laid down in the
CPC or the
Evidence Act .
End of Document
Navneet Krishn
S. 66.
Conciliator not bound by certain enactments
The conciliator is not bound by the

Code of Civil Procedure, 1908 (5 of 1908) or the
Indian Evidence Act, 1872 (1 of 1872).
Conciliators are not obliged to adopt the procedure set out in

CPC, 1908 or in the
Evidence Act, 1872 [ S. 66 ]. This is only to provide flexibility and discretion to them in
the conduct of conciliatory proceedings. Conciliators may conduct the proceedings in a manner they consider
appropriate in the circumstances of the case. Their main objective is to ensure speedy settlement of the
dispute. In deciding the appropriate manner for the conduct of the proceedings, the conciliators are required to
take into consideration under Section 67,—
— the circumstances of the case;
— the wishes expressed by the parties;
— request by a party for hearing oral statements;
— the need for speedy settlement of the dispute;
— the rights and obligations of the parties;
— the usage of trade;

— circumstances surrounding the dispute, including previous business practices of parties.
They are required to assist the parties in an independent and impartial manner and to be guided by the
principles of objectivity, fairness and justice.
Considering the conciliatory nature of the proceedings, no provision has been made as to the law to be chosen
by the parties or applicable to the proceedings.
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ROLE OF CONCILIATORS
Section 67 deals with role of conciliators and lays down guidelines in the conduct of conciliatory proceedings to
reach a speedy settlement of the disputes.
In BP Moideen Sevamandir v. AM Kutty Hassan, 10 the Supreme Court also advocated
the use of this provision, along with ss. 75 and 86, by Lok Adalats in the conduct of their proceedings, till such
time as the National Legal Services Authority came up with independent guidelines for their functioning.
This section is based on Article 7 of the UNCITRAL Conciliation Rules,11 but finds no place in the 2002 Model
Law.
10.
(2009) 2 SCC 198 [
LNIND 2011 SC 1187 ] :
(2009) 1 RAJ 584 .
11. For text of UNCITRAL Conciliation Rules see Appendix 49.
End of Document
Navneet Krishn
S. 67. Role of
conciliator
(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an
amicable settlement of their dispute.
(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to,
among other things, the rights and obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous business practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate,
taking into account the circumstances of the case, the wishes the parties may express, including any request by
a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the
dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons
therefor.
The main function of conciliators is to assist the parties to reach an amicable settlement of their dispute. For
achieving that purpose, they are obliged—
— to act in an independent and impartial manner [Sub-section (1)];
— to abide by the principles of objectivity, fairness and justice [Sub-section (2)].
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The purpose of conciliation proceedings being settlement of disputes by mutual agreement of the parties, in
contrast to adversary proceeding, “a general reference is made to the rights and obligations of the parties, in
addition to more practice-oriented considerations, such as the usages of trade concerned and the previous
business practices of the parties.”12 Accordingly, rules which might be more appropriate to adversary
proceedings are not prescribed.
Section 67(4) specifically enables the conciliator to “make proposals for settlement of the disputes” “at any
stage of the conciliation proceedings”. The Supreme Court in the case of United India Insurance co ltd v. Ajay
Sinha, 13 examined the role of conciliator. The court giving a more pro-active role to the conciliator held that the
role of conciliator is not limited to merely assisting the parties in reaching a settlement. Further, in conciliation
proceedings, decisions cannot be imposed on the parties. The conciliator can, therefore, ‘make proposals’,
even orally and not necessarily with a reasoned statement. Sec. 72 which further emphasizes the nature of
conciliation proceedings supplements the provisions Sec. 67. Under Sec. 72 the parties are also free to make
suggestions to the conciliator for settlement of disputes.
12. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General, Para 53,
Appendix 49A.
13.
(2008) 2 Arb LR 425 :
AIR 2008 SC 2398 [
LNIND 2008 SC 1176 ]:
(2008) 7 SCC 454 [
LNIND 2008 SC 1176 ] :
(2008) 4 RAJ 1 .
End of Document
Navneet Krishn
S. 68.
Administrative assistance
In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent
of the parties, may arrange for administrative assistance by a suitable institution or person.
Section 68 corresponds to of the UNCITRAL Conciliation Rules, 14 and finds no place in the 2002 Model Law.
Administrative assistance by a suitable institution or person can be sought by the parties, or by the conciliators
with the consent of the parties [S. 68]. The cost of the assistance so provided will be included in costs of the
conciliation proceedings which are to be borne equally by the parties, unless a different apportionment has
been agreed upon [S. 79]. In view of this apportionment of cost of assistance, any arrangement for
administrative assistance and the terms of meeting the cost thereof have to be agreed by the parties.
PROCEDURAL MATTERS
Sections 69 to 76 are procedural sections governing conciliation proceedings.
End of Document
Navneet Krishn
S. 69.
Communication between conciliator and parties
(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He
may meet or communicate with the parties together or with each of them separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such
place shall be determined by the conciliator, after consultation with the parties, having regard to the
circumstances of the conciliation proceedings.
This provision was earlier modeled on Article 9 of the UNCITRAL Conciliation Rules 1980. However, Article 7 of
the UNCITRAL Model Law 2002 only states that, ‘The conciliator may meet or communicate with the parties
together or with each of them separately’.
Under Section 69(1), the conciliators have the descretion,—
— to invite the parties to meet them;
— to communicate with the parties orally or in writing;

— to meet or communicate with the parties jointly or with one party alone.
In the interest of the procedure of conciliation, it would be desirable that the conciliatiors, if they communicated
or met with one party, should also communicate or meet with the other party.15
They have the power to decide the place of meeting in consultation with the parties. This power can be
exercised only if the parties themselves have not agreed upon the place of the meeting [S. 69(2)].
No specific provision is made empowering the conciliator to hearing a witness or to appoint an expert at his own
discretion. There is, however, no absolute bar on hearing witnesses or seeking expert advice in conciliation
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proceedings. Reference may be made to the provisions of clauses (a) and (b) of Section 78(2) which provide
for fixing the fees and expenses of witnesses, and the cost of any expert advice requested by the conciliator
with the consent of the parties.
Section 70 casts an obligation on the conciliator to pass on the information given by one party to the other,
subject to any reservation of the informing party to keep the information confidential.
15. Refer UNCITRAL Report on Adoption of Conciliation Rules (Artilce 9), para 67.
End of Document
Navneet Krishn
S. 70.
Disclosure of information
When the conciliator receives factual information concerning the dispute from a party, he shall disclose the
substance of that information to the other party in order that the other party may have the opportunity to present
any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to specific
condition that it be kept confidential, the conciliator shall not disclose that information to the other party.
This section follows the provisions of Art. 10 of the UNCITRAL Conciliation Rules.16 However, the
corresponding provision in the UNCITRAL Model Law on Conciliation 2002, marks a slight departure from the
provision. While not changing0 the position when a party provides information subject to confidentiality, it
increases the scope of disclosure when there is no such condition. Under the UNCITRAL Conciliation Rules,
1980 and the Indian law, only factual information can be disclosed, and that too ‘in order that the other party
may have the opportunity to present any explanation’. However, under Article 8 of the UNCITRAL Model Law
on Conciliation, the information need not be factual, and can be disclosed to the other party for a purpose other
than for demanding an explanation.
This section contains a guideline as to the observance of objectivity, fairness and justice in the conduct of
conciliatory proceedings keeping in view, inter alia, the rights and wishes of the parties as envisaged under
Section 67(2) and (3).
Where ‘factual information’ is given by a party, the conciliator is required to give only the substance of that
information. Full disclosure (e.g., by furnishing a copy) is not needed.
This section imposes observance of confidentiality by the conciliator in respect of any information given by a
party with the specific condition that the information should be kept confidential.
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This section deals with inter-party confidentiality while Sec. 75 relates to disclosure to outsiders.
PARTIES TO CO-OPERATE WITH CONCILIATOR
Section 71 imposes a duty on the parties to comply with the conciliator's request to furnish written material,
evidence, etc.
Section 71 is based on Article 11 of UNCITRAL Rules,17 and finds no place in the UNCITRAL Model Law on
Conciliation, 2002.
End of Document
Navneet Krishn
S. 71. Co-
operation of parties with conciliator
The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with
requests by the conciliator to submit written materials, provide evidence and attend meetings.
It may be noted under Section 69 the conciliator may request the party to submit statements/information. When
a party receives such a request, he is bound to furnish the same in terms of Section 71.
Parties’ Suggestion for Settlement
Section 72 is intended to facilitate speedy and amicable settlement through conciliation. It corresponds to
Artilce 12 of UNCITRAL Conciliation Rules,17 and finds no place in the UNCITRAL Model Law on Conciliation,
2002.
End of Document
Navneet Krishn
S. 72.
Suggestions by parties for settlement of dispute
Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions
for the settlement of the dispute.
A party can make suggestions suo motu for settlement of the dispute. The conciliator can also invite the parties
to make suggestions for settlement. The parties are, however, not obliged to make suggestions when invited to
do so. The duty cast on the parties under Section 71 to co-operate with the conciliator particularly in respect of
requests by him to submit written materials etc. is not applicable to an invitation extended under Section 72 by
the conciliator.
SETTLEMENT AGREEMENT
Part III of the Act sets out three modes of settlement of disputes.
(a) The conciliator can, during the conciliation proceedings, make proposals for a settlement. Such proposals
need not be in writing and can be orally communicated to the parties. No reasons need be given therefor [S. 67
(a)];
(b) Each party can, either on his own or at the invitation of the conciliator, submit suggestions to the conciliator
for settlement [S. 72]. It is only an ‘invitation’ and not ‘request’. Parties may not respond to the invitation.
Section 71 will not be attracted.18;
(c) The conciliator after following the prescribed procedure can formulate the terms of the settlement [S. 73].
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If the proposals of the conciliator as at (a) or of the party as at (b) above are found to be acceptable by both the
parties, the conciliator or the parties can draw up the settlement agreement [S. 73(2)].
A successful conciliation proceeding culminates in ‘settlement agreement’ which reflects the agreed terms of
settlement of the dispute.
Section 73 is based on Article 13 of UNCITRAL Conciliation Rules,18 and finds no place in the UNCITRAL
Model Law on Conciliation, 2002. [Appendix 45] This seems to suggest that the procedural rigidity which the
earlier provision had the likelihood of resulting in has been done away with under the new law. However, as will
be seen subsequently, the retention of the earlier language in India has resulted in decisions which can be
considered to go against the spirit of conciliation.
18. Commentary on the Revised Draft UNCITRAL Conciliation Rules, Report of Secretary General, Para 64,
see Appendix 50.
End of Document
Navneet Krishn
S. 73.
Settlement agreement
(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the
parties, he shall formulate the terms of a possible settlement and submit them to the parties for their
observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a
possible settlement in the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written
settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing
up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons
claiming under them respectively
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the
parties.
If the conciliator is satisfied that an acceptable settlement can be made, he—
(i) should formulate the terms of the possible settlement;
(ii) should submit the terms of the possible settlement to the parties for their observations;
(iii) may reformulate the terms in the light of the observations, [S. 73(1)];
(iv) may draw up or assist the parties in drawing up the settled agreement, if requested by parties. If they
accept the terms the parties themselves can draw up and sign the written settled agreement [S. 73(3)];
The settled agreement becomes final and binding on the parties and the persons claiming under them from the
date of signing thereof by the parties [S. 73(3)]. The conciliation proceedings are also terminated on that date
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[S. 76(a)].
Conciliator should authenticate the signed settlement agreement and furnish a copy of the authenticated
agreement to each party [S. 73(4)].
The Supreme Court has given importance to the statutory provisions dealing with conciliation and the need for
their compliance. A settlement agreement must be signed by the parties and only then it would have the effect
and status of an arbitral award. In the case before the Supreme Court, the Conciliator had some meetings with
the parties. He drew up the settlement agreement by himself in secrecy and sent it to the Court in sealed cover.
The High Court passed an order confirming the settlement agreement as received from the Conciliator. This
procedure was held by the Supreme Court to be wholly unacceptable.19 D.P. Mohapatra, J. surveyed the
statutory provisions and concluded:20
“From the statutory provisions noted above the position is manifest that a Conciliator is a person who is to assist the
parties to settle the disputes between them amicably. For this purpose the Conciliator is vested with wide powers to
decide the procedure to be followed by him untrammelled by the procedural laws like the
Code of Civil Procedure or the
Indian Evidence Act, 1872 . When the parties are able to resolve the dispute between them by
mutual agreement and it appears to the Conciliator that there exists an element of settlement which may be acceptable
to the parties he is to proceed in accordance with the procedure laid down in Section 73, formulate the terms of a
settlement and make it over to the parties for their observations; and the ultimate step to be taken by a Conciliator is to
draw up a settlement in the light of the observations made by the parties to the terms formulated by him. The
settlement takes shape only when the parties draw up the settlement agreement or request the Conciliator to prepare
the same and affix their signatures to it. Under sub-section (3) of Section 73 the settlement agreement signed by the
parties is final and binding on the parties and persons claiming under them. It follows, therefore, that a successful
conciliation proceeding comes to an end only when the settlement agreement signed by the parties comes into
existence. It is such an agreement which has the status and effect of legal sanctity of an arbitral award under Section
74”.
“In the case in hand, as appears from the materials on record, that no such procedure as prescribed under Part III of
the Act has been followed by the Conciliator. The Conciliator appears to have held some meetings with the parties in
which there was discussion and thereafter drew up the so-called settlement agreement by himself in secrecy and sent
the same to the Court in a sealed cover. Naturally the so-called settlement agreement drawn up by the Conciliator
does not bear the signatures of the parties. As the impugned order shows the said settlement has been given a status
higher than an arbitral award inasmuch as the Court has refused to even entertain any objection against the said
settlement agreement reiterating the position that the settlement arrived at by the Conciliator will be binding on the
parties. The Conciliator who is a former Judge of the High Court and the learned Judge who passed the impugned
order failed to take note of the provisions of the Act and the clear distinction between an arbitration proceeding and a
conciliation proceeding. The learned Judge in passing the impugned order failed to notice the apparent illegalities
committed by the Conciliator in drawing up the so-called settlement agreement, keeping it secret from the parties and
sending it to the Court without obtaining their signature on the same. The position is well settled that if the statute
prescribes a procedure for doing a thing, a thing has to be done according to that procedure. Thus the order passed by
the High Court confirming the settlement agreement received from the Conciliator is wholly unsupportable.”
The Court thus, held that the procedure outlined in the statute is to be complied with even when the parties
enter into a binding settlement agreement. Even in such cases, the two stages listed by the Court had to be
complied with by the conciliator.21 This requirement of strict compliance with Section 73 in arriving at a
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settlement was also seen in the only other case decided by the Court, i.e. Mysore Cements. In this case, the
issue was whether a memorandum of understanding, followed by a comfort letter, resulting from a conciliation
proceeding could be considered an enforceable settlement. The Court rejected this contention and held that
these documents were not a settlement agreement, and could not be enforced under the Act.22
The Supreme Court again examined the effect of the provisions of Sections 73, 74 and 76 and stated as
follows:23
“ Section 73 of the Act speaks of Settlement Agreement. Sub-section (1) says that when it appears to the Conciliator
that there exist elements of settlement which may be acceptable to the parties, he shall formulate the terms of a
possible settlement and submit them to the parties for their observation. After receiving the observations of the parties,
the Conciliator may reformulate the terms of a possible settlement in the light of such observations. In the present
case, we do not find there any such formulation and reformulation by the Conciliator. Under sub-section (2), if the
parties reach a settlement agreement of the dispute on the possible terms of settlement formulated, they may draw up
and sign a written settlement agreement. As per Sub-section (3) when the parties sign Settlement Agreement, it shall
be final and binding on the parties and persons claiming under them respectively. Under sub-section (4), the
Conciliator shall authenticate the Settlement Agreement and furnish a copy thereof to each of the parties. From the
undisputed facts and looking to the records, it is clear that all the requirements of Section 73 are not complied with.”
“A Conciliator is a person who is to assist the parties to settle the disputes between them amicably unlike an arbitrator
who has an adjudicatory function. But that does not dispense with satisfying the requirements of Section 73 in bringing
out a binding Settlement Agreement.”
“If the Settlement Agreement comes into existence under Section 73 satisfying the requirements stated therein, it gets
the status and effect of an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral
tribunal under Section 30 of the Act. The submission that when there was substantial compliance with the requirements
of Section 73, as in the present case, when the parties have arrived at a Settlement Agreement like the parties before
any civil court filing a compromise petition, there should be no impediment to take up execution based on such a
compromise or agreement, cannot be accepted. Even a compromise petition signed by both the parties and filed in the
court per se cannot be enforced resorting to execution proceedings unless such a compromise petition is accepted by
the court and the court puts seal of approval for drawing a decree on the basis of compromise petition. In the present
case, looking to the Memorandum of Conciliation Proceedings and Letter of Comfort, it is true that parties have agreed
to certain terms, but they cannot be straightaway enforced by taking up execution proceedings. As rightly held by the
High Court for the reasons stated in the impugned order on the basis of the Letter of Comfort, execution proceedings
could not be taken up under Section 36 of the Act. When the facts are disputed as to the satisfaction of the
modification work and as to the breach of obligations even in relation to the modification work by either party, the High
Court was right in passing the impugned order. It may be again stated here that at the end of Memorandum of
Conciliation Proceedings, it is stated that the terms of Conciliation Settlement are agreed to and accepted by both the
parties. Conciliators and both the parties also have signed the same but the procedure as indicated and various steps
contemplated in Section 73 of the Act were not adhered to. This apart, as already stated above, in this Memorandum
neither consequences for not completing the modification work are stated nor any amount of compensation is fixed. In
this case virtually the letter of Comfort is sought to be enforced. This Letter of Comfort could not be accorded the status
of Settlement Agree-ment to bring it within the meaning of Section 74 of the Act to treat it as an arbitral award under
Section 30 of the Act so as to enforce it under Section 36 of the Act. In the present case, the Conciliation proceedings
were not terminated but they were only adjourned. Under Section 76 of the Act, the proceedings shall be terminated as
per clauses (a) to (d) of the said Section. If there was Settlement Agreement under Section 73. Conciliation
Proceedings would have been terminated under Section 76(a) of the Act. This is yet another pointer against the
appellant's case. It is also not possible to agree with the submission that this Memorandum of Conciliation and the
Letter of Comfort could be treated as interim award in the absence of any Settlement Agreement as already discussed
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above. It is not every agreement or arrangement between parties to the disputes, arrived at in whatever manner or
form arrived, during the pendency of conciliation proceedings that automatically acquires the status of a settlement
agreement within the meaning of Section 73 of the Act so as to have the same status and effect as if it is an arbitral
award, for being enforced as if it were a decree of the court. It is only that agreement which has been arrived at in
conformity with the manner stipulated and form envisaged and got duly authenticated in accordance with Section 73 of
the Act, alone can be assigned the status of a settlement agreement, within the meaning of and for effective purposes
of the Act, and not otherwise. We find in spite of our careful scrutiny, serious deliberations and analysis of the materials
on record, particularly the Memorandum of Conciliation Proceedings and the Letter of Comfort, that either taken
individually or even together they or any one of them can legitimately claim to be entitled to or assigned the status of a
settlement agreement within the meaning of Section 73, for purposes of the Act. In our view, they fall short of the
essential legal pre requisites to be satisfied for being assigned any such status, despite our endeavour to view them
with a liberal approach in the background of the objects and purposes underlying conciliation, arbitration and
alternative mode of settlement of disputes.”
This decision can be considered as being opposed to the principles of party consent and good faith that
underlie conciliation. Especially, given that the Model Law contains no such procedural requirements to be
satisfied for a valid settlement agreement, the decision seems to against the international view on the issue.
Following these decisions, it has been argued that this attitude is not the most appropriate for the
encouragement of conciliation.24 Given that one of the objects of the introduction of conciliation in the 1996 Act
was to offset the failure of arbitration to provide an efficacious ADR mechanism,25 this emphasis on procedure
is not seen as a step in the right direction. Allowing parties to avoid documents that are settlement agreements
in substance in effect amounts to rewarding bad faith negotiation,26 which would militate against one of the
fundamental tenets of any ADR mechanism. This conclusion is also strengthened by the fact that the 2002
UNCITRAL Model Law on Conciliation, the successor to the 1980 Conciliation Rules on which the 1996 Act
was based, contains no provision similar to Section 73 of the 1996 Act. The Model Law was drafted on the
basis of the different conciliation mechanisms adopted by States following the 1996 Rules, and can be
considered as a useful indicator of internationally accepted conciliation procedures.27 During the drafting of the
Model Law, the Working Group observed that, “the use of such non-contentious methods of dealing with
disputes deserved to be promoted”.28 Thus, the emphasis on efficacy and party autonomy during the drafting of
the Model law,29 is something that the Indian position is yet to incorporate.
EFFECT OF SETTLEMENT AGREEMENT
The settlement agreement as regards its legal effect is equal to an “arbitral award on agreed terms” made
under Section 30 [S. 74].
19. Haresh Dayaram Thakur v. State of Maharashtra, (2000) 2 Arblr 401:

AIR 2000 SC 2281 [
LNIND 2000 SC 838 ]:
(2000) 3 RAJ 14 :
(2000) 6 SCC 179 [
LNIND 2000 SC 838 ].
20. [At pp. 2685-2686].
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21. Singh V., Legislative Intent and Judicial Interpretation of ‘Conciliation Proceedings’ under the
Arbitration and Conciliation Act of India, 12 VJ 103, at 105 (2008).
22.
(2003) 1 Arb LR 651 :
AIR 2003 SC 3493 [
LNIND 2003 SC 323 ]:
(2003) 10 SCC 375 [
LNIND 2003 SC 323 ] :
(2003) 1 RAJ 487 , at 389.
23. Mysore Cements Ltd. v. Svedala Barmac Ltd.,

(2003) 1 RAJ 487 :
(2003) 10 SCC 375 [
LNIND 2003 SC 323 ] :
(2003) 5 JT 103 :
(2003) 3 Scale 201 [
LNIND 2003 SC 323 ] :
(2003) 2 SLT 777 :
(2003) 3 Supreme 283 : (2003) 6 SRJ 128 :
(2003) 1 Arb LR 651 : (2003) 2 KHCA CJ 324 (SC).
24. Singh V., Legislative Intent and Judicial Interpretation of ‘Conciliation Proceedings’ under the
Arbitration and Conciliation Act of India, 12 VJ 103 (2008).
25. Markanda, P.C., The Law Relating to Arbitration and Conciliation, 848 (6th ed). (Wadhwa 2006). To quote
the Supreme Court in Guru Nanak Foundation v. Rattan Singh & Sons,
AIR 1981 SC 2075 [
LNIND 1981 SC 402 ]:
(1981) 4 SCC 634 [
LNIND 1981 SC 402 ], the way in which the proceedings under the Act are
conducted and without an exception challenged in the courts, has made lawyers laugh and legal philosophers weep.
Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly
technical accompanied by unending prolixity at every stage providing a legal trap to the unwary. Informal forum chosen
by the parties for expeditious disposal of their disputes has by the decision of the court been clothed with ‘legalese’ of
unforeseeable complexity.
26. Singhania, R., India: Arbitration -- Settlement and Conciliation, 14(6) I.C.C.L.R. 65-67 (2003).
27. Slate W.K. et al, Uncitral (United Nations Commission On International Trade Law) Its Workings In
International Arbitration And A New Model Conciliation Law, 6 Cardozo J. Conflict Resol. 73, at 96 (2004).
28. “Report of the Working Group on Arbitration on the Work of Its Thirty-Second Session (Vienna, 20-31
March 2000)”, United Nations Commission on International Trade Law “A/cn.9/468” (10 April 2000).
29. Dobbins R.N., UNCITRAL Model Law On International Commercial Conciliation: From A Topic Of Possible
Discussion To Approval By The General Assembly, 3 Pepp. Disp. Resol. L.J. 529 (2003).
End of Document
Navneet Krishn
S. 74. Status
and effect of settlement agreement
The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on
the substance of the dispute rendered by an arbitral tribunal under Section 30.
An arbitral award on agreed terms is made by the arbitral tribunal if, during the arbitral proceedings, the parties
settle the dispute. The tribunal then proceeds to record the settlement in the form of an “arbitral award on
agreed terms”, which has the same status and effect as any other arbitral award [S. 30]. Since the settlement
agreement is considered an arbitral award, all the consequences that flow from the passing of an arbitral award
(like the payment of stamp duty) will apply equally to the case of a settlement agreement.30 The settlement
agreement is confidential except where its disclosure is necessary for its enforcement and implementation [S.
75].
CONFIDENTIALITY
If the conciliators receive any factual or additional information from a party pursuant to Section 65(3) or
otherwise subject to a specific condition that it be kept confidential, they are obliged to keep it confidential and
they cannot disclose it to the other party. Section 75 corresponds to Article 14 of UNCITRAL Conciliation
Rules.31
30. Smt. N.S. Geetha W/o Sri H.R. Sudarshan Prasad v. Sri B. Raghuveer S/o late
Vasudeva Acharya and State of Karnataka rep. by its Secretary, Revenue Dept.,
(2009) 1 Kar LJ 169 [
LNIND 2008 KANT 166 ].
Navneet Krishn
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End of Document
Navneet Krishn
S. 75.
Confidentiality
Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties
shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the
settlement agreement, except where its disclosure is necessary for purposes of implementation and
enforcement.
In respect of any information which is not subject to confidentiality, the conciliator has discretionary power in
regard to its disclosure to the other party. There is, however, an absolute prohibition on disclosure of all matters
relating to the proceedings either by the conciliator or by the parties to a third party even under any other law.
TERMINATION OF PROCEEDINGS
Section 76 lays down four ways of terminating conciliation proceedings, which reflect the principles of party
autonomy and amicable settlement.
End of Document
Navneet Krishn
S. 76.
Termination of conciliation proceedings
The conciliation proceedings shall be terminated—
(a) by the signing of the settlement agreement by the parties, on the date of the agreement; or
(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further
efforts at conciliation are no longer justified, on the date of the declaration ; or
(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation
proceedings are terminated, on the date of the declaration; or
(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that
the conciliation proceedings are terminated, on the date of the declaration.
Where an amicable settlement is reached and the settlement agreement is signed by the parties, the
proceedings stand terminated from the date of signing of the settlement agreement by both the parties [Clause
(a)]. The other three ways under which the proceedings can be terminated cover the situation where either the
conciliator or one or more of the parties feel that continuation of the proceedings will be infructuous. Thus, the
conciliator can declare in writing that the proceedings are terminated, but only if, after consultation with the
parties he finds that further efforts at conciliation are no longer justified [Clause (b)]. For instance, he may get
some indication in this regard if he suo motu makes a proposal for settlement of the dispute during the
proceedings pursuant to Section 67(4) and the proposal is rejected. The proceedings can be terminated by one
of the parties or jointly by the parties under intimation to the other party and/or to the conciliator [Clauses (c)
and (d)]. The termination is effective from the date of declaration.
It may be noted that when one of the parties desires to terminate the proceedings, he must inform the other
party and also the conciliator, ‘if appointed’. [Clause (d)]. The expression ‘if appointed’ is used because the
conciliation proceedings commence when the invitation to conciliate given by one party is accepted by the other
[S. 61(2)], although conciliator (s) may not have been appointed pursuant to the agreement to conciliate.
The termination of the proceedings under clauses (b) to (d) may enable the parties to take recourse to arbitral
or judicial proceedings for settlement of their dispute.
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On termination of the proceedings under Section 76, the costs of the proceedings are fixed by the conciliator in
accordance with the provisions of Section 78 and have to be shared in equal or agreed proportions.
Under Section 79, the conciliator is empowered to terminate the proceedings by a written declaration to that
effect on the failure of both the parties to pay in full the advance of deposits called for by him within 30 days of
the call. Alternatively, he can suspend the proceedings on the same ground. He can decide on termination or
suspensions on his objective assessment of the situation.
Section 76 adopts the provisions of Article 15 of UNCITRAL Conciliation Rules.32 This has been replaced by
Article 11 of the UNCITRAL Model Law on Conciliation, 2002. This provision is similar to the Article 15, except
in one material respect. Article 15 of the UNCITRAL Conciliation Rules required that the declaration should be
in writing. This requirement has been done away with under the Model Law, providing another instance of the
move towards procedural flexibility being made by the Model Law.
RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS
The absolute prohibition envisaged under Section 77 is intended to obviate any possibility of the attempt at
amicable settlement through conciliation becoming infructuous. Section 77 corresponds to Article 16 of
UNCITRAL Conciliation Rules.33
End of Document
Navneet Krishn
S. 77. Resort to
arbitral or judicial proceedings
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.
The parties are not to initiate any arbitral or judicial proceedings in respect of the dispute that is the subject-
matter of the conciliation proceedings. A party may, however, resort to any such proceeding where in his
opinion it is necessary for preserving his rights.
Once the conciliation proceedings have commenced, no arbitral or judicial proceedings in respect of the same
dispute can be launched until the conciliation proceedings are terminated in accordance with Section 76. The
law does not, however, overlook the possibility of the failure of the conciliation proceedings and of consequent
initiation of arbitral or judicial proceedings. In such an event, the provisions of Section 80 assume significance.
In other words, the provisions of Section 80 apply when any arbitral or legal proceedings are launched
subsequent to unsuccessful conciliation proceedings. Once the parties agree that the person who acted as
conciliator can function as an arbitrator also, they cannot subsequently challenge the authority or jurisdiction of
the arbitrator “on the ground that his having acted as a conciliator in the same dispute creates doubts as to his
impartiality and independence.”34 That the person who acted as conciliator could have had in his possession
confidential information which may be used by him as arbitrator or counsel is also a factor that should be
considered by the parties prior to agreeing to assign the role of arbitrator/counsel to the erstwhile conciliator.
The UNCITRAL Model Law on Conciliation 2002, in Article 13, however, departs from the earlier position under
Article 16 of the UNCITRAL Conciliation Rules 1980, on which the Indian provision is based. Under the Rules
and Indian law, the bar on initiating arbitral or judicial proceedings existed by virtue of conciliation proceedings
having begun. There was no independent requirement to be satisfied in order for this bar to take effect.
However, the language of the Model Law bars the initiation of judicial or arbitral proceedings ‘where parties
have agreed to conciliate and have expressly undertaken not to initiate ... arbitral or judicial proceedings’. This
provision seems at odds with the approach taken by the rest of the Model Law. However, the rationale for this
provision is explained by the Guide to Enactment and Use of the UNCITRAL Model Law on International
Commercial Conciliation 2002. Paragraph 83 of the Guide elaborates that the reason for this language being
adopted was that “no consensus was found on the formulation of a general rule that would prohibit the parties
from initiating such arbitral or judicial proceedings or restrict such an action to taking the steps necessary to
prevent expiry of a limitation period. It was found that limiting the parties’ right to initiate arbitral or court
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proceedings might, in certain situations, discourage parties from entering into conciliation agreements.
Moreover, preventing access to courts might raise constitutional law issues in that access to courts is in some
jurisdictions regarded as an inalienable right”. Thus, as a result of the lack of an international consensus on the
degree to which conciliation may bar judicial or arbitral proceedings, the Model Law thought it best to leave
such a bar to the agreement of parties.
COSTS AND DEPOSITS
Upon termination of the conciliation proceedings, the conciliator fixes the costs of conciliation considered as
reasonable by him, in terms of Section 78. This section is based on Article 17 of UNCITRAL Conciliation
Rules,35 and finds no place in the UNCITRAL Model Law on Conciliation 2002.
Costs signify the sum of money which the Court orders one party to pay to another in respect of the expense of
litigation incurred. Except where specially provided by the statute or by rule of Court, the costs of proceedings
are a matter of the Court's discretion.36
34. Commentary on the Revised Draft UNCITRAL Conciliation Rules, Report of Secretary General, Para 83,
see Appendix 50.
36. Halsbury's Laws Of England, vol.2, 4th ed., p.414, para 1108.
End of Document
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S. 78. Costs
(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and
give written notice thereof to the parties.
(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—
(a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of
the parties;
(b) any expert advice requested by the conciliator with the consent of the parties;
(c) any assistance provided pursuant to clause (b) of sub-section (2) of Section 64 and Section 68;
(d) any other expenses incurred in connection with the conciliation proceedings and the settlement
agreement.
(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different
apportionment. All other expenses incurred by a party shall be borne by that party.
Power of conciliator to determine costs
The conciliator will give written notice of the costs fixed by him to each party. It is only on termination of the
proceedings as envisaged under Section 76 that the costs are to be fixed. Whether the termination is on signing
of the settlement agreement or mid-stream termination, costs will be fixed by the conciliator and met by the
parties. Unlike in the case of an arbitral award where the costs are incorporated in the award itself [S. 31],
costs, in conciliation proceedings, are fixed after the signing of the settlement agreement which results in
termination of the proceedings [S. 76(a)]. The manner of apportionment of the costs can be provided in the
settlement agreement.
Sharing of costs
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The costs are to be borne equally by the parties unless the manner of apportionment thereof is specified in the
settlement agreement [sub-section (3)]. Such sharing of costs is restricted to the expenses incurred on the
specific items listed under sub-section (2). Other expenditure is to be borne by the party incurring that
expenditure [s ub-section (3)].
Shareable costs
The shareable expenses are:—
(i) fee and expenses of the conciliator;
(ii) fee and expenses of witnesses requested by conciliator with parties’ consent;
(iii) expert advice requested by conciliator with the consent of the parties;
(iv) assistance provided by institution or person for direct appointment of conciliator(s) in terms of Section
64(2)(b);
(v) administrative assistance arranged under Section 68;

(vi) other expenses incurred in connection with the proceedings and settlement agreement.
The fees and expenses of conciliator(s) are to be shared by the parties whether they are appointed by the
parties themselves or with institutional assistance. But, other expenses, e.g., the expenses incurred by a party
in connection with his request to an institution for recommending names of suitable individuals for appointment
as conciliators in accordance with Section 64(2)(a) will have to be met by the party himself and is not
shareable.
However, if a witness is summoned at the instance of a particular party or if the evidence of an expert is
adduced at the request of one side to dispute, the costs incurred have to be borne by such party.37
In comparison with Section 39 of the Act which empowers the arbitral Tribunal to exercise lien on the arbitral
proceedings on account of any unpaid costs, the conciliator has not been given such authority under Section
78. Hence, then the only resort perhaps for the recovery of unpaid costs is the Civil Court!38
DEPOSITS
During the conciliation proceedings, the conciliator is empowered to call for advance towards estimated costs of
arbitration payable in equal amount by each party [S. 79(1)]. Section is based on Article 18 of UNCITRAL
Conciliation Rules.39
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37. Bs Patil And Sarita Patil Woolhouse, “The Law of Arbitration and Conciliation”, 4th ed. 1997, p.338.
38. Va Mohta, “ The

Arbitration and Conciliation Act, 1996 ”, 1st ed. 2001, p.369.
End of Document
Navneet Krishn
S. 79. Deposits
(1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in
sub-section (2) of Section 78 which he expects will be incurred.
(2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an
equal amount from each party.
(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days,
the conciliator may suspend the proceedings or may make a written declaration of termination of the
proceedings to the parties, effective on the date of that declaration.
(4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of
the deposits received and shall return any unexpended balance to the parties.
If found inadequate, the conciliator may call for additional deposits to be advanced by each party [S. 79(2)]. The
advance deposits are to be paid by the parties within 30 days of the call. If both parties fail to pay within the
specified time limit of 30 days, the conciliator is empowered to either suspend or terminate the proceedings [S.
79(3)]. This discretionary power will, of course, be exercised by him on an objective assessment of the
situation. If the amount of deposit already advanced is found to be in excess of the costs fixed by him on
termination of the proceedings in terms of Section 78, the excess amount will be returned to the parties [S.
79(4)].
ROLE IN OTHER PROCEEDINGS
Section 80 prohibits a conciliator from acting as arbitrator, representative or counsel or witness in any
subsequent arbitral or judicial proceedings. This is intended to prevent any prejudice that may be caused to a
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party by disclosure of any information or knowledge which the conciliator might have acquired in the course of
conciliation proceedings. Section 80 Corresponds to Artilce 19 of UNCITRAL Conciliation Rules,40 and finds no
place in the UNCITRAL Model Law on Conciliation 2002.
End of Document
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S. 80. Role of
conciliator in other proceedings
Unless otherwise agreed by the parties,—
(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or
judicial proceedings in respect of a dispute that is the subject of the conciliation proceedings;
(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.
Section 80 highlights the difference between conciliation and arbitration proceedings, by precluding the
conciliator from acting as an arbitrator or as a representative or counsel of a party in any subsequent arbitral or
judicial proceeding relating to the dispute that was the subject-matter of the conciliation proceedings.41 Nor
could he be presented as a witness in any proceedings. However, it is left to the parties concerned to decide
between themselves whether the conciliators can so act.
ADMISSIBILITY OF EVIDENCE
A further extension of the principle of confidentiality envisaged under Section 75 is reflected in Section 81 which
prohibits the parties to the conciliation proceedings from relying on, or introducing as evidence, in subsequent
arbitral or judicial proceedings. Section 81 Corresponds to Article 20 of the UNCITRAL Conciliation Rules.2
41. Alcove Industries Ltd. v. Oriental Structural Engineers Ltd., (2008) 1 Arblr 393:
(2008) 3 RAJ 227 (Del).
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End of Document
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S. 81.
Admissibility of evidence in other proceedings
The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such
proceedings relate to the dispute that is the subject of the conciliation proceedings,—
(a) views expressed or suggestions made by the other party in respect of a possible settlement of the
dispute;
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;

(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by
the conciliator.
This prohibition applies whether or not the subject matter of the subsequent arbitral or judicial proceedings
relate to the subject of the conciliation proceedings.
This section is designed to serve the same purpose as Section 80, that is, to ensure negotiations in the
conciliation proceedings unimpeded by any fear of later disadvantages. While Section 80 deals with the
personal aspect in terms of a later role of the conciliator, Section 81 is concerned with substantive information
or views expressed during the conciliation proceedings. It attempts to answer the difficult question to what
extent such information should be inadmissible in other proceedings because of its possible adverse effect on
the position of a party.42
This section also attempts to define certain categories of information which would be inadmissible in other
proceedings. Taking into account the purpose of the provision, it lists as “classified material” various kinds of
information or statements given for the purpose of reaching a settlement agreement. It is this common trust of
the items listed which makes them potentially prejudicial to one or the other party and justifies their
inadmissibility in other proceedings.43
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42. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General, para 87
see Appendix 50.
43. Commentary on the Revised Draft UNCITRAL Conciliation Rules. Report of Secretary General, paras 87,
90 see Appendix 50.
End of Document
Navneet Krishn
SUPPLEMENTARY PROVISIONS
PART IV SUPPLEMENTARY PROVISIONS
PART IV SUPPLEMENTARY
PROVISIONS
PART IV
PROCEDURE AND POWER OF COURT
Section 44 of the preceding

Arbitration Act , 1940 carried provisions parallel to Section 82 of the 1996 Act.1 That section carried a
list of the subject matters on which Rules could be framed. That list has been dropped by the
Arbitration and Conciliation Act, 1996 .Section 82 now carries the simple provision that the High Court
may make rules consistent with theact as to all proceedings before the court under this Act. By virtue of the
provisions of Section 85(2)(b) of the 1996 Act, the rules made under the 1940 Act are deemed to have been made
under the 1996 Act.2
1. Sec. 44. Power to High Court to make rules.— The High Court may make rules
consistent with this Act as to—
(a) the filing of awards and all proceedings consequent thereon or incidental thereto;
(b) the filing and hearing of special cases and all proceedings consequent thereon or incidental thereto;
(c) the staying of any suit or proceeding in contravention of an arbitration agreement;
(d) the forms to be used for the purposes of this Act;

(e) generally, all proceedings in Court under this Act.
STATE AMENDMENT
Uttar Pradesh.— In Section 44 of Act 10 of 1940, after clause (a), the following clause
shall be inserted, namely :—
“(aa) the fees and other charges payable to an arbitrator or an umpire”— U.P. Act 57 of 1976 S. 23, w.e.f.
1-1-1977.
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See Mohanlal Arora v. Kailash Financiers Calcutta P. Ltd

AIR 1975 Cal 461 [
LNIND 1975 CAL 49 ], rules framed by Calcutta High Court, jurisdiction of High
Court to pass judgments in terms of award not affected.
2. For text of Rules made by High Courts, see Appendices 82, 88 and 119 to 135.
End of Document
Navneet Krishn
S. 82. Power of
High Court to make rules
The High Court may make rules consistent with this Act as to all proceedings before the Court under this Act.
Applicability of
Code of Civil Procedure to court proceedings
Subject to the provisions of the Actand the Rules made thereunder the provisions of the
Code of Civil Procedure apply to all proceedings before the court and to all appeals
under the Act.3 In H.M. Kamaluddin Ansari Co. v. Union of India 4 the Supreme Court
observed :
“Clause (a) of S. 41, 1940 Act (repealed) [deleted from 1996 Act] makes only the procedural rules of the
Code of Civil Procedure applicable to the proceedings in court under the
Arbitration Act . This clause does not authorise the court to pass an order of injunction. That
power is conferred by clause (b) of S. 41, 1940 Act (repealed) [clause (b) re-enacted as S. 9 of the 1996 Act]. The
source of power, therefore, cannot be traced in clause (a). If the contention was accepted appeals would lie under Ss.
96, 100 or 104 of
CPC where as the
Arbitration Act itself provides for appeals unders. 39. Besides, if clause (a) of S. 41 gave wide
powers to pass an order of injunction, clause (b), of S. 41 would become otiose.”
“There is another aspect which calls for our attention. Section 82 of the 1996 Act gives the High Court power to
make rules consistent with the Act. We were informed that all the High Courts have not so far made rules.
Whereas the Section 84 gives the Central Government power to make rules to carry out the provisions of the
Act, the High Court should also, wherever necessary, make rules. It would be helpful if such rules deal with the
procedure to be followed by the Court while exercising jurisdiction under Section 9 of the Act. The rules may
provide for the manner in which the application should be filled, the documents which should accompany the
same and the manner in which such applications will be dealt with by the Courts. The High Courts are,
therefore, requested of frame appropriate rules as expeditiously as possible so as to facilitate quick and
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satisfactory disposal of arbitration cases.5
The following provisions of the

Code of Civil Procedure have been held to apply to certain proceedings under the Act :—
(1)Section 206. (2) Section 96(3)7. (3) Section 248, (4) Section 114 read with Order 479, (5) Section 14410, (6)
Order 1 Rule 811, (7) Order 3 Rule 512, (8) Order 513, (9) Order 6 Rule 1714, (10) Order 9 Rule 1315, (11) Order
23 Rule 316, (12) Order 30 Rule 317, (13) Order 30 Rule 4.18
A proceeding under Section 14 or Section 17 under the 1940 Act (repealed) was not a suit and the provisions of
Section 86 (1)
CPC read with
Section 87 CPC did not apply to such a proceeding.19 Nor did the provision of
Section 80 CPC apply to a proceeding under Section 20 (This section has been deleted
from the 1996 Act).20 Where an application was filed for directions to the arbitrator to frame issues, the court
said that the technicalities of settling issues as required under Order 14. Rule 1 of
CPC need not be imposed upon the arbitrator and it was enough that he formulated the
points on which he was to consider the disputes between the parties.21 This view has now become fully
supported by the declaration in S.
Section 19 of the Arbitration and Conciliation Act, 1996 that the arbitral tribunal is not
bound by the
Code of Civil Procedure, 1908 .
The
Arbitration and Conciliation Act, 1996 does not carry any provision as to the applicability
of
CPC to arbitration matters when they are before a court. It follows that
CPC would apply to court proceedings arising out of arbitrations.
The following provisions of the

Code of Civil Procedure apply to appeals under the Act :—(1)Section 96(3)22, (2) Order
41 Rule 5.23
The power of the Central Government to make provisions for removal of any difficulty in giving effect to the
provisions of the Act can be exercised only up to two years of the date of enforcement of the Act.
1. Extracts from Rules framed by the Madhya Pradesh High Court under Section 82
4.(1) Every application under Section 9, Section 14, Section 17, Section 27, Section
34,Section 39 and Section 43 of the Act shall be made in writing duly signed and verified in the manner
prescribed by Order VI, Rule
s 14 and
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15 of the
Code of Civil Procedure, 1908 and if the Court so directs, shall be supported by an
affidavit.
(2) An application for enforcement of an arbitral award under Section 36 or foreign award under Section 47 or
Section 56 shall be in writing signed and verified by the applicant or by some other person proved to the
satisfaction of the Court to be acquainted with the facts of the case, and shall contain in a tabular form the
particulars prescribed in sub-rule (2) of Rule 11 of Order 21 of the
Code of Civil Procedure, 1908 .
******
9.(1) Save as otherwise expressly provided in the Act or these Rules the following
provisions of the
Code of Civil Procedure, 1908 (V of 1908) shall apply to the proceedings before a Court
in so far as they may be applicable thereto; namely:
(i) Sections 28, 31, 35, 35A, 35B, 107, 133, 135, 148A, 149, 151 and 152, and,
(ii) Orders III, V, VI, IX, XIII, XIV, XVI to XIX, XXIV, and XLI.
(2) (a) For the purpose of facilitating the application of the provisions referred to under sub-section (1) the Court
may construe them with such alterations, not affecting the substance, as may be necessary or proper to adopt
to the matters before it; and
(b) the Court may, for sufficient reasons, proceed otherwise than in accordance with the said provisions if it is
satisfied that the interests of the parties shall not thereby be prejudiced.
Further Reading(Section 82)
1. D.R. Dhanuka, “Drafting of Rules under

Section 82 of the Arbitration and Conciliation Act, 1996 : A Necessity”,
2006 (2) Comp LJ 82 .
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Page 4 of 6
3. Section 41(a), 1940 Act (repealed) [deleted from 1996 Act]. Kerala State Housing Board v. E.A. Yusuff,
AIR 1984 Ker 112 : 1984 Ker LT 55, how this section is to be interpreted.
4.
1983 Arb LR 293 :
AIR 1984 SC 29 : (1983) 4 SCC 417.
5. Sundaram Finance Ltd. v. N.E.P.C. India Ltd.,

(1999) 1 RAJ 365 :
AIR 1999 SC 565 [
LNIND 1999 SC 26 ]:
(1999) 1 SCR 89 [
LNIND 1999 SC 26 ] :
(1999) 2 SCC 479 [
LNIND 1999 SC 26 ] :
(1999) 1 JT 49 :
(1999) 1 Scale 40 [
LNIND 1999 SC 26 ] :
(1999) 1 SLT 179 :
(1999) 1 Supreme 126 :
(1999) 1 SCJ 289 : (1999) 2 SRJ 71 :
(1999) 1 Arb LR 305 (SC).
6. Hakam Singh v. Gammon (India) Ltd.

AIR 1971 SC 740 [
LNIND 1971 SC 21 ]:
(1971) 1 SCC 286 [
LNIND 1971 SC 21 ].

AIR 1971 JK 10 .
8. Union of India v. Rup Kishore,

AIR 1967 All 504 : 1967 All LJ 24.
9. Executive Engineer v. Thingom Iboyaima Singh,

AIR 1970 Manipur 76 .
10. B. Subba Reddy v. Suptd. Engineer, NSC Circle, Pellur,

(2007) 4 Arb LR 209 , 218 :
(2008) 1 RAJ 226 :
(2007) 5 Andh LT 409 (AP)
11. Abdul Gani v. Reception Committee,

AIR 1936 Bom 250 : ILR 60 Bom 645 : 38 Bom LR 380.
12. Ram Bharosey v. Peary Lal,

AIR 1957 All 265 [
LNIND 1956 ALL 167 ]: 1957 All WR 177.
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Page 5 of 6
13. Shrinath Bros v. Century Spinning & Wvg. Co.,

AIR 1968 Bom 443 : 70 Bom LR 219.
14. Indian Minerals Co. v. Northern India Lime Marketing Association,

AIR 1958 All 69 . It is clear from the section itself that the provisions of
CPC apply only subject to the provisions of the
Arbitration Act . Order 6, Rule 17 does not entitle a party to seek an amendment to add a new
objection to the objections already filed for setting aside an award after the lapse of the statutory period of 30 days
[Now 3 months under the 1996 Act]. The amendment was sought more than one and a half years after the filing of the
award.Ashwani Kumar v. Banwari Lal,
(1990) 1 Arb LR 63 Raj :
AIR 1990 Raj 3 . Other authorities to the same effect, Madan Lal v. Sunder Lal,
AIR 1967 SC 1233 [
LNIND 1967 SC 67 ]; Haji Ebrahim Kasam Cochinwala v. Northern Indian Oil
Industries Ltd.,
AIR 1951 Cal 230 Prabhat Kumar Lala v. Jagdish Chandra
Narang,
AIR 1968 Pat 399 amendment is allowable if sought within 30 days, Union of India
v. Binod Bihari Singh,
AIR 1967 Pat 144 ; Bhagwandin Singh v. Fakir Singh, (1913) 20 Indian cases 773.
[For footnote No. 15-18 refer to next page]
15. Ganeshmal v. Keshoram Cotton Mills,

AIR 1952 Cal 10 [
LNIND 1951 CAL 1 ]: ILR (195) 1 Cal 196; Bharat Heavy Electricals v. Shelley
Products,
(1991) 1 Arb LR 250 (MP) so as to question an expert appointment of an arbitrator;
Paras Ram Sood v. Union of India,
ILR 1974 HP 1038 .

AIR 1962 SC 903 [
LNIND 1961 SC 449 ]: 1963 Supp SCR 477.
17. Governor-General in Council v. Associated Live Stock Farm (India) Ltd.,

AIR 1948 Cal 230 : 52 CWN 288. R. Mc Dill & Co. P. Ltd. v. Gouri Sankar Sarda
(1991) 1 Arb LR 290 so as to allow an application for stay to be withdrawn with
permission to file again.
18. Soorajmull Nagarmull v. Asiatic Trading Co.,

AIR 1978 Cal 239 [
LNIND 1978 CAL 38 ]. This list was cited with approval in R. Me
Dill & Co. P. Ltd. v. Gouri Sankar Sarda,
(1991) 2 SCC 548 [
LNIND 1991 SC 143 ] :
(1991) 1 Arb LR 290 SC at 294.
19. Usman Ali Khan v. Sagar Mal,

AIR 1965 SC 1798 [
LNIND 1965 SC 61 ]:
(1965) 3 SCR 201 [
LNIND 1965 SC 61 ].
20. Ramchand v. Governor-General in Council,

AIR 1947 Sind 147 .
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Page 6 of 6
21. Central Coalfields Ltd. v. Ashok Transport Agency,

AIR 1987 Ori 287 [
LNIND 1987 ORI 139 ]:
(1987) 2 Arb LR 351 .

AIR 1971 JK 10 .
23. Scottish Union of National Insurance Co. v. Saraswati Sajnani,

AIR 1960 Cal 22 [
LNIND 1959 CAL 104 ]: 63 CWN 800.
End of Document
Navneet Krishn
S. 83. Removal
of difficulties
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order
published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as
appear to it to be necessary or expedient for removing the difficulty :
Provided that no such order shall be made after the expiry of a period of two years from
the date of commencement of this Act.
(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of
Parliament.
The Supreme Court explained in Gammon India Ltd. v. Union of India 24 the role of the
“removal of difficulties” provision in some other connection. It said :
“
Section 34 of the Contract Labour (Regulation and Abolition) Act, 1970 was challenged as
unconstitutional. Section 34 of the Act provides that if any difficulty arises in giving effect to the provisions of the Act,
the Central Government may, by order, published in the official gazette, make such provisions not inconsistent with the
provisions of the Act as appears to it to be necessary or expedient for removing the difficulty. Reliance was placed by
petitioners on the decision of this Court in Jalan Trading Co. v. Mazdoor Union.25 Section 37 of
the Act in that case authorised the Government to provide by order for removal of doubts or difficulties in giving effect
to the provisions of the Act. This Court held that it is for the legislature to make provisions for removal of doubts or
difficulties. The section in that case contained a provision that the order must not be inconsistent with the purposes of
the Act. Another provision in the section made the order of the Government final. This Court held that in substance
there was the vice of delegation of legislation to executive authority. Two reasons were given. First the section
authorised the Government to determine for itself what the purposes of the Act were and to make provisions for
removal of doubts or difficulties. Secondly, the power to remove the doubts or difficulties by altering the provisions of
the Act would in substance amount to exercise of legislative authority and that could not be delegated to an executive
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Page 2 of 3
authority. In the present case, neither finality nor alteration is contemplated in any order under Section 34 of the Act.
Section 34 is for giving effect to the provisions of the Act. This provision is an application of the internal functioning of
the administrative machinery. Difficulties can only arise in the implementation of rules. Therefore, Section 34 of the Act
does not amount to excessive delegation.”
There is this further explanation of the matter in the decision of the Supreme Court in Madeva Upendra Sinai v.
Union of India. 26
“Now let us turn to clause (7) of the Regulation. It will be seen that the power given by it is not uncontrolled or
unfettered. It is strictly circumscribed, and its use is conditioned and restricted. The existence or arising of a “difficulty”
is the sine qua non for the exercise of the power. If this condition precedent is not satisfied as an objective fact, the
power under this clause cannot be invoked at all. Again, the “difficulty” contemplated by the clause must be a difficulty
arising in giving effect to the provisions of the Act and not a difficulty arising aliunde, or an extraneous difficulty.
Further, the Central Government can exercise the power under the clause only to the extent it is necessary for applying
or giving effect to the Act etc., and no further. It may slightly tinker with the Act to round off angularities, and smoothen
the joints or remove minor obscurities to make it workable, but it cannot change, disfigure or do violence to the basic
structure and primary features of the Act. In no case, can it, under the guise of removing a difficulty, change the
scheme and essential provisions of the Act.”
As to the status of the order for removal of difficulties and its effect upon the difficulty experienced in the
implementation of an Act, the Supreme Court 27 first noted the following passage from the
judgment of the MP High Court : 28
“The language of the section clearly shows that it is for the Central Government to decide, as a pure act of
administration, whether an obstacle or impediment exists in giving effect to the provisions of the Act, Rule or Order
referred to in Section 6 which calls for an order for surmounting the obstacle or removing the impediment. No doubt
Section 6 does not expressly say that the Central Government should be satisfied as to the “existence of any difficulty”
for the removal of which the making of an Order is necessary. But it is implicit in the language of Section 6 that the
Central Government should be satisfied that a difficulty exists in giving effect to the provisions of any Act, Rule or Order
extended by Section 3 to the Merged States. If the existence of any “difficulty” depends on the satisfaction of the
Central Government, then it follows that the condition about the existence of any difficulty, for the removal of which the
Central Government is empowered to make an Order, is a subjective condition incapable of being determined by any
one other than the Central Government which has to take action in the matter.”
The court then continued to observe as follows :
“In so observing, in our judgment, the High Court plainly erred. Exercise of the power to make provisions or to issue
directions as may appear necessary to the Central Government is conditioned by the existence of a difficulty arising in
giving effect to the provisions of any Act, rule or order. The section does not make the arising of the difficulty a matter
Navneet Krishn
Page 3 of 3
of subjective satisfaction of the Government, it is a condition precedent to the exercise of power and existence of the
condition if challenged must be established as an objective fact.”
RULE MAKING POWER
Section 84 empowers the Central Government to make rules for carrying out the provisions of the Act.
24.
AIR 1974 SC 960 [
LNIND 1974 SC 109 ]at 968 :
(1974) 1 SCC 596 [
LNIND 1974 SC 109 ].
25.
AIR 1967 SC 15 : (1967) 1 SCR 15.
26.
AIR 1975 SC 797 [
LNIND 1974 SC 353 ]at 809 :
(1975) 3 SCC 765 [
LNIND 1974 SC 353 ].
27. Straw Products Ltd. v. ITO,

AIR 1968 SC 579 [
LNIND 1967 SC 303 ]at p. 583 :
(1968) 2 SCR 1 [
LNIND 1967 SC 303 ] . The court was considering a parallel provision in the
Taxation Laws (Merged States) (Removal of Difficulties) Amendment Order, 1962. The power to difficulties existed in
Taxation Laws (Extension to Merged States and Amendment)ACT OF 1949.
28. Straw Products Ltd. v. ITO,

AIR 1967 MP 34
End of Document
Navneet Krishn
S. 84. Power to
make rules
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the
provisions of this Act.
(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be, after it is made
before each House of Parliament while it is in session, for a total period of thirty days which may be comprised
in one session or in two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in making any modification in
the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however, that any such modification or annulment
shall be without prejudice to the validity of anything previously done under that rule.
“Now, the increasing complexity of modern administration and the need for flexibility capable of rapid readjustment to
meet changing circumstances which cannot always be foreseen, in implementing our socio-economic policy pursuant
to the establishment of a welfare state as contemplated by our
Constitution , have rendered it convenient and practical, nay, necessary, for the legislatures to
have frequent resort to the practice of delegating subsidiary or ancillary powers to delegates of their choice. The
parliamentary procedure and discussion in getting through a legislative measure in the legislatures is usually time-
consuming. Again such measures cannot provide for all possible contingencies because one cannot visualize various
permutations and combinations of human conduct and behaviour. This explains the necessity for delegated or
conditional legislation. Due to the challenge of the complex socio-economic problems requiring speedy solution the
power of delegation has by now as per necessity become a consituent element of legislative power as a whole.”29
“Nor can Parliament and the State Legislatures visualise and provide for new, strange, unforeseen and unpredictable
situations arising from the complexity of modern life and the ingenuity of modern man. That is the raison d’ etre for
delegated legislation. That is what makes delegated legislation inevitable and indispensable.”30
Navneet Krishn
Page 2 of 2
PENDING ARBITRATIONS
The
Arbitration and Conciliation Act, 1996 had to provide for the repeal of the
Arbitration Act , 1940 and the repeal of the Ordinance of 1996. That is why two provisions
became necessary, namelys. 85 repealing the preceding Act and s. 86 repealing the preceding Ordinance.
29. Tata Iron & Steel Co. v. Workmen,

AIR 1972 SC 1917 [
LNIND 1972 SC 300 ], 1922 :
(1972) 2 SCC 383 [
LNIND 1972 SC 300 ].
30. Registrar, Co-operative Societies v. K. Kunjabmu,

AIR 1980 SC 350 [
LNIND 1979 SC 472 ], 352 :
(1980) 1 SCC 340 [
LNIND 1979 SC 472 ].
End of Document
Navneet Krishn
S. 85. Repeal
and savings
(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the
Arbitration Act . 1940 (10 of 1940) and the
Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby
repealed.
(2) Notwithstanding such repeal,—
(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced
before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to
arbitral proceedings which commenced on or after this Act comes into force ;
(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are
not repugnant to this Act, be deemed respectively to have been made or issued under this Act.
1. Scope [ S. 85(2)(a)]
Section 85(2)(a) of the new Act is in two limbs: (1) Provisions of the old Act shall apply in relation to arbitral
proceedings which commenced before the new Act came into force unless otherwise agreed by the parties and
(2) new Act shall apply in relation to arbitral proceedings which commenced on or after the new Act came into
force. First limb can further be bifurcated into two : (a) Provisions of old Act shall apply in relation to arbitral
proceedings commenced before the new Act came into force and (b) old Act will not apply in such cases where
the parties agree that it will not apply in relation to arbitral proceedings which commenced before the new Act
came into force. First limb of Section 85(2)(a) is not a limited saving clause. It saves not only the proceedings
pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of
the award under that Act.
Navneet Krishn
Page 2 of 8
Section 85(2)(a) is the saving clause. It exempts the old Act from complete obliteration so far as pending
arbitration proceedings are concerned. That would include saving of whole of the old Act uptil the time of the
enforcement of the award. The Section 85(2)(a) prevents the accord right under the old Act from being affected.
Saving provision preserves the existing right accrued under the old Act. It is correct that the new Act is a
remedial statute and, therefore, Section 85(2)(a) calls for strict construction, it being a repealing provision.31
General Conditions of contract
There was a specific arbitration agreement between parties that only provision of
Arbitration Act , 1940 would apply. According to General Conditions or Contract (GCC),
arbitration was to be conducted in accordance with the provisions or
Arbitration Act , 1940 or any statutory modification thereof. It was held that General
Conditions of Contract could not be read as overriding or as providing an exception to specific arbitration
agreement between the parties.32
’Said enactment‘
The words “the said enactments” would include all the three enactments, i.e. the old
Arbitration Act , Foreign Awardsact and the Arbitration (Protocol and Convention) Act,
1937.33
Applicability of Old or New Act
Where the arbitration proceedings were found commenced under the Old Act, before commencement of the
New Act, the Old Act would apply. The proceeding would be deemed to have commenced with service of notice
for appointment of arbitrator.34 In case proceedings are commenced after the coming into force of the 1996 Act,
the provisions of that Act will be applicable.35 The date of entering into reference is irrelevant.36 Similarly, the
date of conduct of the proceedings is also irrelevant.37
No court can direct that the provisions of the 1996 Act be applied when the factual circumstances clearly
warrant that it is the 1940 Act which must apply. This aspect was considered by the Supreme Court in Neeraj
Munjal 38 where the court observed as follows—
“A court of law has no jurisdiction to direct a matter to be governed by one statute when provisions of another statute
are applicable. This Court merely directed the parties to enforce the said award which would mean that the same
Navneet Krishn
Page 3 of 8
should be enforced in accordance with law. If a party to the lis has a right to question an award in terms of the 1940
Act, no Court has the requisite jurisdiction to deprive him therefrom.”
Where the arbitral tribunal set up under the 1940 Act was not in existence anymore, it was held open to a party
to make a reference to the Court to appoint an arbitral tribunal under S. 11 of the new 1996 Act.39
It has been held that even if the arbitration clause contemplates proceedings under the old
Arbitration Act , 1940, if the proceedings are commenced after 22 August 1996 (the date
of commencement of the 1996 Act), then, unless otherwise agreed, such proceedings shall be governed by the
Arbitration and Conciliation Act, 1996 only.40 This is despite the fact that the clause might
refer specifically to the 1940 Act “and any statutory modifications” or “re-enactments” thereof. The question
here should not be whether the 1996 Act will be considered a statutory modification of the 1940 Act or not, but
rather, by virtue of this section, which of the 1940 or the 1996 Act will be applicable depending upon when the
proceedings are commenced.41
It appears that since the 1996 Act was preceded by an Ordinance which was effective from 25 January 1996
and was identical to the 1996 Act, the Act is a continuation of the Ordinance and is deemed to have been
effective from 25 January 1996.42 The ratio of the above case must be read keeping this in mind.
“Unless otherwise agreed”
The repeal is not intended to affect the arbitral proceedings which commenced before the new Act came into
force, “unless otherwise agreed by the parties”. The choice to proceed under the new Act has to be of the
parties and not of the arbitrator.43 Lodging of a general protest before the arbitrator is adequate to infer lack of
agreement.44 Where arbitral proceedings have commenced before coming into force of the new Act and are
pending before the arbitrator, it is open to the parties to agree that the new Act be applicable to such arbitral
proceedings and “they can so agree even before the coming into force of the new Act.”45 However, a party
cannot rely on an arbitration clause which refers to the applicability of the 1940 Act or “any statutory
modifications or re-enactments thereof” as their “agreement to the contrary”. There should be a fresh
agreement before the arbitral tribunal to apply the procedure under the new Act.46 The court may take into
account conduct of the parties to infer “an agreement to the contrary”.47 However, in situations where there is
clearly no agreement before the arbitrator that the procedure under the new Act will apply, courts have been
known to not take into account the conduct of the parties for deciding the applicability of the law which should
govern the arbitration.48
Where request for appointment of an arbitrator was made before the passing of the 1996 Act, but subsequent
proceedings disclose the agreement of the parties to adopt procedure in terms of the new Act, it was held that
the final award given by the Arbitrator could be challenged under S. 34 of the 1996 Act.49
Conversion/Amendment of application as per relevant law
Navneet Krishn
Page 4 of 8
If it is found that an application has been mistakenly brought under either the 1940 or 1996 Act, when in fact
the proceedings are not governed by that law, the court may, in the interests of justice, treat an application as
having been made under the relevant provisions of the applicable law.50
Severability of clause specifying arbitration under 1940 Act subsequent to its repeal
If an agreement is entered into after the coming into force of the 1996 Act, the 1996 Act would apply even if the
agreement states that arbitration would be under the 1940 Act.51 Such clause stipulating that arbitration is
governed by the
Arbitration Act , 1940, present in a contract entered into after the saidact is repealed, is
severable from the rest of the agreement. Since the arbitration will, in such cases, only be invoked after the
coming into force of the newact, the arbitration is to proceed only in terms of the new Act of 1996.52 In such
circumstances, if the conduct of the parties also disclose that they are willingly subjecting themselves to
arbitration proceedings under the new Act, there is no ground for later challenging such proceedings.53
There is however authority to the contrary as well. Thus, when the Patna High Courtwas faced with an
agreement entered into in 2000 (after the repeal of the 1940 Act and the enactment of the 1996 Act) but which
contained a clause to arbitrate under the old Act of 1940, it was held that the arbitration clause was ineffective.
The court speaking through S.N. Hussain J held54 : —
“It is, thus apparent that the said clause of the agreement provided for arbitration under the provisions of the old Act of
1940 but it is also quite apparent that the said Act of 1940, having already been repealed in 1996 itself, has to be
considered as if it had never existed and no proceeding or arbitration can commence or continue on its basis in a
proceeding initiated much after 1996. Hence the provisions of the Act of 1940 not being enforceable, the said
arbitration [clause] in the agreement cannot legally be deemed to be enforceable. Furthermore, the civil Court cannot
legally assume that the said clause in the agreement was for reference to Arbitrator under the provision of the new Act
of 1996 as it had no jurisdiction to create a new agreement for arbitration as the parties had never agreed for any
reference under the provisions of the new Act of 1996, which are quite different from the provisions of the old Act of
1940.” (emphasis added)
Further Suggested Reading (Section 85)
1. K.B. Dabke, “Enforcement of Arbitration Awards: The Law Applicable”, Chartered Secretary, 2000, vol. 30, p.
201.
Navneet Krishn
Page 5 of 8
31. Thyssen Stahlunion GMBH v. Steel Authority of IndiaLtd.,

1999 (3) RAJ 355 :
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]: 1999 (Supp-3) SCR 461:
1999(9) SCC 334 [
LNIND 1999 SC 906 ] :
1999(8) JT 66 :
1999 (6) Scale 441 [
LNIND 1999 SC 906 ] :
1999 (8) SLT 638 :
1999 (3) SCJ 468 : 1999 (10) SRJ 424:
2000(99) Comp Cas 383 :
2000 (1) CLT 95 (.SC) :
1999 (3) Arb LR 532 (SC).
32. National Thermal Power Corporation Limited v. Vijay Fire Protection Systems Limited,
2002 (3) RAJ 269 (Del).
33. Thyssen Stahlunion GMBH v. Steel Authority of IndiaLtd.,

1999 (3) RAJ 355 :
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]: 1999 (Supp-3) SCR 461:
1999(9) SCC 334 [
LNIND 1999 SC 906 ] :
1999(8) JT 66 :
1999 (6) Scale 441 [
LNIND 1999 SC 906 ] :
1999 (8) SLT 638 :
1999 (3) SCJ 468 : 1999 (10) SRJ 424:
2000(99) Comp Cas 383 :
2000 (1) CLT 95 (.SC) :
1999 (3) Arb LR 532 (SC).
34. Union of India v. B.S. Engineering Works Co.,

(2005) 1 RAJ 686 (Del), on facts old Act was held applicable based on notice of
appointment; Dey & Co. v. Union of India,
(2005) 3 Gau LR 404 (DB), arbitration commenced prior to the 1996 Act,
application for referring disputes to arbitration held must be filed under the 1940 Act; Kumar Construction Co. v. Delhi
Development Authority,
(2006) 3 Arb LR 265 , 268-269 :
(2006) 4 RAJ 562 :
(2006) 132 DLT 667 (Del), arbitral proceedings which commenced before the
coming into force of the new Act, will be governed by the
Arbitration Act , 1940;P. Gopal Raju v. Secretary Govt. of India,
(2007) 2 RAJ 78 , notice to initiate arbitration proceedings and appointment of
arbitrator in 1994, held 1940 Act applicable; Oil and Natural Gas Corpn. v. Hotel Paradise,
2008 (4) Gau LR (NOC) 8 , 10, date of receipt of request of a party to commence
arbitration proceedings marks the date of commencement of the arbitration and is also a determinant of whether the
1940 Act applies or the 1996 Act; Union of India v. R.K. Goel,
(2009) 1 Arb LR 610 , 614-615 (Bom) (DB), where reference made and arbitrators
appointed before commencement of new 1996 Act, held old 1940 Act applicable.
35. Executive Engineer v. Vijay Kumar,

(2006) 3 Arb LR 279 , 281-282 :
(2006) PLR 96 (P&H)relying on Shetty's Constructions Co. Pvt.
Ltd. v. Konkan Railway Construction,
(1998) 2 Arb LR 314 :
AIR 1999 SC 1535 : (1998) 5 SCC 599.
Navneet Krishn
Page 6 of 8
36. Delhi Development Authority v. S. Kumar,

(2008) 3 Arb LR 290 , 293 (Del) (DB), notice of appointment given on 30.10.92 but
arbitrator entered into reference on 15.09.1996, old 1940 Act was applicable; Bhatinda Construction Co. v. Union of
India,
2008 (1) Arb LR 283 , 286 :
(2008) 3 RAJ 423 (P&H), date of entering into reference is irrelevant for
determining commencement of proceedings.
37. Aggarwal and Co. v. State of H.P.,

AIR 2009 (NOC) 39 (HP)(DB), proceedings commenced and arbitrator appointed
under the 1940 Act, even though all the hearings were conducted after the commencement of the 1996 Act, the
procedure prescribed under the 1940 Act would govern the arbitration.
38. Neeraj Munjal v. Atul Grover Minor,

(2005) 2 Arb LR 119 , 123 :
AIR 2005 SC 2867 [
LNIND 2005 SC 473 ]:
(2005) 5 SCC 404 [
LNIND 2005 SC 473 ] :
(2005) 2 RAJ 90 , per S.B. Sinha J, where reference has been made before the new
Act was brought in force, the provisions of the Act of 1940 would continue to apply; Continental Construction Ltd. v. HP
State Electricity Board, 2006 (Suppl) Arb LR 174, 181 :
AIR 2007 (NOC) 239 : 2007 (5) RAJ 222 : (2006) 2 Shim LC 453 arbitral
proceedings conducted under the 1940 Act but award given after commencement of the 1996 Act, held objections to
such award can be taken only on the grounds mentioned under the 1940 Act.
39. Mahipatlal Patel v. Chief Engineer,

(2008) 2 Arb LR 198 :
(2008) 2 RAJ 664 :
(2008) 12 SCC 64 [
LNINDU 2008 SC 14 ] :
(2008) 3 Comp LJ 998 .
40. Stup Consultants Pvt. Ltd. v. Soham Engineering Constructions,

(2008) 4 Arb LR 75 , 80 (AP). Ed: Even though the
Arbitration and Conciliation Act, 1996 came into force from 22 August 1996, the date of
commencement of the 1996 Act is deemed to be 25 January 1996 since it is a continuation of an Ordinance which was
effective from such date.
41. Directorate General of Supplies & Disposal v. Machine Tools

(India) Ltd.,
(2008) 3 Arb LR 90 , 93 :
(2008) 151 DLT 646 (Del)relying on Milkfood Ltd. v. GMC Ice
Cream (P) Ltd.,
AIR 2004 SC 3145 [
LNIND 2004 SC 439 ]:
(2004) 1 Arb LR 613 (SC); State of Goa v. Chinna Nachimuthu Constructions,
(2008) 3 Arb LR 220 , 224-228 :
(2009) 2 RAJ 389 (Bom)(DB); Union of India v. B.S. Engineering Works Co., 2005
(2006) 1 RAJ 686 (Del).

(2001) 2 Arb LR 1 (SC) :
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]; Shetty's Construction Co. Pvt. Ltd. v. Konkan Railway
Construction,
(1998) 3 Arb LR 314 :
Navneet Krishn
Page 7 of 8
(1998) 5 SCC 599 :

AIR 1999 SC 1535 : (1998) 3 RAJ 355.
43. Radhey Shyam Associates v. State of Maharashtra,

(2008) 3 Arb LR 216 (Bom); Oil and Natural Gas Corpn. v. Hotel Paradise,
(2008) 4 Gau LR (NOC) 8 , 10, arbitration commenced under 1940 Act and
agreement referred to legislation “for the time being in force” to be applicable, held vague references by arbitrator to
1996 Act will not make 1996 Act applicable.
44. Radhey Shyam Associates v. State of Maharashtra,

(2008) 3 Arb LR 216 , 219 :
(2008) 4 RAJ 254 (Bom).

AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 Arb LR 532 :
(1999) 3 Raj 355 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] (SC).
46. N.S. Nayak & Sons v. State of Goa,

(2003) 6 SC 56 :
(2000) 3 Arb LR 109 :
(2003) 2 RAJ 253 followed in State of Goa v.
Chinna Nachimuthu Constructions,
(2008) 3 Arb LR 220 , 224-228 :
(2009) 2 RAJ 389 (Bom)(DB).
47. Alluminite Pvt. Ltd. v. General Insurance Corpn. of

India,
(2008) 4 Arb LR 298 , 300 :
2009 (2) RAJ 517 :
(2009) 1 Bom CR 391 [
LNIND 2008 BOM 453 ] (Bom)(DB)relying on Delhi Transport
Corpn. Ltd. v. Rose Advertising,
AIR 2003 SC 2523 [
LNIND 2003 SC 446 ]:
(2003) 2 Arb LR 1 :
(2003) 2 RAJ 37 :
(2003) 6 SCC 36 [
LNIND 2003 SC 446 ] ; Thyssen Stahlunion GMBH v. Steel Authority of India Ltd.,
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 Arb LR 532 :
(1999) 3 Raj 355 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] (SC); Haryana State Agricultural Marketing Board, Kaithal v.
Dharam Pal,
(2006) 3 Arb LR 285 , 288 (P&H).
48. State of Goa v. Chinna Nachimuthu Constructions,

(2008) 3 Arb LR 220 , 228 :
(2009) 2 RAJ 389 (Bom)(DB), in the absence of agreement to the contrary,
procedure under the 1940 Act was applicable.
Navneet Krishn
Page 8 of 8
49. Alluminite Pvt. Ltd. v. General Insurance Corpn. of India,

(2008) 4 Arb LR 298 , 300 :
2009 (2) RAJ 517 :
(2009) 1 Bom CR 391 [
LNIND 2008 BOM 453 ] (Bom)(DB)relying on Delhi Transport
Corpn. Ltd. v. Rose Advertising,
AIR 2003 SC 2523 [
LNIND 2003 SC 446 ]:
2003 (2) Arb LR 1 (SC); Thyssen Stahlunion GMBH v. Steel Authority of India Ltd.,
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 Arb LR 532 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] :
(1999) 3 RAJ 355 .
50. Parwani Builders v. Western Coalfields Ltd.,

(2006) 2 Arb LR 483 :
(2006) 2 RAJ 176 , proceedings initiated and various applications made under 1940
Act, application mistakenly filed under S. 34 of 1996 Act allowed to be treated as made under S. 30 of 1940 Act.
51. Kirloskar Computer Services Ltd. v. Lakshmi General Finance Ltd.,

(2007) 1 Arb LR 156 , 162-163 :
(2007) 1 RAJ 95 : (2006) 4 Mad. LJ 547 (Mad); Gayatri Projects Ltd.,
Visakhapatnam v. State of Orissa,
AIR 2008 (NOC) 2472 (DB) (2008) 106 Cut. LT 556, arbitration agreement dated
14.07.1997, clause stated that arbitration be conducted in accordance with the Orissa Arbitral Tribunal Act which was
allowed under 1940 Act but contrary to the 1996 Act, held 1996 Act will be applicable since the agreement came into
effect after commencement of 1996 Act, application for appointment under S. 11 of 1996 Act, held maintainable;
National Thermal Power Corporation v. Lt. Col. A.P. Singh (Retd.),
(2009) 2 RAJ 461 :
(2009) 156 DLT 572 an arbitration agreement entered into after the repeal of the
1940 Act does not become void because it refers to it, in such cases the 1996 Act will be applicable.
52. Rapti Contractors v. Reliance Energy Ltd.,

(2009) 2 Arb LR 9 , 13 (Del)relying on Shin Satellite Public Co. Ltd.
v. Jain Studios Ltd.,
(2006) 1 Arb LR 286 (SC), laying down the proper test of severability of arbitration
clause as “substantial severability” and not “textual severability”
53. Kirloskar Computer Services Ltd. v. Lakshmi General Finance Ltd.,

(2007) 1 Arb LR 156 , 162-163 :
(2007) 1 RAJ 95 : (2006) 4 Mad. LJ 547 (Mad), application made under S. 9 of
1996 Act which was not objected to, and even counter-claim raised, held cannot later contend that 1940 Act was
applicable and proceedings were without jurisdiction.
54. Rajan Kumar Verma v. Sachchidanand Singh,

(2006) 1 Arb LR 559 , 565 :
AIR 2006 Pat 1 : (2008) 4 RAJ 121 :
(2006) 1 Pat LJR 251 :
(2005) 3 BLJR 2070 (Pat).
End of Document
Navneet Krishn
S. 86. Repeal of
Ordinance 27 of 1996 and saving
(1) The Arbitration and Conciliation (Third) Ordinance, 1996 (27 of 1996) is hereby repealed.
(2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action
taken in pursuance of any provision of the said Ordinance shall be deemed to have been made, done or taken
under the corresponding provisions of this Act.
The provision on repeal and savings in the preceding Act of 1940 was in S. 48.55
Section 48, 1940 Act (repealed) exempted from its operation reference which were pending before the Act
came into force on the Ist July, 1940.56
A reference was taken to be pending from the moment the arbitrators had been chosen and they had signified
their consent to act even though they had not entered on the reference.57
The reference was not pending after the award was made until judgment was pronounced on the award by the
court.58
Section 85 repeals the following Acts :
The Arbitration (Protocol and Convention) Act, 1937 ;
The
Arbitration Act , 1940 and ;
Navneet Krishn
Page 2 of 24
The
Foreign Awards (Recognition and Enforcement) Act, 1961 .
1. Effect of repeal
The section then declares in sub-s. (2) that notwithstanding such repeal, unless the parties agree otherwise,
matters pending before the Act came into force are to be decided under the then applicable Act and all rules
and notifications made under the earlier Act shall apply to the extent to which they are not repugnant to the new
Act. Section 86 makes a similar provision about the preceding three Ordinances which repealed the 1940 Act
and which have in turn been replaced by the 1996 Act.59
“Unless otherwise agreed” [ sec. 85(2)(a)]
In relation to the matters wherein the arbitration proceedings would commence after enforcement of the 1996
Act, but under the agreement already executed before coming into force of the 1996 Act, the provisions of the
1996 Act would apply to such proceedings. In respect of such proceedings, it is not left to the will of the parties
to adopt the procedure of their choice — old (1940) or new (1996) Act but such proceedings are necessarily to
be governed by the provisions of the 1996 Act. One thing that is clear from this provision is that the provisions
of the 1996 Act are made applicable even to the proceedings which commence after coming into force of the
1996 Act, but under the agreement executed before coming into force of that Act. It will be thus clear that the
expression “otherwise agreed by the parties” necessarily refers to the intention of the parties regarding
applicability of the provisions of the new or old Act and not to the time factor. In this view of the matter, the
findings of the trial Court that the said agreement was required to be executed after enforcement of the new Act
was not only erroneous and contrary to the scheme and spirit of the Act but tended to defeat the very object
and purpose sought to be attained by the 1996 Act.60
An agreement for the applicability of the new Act could be entered into even before the new Act came into
force.61 In a complicated case, the appointment of the first arbitrator was in 1991. His interim award was set
aside in 1999 under the new Act. A new arbitrator was appointed in 2000. One of the contentions was that the
setting aside in 1999 should have been under the old Act and not new Act. The agreement between the parties
was for application of the new Act for further dispute. Fresh interim award was also under challenge. The fresh
adjudication was ordered by the court. It was held that the Act of 1996 became applicable despite the fact that
the proceedings culminating in the impugned award were started in 1991.62
A prayer for modification of an award under the old Act after taking part in arbitration proceedings under the
new Act was held to be imperssible. The arbitrator was appointed by the Supreme Court. The parties
consented that the proceedings be conducted under the 1996 Act. Though the dispute had arisen prior to the
commencement. They agreed to the application of the new Act even for post award proceedings. It was held
that neither the application of the old could be demanded nor an application for setting aside could lie before
the Supreme Court. The appropriate forum was the principal civil court of original jurisdiction.63
2. Pending Arbitral proceedings only saved
Navneet Krishn
Page 3 of 24
Section 85(2), while repealing the old Act of 1940, saves the repealed Act only for the pending arbitral
proceedings.64 Thus, an intention inconsistent with the provisions of
Section 6 of the General Clauses Act was clearly manifested in so far as the question of
applicability of Section 34 of the 1940 Act to pending judicial proceedings was concerned. Therefore,
applications under Section 34 of the 1940 Act which were pending in a Civil Court on the date of
commencement of the 1996 Act were to be governed by the 1996 Act and not by the 1940 Act.65
An application under the 1940 Act [ s. 34, in this case] pending on the commencement of the 1996 Act in a Civil
Court would be governed by the 1996 Act.66 In this case, the defendant had not filed any written statement on
merits but had submitted an application for stay of proceedings on the ground that the disputes were arbitrable.
It was held that the defendant could prosecute his application under sec. 8 of the 1996 Act.
Where inspite of the notices for appointment of an arbitrator issued prior to the commencement of the 1940 Act,
the other party failed to appoint the arbitrator, and the final notice was issued after the commencement of the
1996 Act, the latter Act of 1996 became applicable. Section 21 of the 1996 Act could be considered only with
reference to actions that could arise under that Act. No reference could be made or no support could be drawn
from the provision of sec. 21 read with sec. 85(2) of the 1996 Act as to the stage of commencement of arbitral
proceedings under the 1940 Act.67
In an unreported judgment of the Calcutta High Court in Matter No. 2281 of 1993 decided on 17th June, 1993,68
an application was filed under
Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 ,69 prior to the
commencement of the Ordinance. A preliminary objection was raised to the maintainability of the application on
the ground of the repeal of 1961 Act by the Arbitration and Conciliation Ordinance, 1996. It was argued that—
— the Ordinance having repealed the 1961 Act, the application under the said Act was no longer
maintainable;
— pending proceedings would lapse unless a different intention would appear in the saving clause
contained in Section 85;
— by deliberately limiting the saving clause to the pending arbitral proceedings the intention of the
Legislature was clear namely that pending legal proceedings were not saved.
The learned Judge after referring to the provisions of

Section 6 of the General Clauses Act came to the conclusion that the express language
of the saving Clause by itself does not determine whether the general rule under
Section 6 of the General Clauses Act will save pending litigation or not. All the provisions
of the repealingact will have to be considered to see whether the earlier right was intended to be and was in
fact destroyed. The learned Judge noted that despite repealing the 1961 Act, Chapter I Part II of the Ordinance
substantially re-enacted the provisions thereof with some modifications. By including similar provision in Section
45 of the Ordinance, it was made clear that it was not the intention to destroy the right of a petitioner under
Section 3 of the 1961 Act. If anything, the Ordinance strengthened the right. It was held that there being no
different intention in the Ordinance within the meaning of
Section 6 of the General Clauses Act , the application under Section 3 of the 1961 Act
was maintainable. Making an application for stay of the proceedings under sec. 34 of the 1940 Actwould not
confer any vested right upon the applicant and, therefore, the question of preservation of that right under sec.
Section 6 of the General Clauses Act does not arise and the right, if any, is not saved
Navneet Krishn
Page 4 of 24
under the provisions of the 1996 Act.70
An appeal against refusal to stay the suit under

sec. 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 was a
continuation of the original proceedings. The suit was still pending. The arbitral proceedings had not
commenced. The provisions of the 1996 Act would apply. The court stayed the proceedings and directed the
parties to take steps to appoint an arbitrator.71
This section repeals the

Arbitration Act , 1940 and also Arbitration (Protocol and Convention)Act, 1937 and
Foreign Awards (Recognition and Enforcement)Act, 1961. The 1937 and 1961 Acts simpliciter dealt with
enforcement of foreign awards. Enforcement of foreign awards cannot be termed as arbitral proceedings. The
execution proceedings which were in force and pending only would stand saved on the date of enforcement of
the 1996 Ordinance Act. Accordingly, the objection to the maintainability of execution proceedings under the
provisions of the 1996 Act (Ordinance) was rejected.72
In terms of sub-section (2)(a), despite repeal of the Acts specified in sub-section (1), the provisions of a
repealed Act would be applicable in relation to arbitration proceedings which commenced prior to 26-1-1996,
being the date of commencement of the 1996 Act. The date of commencement of the arbitration proceedings
under the 1996 Act is to be reckoned as laid down in Section 21 which provides that unless otherwise agreed to
between the parties, the arbitration proceeding in respect of the dispute commenced on the date on which the
request for referring the dispute for arbitration is received by the other party. Therefore, it must be found out
whether, in a given case, the request for referring the dispute for arbitration was moved for consideration of the
other party on and after 26-1-1996 or prior thereto. If such request was made prior to that date, then on a
conjoint reading of Section 21 and Section 85(2)(a) of the 1996 Act, it must be held that these proceedings will
be governed by the old Act.73
No provision was made in the Ordinance for the pending proceedings and, therefore,
General Clauses Act, 1897 applied. A petition pending on the date of the Ordinance did
not, accordingly, come to an end.74
3. Appointment of arbitrator after new Act
Under the new Act proceedings commence on the date when a request for reference is received.75 The words
“entering upon reference” and “to act” are not synonymous. An arbitrator was appointed in this case under the
1940 Act, but he failed to enter upon the reference. He was removed. Another arbitrator was appointed after the
commencement of the 1996 Act. The Supreme Courtsaid that the appointment was not without jurisdiction. The
proceedings were to be governed by the old Act of 1940.76 The court said: [at p. 4566].
“Again a bare reading of the Foreign Awards Act and the Arbitration (Protocol and Convention) Act, 1937 would show
that these two enactments are concerned only with recognition and enforcement of the foreign awards and do not
contain provisions for the conduct of arbitral proceedings which would, of necessity, have taken place in a foreign
country. The provisions of Section 85(2)(a) insofar these apply to the Foreign Awards Act and the 1937 Act, would
appear to be quite superfluous. A literal interpretation would render Section 85(2)(a) unworkable. Section 85(2)(a)
provides for a dividing line dependent on “commencement of arbitral proceedings” which expression would necessarily
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refer to Section 21 of the new Act. This Court has relied on this Section as to when arbitral proceedings commence in
the case of Shetty's Constructions Co. (P) Ltd. v. Konkan Rly. Construction. 77
Section 2(2) read with Section 2(7) and Section 21 falling in Part I of the new Act make it clear that these provisions
would apply when the place of arbitration is in India, i.e., only in domestic proceedings. There is no corresponding
provision anywhere in the new Act with reference to foreign arbitral proceedings to hold as to what is to be treated as
“date of commencement” in those foreign proceedings. We would, therefore, hold that on a proper construction of
Section 85(2)(a)the provision of this sub-section must be confined to the old Actonly. Once having held so it would be
said that
Section 6 of the General Clauses Act would come into play and the foreign award would be
enforced under the Foreign Awardsact. But then it is quite apparent that a different intention does appear that there is
no right that could be said to have been acquired by a party when arbitral proceedings are held in a place resulting in a
foreign award to have that award enforced under the Foreign Awards Act.”
We, therefore, hold that the award given on 24-9-1997...... when the arbitral proceedings commenced before the
Arbitration and Conciliation Act, 1996 came into force on 25-1-1996, would be enforced under
Arbitration Act , 1940 .....”
A petition for appointment of an arbitrator was made under S. 20 of the old Act. The new Act came into force.
The court said that all the cases in which arbitrators had not been actually appointed before coming into force of
the new Act, are to be governed by new Act. All disputed questions including the plea of time bar are to the
decided according to the new Act. The arbitrator so appointed would have to rule on his own jurisdiction under
S. 16.78 But since the matter had lingered on under the old Act for 17 years, rights which had been created
could not be forfeited. The court was to appoint the arbitrator if the authority failed to do so within four weeks.
4. Submission of plaint after new Act
Under S. 20 of the 1940 Act, arbitration proceedings were taken to commence from the date of filing of the
plaint and not from the date when notice for appointment of an arbitrator was served. The plaint was filed in the
court after the enforcement of the new Act. The Court said that the provisions of the new Act became
applicable.79
5. Commencement of proceeding
Application of the new Act depends upon the date of commencement of arbitral proceedings and not upon the
date when cause of action arises. Under S. 21 of the new Act proceedings commence on the date on which a
request for the dispute to be referred to arbitration is received by the respondent.80
Where the arbitration proceedings commenced much before the commencement of the new Act and the
arbitration agreement also provided that the Act of 1940 was to apply, the Court said that the matter was to be
dealt with under the old Act.81
Provision of Section 85 talks about the commencement of arbitral proceedings before the coming into force of
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1996 Act. It clearly means that the arbitral proceedings should have commenced before the coming into force of
1996 Act, in the manner such commencement is understood under the
Arbitration Act , 1940. Expression used in Section 85, vis. “which commenced before this
Act come into force” clearly and conclusively suggests that the principles governing the scope of
commencement of arbitral proceedings as were applicable under 1940 Act were to be applied for
understanding as to whether 1996 Act would have repealed 1940 Act with respect to such proceedings or not.82
Suit filed before but summons served after enforcement
A suit for partition and declaration was filed at a time when the new Act was not in force. But by the time that
the summons could be served, the Ordinance was promulgated. The defendant filed an application under the
Ordinance invoking the arbitration clause contained in the family arrangement. Subsequently, the new Act
came into being and was enforced. The Court said that the new Act became applicable. The application under
S. 8 was, therefore, maintainable.83
Suit filed before but payment under deed of settlement after new Act
Where a demand for arbitration was made in 1990 and the proceedings were instituted in 1991, it was held that
the old Act became applicable. The fact that the proceeding was subsequently withdrawn because of a
settlement and the payment under the settlement was received after the new Act had come into force, that did
not have the effect of depriving the Court of its power under S. 33 of the 1940 Act, (contesting the arbitration
agreement or award). The old Act remained applicable.84
6. Date of cause of action
The date of cause of action has been emphasised in a Calcutta decision.85 The Court said that whether a
dispute is to be governed by the provisions of the 1996 or by those of the Act of 1940 will be governed by the
date of dispute, i.e. cause of arbitration which will ultimately lead to the commencement. In this case the dispute
arose long prior to the coming of the new Act on 25th January, 1996. The arbitration clause provided for
applicability of the
Arbitration Act , 1940 alone. Parties acted on the basis of the agreement. The Court
directed to reference to the arbitrator and its order was complied with. Under such circumstances, it could not
be said that merely because the letter was written by the authority of the petitioner,i.e. Food Corporation of
India appointing an arbitrator after commencement of the new Act, it could be presumed that such date was the
date for commencement of the arbitration proceedings under the new Act.86
7. Enforcement
Under the old Act, there was no requirement for the arbitrator to give reasons for the award. That is not
mandatory under the new Act. Section 27 of the old Act provided that arbitrator or unpire might if they thought
fit, make an interim award, unless of course different intention appeared from the arbitration agreement. Interim
award was also an award and could be enforced in the same way as the final award. It would certainly be a
paradoxical situation if for the interim award, though given after the coming into force of the new Act, it would
still be the old Act which would apply and for the final award, it would be the new Act. Yet another instance
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would be that under Section 13 of the old Act, the arbitrators or umpire had power to state a special case for the
opinion of the Court on any question of law involved in the proceedings. Section 85(2)(a) using the terms
“provision” and “in relation to arbitral proceedings” which would mean that once the arbitral proceedings
commenced under the old Act it would be the old Act which would apply for enforcing the award as well.
Enforcement of the award, therefore, had to be examined on the touchstone of the proceedings held under the
old Act.87
Referring to the expression “for the time being in force”, the court said that it would not only refer to the law
inforce at the time of the making of the arbitration agreement but also any law that may be in force for the
conduct of arbitration proceedings which would include enforcement of the award as well. The words “in relation
to” would mean that the old Act was to apply to the whole gambit of arbitration culminating in the enforcement
of the award. The phrase “in relation to arbitral proceedings cannot be taken to mean only the pending
arbitration proceedings. It would also cover the proceedings before the court and any proceedings which are
required to be taken under the old Act for making the award a rule of the court and any appeal arising
thereunder. The court also said that it was not necessary to consider the provisions of S. 48 of the old Act for
interpreting s. 85(2)(a). Proceedings commenced before new Act came into force and the award was made
after coming into force of new Act and the arbitral proceeding started before coming into force of new act but
came to an end after coming into force of new Act, it was held that execution proceedings also were to be
governed by the old Act; Application of old Act was not only saved in relation to arbitral proceedings but also in
relation to execution proceedings.88
Foreign awards given after the coming into force of the new Act can be enforced only under the new Act.89
Jurisdiction
Objections relating to jurisdiction go to the root of the matter. Such objections can be allowed to be raised even
if there was no such specific pleading.90
THE FIRST SCHEDULE
(See Section 44)
Convention On The Recognition And Enforcement Of Foreign Arbitral Awards
Article 1
1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a
State other than the State where the recognition and enforcement of such awards are sought, and arising out of
differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as
domestic awards in the State where their recognition and enforcement are sought.
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2. The term “arbitral awards” shall include not only awards made by arbitrators appointed for each case but also
those made by permanent arbitral bodies to which the parties have submitted.
3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any
State may on the basis of reciprocity declare that it will apply the Convention to the recognition and
enforcement of awards made only in the territory of another Contracting State. It may also declare that it will
apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are
considered as commercial under the national law of the State making such declaration.
Article II
1. Each Contracting State shall recognise an agreement in writing under which the parties undertake to submit
to arbitration all or any differences which have arisen or which may arise between them in respect of defined
legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.
2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement,
signed by the parties or contained in an exchange of letters or telegrams.
3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have
made an agreement within the meaning of his article, shall, at the request of one of the parties, refer the parties
to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being
performed.
Article III
Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the
rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following
articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the
recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the
recognition or enforcement of domestic arbitral awards.
Article IV
1. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for
recognition and enforcement shall, at the time of the application, supply;—
(a) the duly authenticated original award or a duly certified copy thereof;
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(b) the original agreement referred to in article II or a duly certified copy thereof.
2. If the said award or agreement is not made in an official language of the country in which the award is relied
upon, the party applying for recognition and enforcement of the award shall produce a translation of these
documents into such language. The translation shall be certified by an official or sworn translator or by a
diplomatic or consular agent.
Article V
1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is
invoked, only if that party furnishes to the competent authority where the recognition and enforcement is
sought, proof that—
(a) the parties to the agreement referred to in article II were, under the law applicable to them, under some
incapacity, or the said agreement is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the award was made; or
(b) the party against whom the award is invoked was not given proper notice of the appointment of the
arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission
to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration,
provided that, if the decisions on matters submitted to arbitration can be separated from those not so
submitted, that part of the award which contains decisions on matters submitted to arbitration may be
recognised and enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the
agreement of the parties, or, failing such agreement, was not in accordance with the law of the country
where the arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a
competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the
country where recognition and enforcement is sought finds that—
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of that
country; or
(b) the recognition or enforcement of the award would be contrary to the public policy of that country.
Article VI
If an application for the setting aside or suspension of the award has been made to a competent authority
referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers
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it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party
claiming enforcement of the award, order the other party to give suitable security.
Article VII
1. The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements
concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor
deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to
the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.
2. The Geneva Protocol on Arbitration Clause s of 1923 and the Geneva Convention on the Execution of
Foreign Arbitral Awards of 1927 shall cease to have effect between Contracting States on their becoming
bound and to the extent that they become bound by this Convention.
Article VIII
1. This Convention shall be open until 31st December, 1958 for signature on behalf of any Member of the
United Nations and also on behalf of any other State which is or hereafter becomes member of any specialised
agency of the United Nations, or which is or hereafter becomes a party to the Statute of the International Court
of Justice, or any other State to which an invitation has been addressed by the General Assembly of the United
Nations.
2. This Convention shall be ratified and the instrument of ratification shall be deposited with the Secretary-
General of the United Nations.
Article IX
1. This Convention shall be open for accession to all States referred to in article VIII.
2. Accession shall be effected by the deposit of an instrument of accession with the Secretary-General of the
United Nations.
Article X
1. Any State may, at the time of signature, ratification or accession, declare that this Convention shall extend to
all or any of the territories for the international relations of which it is responsible. Such a declaration shall take
effect when the Convention enters into force for the State concerned.
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2. At any time thereafter any such extension shall be made by notification addressed to the Secretary-General
of the United Nations and shall take effect as from the ninetieth day after the day of receipt by the Secretary-
General of the United Nations of this notification, or as from the date of entry into force of the Convention for the
State concerned, whichever is the later.
3. With respect to those territories to which this Convention is not extended at the time of signature, ratification
or accession, each State concerned shall consider the possibility of taking the necessary steps in order to
extend the application of this Convention to such territories, subject, where necessary for constitutional
reasons, to the consent of the Governments of such territories.
Article XI
In the case of a federal or non-unitary State, the following provisions shall apply:—
(a) with respect of those articles of this Convention that come within the legislative jurisdiction of the federal
authority, the obligations of the federal Government shall to this extent be the same as those of Contracting
States which are not federal States;
(b) with respect to those articles of this Convention that come within the legislative jurisdiction of constituent
States or provinces which are not, under the constitutional system of the federation, bound to take legislative
action, the federal Government shall bring such articles with a favourable recommendation to the notice of the
appropriate authorities of constituent States or provinces at the earliest possible moment;
(c) a federal State Party to this Convention shall, at the request of any other Contracting State transmitted
through the Secretary-General of the United Nations, supply a statement of the law and practice of the
federation and its constituent units in regard to any particular provision of this Convention, showing the extent to
which effect has been given to that provision by legislative or other action.
Article XII
1. This Convention shall come into force on the ninetieth day following the date of deposit of the third
instrument of ratification or accession.
2. For each State ratifying or acceding to this Convention after the deposit of the third instrument of ratification
or accession, this Convention shall enter into force on the ninetieth day after deposit by such State of its
instrument of ratification or accession.
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Article XIII
1. Any Contracting State may denounce this Convention by a written notification to the Secretary-General of the
United Nations. Denunciation shall take effect one year after the date of receipt of the notification by the
Secretary-General.
2. Any State which has made a declaration or notification under article X may, at any time thereafter, by
notification to the Secretary-General of the United Nations, declare that this Convention shall cease to extend to
the territory concerned one year after the date of the receipt of the notification by the Secretary-General.
3. This Convention shall continue to be applicable to arbitral awards in respect of which recognition or
enforcement proceedings have been instituted before the denunciation takes effect.
Article XIV
A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting
States except to the extent that it is itself bound to apply the Convention.
Article XV
The Secretary-General of the United Nations shall notify the States contemplated in article VIII of the
following:—
(a) signatures and ratifications in accordance with article VIII;
(b) accessions in accordance with article IX;
(c) declarations and notifications under articles I, X and XI;
(d) the date upon which this Convention enters into force in accordance with article XII;
(e) denunciations and notifications in accordance with article XIII.
Article XVI
1. This Convention, of which the Chinese, English, French, Russian and Spanish texts shall be equally
authentic, shall be deposited in the archives of the United Nations.
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2. The Secretary-General of the United Nations shall transmit a certified copy of this Convention to the States
contemplated in article XIII.
THE SECOND SCHEDULE
(See Section 53)
Protocol On Arbitration Clause s
The undersigned, being duly authorised, declare that they accept, on behalf of the countries which they
represent, the following provisions:—
1. Each of the Contracting States recognises the validity of an agreement whether relating to existing or future
differences between parties subject respectively to the jurisdiction of different Contracting States by which the
parties to a contract agree to submit to arbitration all or any differences that may arise in connection with such
contract relating to commercial matters or to any other matter capable of settlement by arbitration, whether or
not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject.
Each Contracting State reserves the right to limit the obligation mentioned above to contracts which are
considered as commercial under its national law. Any Contracting State which avails itself of this right will notify
the Secretary-General of the League of Nations in order that the other Contracting States may be so informed.
2. The arbitral procedure, including the

constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the
law of the country in whose territory the arbitration takes place.
The Contracting States agree to facilitate all steps in the procedure which require to be taken in their own
territories, in accordance with the provisions of their law governing arbitral procedure applicable to existing
differences.
3. Each Contracting State undertakes to ensure the execution by its authorities and in accordance with the
provisions of its national laws of arbitral awards made in its own territory under the preceding articles.
4. The Tribunals of the Contracting Parties, on being seized of a dispute regarding a contract made between
persons to whom Article 1 applies and including an Arbitration Agreement whether referring to present or future
differences which is valid in virtue of the said article and capable of being carried into effect, shall refer the
parties on the application of either of them to the decision of the Arbitrators.
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Such reference shall not prejudice the competence of the judicial tribunals in case the agreement or the
arbitration cannot proceed or becomes inoperative.
5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification
shall be deposited as soon as possible with the Secretary-General of the League of Nations, who shall notify
such deposit to all the Signatory States.
6. The present Protocol will come into force as soon as two ratifications have been deposited. Thereafter it will
take effect, in the case of each Contracting State, one month after the notification by the Secretary-General of
the deposit of its ratification.
7. The present Protocol may be denounced by any Contracting State on giving one year's notice. Denunciation
shall be effected by a notification addressed to the Secretary-General of the League, who will immediately
transmit copies of such notification to all the other Signatory States and inform them of the date on which it was
received. The denunciation shall take effect one year after the date on which it was noticed to the Secretary-
General, and shall operate only in respect of the notifying State.
8. The Contracting States may declare that their acceptance of the present Protocol does not include any or all
of the undermentioned territories: that is to say, their colonies, overseas possessions or territories,
protectorates or the territories over which they exercise a mandate.
The said States may subsequently adhere separately on behalf of any territory thus excluded. The Secretary-
General of the League of Nations shall be informed as soon as possible of such adhesions. He shall notify such
adhesions to all Signatory States. They will take effect one month after the notification by the Secretary-General
to all Signatory States.
The Contracting States may also denounce the Protocol separately on behalf of any of the territories referred to
above. Article 7 applies to such denunciation.
THE THIRD SCHEDULE
(See Section 53)
Convention On The Execution Of Foreign Arbitral Awards
Article 1.—(1) In the territories of any High Contracting Party to which the present
Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future
differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clause s
opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced in
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accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said
award has been made in a territory of one of the High Contracting Parties to which the present Convention
applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.
(2) To obtain such recognition or enforcement, it shall, further, be necessary:—
(a) that the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
(b) that the subject-matter of the award is capable of settlement by arbitration under the law of the country
in which the award is sought to be relied upon;
(c) that 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 and in conformity with the law governing the
arbitration procedure;
(d) that the award has become final in the country in which it has been made, in the sense that it will not
be considered as such if it is open to opposition, appeal or pourvoi en cassation (in the countries where
such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the
validity of the award are pending;
(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles
of the law of the country in which it is sought to be relied upon.
Article 2.—Even if the conditions laid down in Article 1 hereof are fulfilled, recognition
and enforcement of the award shall be refused if the Court is satisfied:—
(a) that the award has been annulled in the country in which it was made;
(b) that the party against whom it is sought to use the award was not given notice of the arbitration
proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity,
he was not properly represented;
(c) that the award does not deal with the differences contemplated by or falling within the terms of the
submission to arbitration or that it contains decisions on matters beyond the scope of the submission to
arbitration.
If the award has not covered all the questions submitted to the arbitral tribunal, the competent authority of the
country where recognition or enforcement of the award is sought can, if it thinks fit, postpone such recognition
or enforcement or grant it subject to such guarantee as that authority may decide.
Article 3.—If the party against whom the award has been made proves that, under the
law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and
(c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if
it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving
such party a reasonable time within which to have the award annulled by the competent tribunal.
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Article 4.—The party relying upon an award or claiming its enforcement must supply, in
particular:—
(1) the original award or a copy thereof duly authenticated, according to the requirements of the law of the
country in which it was made;
(2) documentary or other evidence to prove that the award has become final, in the sense defined in Article
1(d), in the country in which it was made;
(3) when necessary, documentary or other evidence to prove that the conditions laid down in Article 1,
paragraph (1) and paragraph (2) (a) and (c), have been fulfilled.
A translation of the award and of the other documents mentioned in this Article into the official language of the
country where the award is sought to be relied upon may be demanded. Such translations must be certified
correct by a diplomatic or consular agent of the country to which the party who seeks to rely upon the award
belongs or by a sworn translator of the country where the award is sought to be relied upon.
Article 5.—The provisions of the above articles shall not deprive any interested party of
the right of availing himself of an arbitral award in the manner and to the extent allowed by the law or the
treaties of the country where such award is sought to be relied upon.
Article 6.—The present Convention applies only to arbitral awards made after the coming
into force of the Protocol on Arbitration Clause s opened at Geneva on September 24th, 1923.
Article 7.—The present Convention, which will remain open to the signature of all the
signatories of the Protocol of 1923 on Arbitration Clause s, shall be ratified.
It may be ratified only on behalf of those Members of the League of Nations and Non-Member States on whose
behalf the Protocol of 1923 shall have been ratified.
Ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who
will notify such deposit to all the signatories.
Article 8.—The present Convention shall come into force three months after it shall have
been ratified on behalf of two High Contracting Parties. Thereafter, it shall take effect, in the case of each High
Contracting Party, three months after the deposit of the ratification on its behalf with the Secretary-General of
the League of Nations.
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Article 9.—The present Convention may be denounced on behalf of any Member of the
League or Non-Member State. Denunciation shall be notified in writing to the Secretary-General of the League
of Nations, who will immediately send a copy thereof, certified to be in conformity with the notifications, to all the
other Contracting Parties, at the same time informing them of the date on which he received it.
The denunciation shall come into force only in respect of the High Contracting Party which shall have notified it
and one year after such notification shall have reached the Secretary-General of the League of Nations.
The denunciation of the Protocol on Arbitration Clause s shall entail,ipso facto, the denunciation of the present
Convention.
Article 10.—The present Convention does not apply to the colonies, protectorates or
territories under suzerainty or mandate of any High Contracting Party unless they are specially mentioned.
The application of this Convention to one or more of such colonies, protectorates or territories to which the
Protocol on Arbitration Clause s opened at Geneva on September 24th, 1923, applies, can be effected at any
time by means of a declaration addressed to the Secretary-General of the League of Nations by one of the High
Contracting Parties.
Such declaration shall take effect three months after the deposit thereof.
The High Contracting Parties can at any time denounce the Convention for all or any of the colonies,
protectorates or territories referred to above. Article 9 hereof applied to such denunciation.
Article 11.—A certified copy of the present Convention shall be transmitted by the
Secretary-General of the League of Nations to every Member of the League of Nations and to every Non-
Member State which signs the same.
55. S.48. Saving for pending reference.— The provisions of this Act shall not apply to any
reference pending at the commencement of this Act, to which the law in force immediately before the commencement
of this Act shall notwithstanding any repeal effected by this Act continue to apply.
56. Rupchand v. Pannalal,

AIR 1941 Cal 415 ; Appollo Mills Ltd. v. Babuhai Chandulal,
AIR 1944 Bom 14 : 45 Bom LR 904.
57. Chouthmal Jivrajjee Poddar v. Ramchandra Jivrajjee Poddar

AIR 1955 Nag 126 .
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58. Sher Bahadur Singh v. Ram Narain Singh,

AIR 1945 Oudh 1 ; See also Sukhdeo Singh v. Radhika Singh,
AIR 1950 Pat 77 .
59. Rani Construction P. Ltd. v. H.P. State Electricity Board,

(1998) 2 Arb LR 322 :
(1999) 1 RAJ 332 (HP—DB), award not allowed to be set aside on the grounds
which were available under the 1940 Act, the matter being under the new Act of 1996.
60. Reshma Constructions v. State of Goa, (1999) 1 Mah. LJ 462 :

(2000) 1 RAJ 552 :
(1999) 3 CLT 675 (Bom). Delhi Transport Corporation Ltd. v. Rose Advertising,
(2003) 2 RAJ 37 :
AIR 2003 SC 2523 [
LNIND 2003 SC 446 ]:
(2003) 6 SCC 36 [
LNIND 2003 SC 446 ] :
(2003) 4 JT 100 :
(2003) 4 Scale 141 [
LNIND 2003 SC 446 ] :
(2003) 3 SLT 214 :
(2003) 3 Supreme 431 : (2003) 7 SRJ 44 :
(2003) 2 Arb LR 1 (SC). Parties agreed to be governed by the law as in force at the
relevant time. Section 85(2) of the 1996 Act recognizes such an agreement between the parties. The conduct of the
arbitration proceedings and the participation of the parties therein shows that the parties acted under the 1996 Act.
Even the arbitrator proceeded on that understanding and gave his award in pursuance of the 1996 Act. Therefore, the
impugned judgment of the High Court appears to be totally unassailable. We are unable to find any ground or reason to
differ with the view taken by the High Court on the main issue.
61. Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd.,

AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]:
(1999) 3 RAJ 355 :
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] :
(2000) 99 Comp Cas 383 :
(1999) 3 Arb LR 532 .
62. Mahanagar Telephone Nigam Ltd. v. Unibros,

(2003) 3 RAJ 146 (Del) : (2003) 105 Del LT 837 :
(2002) 2 Arb LR 346 . Rose Advertising v. Delhi Transport Corpn.,
(2001) 2 RAJ 262 :
(2001) 90 DLT 834 , demand for reference before new Act, court also approached
before, but appointment of arbitrator made after the new Act, parties expressed their intention for the new Act, held,
governed under the new Act, appointment could not be made under the provisions of the old Act, Milkfood Ltd. v. GMC
Ice Cream P. Ltd.,
(1999) 1 RAJ 213 :
(1999) 76 DLT 181 :
(2000) 83 DLT 130 , reference to arbitration by the High Court after new Act and
also consent for reference given under the new Act, new Act applied State of Goa v. Heera Constructions,
(2001) 3 RAJ 43 :
AIR 2001 Bom 45 [
LNIND 2000 GOA 30 ]:
(2001) 1 Arb LR 240 (Bom), even for proceedings under the old Act, parties can
agree to the application of the new Act after its enforcement. Instalment Supply Ltd. v. Malkiat Singh,
(2002) 4 RAJ 150 , petition filed in 1995, repeal of 1940 Act during pendency S. 20
of the old Act remained applicable. Dynaneshwar Bhika Dhargalkar v. State of Goa,
(1999) 4 RAJ 350 (Bom), request for reference of dispute before the new Act,
proceedings to be under the old Act. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2000) 1 RAJ 266 :
Navneet Krishn
Page 19 of 24
(1999) 78 DLT 228 (Del), enforcement under

Foreign Awards Enforcement Act, 1961 because of the commencement of proceedings under the new
Act. Delhi Development Authority v. Bhai Sardar Singh,
(2004) 3 RAJ 422 (Del), enforcement under the old Act, new Act being not applicale
to the circumstances of the case. Union of India v. Jamil Ad,
(2005) 1 RAJ 129 (Del), proceedings commenced on service of notice for
appointment of arbitrator. This happened before the new Act which was not to apply automatically, no agreement on
the point, old Act applicable. Selected Marble Home v. Arun Kumar Kamal,
(2005) 1 RAJ 8 (Del), appointment of arbitrator under the old Act, award after the
new Act, old Act applicable; Bhatinda Construction Co. v. Union of India,
(2008) 1 Arb LR 283 , 286 :
(2008) 3 RAJ 423 (P&H), parties agreed to apply 1996 Act to challenge award
given under 1940 Act, held since proceedings commenced before 1996 Act, they will be governed by 1940 Act (though
this appears to be wrong law since it does not take into account the requirement of ‘unless otherwise agreed’ under S.
85(2)(a)).
63. National Aluminium Co. Ltd. v. Pressteel Fabrications P. Ltd.,

(2004) 1 RAJ 1 (SC) :
(2004) 1 SCC 540 [
LNIND 2003 SC 1115 ] :
(2004) Arb LR 67 . Minny Enterprises, General Manager, LTDC, V. JGKF
(2004) 1 RAJ 57 (Del), a clause in the contract showed a specific agreement
between the parties that their dispute would be subject to the provisions of the new Act. The expression “unless
otherwise agreed” in S. 85(2) referred not only to the law in force but also to the law that may be in force for
enforcement of award.
64. Birat Chandra Dagara v. Steel Authority of India,

AIR 2003 NOC 336 (Ori) : (2003) 95 Cut LT 396, the arbitration proceedings
commenced before coming into force of the new Act, proceeding was to continue under the old Act. The order of the
Civil Court under S. 20 of the old Act was held to be proper. An application for the same relief filed under S. 11(6) of the
new Act was held to be not maintainable. National Hydro Electric Power Corpn Ltd. v. Asian Techs Rani Constructions,
AIR 2003 U'chal 1 at pp. 4-5 :
(2003) 1 RAJ 286 :
(2003) 1 Arb LR 320 (Ust), proceedings commenced when the old Act was in force,
award made and signed after enforcement of the new Act, a clause in the agreement stated that statutory modifications
or re-enactments would apply to proceedings, the Court said that the proceedings would be governed by the new Act
from the date of its enforcement. The fact that the parties applied for enlargement of time under the old Act did not
amount to waiver of the right to be governed by the new Act. Sanyuki Nirmata v. Delhi Development Authority,
AIR 2002 NOC 151 (Del), award made and objections filed prior to the enforcement
of the new Act. The Court said that the provisions of the new Act were not applicable. No question of enforcement
under the new Act and treating the objections under the new Act. Shetty's Constructions Co. P. Ltd. v. Konkan Rly
Constn.,
(1998) 2 Arb LR 314 :
AIR 1999 SC 1535 : (1998) 5 SCC 599 :
(1998) 3 RAJ 355 , demand for reference made prior to the new Act, to be decided
under the old Act. Union of India v. Monoranjan Mondal,
AIR 2000 Cal 148 [
LNIND 1999 CAL 413 ]:
(1999) 4 RAJ 438 : 1998 Supp Arb LR 462, S. 21 of the new 1996 Act, being not
applicable, proceedings were not taken to be commenced because the arbitrations had not yet expressed their
willingness to act, nor they had actually entered upon the reference. On appeal from Monoranjan Mondal v. Union of
India,
AIR 1999 Cal 117 [
LNIND 1998 CAL 325 ]; K. Venkateswarlu v. State of A.P.,
(2003) 3 RAJ 214 (AP) :
(2003) 4 ALT 724 :
(2003) 3 Arb LR 440 , arbitrator appointed under the old Act did not work, his
neglect gave the parties to seek new appointment. It could not be said that any arbitration proceeding was pending
when the new Act came into force. The new appointment being under the new Act, the new Act would apply to
proceedings. MGF (India) Ltd. v. Rajinder Singhal,
(2003) 3 RAJ 414 (Del) :
(2003) 106 DLT 422 :
(2003) 3 Arb LR 162 , the agreement between the parties provided for application of
the old Act, or if the new Act came into force, the latter was to apply. The Court said that the arbitration between the
Navneet Krishn
Page 20 of 24
parties was to be governed by the new Act. Bhai Sardar Singh & Sons v. DDA,
(2001) 4 RAJ 664 Del, no agreement that even after the award proceedings would
be under the old Act. Application for making award a rule of the court not allowed. Sanyuki Nirmala v. DDA,
(2002) 3 RAJ 173 :
(2002) 97 DLT 191 :
(2002) 2 Arb LR 56 , arbitra tion and award under old Act, objections filed under old
Act before commencement of the new Act, no right to seek application of the new Act. Atree Associates v. DDA,
(2002) 1 RAJ 68 (Del), award delivered in 1998 when new Act was applicable, but
everything up to that time was carried on under the old Act, new Act to apply. Sukumaran Chand Jain v. DDA,
(2002) 3 RAJ 157 , agreement provided for applica tion of the 1940 Act or any of its
reenactments, etc., held new Act was to apply after its enforcement. Another similar decision, National Project
Construction Corpn. Ltd. v. Royal Construction Co. P. Ltd.,
(2003) 2 RAJ 334 :
(2003) 104 DLT 382 ; Krishna Construction Co. v. DDA,
(2003) 1 RAJ 477 (Del), proceedings under old Act, award after new Act,
agreement provided for application of the old Act with all its reenactments, etc., the court said that objections to the
award under the old Act to be determined by deeming them objections under S. 34 of the new Act. Kothari & Co. v.
UOI,
(2000) 2 RAJ 180 :
(2000) 1 Arb LR 340 (Bom), proceedings started under the old Act, award set aside
under the old Act, no question of application of the new Act. Anil Kumar v. Union of India,
(2001) 2 RAJ 136 :
(2001) Ker LT 692 : 2000 Supp Arb LR 303 (Ker), petition for reference of dispute
to arbitration, notice for appointment of arbitrator received by the respondent before the new Act, the old Act was held
to apply though the respondents reply was filed after the new Act. H.S. Kothadia & Co. v. Union of India,
(2000) 1 RAJ 547 (Bom). Non-reference of some of the claims before coming into
force of new Act, once arbitration proceedings commenced during the currency of the old Act, all matters arising out of
the disputes were to be referred and decided as per the procedure laid down under the old Act, claims, if any, which
were also part of the original dispute even if could not be referred to the arbitrator before coming into force of new Act
should be dealt with as per the old procedure and governed by the old Act. Housing & Urban Development Corpn. Ltd.
v. DSA Engineers (Bom),
(2002) 2 RAJ 76 :
(2002) 95 DLT 656 (Del), no party either by waiver or acquiescence can forgo terms
of agreement, original clause stated that any statutory modification or re-enactment of
Arbitration Act , 1940 would apply, Minutes of meeting stated that a decision would be taken in terms of
Arbitration Act , 1940, not objected by respondent the old Act remained applicable. Another similar
ruling,Rani Construction Co. P. Ltd. v. H.P. State Electricity Board,
(1999) 1 RAJ 332 (HP). Housing and Urban Development Corpn Ltd. v. DSA Engrs
(Bom),
(2002) 2 RAJ 76 :
(2002) 95 DLT 656 (Del), another similar ruling Kusuma Construction v. Union of
India,
(2002) 3 RAJ 422 (AP), another similar ruling, Reshma Construction v. State of
Goa,
(2000) 1 RAJ 552 :
(1999) 3 CLT 675 (Bom) another similar ruling Vijay Industries & projects Ltd. v.
NTPC Ltd.,
(2003) 2 RAJ 360 :
(2003) 104 DLT 171 , another similar ruling Punjab State Co-operative Supply &
Marketing Federation Ltd. v. Shiv Rice & General Mills,
(2000) 3 RAJ 511 : AIR 2000 P&H 333 :
(2001) 1 Arb LR 476 , where no claim was made by any party for arbitration before
the new Act, old Act could not be applied, mere filing of a civil suit was of no relevance Ashi P Ltd. v. Union of India,
(2003) 1 RAJ 44 (Del), application under S. 20 of the old Act, made before
commencement, not allowed to be converted into one under S. 11 of the new Act. Food Corpn. of India v. Dilip Kumar
Dutta,
(1999) 2 RAJ 228 (Cal), arbitration proceedings commenced before the new Act,
meant, that cause of action arose before the new Act, which had happened long prior to the new Act, the arbitration
clause provided for 1940 Act, old Act applied though the letter appointing the arbitrator was issued after the new Act.
Motor & General Finance Ltd. v. S. Nirpal Singh,
(2002) 2 RAJ 183 :
(2002) 97 DLT 316 :
(2002) 2 Arb LR 148 (Del), appointment of arbitrator when new Act was in force,
agreement provided for application of law in force at the time of appointment, held proceedings to be governed by new
Act. Rakesh Kumar v. Superintending Engineers Meerut,
(2001) 4 RAJ 312 (All), invocation of arbitration clause before new Act, appointment
of arbitrator after new Act, held, proceedings to be governed by the old Act. Enkay Construction Co. v. DDA,
Navneet Krishn
Page 21 of 24
(2002) 4 RAJ 333 :

(2002) 96 DLT 417 (Del), date of commencement of proceedings is a vital factor in
determining application of the new or old Act, facts showed application of the new Act. M.A. Narayana Murthy v. K.N.
Narayana Gupta,
(1999) 4 RAJ 1 :
AIR 1999 Kar 224 , if for any reason even the arbitrator could not be appointed
under the old Act.
Section 6 of the General Clauses Act, 1897 , saved the rights of the parties. Appointment of arbitrator
could be sought only under the old Act.Rani Construction Co. P. Ltd. v. H.P. State Electricity Board,
(1999) 1 RAJ 332 (AP), application of the old Act. Reddy & Co. v. APSRTC,
(2000) 1 RAJ 470 :
(1999) 3 Arb LR 286 (AP), commencment of proceedings before 1992, new Act
could not applied. Chairman & Managing Director, NTPC Ltd. v. Subbarao & Co.,
(2001) 4 RAJ 505 (AP—DB), initiation of proceedings under the old Act, held
enforcement of award under the old Act only Rajputana Hotels P. Ltd. v. Pradeep Kumar Sriya,
(2000) 1 RAJ 108 :
AIR 1999 Raj 312 : (1999) 3 Arb LR 609 (Raj), termination of proceedings after the
new Act, old Act would apply. General Electric Canada Inc. v. National Hydroelectric Power Corpn. Ltd.,
(2003) 2 RAJ 383 (Delhi) where the right to enforce the award under the old Act
became accrued, it could not be taken away because of the enforcement of the new Act, ABB ABL Ltd. v. Cement
Corpn of India,
(1999) 3 RAJ 234 :
(1999) 78 DLT 133 (Del), request for arbitration before new Act, old Act applicable.
Uttar Pradesh State Sugar Corpn. v. Jain Construction Co.,
(2004) 3 RAJ 1 (SC) :
AIR 2004 SC 4335 [
LNIND 2004 SC 842 ]:
(2004) 7 SCC 332 [
LNIND 2004 SC 842 ] :
(2004) 3 Arb LR 1 , disputes and differences in 1991, application filed under s. 20,
1940 Act in 1991, held old Act to apply. Kelkar and Kelkar v. Indian Airlines,
(2004) 2 RAJ 146 (Bom) suit filed by the contractor under the old Act, order also
passed under the old Act before enactment of the new Act, held, the correctness of the order must be judged as per the
old Act. JPN Singh v. National Building Construction Corpn Ltd.,
(2004) 2 RAJ 627 (Del), commencement before new Act, award after new Act,
arbitrator asked to file the award in the court under the old Act, new Act held to be not applicable. Elsic Felix v. Larsen
& Toubro Ltd.,
(2004) 2 RAJ 545 (Ker), proceedings commenced before the new Act only are
saved; Krishan Lal Arora v. Union of India,
(2005) 3 Arb LR 565 , 567 :
(2005) 3 RAJ 670 (Del), execution of contract as well as filing of petition for
reference to arbitration was before enforcement of 1996 Act, petition was to be treated as one under the 1940 Act;
Ashok Parbanda v. Vipin Kumar Parbanda,
(2006) 4 Arb LR 141 , 145 (Del), arbitration agreement under 1940 Act, proceedings
commenced after commencement of 1996 Act, held 1996 Act applicable; Mahalingam Shetty & Co. Ltd. v. NPCC Ltd.,
(2006) 1 RAJ 275 (Del) proceedings commenced before 1996 Act, provisions
relating to extension of time under 1940 Act found applicable.
65. Varun Seacon Ltd. v. Bharat Bijlee Ltd.,

AIR 1998 Guj 99 [
LNIND 1997 GUJ 365 ], 102 : 1979 (Supp) Arb LR 559. See also
Societe Commercial Coreales & Financiers v. State Trading Corpn
AIR 1998 Guj 94 [
LNIND 1997 GUJ 407 ]:
(1998) 1 RAJ 156 : (1998) GCD 451 as to the effect of the repeal of 1940 Act and
Foreign Awards (Recognition & Enforcement) Act, 1961.
66. Varun Seacon Ltd. v. Bharat Bijlee Ltd.,

AIR 1998 Guj 99 [
LNIND 1997 GUJ 365 ]:
(1997) 3 GLR 553 .
Navneet Krishn
Page 22 of 24
67. Marshall Corpn. Ltd. v. Union India, of

(1998) 1 RAJ 69 :
(1998) 2 Arb LR 175 [
LNIND 1997 AP 924 ] (AP); Y. Parthasarathy v. General Manager, Railway
Electrification, Allahabad,
(1997) 2 Arb LR 347 (AP).
68. Matter No. 2281 of 1993 decided on June 17, 1993. Referred to in Bombay Gas Co. Ltd. v. Parmeshwar
Mittal,
AIR 1998 Bom 118 [
LNIND 1997 BOM 921 ]: 1997 (Suppl) Arb LR 271 (Bom) Sec. 85 of the 1996 Act
contains provisions identical with sec. 85 of the Ordinance, 1996.
70. Bombay Gas Co. Ltd. v. Parmeshwar

Mittal,
AIR 1998 Bom 118 [
LNIND 1997 BOM 921 ]: 1997 (Suppl) Arb LR 271 (Bom). N.S. Nayak & Sons v.
State of Goa,
(2003) 6 SCC 56 [
LNIND 2003 SC 519 ] :
(2003) 2 RAJ 253 :
(2003) 3 Arb LR 109 , proceedings commenced under the old Act, an appeal was to
be filed under the old Act.
71. Societe Coreales & Financial v. State Trading Corp. of India,

AIR 1998 Guj 94 [
LNIND 1997 GUJ 407 ]:
1998 (1) RAJ 156 : 1997 (Suppl.) Arb LR 570.
72. Western Shipbreaking Corpn. v. Clare Haven Ltd. (UK),

(1998) 1 RAJ 367 , 376 : (1998) Supp Arb LR 53 (Guj). Arbitral proceedings
commenced on 1-1-1995 in England, award passed on 25-2-1996, Ordinance, 1996 effective from 25-1-1996,
Ordinance applied. Furest Day Lawson Ltd. v. Jindal Exports Ltd.,
AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ], a foreign award given after the commencement, governed
by the Act, although arbitral proceedings had commenced prior to the enforcement.
73. Shetty's Constructions Co. Pvt. Ltd. v. Konkan Railway Construction IX,
(1998) SLT 79 (SC) :
AIR 1999 SC 1535 : (1998) 3 RAJ 355 :
(1998) 5 SCC 599 .
74. First Security Bank of Utah v. East West Travel & Trade Links Ltd.,
(1997) 1 Arb LR 701 , 703 (Del)
75. Shetty's Construction Co. P. Ltd.

Konkan v.
Rly Constn.,
AIR 1999 SC 1535 : 1999 AIR SCW 4004 :
(1998) 5 SCC 599 , commences on the day on which a request for reference is
received.
76. State of West Bengal v. Amritlal Chatterjee,

AIR 2003 SC 4564 [
LNIND 2003 SC 740 ]:
(2003) 3 RAJ 267 :
Navneet Krishn
Page 23 of 24
(2003) 5 SLT 375 :

(2003) 3 Arb LR 158 . In Thyssen Stahlunion, Gmbh v. Steel Authority of India Ltd.
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]: 1999 AIR SCW 4016 :
2000 CLC 128 , the courts were concerned with the enforcement of a foreign award
and execution. This had no relevance to the present case. The award in the Thyseen case was made under the old Act
but after coming into force of the new Act. S. 85(2)(a) saves such matters and, therefore, enforcement was under the
old Act. Himachal Builders v. Cosmo Fertilizers Ltd.,
(2002) 4 RAJ 139 (HP), first appoints under the old Act, but did not work, new Act
came into force, one party informed the other of the applicability of the new Act and the other made an appointment.
New Act became applicable followed in Ambuja Cement Ltd. v. Oil and Natural Gas Corporation Ltd.,
(2007) 3 Arb LR 489 , 493-494 :
AIR 2007 (NOC) 1660 : (2008) 1 RAJ 603, proceedings initiated under the 1940
Act, held 1940 Act applicable.
77.
AIR 1999 SC 1535 : 1998 AIR SCW 4004 :
(1998) 5 SCC 599 .
78. Suresh Chander v. DDA, :

(2003) 2 Arb LR 176 :
(2003) 103 DLT 35 :
(2003) 1 RAJ 583 (Del)per contra State of Punjab v. Rajinder Pal
Garg, 2006 (Suppl) Arb LR 531, 532 :
2007 (5) RAJ 6 (P&H), application for reference made prior to the 1996 Act, but
order of reference was passed only in 2000, provisions of 1940 Act were held applicable.
79. Wimco Ltd. v. Vikram Singh,

AIR 2002 All 272 [
LNIND 2002 ALL 113 ]:
(2002) 3 RAJ 356 :
(2002) 3 Arb LR 465 (All).
80. Sri Venkateswara Construction Co. v. Union of

India,
AIR 2001 AP 284 [
LNIND 2001 AP 129 ]:
(2001) 3 RAJ 172 :
(2001) 2 Arb LR 619 (AP). In this case the first request for reference was made on
22-10-1996. The new Act was in force at that time.
81. H.P. State Council for Child Welfare v. Unique Miners and Furnaces P. Ltd.,
AIR 2001 HP 22 : (2001) 1 RAJ 280 :
(2001) 1 Arb LR 566 ; Union of India v. G.G. Satyanarayana,
(2003) 3 RAJ 232 (AP) :
(2003) 2 Arb LR 391 , willingness for arbitration expressed in 1997, it could not be
said that proceedings could have commenced before 1996. Hence, new Act applied.
82. Union of India v. Monoranjan Mondal (DB),

(2000) 2 RAJ 173 (Cal).
83. Prem Sagar Khanna v. Ravi Khanna,

AIR 2002 Del 98 : (2001) 4 RAJ 299 :
(2001) 7 AD (Delhi) 163 . The Court cited the decision of the Supreme Court in
Qudrat Ullah v. Bareilly Municipality,
AIR 1974 SC 396 [
LNIND 1973 SC 374 ]on the effect of repeal under S.
Section 6 of the General Clauses Act .
Navneet Krishn
Page 24 of 24
84. Oil and Natural Gas Commission Ltd. v. R.S. Avtar Singh & Co.,
(2003) 3 RAJ 83 (Bom) :
(2003) 2 Arb LR 219 . The contractor tried to raise a claim for the unpaid balance
after receiving payment under the deed of settlement. The claim was rejected because there were no bona fides in it.
85. Food Corpn. of India v. Dilip Kumar Dutta,

AIR 1999 Cal 75 [
LNIND 1998 CAL 243 ].
86. Nothern Sanitations P. Ltd. v. Unoin of India,

(2002) 4 RAJ 346 :
(2002) 64 DRJ 229 [
LNIND 2002 DEL 58 ] (Del), cause of action arose prior to the new Act, reference
also made in accordance with the old Act, because the new Act was still not there, no agreement for opting the new
Act, hence old Act –applied.
87. Thyssen Stahlunion GMBH v. Steel Authority of India

Ltd.,
(1999) 3 RAJ 355 :
AIR 1999 SC 3923 [
LNIND 1999 SC 906 ]: 1999 (Supp-3) SCR 461:
(1999) 9 SCC 334 [
LNIND 1999 SC 906 ] :
(1999) 8 JT 66 :
(1999) 6 Scale 441 [
LNIND 1999 SC 906 ] :
(1999) 8 SLT 638 :
(1999) 3 SCJ 468 : (1999) 10 SRJ 424 :
(2000) 99 Comp Cas 383 :
(2000) 1 CLT 95 (SC) :
(1999) 3 Arb LR 532 (SC).

(1999) 4 RAJ 379 :
(1999) 48 DRJ 210 (Del)followed in State of Himachal Pradesh v.
J.C. Gupta, (2009) 1 Shim. LC 449 (DB).

AIR 2001 SC 2293 [
LNIND 2001 SC 1180 ]:
(2001) 2 RAJ 1 :
(2001) 2 Arb LR 1 .

(2000) 1 RAJ 266 (Del),
Civil Procedure Code, 1908 , Ss. 9 & 20.
End of Document
Navneet Krishn
PROVISIONS OF 1940 ACT WHICH DO NOT FIND PLACE IN 1996 ACT — 1
PART V PROVISIONS OF 1940 ACT WHICH DO NOT FIND PLACE IN 1996 ACT
PART V PROVISIONS OF 1940

ACT WHICH DO NOT FIND PLACE IN 1996 ACT
REVOCATION OF AUTHORITY OF ARBITRATORS
[ Section 5 of 1940 Act]
S. 5. Authority of appointed arbitrator or umpire irrevocable except by leave of court.—The

authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the court, unless a
contrary intention is expressed in the arbitration agreement.
An arbitration agreement to refer without naming the arbitrator was always irrevocable.1
Under the English common law, the authority of the arbitrator was revocable,2 and this view was until 1868 followed
in India.3 In 1868 in Pestonjee's case,4 the Privy Council held that “it is not in the power of a party simply, at his own
will and pleasure to revoke the authority of the arbitrators in whose appointment he had concurred”. Thereafter, it
had been always held that a submission of dispute once made was not revocable without just and sufficient cause.5
The same rule prevailed in Ceylon under the Ceylon
Civil Procedure Code [now Sri Lanka] and a party could not withdraw from a judicial order of reference
in a pending action made on the joint application of himself and the other party.6
After the enactment of

Section 5 of the Arbitration Act , 1899, [repealed] and then under Section 5 of the 1940 Act, [repealed]
the authority of an appointed arbitrator or umpire was not revocable except with the leave of the court.7 And now
under
Arbitration and Conciliation Act, 1996 the provisions on the point are to be found in Section 14 of the
Act. Sub-section (1) provides for the termination of the authority of an arbitrator if he is not able to perform his
functions de jure or de facto or for any reason fails to act without undue delay [clause (a)], or withdraws from his
office or the parties terminate his authority under their agreement [clause (b)]. The court would have to be
approached only if any controversy remains about the operation of the provision in S.14(1)(a). The court will then
decide whether or not the grounds have operated to terminate the authority of the arbitrator.
Section 33 [now S.16] and not Section 5 of the 1940 Act [now S.14] was the proper section to be invoked if the
dispute was as to the effect of the arbitration agreement, e.g., whether the matter in controversy was within the
scope of the arbitration clause.8
Navneet Krishn
Page 2 of 115
A rule of a chamber of commerce permitting non-disclosure of the names of arbitrators was not opposed to Section
5 of 1940 Act [now S. 14] and was not void.9
The authority of an arbitrator appointed under a written arbitration agreement was not revocable under the 1940 Act
without leave of court though he had been appointed orally.10 Now the parties can revoke the appointment under
their agreement.
When an arbitration clause provided for reference to the Bengal Chamber of Commerce, the appointed arbitrator
was the Bengal Chamber of Commerce though under its rules it was authorised to delegate its powers to a smaller
body. The court could in an appropriate case revoke the authority of the Bengal Chamber of Commerce.11
1. Removal of arbitrators
On a petition u/ s
s. 5 ,
11 and
12 of the
Arbitration Act , 1940 praying for removal of arbitrator it was observed on facts that arbitration
proceedings could not reach desired destination and the two arbitrators became functus officio because the time
granted for publishing award had expired. Under the circumstances, relief had to be moulded and a sole arbitrator
was appointed by the court to decide the dispute.12
2. Power of court to decide matter of termination discretionary [1940 Act]
The power to grant leave was discretionary13 to be exercised according to the circumstances of each particular
case.14 In exercising the discretion, the court considered the balance of convenience and inconvenience.15 In
exercising its discretion cautiously and sparingly the court had to keep this circumstance in view that the parties
should not be relieved from a tribunal they had chosen because they feared that the arbitrator's decision might go
against them. But subject to this, the court had the power to rescind the arbitration agreement under S. 5 read with
S. 12 [both of the 1940 Act].16 Similar considerations come into play when an arbitrator wants to be relieved. Where
the arbitrators recorded evidence from several witnesses extending up to 100 pages spread over a period of three
years and produced 245 documents, an application by one of the arbitrators, who retired from his official position
and who represented one of the parties, for withdrawal of consent to reference was not allowed. It was not made in
good faith and there were adverse findings by the arbitrator against that party.17
Where the Union of India did not present its claim for as many as 4 years after the appointment of an arbitrator, it
was held to be a good case for granting relief to the other party by holding that the arbitration agreement ceased to
exist.18 A material consideration is whether the order granting leave would be likely to lengthen arbitration
proceedings.19 The court would more rapidly grant leave to revoke if an application is made at an early stage of the
proceedings assuming that a good cause of revocation exists.20 The applications under Section 5 of the 1940 Act
had to be [now S. 14] be made before the award was made.21 An application under Section 5 of the 1940 Act was
not rendered infructuous by the mere fact that the arbitrator had subsequently made and filed his award.22 Even if
objections to the award had been filed under Section 30 of the 1940 Act, the court could grant relief under Section 5
of the 1940 Act until the award was made a rule of court. Leave to revoke may be given after the award where the
Navneet Krishn
Page 3 of 115
parties had compromised the dispute.
The grounds which had emerged under S. 5 of the 1940 Act could be put under the following heads :
(a) Excess or refusal of jurisdiction by arbitrator. (b) Misconduct of arbitrator. (c) Charges of fraud. (d) Disqualification of
arbitrator. (e) Error of law. (f) Exceptional cases.
Excess or refusal of Jurisdiction by arbitrator
An application lies for a decision as to the effect of an arbitration agreement for a declaration that a dispute is not
within the jurisdiction of the arbitrator.23 In an appropriate case where the arbitrator is going to exceed his
jurisdiction a party may obtain such a declaration under Section 16 of the 1996 Act instead of proceeding for
disqualifying the arbitrator.
Section 16 provides for such challenge. Sub-s (2) says that a plea that the arbitral tribunal does not have jurisdiction
should be raised not later than the submission of the defence. If the excess of jurisdiction crops up during the
proceedings, the objection should be made at that very time. The objection has to be made to the tribunal itself and
not to the court. The tribunal may permit a delayed objection also. The tribunal itself has to dispose of the objection.
If the objection is accepted, the other party can appeal to the court [ S. 37(2)(a)]. If the objection is over-ruled, the
tribunal can continue its proceedings and make the award. The only remedy to the aggrieved party is to apply for
setting aside of the award under Section 34 if it is in excess of jurisdiction. The judicial pronouncements under the
preceding Acts touching upon excess of jurisdiction continue to be valid under the new provision also, and could be
fruitfully relied upon by the tribunal, now that it has been vested with the power to rule on its own jurisdiction and
authority.
Leave to revoke could be granted if the matter in dispute was not within the jurisdiction of the arbitrator,24 or if the
arbitrator was proposing to exceed his jurisdiction25 or if he had received evidence on claims not within his
jurisdiction26 or if he proposed not to exercise jurisdiction on a matter in dispute which was within his jurisdiction.27
In a doubtful case the court could refuse to give leave to revoke and could leave the question to be determined after
the award was made.28
The provisions are aimed at the same result, namely, to prevent arbitration, the difference between the two
proceedings being only in point of time. The power was to be used only in very exceptional circumstances, such as,
misconduct on the part of the arbitrator or the like.29 Different considerations arise in an application to set aside an
award.30
Before exercising its discretion to give leave to revoke the authority of the arbitrator the court was to be satisfied
that a refusal to do so might result in a substantial miscarriage of justice31 or that some manifest injustice would be
the consequence of binding the parties to the contract.32 Leave to revoke was to be granted with great caution,33
sparingly34 and in the most exceptional circumstances.35 To induce the court to grant leave a strong case had to be
made out.36 The arbitration clause forms part of the consideration for the contract37 and a party should not be
relieved of a tribunal of his own choice because he fears that the arbitrator's decision is going against him.38
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There were two limits upon the exercise of discretion : one, the court should not lightly release the parties from their
bargain that follows from the sanctity that the court attaches to contracts ; second, the court should be satisfied that
substantial miscarriage of justice would result in the event of its refusal to grant leave. Acting on these principles the
court rejected an application because it appeared to have been filed only to cause delays in the payment of the
applicant's dues to the Government and there was nothing improper on the part of the arbitrators who were trained
lawyers to refuse to state a special case because they thought that they would be able to tackle legal issues as
well.39 [The power and duty to state a special case under S. 13 of the 1940 Act does not appear to be there under
1996 Act]
Where under an arbitration clause the appointment of an arbitrator was to be made by the Chief Engineer, but he
did nothing in the matter for over a year, his long silence was held to be sufficient to indicate that he failed or
neglected to appoint an arbitrator or to enter upon the reference himself. This was held to be a fit and proper case
for revocation of his authority.40 Where the appointed arbitrator did not enter upon the reference for 14 months and
the court removed him without appointing any other, the High Court would get the power to appoint an arbitrator.41
[Such power existed under Section 12 of the 1940 Act].
Misconduct
Misconduct of arbitrator was a ground for giving leave to revoke e.g., when the arbitrator listened to evidence
behind the back of one of the parties to the arbitration42 and where the arbitrators appointed an umpire [now
“presiding arbitrator” under the 1996 Act] by lot unknown to the parties.43 An arbitrator granted adjournments to one
party behind the back of the other and thereby allowed the proceedings to drift for more than four months, his
authority was held to be justifiably revoked.44 Where the party was not allowed to be represented by a lawyer and
the arbitrator also proceeded ex parte in several sittings, his authority was allowed to be revoked.45
Demand of unreasonable and unconscionable remuneration amounts to misconduct. The authority of an arbitrator
can be superseded on this ground.46
Panel arbitrator
Where a person allows his name to be on an Institute's panel, he holds himself out as a skilled arbitrator. He would
be held responsible if the arbitration went wrong and though he could not be held liable in negligence, it could be a
misconduct on his part to fail in important respects to show the elementary shell of an arbitrator. If he reduces the
arbitration to such a state that there was no prospect of justice being done if it continued and what was a virtual
certainty that injustice would be done to the complaining party, he ought to be removed.47
Fraud
Fraudulent collusion of the arbitrator with the other party48 and disqualification of the arbitrator e.g., where unknown
to the applicant the arbitrator was indebted to or was acting as the mukhtiar of 49 or was related to one of the
parties50 are sufficient grounds for revocation of his authority.
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Disqualification by reason of bias
The court may give leave to revoke if there is reasonable ground for the apprehension of the applicant that the
arbitrator will be likely to be biased51 or if there is little chance of receiving impartial justice from him52 or if there
would be failure of justice if the arbitration was allowed to proceed53 or if the arbitrator had disclosed actual bias
against a party54 or where the chief engineer who had terminated the contract was appointed as the abitrator.55
The removal of an official arbitrator was sought on the ground of bias. The dispute related to the revision of licence
fee of a railway land. The designated arbitrator was the general manager of the railway. The ground of attack was
not his official connection, but the fact that he had in his counter-affidavit taken a definite stand in favour of the
enhancement of the licence fee. This was held to be sufficient to create an apprehension in the mind of the party of
the possibility of bias and, therefore, the trial court was justified in conceding to the prayer.56
Actual bias on the part of arbitrator need not be proved.57 It is enough that there is likelihood of bias. But where
nothing of the sort was proved and the arbitrator's conduct also seemed to have been fair, leave was not granted.
The Supreme Court found on the facts that the arbitrator ordered recording of the evidence about his adoption of
the eighty-four year old witness who was also ailing because even if afterwards the same was proved to be wrong it
would be expunged and that the arbitrator refused to give any long adjournment because the matter had been
lingering for a long time and, therefore, held that all this was justifiable in the circumstances.58 In Ranjit Thakur v.
Union of India 59 the Supreme Court observed that the test of determining likelihood of bias is whether
a reasonable person in possession of relevant information would have thought that bias was likely and whether the
person concerned was likely to be disposed to decide the matter only in a particular way. The court must be
satisfied that substantial miscarriage of justice will take place in the event of its refusal to accept the plea of bias. In
this case the proceedings had not yet commenced.
In a Calcutta case, the power of appointment was with the chief engineer. He did not do so in spite of the
contractor's request. He made an appointment after court order. The State raised its counter-claim though it had
never raised any claim before. The arbitrator entertained it. He did not supply to the contractor a complete minutes
of sittings despite request. The court removed him because of bias and appointed a new arbitrator in his place.60
The court was guided by the two decisions of the Supreme Court 61 to the effect that purity of
administration required that the party to the proceedings should not have apprehension that the Authority is biased
and is likely to decide against him. The Supreme Court issued this caution that it is not every suspicion felt by a
party that must lead to the conclusion that the Authority hearing the proceedings is biased: the reasonable and
average point of view and not apprehensions of a whimsical person. The fact that the arbitrator appeared as a
witness against the applicant in security proceedings was not considered to be a sufficient ground for revoking his
authority.62 The mere fact that one of the arbitrators is an associate of the opposite party's counsel is not sufficient
in itself to disqualify an arbitrator. The relationship was of professional nature and had also ended before the
complaint. It would be necessary to show that the bias was due to relationship between the arbitrator and the party
or that there is a predisposition to decide for or against one party.63
Expression of opinion by Sir Sulaiman in course of the reference that he might decide against the plaintiff was not
considered to be a ground for revocation of his authority specially as it was not alleged that he was partial.64
The court could grant leave to revoke if the arbitration was likely to be subjected to interminable delays and
multiplied expenses by the conduct of the arbitrator.65 The court could give leave to revoke after the award was
made where the parties settled the disputes by compromise if the compromise was admitted, but not if it was
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disputed.66
An application to revoke the submission on the ground that (i) the selection of the umpire was decided by lot, and
(ii) that the umpire had for a pupil the son or the nephew of one of the parties concerned in the reference was
rejected as the grounds urged in the application were not sufficient.67 Looking at the first heavy award in favour of
the contractor which was made a rule of the court, the Government became very much apprehensive that the
arbitrator might not fairly proceed with the second claim, and, therefore, applied for revocation of his authority, but
the same was not allowed.68
During the pendency of a reference of disputes between two rival companies one of the companies was ordered to
be wound up. It was held that the other company was entitled to an order to revoke the submission unless security
for costs was given by the company ordered to be wound up.69
Error of Law
The court had jurisdiction to grant leave to revoke if there was reasonable ground for believing that the arbitrator
was going wrong on a point of law within his jurisdiction e.g., if he admitted evidence which was objected to as
varying the contract and which was admissible on one view of the contract and inadmissible on another view. The
court could give leave to revoke unless the parties agreed that the arbitrator should make an award in the form of a
special case stating all the purposes for which he admitted the evidence and the effect, if any, he had given to the
different types of evidence.70 The application though in form for leave to revoke was in effect a method of obtaining
the opinion of the court. Where during the progress of the arbitration, the arbitrator made a mistake of law and was
about to act upon it, the court had power to set him right by giving leave to revoke. In England, this power used to
be exercised under the Common Law Procedure Act, 1854, but after the court was empowered to compel the
arbitrator to state a special case, it became extremely difficult for a party to induce the court for giving leave to
revoke his authority on this ground.71 The procedure may at times become necessary in India because the court
has no power to compel the arbitrator to state a special case.72 [There is no power under the 1996 Act enabling the
tribunal to state a special case.] If the court is satisfied that the arbitrator will act upon the court's opinion, the court
could instead of giving leave to revoke, would give its opinion.73 The court could give leave to revoke if the question
of law was too difficult for the arbitrator to decide.74 But normally the question as to the frustration of the contract
should be left to the arbitrator.75
Extraordinary Circumstances
Extraordinary circumstances may arise, as in the case of a commercial crisis when the members of a committee of
an association may be sharply divided into two opposing groups as buyers in general and sellers in general so as to
make it improper for the committee which may be packed with an over-whelming majority of buyers or sellers, as
the case may be, to adjudicate upon a dispute between a buyer and a seller.76 But the court would not grant leave
to revoke unless the emergency was of a kind which nobody could foresee and it was impossible to say that the
appointed arbitrator would be unable to judge the dispute with fairness and impartiality.77 When the Indian Jute Mills
Association which was a body affiliated to the Bengal Chamber of Commerce gave its ruling on a subject which was
the main point in dispute between the parties and it was clear on the affidavits that the policy of the Association
would be the policy of the Bengal Chamber of Commerce, the court granted leave to revoke the authority of the
Bengal Chamber of Commerce.78
The court would not give leave to revoke because the applicant had commenced an action in a foreign country and
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the object of the application was to stay the arbitration proceedings in this country in aid of a concurrent action
abroad79 or where the object of the application was to obtain extension of time under Section 37 of the 1940 Act
[now Sections 21 and 43 of the 1996 Act].80 The court could refuse leave when the delay in the arbitration
proceedings is due to the conduct of the applicant.81
Hopeless Claims
In Mustill and Boyd's Commercial Arbitration82 there is a full Chapter 31 dealing with hopeless claims and defences.
The Supreme Court in its decision in Panchu Gopal Bose v. Board of Trustees for Port of Calcutta 83
picked up the following passage from the book:
There is undoubtedly jurisdiction to interfere by way of injunction to prevent the respondent from being harassed by a claim
which can never lead to a valid award, for example, in cases where the claim is brought in respect of an alleged arbitration
agreement which does not really exist or which has ceased to exist so also where the dispute lies outside the scope of the
Acting on this observation, the Supreme Court held in the case before it:84
The case on hand is clearly and undoubtedly barred claim as the petitioner by his conduct slept over his right by more than
ten years . . . . It is an exceptional case and the courts below have justifiably exercised their discretionary power and
jurisdiction to permit the respondent to rescind the arbitration agreement and declare that the arbitration agreement shall
cease to have effect with respect to the difference or dispute referred to in the notice of the petitioner and relieved the
parties from the arbitration agreement.
The Supreme Court also cited a passage from the present book:85. “In an appropriate case leave should be given to
revoke the authority of the arbitrator.”
Complex Legal Issues
In a case before the Calcutta High Court, permission was sought for revoking the authority of the arbitrator on the
ground that the question before him was wholly a legal issue. The question was whether a party was entitled to the
benefit of price reduction and whether he was liable to be charged sales-tax. This was held to be not such a
complex issue as could not be handled by an arbitrator.86 The Court cited a passage from an English case:87
The principle seems to be that there can be a contract to submit both questions of law as well as questions of fact. Indeed
in most of the contracts for arbitration some questions of law are embedded. If, however, questions of law are of such
complex nature that an arbitration by a private forum, where there is justified apprehension that the adjudication involves
decision on such complex questions of law, would not lead to proper justice between the parties, the courts lean to exercise
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the discretion in favour of the revocation of the authority of the arbitrator and in such cases the question whether the
arbitrator is legally literate or not is not a relevant factor. But simply because certain questions of law have arisen, that by
itself, is not sufficient ground to revoke the authority of the arbitrator as such.
Arbitrator with legal background
It was held to be a meritless ground for revocation of authority that the arbitrator was not legally qualified.88
Complexity of the case
In a dispute between the members of a private family company, some wanted arbitration, some wanted removal of
arbitrators resulting in criss-cross proceedings at different places and the matter came before the Supreme Court.
The court disposed of the matter itself finding that it was not desirable that the family members should suffer a
prolonged dispute.89
3. Practice note
Leave to revoke was not be given ex parte. 90 Notice of the application should be served on the
91
arbitrator. An application for stay may be made in the name of a firm inspite of the death of a partner. Section 41
of the 1940 Act (S. 9 of the 1996 Act) attracted the provisions of Order 30, Rule 4 of the
Code of Civil Procedure .92 Where no notice was given to the arbitrator of the dismissal of the
application for his dismissal, nor any application was made to him to commence proceedings and consequently no
proceedings were taking place, a second petition for removal was not allowed.93
4. Effect of revocation
Section 5 of the 1940 Act (now S.12 of the 1996 Act) did not enable a party to obtain cancellation of the arbitration
agreement.94 Revocation of itself did not put an end to the reference unless the reference was superseded by an
order under Section 1995 of the 1940 Act. This section has been deleted under the 1996 Act. The section enabled
the court to supersede the agreement itself on setting aside an award. After the revocation fresh arbitrators could
be appointed to decide the dispute.96 An award made by an arbitrator whose powers were revoked was not void ab
initio and had to be set aside under Section 30 of the 1940 Act (now S. 34 of the 1996 Act).97
The observation in Prafulla Chandra v. Panchanan 98 that “when the section speaks of the authority of
the arbitrator it means the reference” is no longer good law in view of Section 19 of the 1940 Act and Juggilal
Kamalapat's case. Leave was not given under the section to revoke the reference. Section 19 of the 1940 Act under
which the reference itself could be superseded has not been retained in the 1996 Act. Hence, the power to
supersede the arbitration agreement does not exist.
Challenge to the authority under S. 16(2) of the 1996 Act can be made on the ground that the ‘matter alleged’ is
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beyond the scope of authority. The ‘matter alleged’ can mean only the subject matter referred for arbitration. Thus,
the decision in Prafulla Chandra's case will hold good for the purposes of S. 16(2) of the 1996 Act by virtue of the
changed provisions.
5. Revocation how made
Revocation was made by the party after the order under Section 5 of 1940 Actwas passed. Under
Section 12 of the Arbitration and Conciliation Act, 1996 , revoca-tion is effected either under the parties’
agreement or under court order. The order itself did not revoke the authority.1 The authority of the arbitrator stands
revoked if the court refuses to stay a suit in respect of the matter agreed to be referred to him.2 The parties may
without recourse to the Act revoke, amend, or alter the authority of the arbitrator.3 If an arbitrator desires to be
relieved from his duty and the court appoints another arbitrator the authority of the first arbitrator stands revoked.4
The court could not appoint another arbitrator by the same order by which the authority of the arbitrator was
permitted to be revoked. It was a permission granted to the party to revoke the authority of the arbitrator. When he
actually did so and applied to the court-under S. 12 of the 1940 Act for the appointment of another arbitrator the
court could only then do so.5 Section 12 of the 1940 Act has been deleted from the 1996 Act.
6. Jurisdiction
Where the chief engineer designate neither entered upon the reference nor appointed any other person in his place
so that revocation of his authority and appointment of another person became necessary and the question was that
of the jurisdiction of the court for the purpose, it was held that the court in whose jurisdiction the contract was
executed or work was performed was the appropriate court but that at the same time the court in whose jurisdiction
the office of the arbitrator whose authority was sought to be revoked would also have jurisdiction to entertain such
petition.6
7. Appeal and Revision
An order giving leave to revoke the authority of the arbitrator was not an order superseding the arbitration and was
not appealable under Section 39(1)(a) the 1940 Act.7 [ Section 37 of the 1996 Act]
If the court assumed jurisdiction to pass an order under Section 5 of the 1940 Act in circumstances under which the
section did not apply the order could be to set aside by an order in revision8, and the court could, if necessary,
convert an appeal into a revision petition.9
Where the courts in Maharashtra had jurisdiction and the agreement also provided that proceedings would be
launched there, the agreement was held to be neither unreasonable nor opposed to S. 28 of the Contract Act.10
CERTAIN POWERS OF ARBITRATORS
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Special case [Clause ( b ) of 1940 Act, repealed by 1996 Act]
Section 13 of the 1940 Act was as follows:—
S. 13. Powers of arbitrator.—The arbitrators or umpire shall, unless a different intention is expressed
in agreement, have power to—
(a) administer oath to the parties and witnesses appearing;
(b) state a special case for the opinion of the Court on any question of law involved, or state the award, wholly
or in part, in the form of a special case of such question for the opinion of the Court;
(c) make the award conditional or in the alternative;
(d) correct in an award any clerical mistake or error arising from any accidental slip or omission;
(e) administer to any party to arbitration such interrogatories as may, in the opinion of the arbitrators or umpire,
be necessary.
This kind of provision is not to be seen in 1996 Act. The provision of clause (b) of Section 13 of 1940 Act was
permissive and not obligatory.11 The arbitrator could not be compelled to state a special case.12 It was for him to
decide whether or not to state a special case. If he refused to do so, he was not guilty of misconduct.13 He could not
state a special case if a contrary intention was expressed in the arbitration agreement.
In England the arbitrator could be compelled to state a special case and the parties could not by agreement take
away the power of the court to compel the arbitrator to do so.14 In view of these differences the decisions of the
English Courts were not helpful guidelines on the powers and duties of the arbitrator with regard to stating a special
case.15 The power of the English Courts to compel the arbitrator to state a special case was taken away by
Arbitration Act , 1979. [Now replaced by the (English)
Arbitration Act, 1996 ]. An arbitrator when asked by a party to state as special case could do so either
by consultative interim award or by final award in the form of a special case. In this case, since the arbitrator had
failed to find a material fact the award was remitted to him. The following observations of Greer, J., on the power of
the court to amend an award without first setting it aside deserve to be noted:
There are two ways in which an umpire may receive the assistance of the court in coming to a right conclusion on matters
of law. One is by asking the court's advice in the course of the arbitration before a final award is made. If he does that the
court advises him as to what he ought to do in a certain event. That is to say, if points of law be raised in that way there is
no appeal from the decision of the court on the advice that is asked. But he may take the other course of raising the points
which the parties desire to raise for the decision of the court in the form of a final award. It seems to me he is asked to state
a case for the consideration of the court, and he comes to the conclusion that it is better that those points should be raised
in a final award, rather than that there should be an application first and then an award. Nobody could say he is guilty of
misconduct in this unless he is seriously misled and it resulted in an injustice being done.16
A clause in an agreement stating that neither party should apply for a special case to be stated was held to be
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unenforceable and void.17
Where the arbitrators refused to state a special case on the issue of currency, the court said that although this
amounted to a technical misconduct, the award would not be remitted or set aside. Even if it was advisable to order
a special case, the small amount at stake and the additional delay involved would have tilted the balance against
ordering a special case.18
Where the main contractors wanted a special case to be stated on the issue of repudiation whereas the arbitrators
stated the case on the issue of construction, it was held that the main contractors would be entitled to their order
and the arbitrator would be ordered to state the case.19
The case could be stated at any stage of the proceedings if there was any real difficulty on a point of law.20
The opinion of the court on a special case stated by the arbitrators was given in a consultative capacity.21 The word
“opinion” signifies the consultative jurisdiction of the court.22 The opinion was not a judgment or order23 or
decision.24 It was for this reason that no appeal was allowed from the opinion of the court given on a case stated.25
No appeal from such opinion was provided in Section 39 of 1940 Act.
Under Section 14(3) of 1940 Act the court pronounced its opinion after giving notice to the parties and the opinion
was added to and formed part of the award. The scheme of Section 14(3) of 1940 Act showed that the opinion was
concerned with the making of the award and consequently it was added to and formed part of the award.26 If the
opinion of the court was erroneous and was acted upon by the arbitrator, the award was liable to be set aside on
the ground that the error of law appeared on the face of the award.27 After the opinion was given by the court, the
arbitrator was still the judge of both law and fact and was not bound to follow the opinion28 but a fair and honest
arbitrator should follow the opinion. If he did not, this might be a ground for setting aside the award. The opinion of
the court being given in a consultative capacity, it did not operate as res judicata. 29
On refusal of the arbitrator to state a special case a party could apply to the court for leave to revoke the authority of
the arbitrator but such application had to be made before the award was made.30
Question of Law
The arbitrator could state only a question of law, such as the construction of a document,31 for the opinion of the
court. It was also the duty of the court on a special case to consider questions of law and not to act as an appellate
court on questions of fact.32 Where the cargo of pipes worked loose and a number of pipes were lost but they were
restowed and they were lost again when the vessel encountered a storm, the arbitrator refused to state a special
case holding that there was no break in the chain of causation. The court was of opinion that the finding of the
arbitrators that there was no break in the chain was essentially a matter for them and they were not compellable to
state a special case. The court said that causation was a mixed question of law and fact and only in exceptional
cases should a bare question of causation be removed from the final decision of an arbitration tribunal by ordering it
to state its award in the form of a special case. There was no material here which showed at least prima facie that
the arbitrators had gone wrong in law. Whether the facts brought about frustration of the contract or constituted only
breach are questions of law.33 The question whether there is any evidence on which the arbitrator may come to a
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particular finding is a question of law.34
It was the duty of the parties who wished to raise questions of law for the decision of the court to make plain to the
arbitrator all the points on which they wished the facts to be found for purpose of arguing the question of law.35
Findings of fact should be separated from findings of law. If rolled up questions of mixed fact and law were stated
the case was to be remitted to the arbitrator for further findings of fact36 e.g., when it revealed an error
of construction.37 The question of law must truly arise in the course of the reference and not a question which might
or might not arise or a question on an assumed state of facts.38
Arbitrator's Duty
The arbitrator could not of his own volition state a special case as to whether he had jurisdiction to deal with a
dispute.39 If the arbitrator had no jurisdiction to deal with the case, he could have no jurisdiction to state a special
case about it40 but the question whether the contract had been frustrated was not a question the answer to which
could oust the jurisdiction of the arbitrator and he could state a special case on the question.41
The duty of the arbitrator was to find facts and not to set out the oral or documentary evidence in the special case42
save where the question was whether there was any evidence on which a particular finding of fact might be made.43
The findings of fact had to be clearly stated.44 The special case had normally set out all the findings of fact45 and the
contention of the parties,46 which were necessary in order to enable the court not only to decide the questions
submitted but also to decide what questions arose and how they arose.
At the hearing of the special case, the court was bound by all findings of fact including inference of secondary facts
from primary facts47 but it was open to the court to make inferences of secondary facts where no such inference
had been made by the arbitrator and no additional finding of fact could affect the inference.48
The arbitrators could impose conditions on the stating of a special case and since the arbitrators considered that a
certain sum of money was in any event payable to the owners, it was legitimate and proper for them to require
payment of that sum into a joint account as a condition of stating an award in the form of a special case.49 The word
“may” in S. Section 21 of the English
Arbitration Act , 1950 (repealed) gave a discretion and gave them power to make any term or condition
which in their discretion they thought was proper in stating a special case.50 The power of an arbitrator to impose a
condition was undoubtedly useful and in a proper case there was no reason why there should not be a condition
making the whole sum in dispute payable but where there was a clear cut fully arguable point of law which it was
proper for a party to raise and on which a great deal of money depended, it would be overharsh to put upon him a
condition that he should bring that sum of money into the court.
In this case though the learned Judge thought that this was not a proper case for ordering the deposit of the whole
sum or any sum into court ; this was a matter for his discretion. There was no wrong approach in the way he had
exercised his discretion. The court did not interfere.51
Award in alternative form
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The arbitrator could prepare the award in an alternative form, one operating as a special case if questioned and, if
not, as a final award.52
Proper Method of stating case
In Skibs A/s Staalmeton v. Delfzyl Steamship Co. 53 the Master of the Rolls explained this matter thus:
“It is a most inconvenient way of dealing with this arbitration that we should have in the case some portion of the evidence
set out, then some findings, then annexed to the case and as part of the case a shorthand note of the whole of the
evidence. In such cases the umpire should state the facts. If it is necessary to have material on which the court can judge
whether a finding of fact is right in law, the material should be supplied. But the findings of fact should be clear and distinct
and should not be accompanied by the evidence on which the court would be asked to say whether the umpire was right in
the conclusion to which he came. Annexing detailed evidence, although done with the best intentions, does inevitably lead
to the discussion of the exact meaning of the findings of the umpire, to great discussions as to whether on that evidence he
ought to have so found in fact, and whether he has given proper weight to various pieces of evidence and documents in the
correspondence.”
There is this further explanation to be found in a subsequent case where Scrutton, L.J. said:
“In my view an arbitrator should not state a special case except on well defined questions of law, and should insist that
those who ask him to state a special case should formulate the questions of law on which they desire it to be stated.”54
Abuse of special case
For avoiding such abuse Kerr, J. offered the following advice : “There are now a days many complaints that our
special case procedure in commercial arbitration is being abused. Special cases used to be the exception but they
are becoming the rule and increasingly frequent as a means of delaying the speedy solution of commercial disputes
for which arbitrations are designed, and which the business men themselves want when they agree to London
arbitration . . . Again and again . . . this court finds, that in these times of economic difficulty respondents with weak
cases use the decision of the Court of Appeal in Halfdan Grieg & Co. A/S v. Sterling Coal & Navigation
Corporation,55 merely as a means of gaining time in order to postpone a final award against them. In the result we
are in danger of suffering a loss of reputation in our system of commercial arbitration.56
1. Conditional or alternative award [ Section 13( c ) of 1940 Act, deleted

by 1996 Act]
Section 13 of 1940 Act has been deleted as a whole. Clause (c) of that section which empowered the arbitrator to
make conditional or alternative award does not appear to be reflected in any of the provisions of 1996 Act. Nor is
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there anything in the new Act against such awards. The legal literature on the subject would, therefore, seem to be
of continuing relevance at least in so far as ‘conditional award is concerned to facilitate determination of finality of
an award.
Unless a different intention is expressed in the arbitration agreement, the arbitrators or umpire have power to make
the award conditional or an alternative one. An award that it should be void if something happened in the future is
bad.57 An award of a sum of money subject to reduction in amount if the defendant exonerates himself by affidavit
from certain payments and receipts was held to be void for want of finality.58 But an award that the party in
possession of a diamond ring should pay Rs. 1000 to the other party, to be reduced to Rs. 5 if the ring is returned
within 14 days was good.59 On a reference of a claim by a company for a call on shares and a counter claim by the
subscriber for the return of the price of the shares, an award for a sum of money in favour of the subscriber on his
surrendering or transferring the shares to the company was bad as it was not final and certain.60 An award under a
submission authorising the arbitrator to set aside certain deeds, stated that the deeds be set aside if and so far as
the same respectively were in force and if so far as the arbitrator had jurisdiction to set them or any of them aside
and if he had no power to set them or any of them aside the rest of his award was yet to stand. It was held that the
award was not final and was invalid.61
An award in the alternative (a) in the form of a special case if either party should give to the other within 14 days
written notice of his desire to take the opinion of the court and should within 14 days of the service of such notice
set the award down for argument and (b) in the form of a final award if the notice was not given and the case set
down for argument as aforesaid was not bad by reason of the alternative form.62 An award directing payment of
money to the plaintiff or to A, his solicitor in the cause, is sufficiently certain.63
An award that A or B shall do a certain act is bad for uncertainty if under the reference the arbitrator is to decide
which of them is to do the act.64 An award that a certain sum of money be paid by some or one of several named
persons is bad.65
Stay of Execution
The Supreme Court stayed the execution of a decree on the condition that half of the decretal amount be deposited
in the trial court. The decretal amount was in dollars and there was a difficulty in conversion into rupees. The party
was directed to deposit some extra amount.66
2. Directions to parties to be present
An arbitrator can, for the purpose of conducting proceedings, direct the parties to be present before him on a
particular date, particular time and place. This would also be a sufficient compliance of the requirements of law.67
SIGNING AND FILING OF AWARD [ S. 14]
The whole accumulated literature under the

Arbitration Act , 1940 relating to the filing of an award and getting it converted into a rule of the court
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has become a material of historic value only. Under the new dispensation, an award is a decree in itself and can be
enforced directly under the
Civil Procedure Code as such.
The earlier provisions and court rulings have been retained in the interest of reference for disposal of pending cases
and also because they continue to be of relevant particulary on matters of jurisdiction of courts, limitation,
registration of awards and stamp duty.
14. Award to be signed and filed.—(1) When the arbitrators or umpire have made their award, they
shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of
fees and charges payable in respect of the arbitration and award.
(2) The arbitrators or umpire, shall, at the request of any party to the arbitration agreement or any person claiming
under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the
arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it,
together with any depositions and documents which may have been taken and proved before them, to be filed in
Court, and the Court shall thereupon give notice to the parties of the filing of the award.
(3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice
to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall
form part of, the award.
Notice of Award, Fee and Charges [Sub-section (1), 1940 Act]
After the making and signing of the award the arbitrators and umpire were required to give notice in writing to the
parties of the making and signing thereof and of the amount of fees and charges payable in respect of the
arbitration and award. Failure to give the notice did not invalidate the award.68
The word “notice” in Section 14(1) 1940 Act merely denoted an intimation to the party of a particular fact. The notice
could take several forms. It was not limited to a letter.69 To be sufficient, it had to be in writing and had to intimate
quite clearly that the award had been made and signed.70 The sending71 of or handing over a copy of the award to
the parties was sufficient notice that the award had been made and signed. Such notice satisfied the requirement of
notice both under Section 14 of 1940 Act and
Article 119(a) of the Limitation Act, 1963 . If there was omission in the notice of the amount of the fees
and charges payable in respect of the arbitration and award, the notice was not bad since what was omitted was
not an integral part of the notice for the purpose of limitation.72 Omission to give the notice did not invalidate the
award.73 What was a sufficient notice under Section 14(1) was a question of fact, in each case.74 Thus where thumb
impressions of the parties to the award were taken on the award below the signature of the arbitrators, the party
thus became aware of the award and was also receiving benefits under the award, it was held that the party must
be taken to have notice in writing on the day on which his thumb impression was taken and the application thirty
days thereafter for filing the award was time-barred.75
Time under Article 119(a)

Limitation Act, 1963 did not seen until the notice under Section 14(1) 1940 Act was given. Mere
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signatures of the parties on the award did not start time running under that article.76 Time did not commence to run
unless the award was filed.77
Filing of Award—Limitation
The actof the arbitrator in handing over the award to the proper officer of the court to be filed was not an application
within the meaning of the
Limitation Act .78
Article 119(a) of the Limitation Act, 1963 , corresponding to
Article 178 of the Limitation Act , 1908, applies to applications made by the parties and not to the filing
of the award by the arbitrator.79 The Article was not applicable when the award was before the court already80 or
when the award was summoned by the court suo motu. 81 There was no limitation prescribed for the
act of filing of the award. It could be filed at any time after it was made. 82
The Article was not applicable if a party who was in possession of the award filed it with a prayer that judgment on
the award be passed by the court.83 There was no limitation for an application for the passing of a judgment on the
award.84
The limitation prescribed by

Article 119(a) of the Limitation Act, 1963 , applied only when an application was moved by a party
under Section 14(2) 1940 Act for an order directing the arbitrator to file the award85 and that period was thirty days
from the date of the service of the notice of the making of the award.86 Article 119(a) didnot apply to an
application for setting aside or remitting or modifying an award87 nor did it apply to an objection that the application
under Section 14 1940 Act was barred by limitation or that all necessary parties had not been joined in it.88
Article 119 will not apply to the filing of the award by the arbitrator. In such cases, Article 137 will operate, which
prescribes a period of three years from the date of the award.89
Where the period for filing objections expired during court holidays but objections were not filed on the opening day
of the court and no explanation was given for the delay, it was held that the delay could not be condoned in the
circumstances.90 Where objections were filed within time but they were returned with objections and refiling took
them beyond time, the delay was condoned.91 Delay was not condoned where the conduct of the party showed that
he had received notice because he engaged a counsel but filed objections after more than eight months. The court
said that the expression “give notice” in S. 14(2) 1940 Act simply meant giving intimation of the filing of the award
and such intimation need not be given in writing and could be communicated orally or otherwise.92 Where the award
was such that it required registration under the
Registration Act and the registration was stayed by a court order, it was held that in computing the
period of registration the period of stay would be excluded.93
1. Duty of arbitrator to sign and file award
The award signed by all the arbitrators94 or a signed copy of it could be filed.95 A letter of the arbitrator forwarding
the signed copy constitutes sufficient proof of his signature in the absence of any other evidence.1 The
endorsement on the award “certified to be a true copy” signed by the arbitrator was sufficient proof that the
document was a true copy of the award.2 A document purporting to be a true copy of the award but not signed by
the arbitrator could not be filed.3 Where the arbitration and the umpire signed an award as “arbitrators”, a motion to
set aside the award on the ground that it was invalid owing to the way it was signed, was rejected. It was held by
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Court of Appeal that the umpire was properly appointed, acted as umpire, and intended to sign as umpire ; and that
in signing as an arbitrator he made a mistake which required purely formal amendment.4 If the award was lost, the
secondary evidence of it was admissible under
Section 93 of the Evidence Act, 1872 and could be produced before the court. A draft of the award
was not admissible in evidence as a copy of the award in the absence of proof that the draft was compared with the
original5 and the parties had notice.6
Stamp duty
Where the award was engrossed on a plain paper and a signed copy of the award on duly stamped paper was filed
in the court, this was held to be a mere technical flaw not fatal to the validity of the award. No such objection was
taken before. It was not allowed to be raised in appeal against decree.7
2. Duty to file depositions and exhibits
It was the duty of the arbitrators to file in court any depositions and documents which could have been taken or
proved before them8 and if he did not, the court could direct him to do so.9 The award was not taken to be properly
filed unless the depositions and documents were filed in the court along with the award.10 The arbitrator need not
file account books produced before him but not received in evidence.11 He had no authority to return to the parties
any document forming part of the records of the court and entrusted to him.12 He need not file in formal pen or
pencil notes of evidence when formal notes had been kept and filed.13
The arbitrator was not bound to reduce into writing the evidence taken before him.14 The duty to file the depositions
arose only when they were reduced into writing. Failure of the arbitrator to take down the evidence in writing could
constitute evidence of misconduct.15
Failure of the arbitrator to file the depositions and documents in court did not invalidate the award16 or affect the
jurisdiction of the court to pass a decree on the award.17 The arbitrator was bound to file in court other documents,
e.g., the arbitration agreement which he was required to file by the rules of the High Court. An award was remitted
for reconsideration because the arbitrator had ignored one important clause of the contract which provided for
extension of time. The arbitrator did not give to the parties the opportunity for hearing while considering the matter
after remittance. A party objected and applied for an order for producing before the court the agreement and other
documents submitted before the arbitrators. The court passed the appropriate orders.18 What documents the
arbitrators chose to annexe for the purpose of their reasoned award was a matter for them. There did not appear to
be any authority in favour of annexing telex exchanges relevant to an issue such as repudiation or renunciation. It
was not arguable that the arbitrators’ failure to annexe these telexes despite the charterer's very explicit request
was misconduct.19
3. Filing of award by authority of arbitrator
It was the duty of the arbitrators or umpire upon request by a party or if directed by court to cause the award or a
signed copy of it to be filed in court. The fact that the arbitrators did not mention in their application that the parties
had requested them to file the award was not of much consequence.20 The arbitrator need not file the award or a
signed copy of it personally. He might send it by post21 or might hand it over to a party for filing it in court.22 The
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section clearly implied that where an award or a signed copy of it was filed by a party he should have the authority
of the arbitrators or umpire for doing so.23 The authority had to be specifically alleged and proved.24 The handing
over of the awards to any party does not necessarily imply the authority of the umpire to file the same into court on
his behalf.25 The requisite authority of the party to file the award could not be assumed26 but it could be inferred
from the conduct of the parties and the circumstances of the case.27 The authority should be clearly alleged by the
party in his application,28 but the absence of a clear allegation in the affidavits was not fatal if the authority was
proved from the materials on the record.29 The court said in this case that the mere handing over of the award by
the arbitrator to the parties did not necessarily imply the authority of the arbitrator or umpire to file the same in the
court on his behalf. He might not be aware of the requirement that filing had to be done by himself only or by
someone else under his authority. Implied authority could not be proved in this case. Facts showing authority for
filing were to be seen in Food Corporation of India v. E Kuttappan.30 The arbitrator sent the award to the party's
counsel in response to specific request for it for the purpose of filing in court. The award so received and filed by the
party's counsel was held to have been filed on behalf of the arbitrator. It was also held that as against the party so
filing and the court accepting it, the period of limitation for filing objections, if any, ran from that date.31 The fact that
the court subsequently issued notices to the parties informing them of the filing for the purpose of inviting their
objections to the award being made the rule of the court would be inconsequential. Such an act of the court could
not prejudice the rights of the parties.
Where a signed copy of the award was merely handed over to the applicant for his knowledge and information as
shown by a subsequent letter of the arbitrator, it was quite obviously held that the application must be taken to be
filed under S. 14(2) (of 1940 Act) and not S. 17 (of 1940 Act) so that Article 119(a) and not
Article 137 of the Limitation Act was attracted. The application was taken to be for a direction to the
arbitrator to file the award. There was no express authority for filing the award on behalf of the arbitrator.32
One of two joint arbitrators could file the award.33 One of them could also give the requisite authority,34 but the
contrary view was also held. Causing the award to be filed was a ministerial act.35 In the absence of proof that the
award received by court was filed by the arbitrator or with his authority, the court would take no notice of the
award.36 The question of absence of requisite authority of the arbitrator was not a pure question of law. The
question could be entertained by the appellate court for the first time in the appeal if no objection was raised to the
taking of the point.37 Receipt of award by court amounted to filing of the award.38
If the arbitrator or umpire died before filing the award without authorising any one to file it, Section 14(2) of 1940
Actdid not apply, but the court could in a proper case direct the filing of the award by a party in possession of the
award in the exercise of its inherent powers under
Section 151 of the Code of Civil Procedure and such award could be acted upon in further
proceedings under the 1940 Act.39 Where the office-holder arbitrator retired while the award was still not ready and
the petitioner apprehended that the opposite party would not permit him to proceed, the court issued direction that
the oppositely would not raise any such objection nor any such objection would be entertained and that the
arbitrator would submit his award within a period of 4 months from the date of receiving the notice.40
A writ of mandamus could not be issued against a private arbitrator directing him to file the award in court.41
The arbitrator could file the award without making an application,42 and if he did so, no question of limitation would
arise.43
If the arbitrator made an application for the filing of the award, the court should allow the parties to take up the
litigation in their hands and to relieve the arbitrator. The application could not be dismissed for the default of the
appearance of the arbitrator.44 If his application was dismissed, an aggrieved party could apply in revision for setting
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aside the order.45
If a party desired to file the award, he could move an application for filing the award which might be in the form of a
letter.46
The court had jurisdiction to entertain an application for filing of an interim award.47
4. Issue of notice by court [ S.14(2) 1940 Act] (No parallel provision in 1996 Act)
Once the award was filed in court, the court was bound to issue notice to the parties including the party filing the
award48 and a party who did not appear before the arbitrator.49 Ommission to give the notice was a material
irregularity. A decree passed without giving such notice was liable to be set aside even in revision.50
Where the Government Advocate was told that notice of the filing of the award would be given to the Government,
the information given to the Advocate could not be held to be notice under Section 14(2), (1940 Act) even if he
knew that the award was filed in the court.51 Limitation under Act 119(b) did not start running until the notice under
Section 14 (2) (1940 Act) was given.52
Section 14(2)1940 Act was mandatory and a notice had to be given of the filing of the award. There was a conflict
of opinion on the question as to whether notice under Section 14(2) 1940 Act had to be given if the party had
knowledge of the filing of the award in court. One view was that knowledge was not sufficient and notice under
Section 14(2) 1940 Act by the court must be given.53 The other view was that if the party is aware of the filing of the
award no further notice under Section 14(2) need be given.54 The Gauhati High Court held that the notice was
sufficiently conveyed when the party became aware of the filing of the award in the court by being present at that
time. What was required, the court said, was to bring to the notice of the party the fact of the filing of the award by
whatever mode it could be.55 It had been held that where the party who was cognisant of the filing of the award
appeared in the case and applied for leave to examine the record and for time to file objection the date of entering
appearance in the proceedings should be deemed to be the date of the service of the notice under Section
14(2)(1940 Act)56. In a case before the Supreme Court 57 a party to the award filed an affidavit on 4-2-
1978 stating that the award had been wrongly filed in the High Court and that it should be taken off the file.
Subsequently a formal notice of the filing was served on the party. The party then filed objections under S.30 (1940)
Act. The objections were within time if taken from the date of notice but out of time if taken from the date of the
party's affidavit. The Supreme Court came to the conclusion that objections must be regarded as time-barred. By
filing the affidavit the party acknowledged that it had notice of the filing. The question whether a party had
knowledge of the filing of the award or not was a question of fact to be determined on the facts of each case.58
If the parties are present in court at the time of the filing of the award written notice under Section 14(2) (1940 Act)
need not be issued.59 If the award was filed by the parties, no notice under Section 14(2) need issue to them and
limitation runs from the date of filing of the award.60
If an uncertified copy of the award not bearing the signatures of the arbitrators was filed in court there was no filing
of an award or a copy thereof as required by Section 14(1) 1940 Act and it was not possible to hold that the other
party had knowledge of the filing of the award.61
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The court had no power to pass a decree on the award unless notice under Section 14(2) (1940 Act) was given.62
The notice issued by the court could be informal, even oral.63 In Nilkantha Shidramappa Ninga Shetti v. Kashinath
Somanna Ninga Shetti 64 the arbitrator filed the award in court on Feb 18, 1948 and three days later on
Feb 21, 1948 the civil judge adjourned the matter to Mar 22 to enable the parties’ to have their say on the
arbitrator's report. The point which fell for consideration was that when no specific notice in writing had been issued
by the court, the period of limitation for filing objections was to begin from which date. The court noted the
difference between sub-s (1) and sub-s. (2) (1940 Act) to the effect that under sub-s(1) the notice which the
arbitrator had to give to the parties of the fact of making and signing of the award had to be in writing, but the notice
which the court had to give to the parties of the fact of filing need not be a notice in writing. It could be given orally.
No question of the service of the notice in the formal way of delivering the notice or tendering it to the party could
arise in the case of notice given orally. The communication of the information that the award had been filed is a
sufficient compliance with the requirements of s 14(2) with respect to the giving of the notice to the parties
concerned about the filing of the award. Notice did not necessarily mean communication in writing.65 The court was
of the opinion that the expression “give notice” in S 14(2) (1940 Act) simply meant giving information of the filing of
the award which certainly was given to the parties through their pleaders on Feb 21, 1948. Notice to the pleader
was notice to the party in view of Rule 5 of Order III of the
Civil Procedure Code which provides that any process served on the pleader of any party shall the
presumed to be duly communicated and made known to the party whom the pleader represents and, unless the
court otherwise directs, shall be effectual for all purposes as if the same has been given to or served on party in
person. The ratio of this case was applied by theSupreme Court in Indian Rayon Corporation P. Ltd. v. Raunaq &
Co. P. Ltd. 66 so as to reiterate that the expression “give notice” in S. 14(2) 1940 Act simply meant
giving information of filing of the award and such intimation need not be given in writing and could be communicated
otherwise.
Where notice under Section 14(2) (1940 Act) was sent by registered post to the defendant firm and the
acknowledgement receipt of the notice was signed by a person who did not state that he was a partner or the
manager in charge of the firm, it was held that in the absence of any enquiry by the court that the person signing the
acknowledgement was the proper person to receive the notice, the service was bad in law. Until proper service of
the notice no decree could be passed on the award.67
When the notice was served on the karta of the joint family, it need not be served on the junior/adult or minor
members of the family.68
When a notice which was less than thirty days notice was served and thereafter a second regular notice was
served, an application for setting aside the award filed within 30 days of the second notice was held to be not time
barred.69 A notice under Section 14(2) could not be partly good and partly bad. It could not be a good notice for the
filing of the award and a bad notice of the date when the court would pronounce the judgment.70 The notice to be
given under Section 14(2) (1940 Act) was simply notice of the filing of the award. The notice might or might not fix a
date as to when the matter was to be taken up finally by the court.71
Notice through Newspaper
Where notice was sent on the correct address as located from the hire-purchase agreement but was not served,
substituted service by publication in a newspaper was held to be a good service.72
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No Enclosures necessary with notice
Where the party served with notice refused to accept it saying that it was without any enclosures, it was held that no
enclosures were necessary with the notice of the filing of an award. Refusal to receive the notice amounted to
service. No objections having been filed within the period of limitation, the order making the award a rule of the
court could not be set aside.73
No Form of Notice prescribed
No particular form of notice was prescribed under S.14(2) (1940 Act). Summons enclosing copy of the award issued
by the court was held to be a good enough notice.74
As long as the notice bears the alpha numeric character ‘A’ which is assigned for matters relating to arbitrations, a
party cannot plead a defect in the notice or argue that it was unable to discern from the notice whether it was in
respect of a suit or an arbitration.75
Notice issued by the court would be presumed valid if all the parties appear in court thereafter and file their
respective petitions.76
5. Notice—starting point of limitation
Notice to the pleader is notice to the party in view of Rule 5, Order III of the
Code of Civil Procedure .77 Oral intimation by the court to the pleaders of the parties of the filing of the
award was sufficient notice to the parties and an objection filed by a party after the expiry of 30 days from the date
of such notice was barred by limitation.78 Though oral notice was sufficient, the giving of the notice would not be
implied from an order recording only the presence of the parties at the time of the filing of the award.79 The notice of
the filing of the award must come from the court orally or in writing either directly or indirectly and knowledge from
any other source was not sufficient to start limitation running.80 Knowledge from any other source if treated as
equivalent to notice of the filing of the award would destroy the very foundation of Section 14(2).81 If a written notice
was issued under Section 14(2)(1940 Act), limitation would start running from the date of service of such notice and
not from the date of knowledge alinude.82 If a second notice is given by the court because the first notice was bad,
limitation started running from the date of service of the second notice.83
In a case of this kind before the Gujarat High Court 84 the view taken was that when a written notice
was sent under S. 14(2) that would be the starting point for the period of limitation. If there was no written notice
then the date on which oral or informal or constructive intimation was given to the parties by the court of the fact
that the award stood filed would be the starting point for limitation. The court took the view that since there could not
be two starting points for the period of limitation, one from the date of oral intimation and the other from the date of
service of notice, the latter, if existing, would prevail over the former.
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If notice to counsel was replied upon, it had to be shown that the counsel had authority to receive the notice.85
The act of the party's counsel in filing the award on behalf of the arbitrator cannot constitute notice to that party.86
There is a difference between “knowledge of award” and “notice of filing”, and only the latter results in initiating the
limitation period.87
Where notice was not given and the trial court, having tried limitation as a separate issue, held the filing to be time-
barred, and the appellate court overruled the same, it was held that the appellate court could not order the award to
be made a rule of the court without following the procedure of the
Arbitration Act ,1940 (repealed) by giving notice of the filing and hearing objections, if any.88
Where the party came to know of the award only when his property was attached and appearing before the court
came to know of the filing of the award, it was held that such knowledge operated as a notice giving him thirty days
time from that date. There was no longer the necessity of a formal notice. There was no question of bar of limitation.
He learned of the decree on Jan 4 and filed an application on Jan, 13 under Order 9, Rule 13,
CPC for setting aside the ex parte decree and in that application also mentioned Sections
Section 30 and
33 of the
Arbitration Act ,1940 (repealed). That operated as a statement of objections.89
6. Article 119(b) of
Limitation Act, 1963
Under
Article 119(b) of the Limitation Act, 1963 , corresponding to
Article 158 of the Limitation Act , 1908, the prescribed period of limitation for setting aside or remitting
an award for reconsideration was thirty days from the date of service of notice of the filing of the award. In this
Article the phrase “service of notice of the filing of the award” refers to the notice to be given by court under Section
14 sub-section (2)1940 Act.90 The notice could be given orally.91 The communication of the infor-mation that an
award had been filed was sufficient compliance with S.14(2) of the repealed 1940 Act with respect to the giving of
notice to the parties concerned about the ‘filing of the award’. The word ‘notice’ meant not only a formal notice but
also an informal one. The service of a notice” would include constructive or informal notice.92 Sub-section (2) of
Section 14 1940 Act would be applicable whether the reference to arbitration was out of court or in a suit.93 In a
case before the Supreme Court 94 a copy of the application for making the award a rule of the court
was served on a counsel of the opposite party who had appeared on the party's behalf in an earlier proceeding
under S. 8(1940 Act,repealed). That was held to be not a notice within the meaning of S.
Section 14 of the Arbitration Act (1940 [Repealed]) read with
Article 119(b) of the Limitation Act, 1963 . Therefore, the objections filed within thirty days from the date
of the direction of the court that the opposite party should be informed about the filing of the award were held to be
not barred by time.95
When the arbitration proceeding was without the intervention of the court no party was expected to be present in
court at the time of the filing of the award and, therefore, the notice was to go to the party formally. A written notice
would issue from the court to the parties concerned intimating them that the award had been filed.96 It was only in
cases where an arbitration was through court, that the court could have counsel for the parties present when the
award was filed and the case was put up with the award and the court orally intimated to counsel about the filing of
the award. Oral communication amounted to service when no particular mode of service was prescribed.97
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Section 42 1940 Act (repealed) did not apply to the giving of notice by courts.98
Article 119(b) of the Limitation Act, 1963 , did not apply to an application to modify the award under
Section 151 (repealed 1940 Act) did or to an objection that the application procedure under Section 14(2) of
repealed 1940 Act had not been followed2 or to an objection that the notice under Section 14(2) 1940 Act had not
been sent to all necessary parties.3
An application to set aside an award on the ground that three out of five arbitrators did not sign the award although
the award purported to be signed by them4 or on the ground that the award was a sham or bogus award5 was
governed by this article. Time ran from the date of the service of the notice of the filing of the award and not from
the date of the filing of the award.6 Formerly the court had no power to extend the prescribed period of limitation.7
Now under
Section 5 of the Limitation Act, 1963 , the court has power to extend the time for the making of an
application to set aside the award for sufficient cause.8
In computing the period of limitation the time requisite for obtaining a copy of the award will be excluded under
Section 12 of the Limitation Act .9 If the period expires on a Sunday or a holiday, that date will be
excluded under
Section 4 of the Limitation Act . However, if the court has passed judgment on the day on which the
period of limitation expires, the applicant cannot subsequently move to set aside the award though in view of
Section 4, Limitation Act his right to apply on that day was not barred by limitation.
Where a party bona fide filed an application to make an award a rule of the Court before the wrong forum, the time
involved in such a process was held excluded for the purposes of limitation.10 Where the delay was due to the fact
that the party seeking condonation was misled by the provision of the old
Limitation Act , theSupreme Court refused to condone the delay.11 G. N. Ray, J. said:12
“The plea of ignorance of the change in the

Limitation Act need not be considered and accepted. As the case sought to be made out by the appellant
that he had received the signed copy of the award only in May 1965 has not been accepted, the question of condonation of
delay could not arise. It is not at all a fit case where in the anxiety to render justice to a party so that a just cause is not
defeated, a pragmatic view13 should be taken by the court in considering the sufficient cause for condonation of delay under
S.
Section 5 of the Limitation Act . It may not be desirable for the Government or a public authority to take
shelter under the plea of limitation to defeat the just claim of a citizen. But if a claim is barred by limitation and such plea is
raised specifically the court cannot straightway dismiss the plea simply on the score that such plea is ignoble. A bar of
limitation may be considered even if such plea has not been specifically raised.
Limitation Act is a statute of repose. The appellant having taken a false stand on the question of receipt of
the signed copy of the award to get rid of the bar of limitation, should not be encouraged to get any premium on the
falsehood on his part.”
The award was sent to the party by registered post. Evidence was available of the date of posting. The
stenographer of the arbitrator testified that he received back the acknowledgement within ten days of the date of
despatch. The party did not produce the registered cover from which the date of delivery could have been
observed. Thus the party was lying about the date of delivery and, therefore, his plea of condonation did not
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deserve to be considered.14
Condonation was allowed in a matter of partnership because time was lost in the inspection of account books.15 A
delay of seven days on the part of the Government was condoned because it was for a short period and the service
of notice took place towards the end of the financial year.16
In an application for leave to give notice to set aside the award of an arbitrator, after the time for giving such notice
had expired, the court granted leave and stated that it exercised the discretion given under
CPC not on the ground of any legal flaw in the award, but on the general grounds that the justice of
the case demanded it and that a court should take a strong hand in setting aside an award when it knew a wrong
had been done, although it was difficult to pick a legal technical hole in the award, it was held that the court had
wrongly exercised its discretion.17
Bearing in mind that the delay was very short, i.e., four days, the charterers’ solicitors were abroad and the
Christmas period intervened, the Court would exercise the discretion and extend the time.18
Where the delay was that of three years during which period it seemed that the party deliberately decided to ignore
the award and did not take any of the steps open to him under the law, it was held that the discretion in the
extension of time was not to be exercised in his favour.19
Where objections were filed in time but there was a defect in verification which could be rectified only after the
expiry of the period, the objections were held to be not time-barred.20
7. Nature of proceeding under Section 14 of repealed 1940 Act [No parallel provision in 1996
Act]
A proceeding under Section 14 was a judicial proceeding for the purpose of determining whether the award had
been properly filed or not and that question had to be determined after hearing the parties.21 The proceeding was
not a suit for the purpose of immunity from suits under Section 87 read with
Section 86(2)of the Code of Civil Procedure .22
The word ‘suit’ ordinarily means a proceeding which commences with a plaint23 or a document in the nature of a
plaint.24 A proceeding under Section 14 (repealed 1940 Act) though registered as a suit was not a suit25 for the
purpose of fees to legal practitioners26 or for taxing the costs on the scale prescribed for suits27 or for the purpose of
Section 10,28 Section 11, 29 Section 21, 30 Order 34 rules 4 and 531 and Order 3832 of the
Code of Civil Procedure . The proceeding was a civil proceeding within the meaning of the
Code of Civil Procedure and it was incumbent upon the parties to obtain the appointment of a guardian
ad litem for a minor party.33
A party against whom the arbitrator had made an ex parte award was entitled to file objections to the award. His
objections could not be summarily rejected on the ground that the award against him was made ex parte.
34 An application for ex parte relief should make full and fair disclosure of the points which were against the
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applicant as well as those in his favour ; where a party failed to make such a disclosure the Court might deprive him
of the order depending on the nature of the application, the seriousness of the non-disclosure, the consequence of
setting aside the order and all the other circumstances of the case.35 Where preliminary objections were filed to the
effect that the claimant did not move the next higher officer before going in for arbitration as required by the
agreement, that he had accepted payment under full and final settlement of all claims under the contract and that
the claims were such as could have been raised in the previous arbitration, it was held that the arbitrator should not
have proceeded with the matter without considering these objections. They affected his jurisdiction. He thus
committed an apparent error. The award was set aside.36
For filing of award under S. 14(2) and 17, 1940 Act, it was necessary that the notice to the party should accompany
the copy of the award. Thirty days time was allowed for filing objections against the award. Computation was to be
made from the date on which the contents of the award came to the knowledge of the party against whom it was
made. Delay of 21 days was condoned. An award could not be set aside unless it was filed.37
Evidence to be allowed
The court should allow oral evidence and not confine itself to affidavits when the applicant has raised a large
number of objections involving points of fact which ought to have been scrutinised and determined with a little more
circumspection. In this case38 the court should have given an opportunity to the parties to produce their oral
evidence before deciding the question whether the award was a valid award and whether a judgment in its terms
should follow.
Where three contracts executed at different places were the subject-matter of arbitration and three awards were
typed on three consecutive sheets, it was held that they were three different awards, not one award and since two
of them were beyond jurisdiction, the court ought not to have dealt with them. The proper course would have been
to pass a decree in respect of the award which was within the jurisdiction of the court.39
An unfiled private award was not allowed to be used as an evidence of the surrender of rights in the family property
which was the subject matter of a subsequent arbitration.40
Appeal
An order refusing the filing of award on the ground that the requirements of S.14(2) 1940 Act were not complied
with was not appealable.41 No appeal was allowed on the ground that the decision on the point of limitation was
erroneous.42
Unregistered Award
The court in its discretion could return the award to the arbitrator to enable him to fulfil the requirement of
registration. Here in this case an award of this kind wasfiled by the arbitrator in a court which had no jurisdiction to
receive it. It was held that the arbitrator alone had the right to take back the award.43
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8. Jurisdiction for filing award
In a charterparty agreement between the Food Corporation of India and a shipping company each party appointed
its own arbitrator one of whom made and signed the award at Bombay and the other at Delhi. The award was filed
in the Bombay High Court. A single judge recorded a specific finding that the agreement was signed in Bombay and
the same was affirmed by a Division Bench. It was held that the finding could not be impeached in a special leave
appeal.44
Where the arbitrator was appointed by the Supreme Court, the forum for filing the award and for all further
proceedings was held to be the Supreme Court.45
Where the properties about which reference was made were located within the jurisdiction of two courts, one within
the jurisdiction of one of them, it was held that court had jurisdiction to entertain the award.46
Once an award was filed with the court, it would get the power to send it to the proper court.47
SUPERSEDING THE REFERENCE AND EFFECT OF NOT DOING SO
There is no provision in the

Arbitration and Conciliation Act, 1996 conferring power on the court to supersede the arbitration
agreement itself where the award either becomes void or is set aside. This power existed in S. Section 19 of the
preceding
Arbitration Act , 1940. That section and the cases decided under it have been retained here in the
interest of record of laws on the subject in existence before the
Arbitration and Conciliation Act came into force.
S. 19. Power to supersede arbitration where award becomes void or is set aside.— Where an
award has become void under sub-section (3) of Section 16 or has been set aside, the Court may by order
supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with
respect to the difference referred.
Where an award has become void under Section 16(2) or has been set aside, the court is empowered by Section
19 to supersede the reference and if it does so it must order that the arbitration agreement will cease to have effect
with respect to the dispute referred.
1. Effect of not superseding the reference
The plain implication of the section is that unless the reference is superseded after the award is set aside, the
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reference continues and the arbitration agreement subsists. Under a similar provision in Section 25, 1940 Act
(repealed) with regard to reference in suits, the court may in certain circumstances proceed with the suit after
making an order for superseding the arbitration. Section 19, 1940 Act (repealed) has given a discretionary power to
the court to decide what the consequences of the order setting aside the award will be. If the court finds that the
arbitration is of the kind which exhausts itself after the first reference is made or if it finds on account of the reasons
which impelled it to set aside the award that there should be no further reference of the dispute to arbitration, the
court may supersede the reference and direct that the arbitration agreement will cease to have effect with respect to
the dispute referred. On the other hand, if the court finds that the arbitration agreement is of a general nature and
contemplates successive reference in respect of different disputes arising under the terms of the arbitration
agreement it may not supersede the reference with the result that the reference as well as the arbitration agreement
on which it is based survives. Where the arbitration agreement and the reference survive, the same dispute may go
before the arbitrator again if there is machinery provided in the arbitration agreement which makes this possible.48
Where a dispute was referred to arbitration under the rules of arbitration of the Bengal Chamber of Commerce and
an award made by a tribunal of arbitration constituted under those rules was set aside, it was held that another
tribunal could be constituted under the rules and the new tribunal could proceed with the subsisting reference and
the award made by the new tribunal was valid.49
Describing the effect of this decision in a subsequent case,50 the court said that if there is no order of supersession
under S. 19, 1940 Act (repealed) the reference and the agreement both survive. The Division Bench also held that
the setting aside of the award does not by itself terminate the reference except obviously where the award is set
aside on a finding that the reference itself was invalid. It was also held that when the award was set aside and there
was no order of supersession, there could be no question of either the reference coming to an end or the arbitration
agreement being exhausted by the reference already made. The Division Bench also held that where an agreement
was wide enough to include all the disputes, there could obviously be successive reference under its authority. This
was applied to the case where the appointment of an arbitrator on an earlier occasion was held to be invalid and it
was also held that the arbitrator had no jurisdiction to arbitrate. Thus the dispute remained undecided and since the
arbitration agreement survived the same was enforceable and there could be a fresh reference.
The court may not supersede the reference at all in which case though the award is set aside, the reference will
continue.51
The Supreme Court held, inter alia, in this case that the legislature has given discretion to the court under S.19,
1940 Act (repealed) to decide what the consequences of setting aside would be, the court said :52
“The scheme of the Act, therefore, is, whether the arbitration is under chapter II, chapter III & chapter IV, to give discretion
to the court to decide whether to supersede or not. Where it decides to supersede the reference, it has to order that the
arbitration agreement shall cease to have effect with respect to the difference referred, but where it decides not to
supersede the reference and the arbitration agreement and the reference made under it subsist and if there is machinery
provided in the arbitration agreement for making a further reference or for continuing the same reference, further arbitration
can take place.”
The arbitrator cannot correct any error in the award except any clerical mistake or any error arising from any
accidental slip or omission under Section 13(d), 1940 Act (repealed). Generally speaking the arbitrator is functus
officio after he has made the award and the award has been set aside. This only means that after the award is set
aside, he cannot make any change of substance in the award except to the extent provided by law.53 But this does
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not take away the court's power to remit the award for reconsideration under Section 16, 1940 Act (repealed) or to
refuse under Section 19, 1940 Act (repealed) to supersede the reference and to leave the arbitration agreement
effective even when it sets aside the award.54 There is no provision similar to Section 19 in the English
Arbitration Act .55 Even under the English Law, the court on setting aside the award on the ground of
excess of jurisdiction of the arbitrator there is liberty for the parties to go to him again.56
An arbitration ending in an award which is set aside as being invalid is an abortive arbitration and the agreement to
refer is not exhausted thereby.57
After a suit is filed and dismissed neither party can invoke the arbitration clause for the decision of disputes covered
by the suit and cannot apply under Section 20, 1940 Act (repealed).58
If the award is set aside, but the reference is not superseded the party may apply under Section 20 to enforce the
arbitration agreement.59 It cannot be said in suchcases that the arbitration agreement is exhausted unless there is a
provision to that effect in the contract.60
An order determining that an arbitration agreement being induced by fraud is void is an order passed under Section
33, 1940 Act (repealed) and not under Section 19 and is not appealable. The basic difference between an order
passed under Section 33, 1940 Act (repealed) and the one passed under Section 19 is that the former makes the
arbitration agreement itself non-existent while the latter pre-supposes the agreement but the agreement remains
valid.61
It is clear from Section 19 that the setting aside of the award does not of itself terminate the reference except when
the award is set aside on the ground of invalidity of the reference. If the court supersedes the reference it must
make a further order that the arbitration agreement shall cease to have effect. In a case where the court does not
supersede the reference, the court cannot appoint another arbitrator.62
Court's Discretion
The court should not lightly supersede the reference when no suit is pending. If the court supersedes the reference
in a pending suit, the rights of the parties may be agitated before the court in the suit itself and no harm is done. But
if a reference under Section 20(4), 1940 Act (repealed) is superseded, the parties would be compelled to litigate
their rights in court and serious questions of limitation would arise in such a suit.63
The reference cannot be superseded after the award is made. An application for superseding the reference after
the award is made, but before it is filed, is too late.64 Further, reference will not be superseded merely because
there is delay since the interim award has been made, where such delay occurred because the arbitrator waited for
the proceedings in court to set aside the award to finish.65
It has been held that the court has inherent power to revoke a grossly irregular and defective reference as it would
be futile to proceed with the reference.66
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The mere lapse of time fixed by the court does not supersede the arbitration. A specific order of the court to that
effect would be necessary.67 The court may supersede the arbitration with consent of the parties.68
IMPLIED TERMS IN ARBITRATION AGREEMENT [S.3 OF 1940 ACT (REPEALED)]
S. 3. Provisions implied in arbitrations agreement.— An arbitration agreement, unless a different

intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as
they are applicable to the reference.
By Section 3 an arbitration agreement in the absence of a different intention expressed therein is deemed to include
the provisions set out in the First Schedule as far as they are applicable to the reference.
The section did not override the express terms of a submission but merely introduced provisions into a submission
unless the contrary had been provided or unless the intention that they should not be added was expressed.69 The
provisions of Rule 2 of the First Schedule as to the time for the making of the award applied in the absence of a
contrary intention70; the parties were free to provide that the arbitrator will have more or less time for making the
award.71 Where the parties agreed that the arbitration would be in accordance with the rules and bye-laws of a
chamber of commerce, the provisions in those rules and bye-laws with regard to the time for the making of the
award,72 the provision for appeal73 and other matters74 would apply. Express provisions in the agreement with
regard to the nomination of an arbitrator75 or the appointment of an umpire76 excluded the corresponding provisions
in the First Schedule. Clear language had to be used in the arbitration agreement to exclude those provisions.77 The
provisions of any rule in the First Schedule became excluded only to the extent they were inconsistent with the
express terms of the agreement, but the rest of the provision applied.78
The provisions of the First Schedule applied if no intention was expressed in the arbitration agreement.79
Where no time was fixed by the court in the order of reference to arbitration, the award had to be made within the
period of four months prescribed by paragraph 2 of Schedule I.80 It was doubted whether the provisions of the First
Schedule applied to arbitration through intervention of court.81
1. Paragraph 1—The First Schedule, 1940 Act (repealed)
1. Unless otherwise expressly provided, the reference was to a sole arbitrator.
Reference was to the sole arbitrator appointed by common consent unless otherwise expressly provided otherwise
in the arbitration agreement. An agreement for reference to arbitration which did not specify either the number of
arbitrators or their mode of appointment was valid and certain.82 The provisions of paragraph 1 applied and the
agreement took effect as an agreement for reference to a sole arbitrator to be appointed by consent of the parties.83
If the parties could not agree, the appointment was to be made by the court. One party alone without the consent of
the other could not make the appointment.84 If the agreement specified the number of arbitrators but not their mode
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of appointment, it was an implied condition of the agreement that the appointment would be made by common
consents.85 The provisions of this paragraph could be excluded by consent of the parties.86 An agreement for
reference to “an arbitrator or umpire” meant a reference to a single arbitrator, the expressions “arbitrator or umpire”
being tautologous. An agreement providing arbitrators to be “European Principals” meant reference87 to an
arbitrator who would be a European Principal.88 But an agreement for reference to “arbitrator”89 or to “arbitrators to
be elected by the parties”90 was not certain for it was not known how many arbitrators were to be appointed. An
agreement for reference to a single arbitrator if the parties agreed upon one, otherwise to two arbitrators could not
be construed as an agreement for reference to a single arbitrator simpliciter. 91
APPOINTMENT OF UMPIRE
The institution of umpire has been abolished by the

Arbitration and Conciliation Act, 1996 . It has been replaced by a third presiding and participating
arbitrator. The Chapter has been retained in the interest of maintaining existing knowledge.
2. Paragraph 2—Time for appointment of umpire, 1940 Act (repealed)
2. If the reference is to an even number of arbitrators the arbitrators shall appoint an umpire not later
than one month from the latest date of their respective appointments.
If the reference was to an even number of arbitrators, the arbitrators had to appoint an umpire not later than one
month from the latest date of their respective appointments. In U.P. the words “within one month from the latest
date of their respective appointments or within such extended time as the parties agree to or in the absence of such
agreement as the court may allow” were substituted for the words “not later than one month from the latest date of
their respective appointments” by U.P. Act 57 of 1976 with effect from 30-12-1976. The word “appoint” meant
concur in appointing.92 The agreement could give a longer time for the appointment. It could provide for
appointment of an umpire before proceeding with the reference93 or if the arbitrators happened to disagree.94 An
agreement that the arbitrations had to appoint an umpire excluded the provisions of this paragraph and they could
appoint an umpire after entering on the reference.95 There was no implied power to appoint an umpire when the
number of arbitrators was odd.96
If the terms of the reference provided that an umpire was to be appointed before the arbitrators entered on the
reference, the reference could not go on until the umpire was appointed and an award of the arbitrators without
appointing an umpire was invalid.97 In the absence of any provision in the arbitration agreement on the subject, the
provisions of Schedule I paragraph 2 applied. There was a conflict of opinion on the question whether failure to
appoint an umpire within the time specified in Schedule I paragraph 2 invalidated the award. One view was that the
provisions of Schedule I paragraph 2 were mandatory and failure to appoint an umpire within one month as required
by it vitiated the award.1 On the other hand, it had been held that the provisions of Schedule I paragraph 2 were
directory only and a breach of the rule did not invalidate the award.2
In keeping with this line of authorities the High Court of Delhiheld that the provision to appoint within 30 days was
not mandatory. If the arbitrators did not appoint an umpire, the cause of action arose after the expiry of 15 days
(under the 1940 Act) of the service of notice and a petition under S. 8(2), 1940 Act(repealed) could be filed within
three years of the date when the right to apply accrued.
Article 137 of Limitation Act, 1963 applied. Accordingly the petition filed within 14 months was within
time. But notice under S. 8 (2), 1940 Act (repealed) was a sine qua non for exercise of jurisdiction under the
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section. In this case notice was not given before petition. It was given during the pendency of the petition. The Court
did not consider it necessary that the arbitration should be superseded because of this technical ground.3
Failure to appoint Umpire
It had been held that where the arbitrators agreed, they had jurisdiction to make an award without calling on the
umpire even though they had to appoint an umpire immediately after their appointment. The court said that the
failure of the arbitrators to appoint an umpire was at the most a “procedural mishap” without any consequential
effect upon the award and if the charterers had wished to attempt to set aside the award on this ground as
amounting to technical misconduct their proper procedure was to have moved to set aside the award ; and
proceedings under S. Section 26 (English Act 1950, enforcement of award) [replaced by the 1996 Act] were not
appropriate for raising the issue of misconduct.4
3. Appointment by choice and not by chance
The appointment of an umpire had to be an act of will and judgment of the arbitrators; it must be a matter of choice
and not of chance unless the parties consented to or acquiescence in an appointment by chance or by lot.5 The
appointment was bad if it was made by lot,6, e.g., by tossing a coin,7 or by putting the names of the nominees of
both arbitrators into a hat and drawing a name.8 An appointment by lot was bad if the nominee of one of the
arbitrators was not known to the other,9 or if the nominee of neither was known to the other,10 or though their names
were known and were not disapproved of, they were not expressly approved.11 But where both arbitrators agreed
that the nominees of both, if selected, would be fit and proper persons to act as umpire, a selection of the umpire by
lot was valid.12
If the appointment of the umpire was invalid, the submission to arbitration could be revoked13 or an injunction could
issue restraining the umpire from acting as such.14 If an award was made it could be set aside.15
4. Paragraph 3—Time for making the award by arbitrator or umpire, [1940 Act (repealed)]
3. The arbitrators shall make their award within four months after entering on the reference or after having been
called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as
the Court may allow.
5. The umpire shall make his award within two months, of entering on the reference or within such extended time as
the Court may allow.
It was an implied term of the arbitration agreement that the arbitrators had to make their award within four months
after entering on the reference or after having been called upon to act by notice in writing from any party or within
such extended time as the court could allow.16 “Month” meant calendar month and not lunar month of 28 days.17
This rule did not apply to a reference by order of court since the time for the making of the award was fixed by order
of court.18 The time fixed by this rule was an implied term of the arbitration agreement.19 The implied term did not
apply when another time was fixed by the arbitration agreement or by the Association Rules by which the parties
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had agreed to abide.20 The implied term was subject to alteration by the parties.21 The arbitrator had no jurisdiction
to make the award after expiry of the time.22 If the time had expired, the proper course was to apply for an extension
of time under Section 28, 1940 Act (repealed).23 The time limit prescribed under clause 3 paragraph 3 Schedule 1,
1940 Act (repealed) cannot be extended by the arbitrator.24 The court alone could do it.25 An appeal in this regard
was pending before the Supreme Court. Parties were not estopped from challenging the award given within the
prescribed time limit of four months inspite of participating in the arbitration proceedings held after the expiry of the
period.26 If the parties participated in the arbitration proceedings after the expiry of the time, they were estopped
from raising the objection after the award was made.27
If an arbitrator died during the reference and new arbitrator was appointed in his place, the period of 4 months had
to be computed from the date on which the second arbitrator entered upon the reference.28
U. P. Amendment
In view of the amended provision for the State of Uttar Pradesh it was quite obvious that it was only when the
parties did not agree to extension of time that the intervention of the Court was necessary. The amendment has
brought in para 3 of the First Schedule was consonant with S. 28 (2), 1940 Act (repealed) which confered power on
the Court to enlarge time for award.29
5. Entering on reference
There was a difference of opinion on the question when the arbitrator entered on the reference. One view was that
arbitrators entered on the reference when they accepted their appointment,30 but the better and prevailing view was
that they enter on the reference when they first apply their minds to the dispute referred and do something in
furtherance and execution of the work of arbitration.31 Following this, it was held that the arbitrator could not be said
to have entered upon the reference when he sent a notice to the party calling upon her to file her counter statement.
The court said that assumption of office by the arbitrator or doing some thing towards decision making in the
presence of both parties or ex parte did not necessarily amount to entering upon the reference.32 This conflict of
opinion is not now material in England when under Section 13(1)of the English
Arbitration Act 1950, (replaced by the
Arbitration Act, 1996 ) the arbitrators can make their award at any time. It is also not matter under the
Arbitration and Conciliation Act, 1996 because this Act also does not prescribe any time-limit.
6. Being called on to act
“Being called on to act” meant being called upon to do something as an arbitrator, e.g., to appoint an umpire, for the
arbitrators could appoint an umpire only in their character as arbitrators.33 It was not synonymous with entering on
the reference.34 Though entering on the reference was an act of the arbitrator, that act was not exhaustive of the
words “to act”.35 The words “to act” were more comprehensive than the words “to enter on the reference”.36
The Court said:
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“Rule 3 of the First Schedule to the 1940 Act imposes a duty on the arbitrators to make their award within one or other of
the three alternative period mentioned therein. The Court having regard to the duty imposed upon the arbitrator held that
the arbitrators enter on the reference as soon as they have accepted their appointment and have communicated to each
other about the reference. If the arbitrator fails in his duty to enter on the reference or make a public award during the
period stipulated under Rule 3 of the First Schedule indisputably a cause of action will arise for his removal or appointment
of a new arbitrator in terms of Sections 11 and 12 of the 1940 Act. The words “commencement of the arbitration
proceedings” have not been defined in the 1940 Act. They have to be given their ordinary meaning having regard to the
provisions contained in Chapter II thereof. Furthermore, Section 85(2)(a) of the new Act may have to be construed keeping
in view the provisions contained in Section 21 of the new Act”.
The arbitrator should be removed if he allowed the time for making the award to expire.37 Time began to run from
the date of the service of the notice calling upon the arbitrators to act.38 But if the arbitrators had entered on the
reference and four months’ time to make the award had already expired, a notice calling upon the arbitrators to act
did not give them another period of four months to make the award from the date of notice, for the arbitrators could
not then act.39 The effect of a notice given after the arbitrators had entered on the reference but before the time to
make the award had expired was an open question.40 On the expiry of four months from the date of the notice, the
umpire could enter on the reference.41
Where a compromise decree fixed one month as the period for making the award and provided that on the failure of
arbitrators to do so, the plaintiffs would be at liberty to execute the decree, the decree could be executed if the
arbitrators omitted to give the award within one month.42
An arbitrator could not limit the time for making the award in the absence of any power to that effect contained in
the arbitration agreement.43
7. Paragraph 4—When umpire must enter on reference [1940 Act (repealed)]
4. If the arbitrators have allowed their time to expire without making an award or have delivered to any party to the
arbitration agreement or to the umpire a notice in writing stating that they cannot agree, the umpire shall forthwith
enter on the reference in lieu of the arbitrators.
If the arbitrators allowed their time to expire without making the award or have delivered to any party to the
arbitration agreement or to the umpire a notice in writing that they could not agree, the umpire had to enter on the
reference in lieu of the arbitrators.44
An arbitration agreement could provide that in the event of any difference arising between the arbitrators they
should refer the matter to the umpire for his decision and award did not exclude the power of the umpire to enter on
the reference when the arbitrators had allowed their time to expire without making the award.45 The umpire's
jurisdiction to act under this paragraph was not taken away by the fact that the umpire wanted an order from the
court or from the fact that he did not purport to act under the paragraph but under the order of the court or from the
fact that an application had been made for extension of time.46
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What constituted disagreement between the arbitrators was a question of fact in each case.47 The court said:
The arbitrators had entered upon the reference as they had accepted their appointment and had communicated with each
other about the reference. Accordingly there was a disagreement between them and, therefore, the Court was entitled to
appoint an umpire. There is disagreement between them if the time is allowed to expire due to the intentional manipulation
of the arbitrators.48 To enable the umpire to act, it is sufficient that they arrive at different opinions on some of the matters
referred,49 or if they cannot agree on the question whether production of more evidence should be allowed or not,50 or if
after proceeding with the reference for some time, they cannot for some reason or other meet again51 and a notice in writing
that they cannot agree is given by the arbitrators. The notice by one of them is not sufficient.52 The disagreement referred to
in this paragraph need not be a specific disagreement.53
A pragmatic view of the word “disagreement” was emphasised by the Supreme Court in Keshavsingh Dwarkadas
Kapadia v. Indian Engg Co.54
As to what constitutes disagreement cannot be laid down in abstract or inflexible propositions. It will depend upon the facts
of the case as to whether there was a disagreement. . . . . . . . . Disagreement between arbitration may take various shapes
and forms. In the present case the arbitrators by reason of the attitude of a party in a correspondence addressed to the
arbitrator could not agree to proceed with the matter. Where one of the arbitrators declines to act and the other is left alone,
it will amount to disagreement between two arbitrators. In the present case there was a disagreement between the
arbitrators. Time to make the award also expired. Therefore, from both points of view the umpire had authority to enter
upon the reference.
Where of the two arbitrators working with an umpire, one of them left leaving the others two to draw up the award
and saying that he would not join in it if he could not change their minds. The other arbitrator sent to him his draft
award by mistake. He recorded his objections and sent it to the umpire who along with the other finalized the award.
The award was held to be bad. The objecting arbitrator should have been given full notice for explaining his
objections and the award should have been finalized only after hearing him, if he would have so liked. The court
said that if after discussion it appeared that there was no chance of agreement with one of the arbitrators, the other
might proceed without him.55
It was held in a very old case56 that where a cause was referred to three persons and if they or any two of them
were empowered to make an award, an award made by two of them was good if the third had notice of the meeting.
But if he had no such notice then such an award was bad. This principle influenced the Calcutta High Court to
observe :57 “The presence of all the arbitrators at all the meetings and above all at the last meeting, when the final
act of arbitration is done is essential to the validity of the award. The court cited from Russel on Arbitration the
following passage:58
“As the arbitrators must all act, so they must all act together. They must each be present at every meeting ; and the
witnesses and the parties must be examined in the presence of them all, for the parties are entitled to have recourse to the
arguments, experience and judgment of each arbitrator at every stage of the proceedings brought to bear on the minds of
his fellow judges, so that by conference they should mutually assist each other in arriving at a just decision.”59
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The Supreme Court surveyed these authorities in Reserve Bank of India v. S. S. Investments,60 so as to find out
what constituted a disagreement to enable the umpire to set in and cited the following passage from Rusell on
Arbitration:61 “The question what constitutes such a disagreement between arbitrators as will entitle the umpire to
make an award . . . . .is one on which no definite rule can be laid down. It has been held that there was such a
disagreement where one of the arbitrators declined to proceed further with the case and also where one arbitrator
refused to permit certain evidence to be produced which his fellow arbitrator declared to be essential and in another
case it was decided that non-agreement on important points was equivalent to disagreement”.62 Following these
authorities the Supreme Court held that where both the arbitrators were present at all the meetings and then
submitted different awards without joint deliberation and joint application of mind, this was a sufficient disagreement
for the umpire to take over. It ws not possible for the parties to know whether their arbitrators had joints
deliberations.
The requirement as to notice in writing of disagreement between arbitrators was not satisfied by merely furnishing a copy of
the notes of evidence showing different observations by arbitrators about admissibility of certain evidence coupled with
adjournment for further consideration. It does not amount to notice in writing.63 The Court considered the effect of
illustration 2 in Russel on Arbitration,64 which was as follows:
One of the two arbitrators insisted on the production of further evidence and the other refused to allow it. Held a sufficient
disagreement between the arbitrators to authorise the interference of the umpire : Cudtiff v. Walters.65 An umpire would get
jurisdiction to decide all disputes even though there were only partial differences between arbitrators.66
8. Scope of authority of umpire
The umpire entered on the reference in lieu of the arbitrators. When he did so, he had to decide all the matters
referred to the arbitrators and not merely those on which they did not agree.67 If he did not, the award was bad.68 He
must adjudicate on the whole case even if the arbitrators had disagreed on one point only69 or only on the question
of interest70 or only on the question of costs71 or on the jurisdictional issue only.72 An award of the umpire stated
“First issue—Arbitrators agree that respondents’ case on the first issue fails. Second issue—The arbitrators
disagree, so as umpire I am obliged to decide on the issue involved” was bad since the award of the umpire
showed that he did not apply his mind to that first issue.73 If the arbitrators disagreed after making an interim award
on some of the matters referred, the umpire could not re-open the matters dealt with by the interim award,74
because the arbitration agreement provided that whatever the arbitrators or umpire should determine in the
premises by an award interim or final to be pronounced by them should be binding on the parties.
9. Costs of reference and award—Paragraph 8 [1940 Act (repealed)]
8. The costs of the reference and award shall be in the discretion of the arbitrators or umpire who may direct to, and
by whom and in what manner, such costs or and part thereof shall be paid, and may tax or settle the amount of
costs to be so paid or any part thereof and may award costs to be paid as between legal practitioner and client.
STATE AMENDMENT
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Uttar Pradesh–AMENDMENT OF THE FIRST SCHEDULE.— In the First Schedule to Act 10 of

1940—
(a) in paragraph 2, for the words “not later than one month the latest date of their respective appointments” the
words “within one month from the latest date of their respective appointments or within such extended time
as the parties to the reference agree to, and in the absence of such agreement as the court may allow”
shall be substituted;
(b) in paragraph 3, for the words “or within such extended time as the court may allow”, the words “or within
such extended time as the parties to the reference agree to, and in the absence of such agreement, as the
court may allow” shall be substituted;
(c) in paragraph 5, for the words “or within such extended time as the court may allow”, the words “or within
such extended time as the parties to the reference agree to, and in the absence of such agreement, as the
court may allow” shall be substituted;
(d) after paragraph 7, the following paragraph shall be inserted, namely:—
“7-A. Where and in so far as an award is for the payment of money, the arbitrators or the umpire may,
in the award, order interest at such rate as the arbitrators or umpire may deem reasonable to be paid
on the principal sum awarded, from the date of the commencement of the arbitration, as defined in
sub-section (3) of Section 37, to the date of award, in addition to any interest awarded on such
principal sum for any period prior to such commencement, with further interest at such rate not
exceeding six per cent per annum as the arbitrators or umpire may deem reasonable on such principal
sum from the date of the award to the date of payment or to such earlier date as the arbitrators or
umpire may think fit, but in no case beyond the date of the decree to be passed on the award”—U.P.
Act 57 of 1976, S.24, w.e.f. 1-1-1977.
Note.—See also Ss. 37 and 38 of U.P. Act 57 of 1976 given at the end.
Unless a different intention was expressed in the arbitration agreement, an arbitrator had implied power to award
the costs of the reference and the award and to direct by whom and in what manner such costs were to be paid and
could settle the amount of costs to be so paid or any part thereof and could award costs as between legal
practitioner and client.75 If the agreement provides as to how and by whom the cost were to be paid, the arbitrator
had no power or discretion as to costs.76 The costs of the reference include any special expenses incurred by the
arbitrator in connection with the arbitration, e.g., the cost of an accountant, costs of a special case, costs of drawing
up of the award, lawyer's fees and the arbitrator's remuneration.77
The arbitrator could not enforce the award by executing the decree passed on it.78 Under paragraph 8 of Schedule
I, 1940 Act (repealed) the arbitrator could settle the costs of the reference and award including his own fees unless
the arbitration agreement expressly excluded his power to do so.79 His fees were within his discretion provided they
were reasonable80 and not excessive.81
Where it was clear, on the face of an award, that the arbitrator was not exercising a judicial discretion at all, and
was awarding costs on a perfectly wrong and improper ground, and those matters appeared and indeed were
deliberately put by the arbitrator on the face of his award so that the court could come to a conclusion about it, it
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was held that in those circumstances the award ought to be set aside.82
There was no obligation on the arbitration tribunal to tax or settle its own fees. It could by its award direct that the
costs of the award be paid by a particular party without specifying the amount of the costs. The parties were then
informed by letter that upon payment of a specified sum they could take up the award. This procedure enabled
either party to apply under Section 38(1), 1940 Act (repealed) for an order fixing the arbitrator's remuneration, and
while preserving the arbitrator's lien on the award prevented either party from depriving the other of this right.83
If the arbitrator fixed by the award an exorbitant sum as costs of the award and a party to the reference was obliged
to pay such sum in order to obtain possession of the award, such party could recover the excess beyond what was
reasonable compensation to the arbitrator in an action against the arbitrator for money had and received.84
In order to succeed in the action, the plaintiff had to show that the fees charged were unreasonable and
extortionate. A certificate of the taxing master disallowing as between party and party a part of the fees paid by the
party taking up the award was not conclusive as to the unreasonableness.85
If an arbitrator awarded that each party would pay one half of the costs of the arbitration and one party, in order to
obtain delivery of the award from the arbitrator, paid the whole he could sue the other party to pay his share of the
costs, if he refused to pay.86
The arbitrator had no power to make an interlocutory order directing each party to pay his half share of the
arbitration fees and expenses as they accrued from time or to threaten to adjourn the proceedings unless the costs
were paid.87
The meaning and intent of paragraph 8 Schedule I, 1940 Act (repealed) was that the umpire should tax or settle
the fees of the arbitrators and that except where the fees had been taxed and agreed by the parties it was his duty
to apply his own independent view and judgment as to the fees demanded and the work done and to satisfy himself
that the fees were fair and reasonable, bearing in mind the interest of the party who would ultimately have to pay
them as well as the interest of the arbitrators. If he did not do so, he was guilty of technical misconduct. He could
not include in the award the amount of the fees asked by the arbitrators because he did not consider it his business
to consider or assess the value of their services or the remuneration properly payable to them. The court did not
normally interfere unless it was satisfied that the fees could properly be described as extravagant or it was apparent
that the umpire had seriously misapprehended his duty as regards assessment of fees. The absence of proper
assistance from the umpire by way of adequate information to the court when the fees prima facie
appeared to be out of proportion to the work involved could lead to the conclusion that the umpire had
misconceived his duty. The umpire or arbitrator in fixing his fees should do so by reference to the period of time
devoted to the work done and the scale of charges for the time so computed which could be justified as reasonable
before the court if an application was made under Section 38(1), 1940 Act (repealed). In the case of arbitrator
advocates, the umpire should distinguish between the amounts of fees referable to this judicial function and the part
referable to their function as advocates.88
The fees of the arbitrators and the umpire had to be stated in the award by the umpire separately.89
The costs were in the discretion of the arbitrator.90 The discretion had to be exercised judicially91 and not
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capriciously.92 The normal rule is that costs follow the event. If the arbitrator departs from the normal rule and the
reason for such departure does not appear from the award or from the evidence before the court, the court could
under the 1940 Act (repealed) interfere and could either remit the award or set it aside.93
If the arbitrator deprived the successful party of the costs or the bulk of the costs,94 or deprived the successful party
of costs for no reason or for no sufficient reason95 the court did generally remit the award. Though the arbitrator
gave no reason, the facts showed that the arbitrator was justified in making the unusual order for costs.96 In the
exercise of his discretion, the arbitrator may direct that each party should pay and bear his own costs. He may,
while awarding damages to the plaintiff, direct him to pay all the costs.97
Technical and legal Expenses
An amount claimed by the plaintiff by way of technical and legal expenses and the arbitrator being satisfied that the
expense was actually incurred and was directly involved in the arbitration, it was very much within his competence
to allow the same and would not be guilty of misconduct in doing so.98
Role of Court in cost matters
The role of the court in the matter of costs was thus explained by Devlin, J.: “Where costs are concerned, the court
exercises a jurisdiction of a somewhat exceptional character over the orders that are made by arbitrators—
exceptional, I mean, in relation to awards. It exercises the same sort of jurisdiction as an appellate court would
exercise over the orders as to costs of a Judge sitting at first instance. If it can be shown that he has exercised his
discretion improperly, then the court will intervene and, in the case of an award, it intervenes by remitting the matter
to the arbitrator, either with a direction as to how he should exercise his discretion, if there is only one way in which
it can be properly exercised, or else with some guidance as to how he should apply his mind to the question of
exercising his discretion.” It was held on the facts that as the umpire had intimated that he had considered the
possibility that his findings on the law might be upset before making his award, there was no mistake or
misapprehension justifying remission to him for his further consideration of his order upon costs.1
There is no basis for any limitation upon the power of the court that costs can be ordered to be paid by persons who
were not parties to the relevant proceedings.2
Security for Costs
Where both parties carried on business outside the jurisdiction, both were claiming against the other as parties who
had been badly treated and had suffered damage and it was mere chance that one party had started the arbitration
before the other could get in a claim, it was held that both should have been treated alike and since the learned
Judge did not seem to have had as many of the relevant decisions brought to his attention and since he seemed to
have thought that establishing that the same issues were likely to arise on both the claim and counter-claim was a
decisive factor, he had misdirected himself so as to entitle the Court of Appeal to interfere and the respondent
would be ordered to pay a similar amount as that payable by the claimants by way of security for the costs of their
counter-claim.3
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ARBITRATION WITH INTERVENTION OF COURT WHEN NO SUIT IS PENDING
All the provisions of the

Arbitration Act , 1940 relating to Arbitration with intervention of court whether during the pendency of a
suit or otherwise have been deleted from the
Arbitration and Conciliation Act, 1996 . This mode of reference to arbitration has been abolished by the
new Act. Such provisions and the knowledge generated by them through court decisions have been retained here
for reference in cases of pending matters.
S. 20. Application to file in Court arbitration agreement.—(1) Where any persons have entered
into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or
any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of
proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates,
that the agreement be filed in Court.
(2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the
parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants,
if the application has been presented by all the parties, or if defendants.
(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement
other than the applicants, requiring them to show cause within the time specified in the notice why the agreement
should not be filed.
(4) Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of
reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties
cannot agree upon an arbitrator, to an arbitrator appointed by the Court.
(5) Thereafter the arbitration shall proceed in accordance with and shall be governed by, the other provisions of this
Act so far as they can be made applicable.
STATE AMENDMENT
UTtar Pradesh—Amendment of Section 20.—In Section 20 of the Act 10 of 1940—
(a) for the existing marginal heading the following shall be substituted, namely:—
“Application to court for making reference”
(b) in sub-section (1), for the words “the agreement be filed in court” the words “a reference be made
according to the agreement” shall be substituted;
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(c) in sub-section (3), for the words “why the agreement should not be filed” the words “why a reference in
accordance with the agreement should not be made” shall be substituted;
(d) in sub-section (4)—
(i) the words “shall order the agreement to be filed and” shall be omitted;
(ii) at the end, the following explanation shall be inserted, namely:—
“Explanation .—Where the arbitration agreement provides for reference to a person by

name or designation, the fact that the arbitrator or the umpire so named or designated, is an employee of,
or is otherwise connected with, one of parties, shall not by itself, be deemed to be a reason for not referring
the matter to the arbitrator or the umpire so named or designated”—U. P. Act 57 of 1976, S. 18, w.e.f. 1-1-
1977.
Where is an application under S. 20 an agreement and a dispute stand proved an order of reference can be made
ex parte if the opposite party does not enter appearance1.
1. Filing of agreement in court [ S. 20(1)]
Where any person has entered into an arbitration agreement before the institution of any suit with respect to the
subject-matter of the agreement or any part of it, he or any party upon a difference arising to which the agreement
applies may apply under Section 20, 1940 Act (repealed) sub-section (1) to the court having jurisdiction in the
matter to which the agreement relates that the agreement be filed in court.
Section 20 has been amended in Uttar Pradesh by Act 57 of 1976 to make it clear that the application under
Section 20, 1940 Act (repealed) is for an order that a reference be made by the court.
An application before the court under the section is not in the nature of a proceeding for decision of any dispute.
Accordingly, when an Act providing a different arbitration machinery intervened and carried a saving clause that
pending proceedings before any court or tribunal would not be affected, it was held that an application under S. 20,
1940 Act (repealed) would have to be dismissed because it would not be covered by the saving clause.2
2. Conditions of applicability of section
To maintain an application under Section 20, 1940 Act (repealed) the following conditions had to be fulfilled:3
(1) there was a valid and subsisting arbitration agreement between the parties;4
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(2) the agreement was entered into before the institution of a suit with respect to the subject-matter of the
agreement or any part of it;
(3) a difference to which the agreement applied had arisen;5

(4) the application was made to a court having jurisdiction in the matter to which the agreement related.
The court must be satisfied that the disputes to be referred to arbitration could be the subject-matter of a suit.6 A
caste question could not be referred.7
The merits of the claim are not required to be adjudicated at this stage.8 The scope of enquiry of the Court has been
spelled out by the Supreme Court in these words9 —
“[W]hile dealing with a petition under Section 20, the court has to examine — (i) whether there is an arbitration agreement
between the parties, (ii) whether the difference which has arisen is one to which the arbitration agreement applies, and (iii)
whether there is a cause, shown to be sufficient, to decline an order of reference to the arbitrator. The word agreement
finding place in the expression “where a difference has arisen to which the agreement applies”, in sub-section (1) of Section
20 means “arbitration agreement”. The reference to arbitrator on a petition filed under Section 20 is not a function to be
discharged mechanically or ministerially by the court, it is a consequence of judicial determination, the court having applied
its mind to the requirements of Section 20 and formed an opinion, that the difference sought to be referred to arbitral
adjudication is one to which the arbitration agreement applies.”
Specific performance
The remedy of specific enforcement of a contract can be awarded only by the court. This is so by virtue of the
provisions of the
Specific Relief Act, 1963 . Hence, where the only relief claimed was that of specific enforcement,
neither an arbitrator was appointed nor reference ordered.10
3. Applicability of principles relating to appointment under 1996 Act
The Supreme Court in Patel Engineering has extensively spelled out the permissible scope of interference and the
nature of power of the Chief Justice in the context of S. 11 of the 1996 Act.11 The Supreme Court in a later decision
has held that the principles and reasonings developed around Patel Engineering will be applicable to determine the
scope and nature of interference even under the 1940 Act12 The following commentary must be read keeping in
mind this dictum of the Supreme Court.
4. Before institution of suit in respect of subject-matter of agreement
The words “before the institution of a suit” meant “while no suit is pending” with respect to the subject-matter of the
arbitration agreement. If the agreement was entered into while a suit was pending, it could not be enforced by an
application under Section 20, 1940 Act even though the suit was no longer pending when the application was
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made.13 The decisions14 to the contrary under the

Code of Civil Procedure s, Sch. II, para 17 (3) became obsolete.
When an agreement for arbitration with respect to the subject-matter of a suit was entered into while the suit was
pending upon the stipulation that the suit would be withdrawn and the suit was thereafter withdrawn, the parties
obviously intended that the agreement will become operative after the suit was withdrawn. Such an agreement
could be filed under Section 20, 1940 Act (repealed).15
The
Arbitration Act , 1940 dealt with three classes of arbitrations, namely,(1) arbitration without intervention
of court under Chapter II, (2) arbitration with intervention of court under Chapter III where no suit was pending, and
(3) arbitration in suits under Chapter I V. 16 An arbitration agreement with respect to the subject-matter
of the suit could be enforced only by obtaining an order of reference from the court in which the suit was pending
and not by proceeding under Chapter II or Chapter III. But an arbitration agreement entered into while no suit was
pending could be enforced by proceeding either under Chapter II or under Chapter III.17 In order to attract Section
20, 1940 Act it was not necessary that the arbitration agreement should be followed by a suit with regard to the
subject-matter. The word “before” was not used in the grammatical sense of priority of time.18 There is nothing in
Section 20, 1940 Act which required that it would be attracted only when a suit follows the application. Section 20,
1940 Act had no application to agreements to refer to arbitration disputes in a pending suit.19 The application under
Section 20, 1940 Act could not be moved after an award had been made.20 And it would become infructuous if the
award was made during the pendency of the application.21
5. Instead of proceeding under Chapter II
The words “instead of proceeding under Chapter II” in Section 20 sub-section (1), 1940 Act suggested that the
parties could enforce the arbitration agreement under Section 20, 1940 Act in a case where they could proceed
without intervention of court under Chapter II.22
Section 20(1), 1940 Act made it plain that the provisions of Section 20 could be availed of only if no proceeding
under Chapter II had been initiated.23
But if the application under Section 8 was, for some reason, not maintainable, the applicant could not proceed with
it and could file an application under Section 20, 1940 Act.24
The word “may” shows that the section was permissive and not mandatory. A party had the option of proceeding
either under Section 20, 1940 Act or under Chapter II of that Act without intervention of court.25 A party was not
compelled to resort to Section 20, 1940 Act because the other party denied the arbitration agreement.26 Where the
agreement provided for a named arbitrator and the party decided to resort to this section, the court could order
reference even if the other party did not enter appearance and the matter could have to be taken up ex
parte. 27
An application under Section 20, 1940 Act where an arbitrator was appointed had been filed and the applicant was
aware of it. The question as to the maintainability of an application under Section 20, 1940 Act, was to be
considered on the facts as they stood on the date of the filing of the award and not on the date on which the date of
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maintainability as actually considered.28
It had been held under this section that if a fair offer of the contractor by giving notice for appointment of arbitrator
had not been accepted by the corporation, a composite application by the contractor for filing of the agreement and
appointment of arbitrator was competent although it mentioned only S. 20, 1940 Act and not S. 8, 1940 Act and the
court was competent to appoint an arbitrator.29
Proceedings under the section are not a suit for the purposes of, or having the effect of, bringing about the
dissolution of a partnership firm.30
6. Statutory arbitration
If an arbitration agreement is arrived at before a suit with respect to the subject-matter of the agreement is instituted
in a court which had no jurisdiction to deal with the matter by reason of a statutory provision that the suit should be
referred to the arbitration of a specified person, the agreement could be filed under Section 20, 1940 Act even
though a suit was pending.31
Section 20, 1940 Act applied to statutory arbitrations in view to Section 46, 1940 Act32 unless the provisions of the
statute were inconsistent with Section 20, 1940 Act.
7. Application for dissolution and accounts of an unregistered firm
An application under Section 20, 1940 Actclaiming reference for accounts and dissolution of an unregistered firm
was not barred by Section 69(1)of the Partnership Act . Such an application was not “other proceeding” falling
within Section 69(2)of the Partnership Act.33
In respect of the matters which do not come within the scope of the exceptions in S.
Section 69 of the Partnership Act, 1932 , it would not be open to the partners of an unregistered firm to
seek the help of the court for having the arbitration agreement filed in the court.34 Where the dispute was whether
one of the partners had abandoned his interest in the firm and whether, as he alleged, the documents evidencing
abandonment were genuine or forged the court would not refer it under S. 20, 1940 Act it being not one of the
exceptions permitted by S. 69 to the partners of an unregistered firm. So would be the case where some of the
partners were not parties to the agreement of arbitration.35 The court referred to one of its own earlier decisions.36
Where it was said:
“The fact that there are allegations of fraud is a factor which the court should take into account in considering the exercise
of discretion. The nature and type of the allegations are also relevant factors. If a party charged with fraud wants public trial,
stay should be granted. But even if the party charged with fraud does not want public trial but the party alleging fraud so
wants, the court should refuse to grant stay.37”
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All kinds of dispute between partners of an unregistered firm could be referred to arbitration without court's
intervention.38
Reference between Partners
In an arbitration without the intervention of the court, it was not necessary that all the interested parties should be
brought into the reference. Accordingly, in a matter of partnership, there was a dispute between two of the partners
only. A reference to arbitration without bringing in the other partners was held to be valid.39
New Application after Registration
The firm got itself registered during the pendency of its application filed before registration and applied for court
permission for withdrawal of the application with permission to file a fresh application under the status of a
registered firm, but the permission was not granted. The court said that non-registration at the time of application
was not a formal defect but was one that went to the root of the matter.40
8. Arbitration agreement
In order to determine whether a clause in an agreement amounted to an arbitration clause, the courts used to go by
the substance of the matter and not by its form. The absence of the word “arbitration” was not decisive of the
matter. A provision in an agreement that disputes relating to interpretation of the agreement would be referred to
the Government and its decision was to be final. The court said this provision in its essence amounted to reference
of disputes to Government arbitrator and, therefore, both the conditions of reference under S. 20, 1940 Act were
satisfied, namely, a subsisting arbitration agreement and the differences under the agreement.41
Where the clause in the agreement was that the decision of the superintending engineer in all matters shall be final
and binding on all the parties, this was held to be not an arbitration clause and, therefore, an application for
appointment of arbitrator was dismissed.42 Where the contract provided that the amount of compensation for
delayed performance would be determined by the Superintending Engineer whose decision would be final, it was
held that the amount of compensation so fixed was not an arbitrable issue.43
Where the agreement was that the works would be executed as per MDSS specifications but that the arbitration
clause would not apply, it was held that there was no right to have the matter referred to arbitration.44
The court would not make a reference under Section 20, 1940 Act if the consent of any party to the agreement was
induced by fraud or misrepresentation45 or if all the parties did not execute the agreement46 or if the agreement was
invalidly executed by a de facto guardian of a Mohamedan minor47 or where under the agreement the claim had to
be notified within a prescribed period and the same was not done.48 The question whether the contract was for
some consideration and, if so, what, could be decided by the arbitrator.49
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A dispute as to the existence of the insurable interest of the insured could not be referred under Section 20, 1940
Act under an arbitration clause in the insurance policy.50
The consideration of the question whether the arbitration agreement should be filed or not may involve dealing with
objections as to the existence and validity of the main agreement itself.51 Where the arbitration clause was wide
enough to cover disputes even before the commencement of works and the contractor alleged losses in the nature
of pre-commencement expenses he had a right to ask for reference.52 The conclusion of a contract through tender
and its acceptance which carried the name of the arbitrator would enable the court to order the agreement to be
filed even if the tenderer said that he was not aware of and, therefore, not ad idem to the arbitration clause.53 Once
it was found that the agreement was valid, the court need not go into the arbitration clause.54 A reference without
recording a finding on the existence of the agreement and a dispute under it would be invalid and the participation
by a party in the proceedings would not prevent him from questioning the validity.55
Disputes arising out of a contract containing an arbitration clause which was illegal and void could not be referred to
arbitration56, e.g., an arbitration clause in a deed of partnership carrying on illegal business in liquor under an excise
licence in the name of one of the partners since the partnership amounted to a transfer of the licence which was not
permitted under the Excise Rules.57 Disputes could not be referred to arbitration under Section 20, 1940 Act under
an arbitration clause contained in a contract which does not comply with the provisions of
Article 299 of the Constitution ,58 nor when an arbitration agreement was not in writing.59
Time-limit for reference and undue hardship
Where the agreement prescribed a time-limit for exercising the rights under the arbitration clause, the question
whether the claim was lost by reason of the expiry of time would be for the arbitrator to consider and not for the
court.60 Where a charterparty provided for reference within three months of discharge, it was held that the court
could extend this time if undue hardship would be caused.61
Matters excepted
Matters excepted from arbitration could not be referred. Where an agreement barred arbitration in case of stoppage
of work or termination of contract and the dispute arose out of the termination of the contract by one party due to
delay in completion, it was held that the matter of the termination could not be referred to arbitration.62
Matters not covered
Where the clause in the agreement restricted the right to seek arbitration to contracts up to the value of Rs. 2 Lacs
only, reference of a dispute about a contract going beyond that value was not allowed.63
Novation of Contract
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Where a film was leased out on payment of consideration under a contract which carried an arbitration clause and
this contract was terminated on the condition that the party would refund the consideration amount which he failed
to do, it was held that the original contract revived enabling the aggrieved party to ask for reference to arbitration.64
Where an attempted novation could not be effected because of the failure of the conditions precedent, the old
agreement remained effective and could be acting upon for ordering reference.65 Where the substituted agreement
did not contain any arbitration clause, a plaint for arbitration under the section was not entertained.66
Expiry of Period of Contract
Where the site was not provided to the contractor during the whole of the period of contract and the project was
handed over to someone else, it was held that the contract was broken resulting in a liability to compensate the
contractor. The court ordered filing of the agreement and appointment of arbitrator.67
Matters settled
A contract was terminated under mutual agreement. All the claims of the contractor were paid off and he issued a
no claim certificate. Subsequently, the contractor applied for arbitration under S. 20, 1940 Act for reference for
determination of his claims for damages. He was not allowed to do so partly because of estoppel by conduct and
also because the arbitration agreement ceased to exist on termination of the contract by mutual agreement.68
Public premises Eviction
Where certain railway premises were leased out on renewable lease and the lessee was not agreeing to increased
lease-rent on renewal so that proceedings were commenced against him for eviction under the Public Premises
Eviction Act, an application for referring the dispute to arbitration was held to be not maintainable.69
Time-limit set in Agreement
An agreement provided that the claim should be submitted to the engineer within 15 days to facilitate proper
verification and also provided that any claim raised after a long time so that verification of facts was not possible
would not be entertained. The court said that this did not constitute 15 days as dead line for submitting the claim.70
Party to arbitration agreement
Only a party to an arbitration agreement,71 or his legal representative72 could apply to enforce, the arbitration
agreement under Section 20, 1940 Act. In the case of a limited company, only the persons in whom the
management of the company was vested could apply under Section 20, 1940 Act but a single shareholder of the
company could not do so.73 The agreement could not be enforced against a person who was not a party to it.74
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A beneficiary could apply if the party to the agreement was unwilling to do so.75 When under an insurance policy
insuring a vehicle, the insured who was the hirer of the car agreed that the owners of the car would be entitled to
receive payment of all losses and damages and the owner's name appeared in the policy under the hirer's name, it
was held that the owners were not only the beneficiary under the policy, but also a party to it and they could apply
under Section 20, 1940 Act to enforce the arbitration agreement contained in the policy.76 The transferee of a motor
vehicle insured under an insurance policy containing an arbitration clause could not apply under Section 20, 1940
Act to enforce the agreement.77
By an agreement for sale and purchase of a mill, the vendors agreed to convey the property to purchasers or their
nominee subject to the approval of the nominee by the vendors, the consent not to be unreasonably withheld. The
purchaser nominated P. The vendors withheld their consent to the nomination as P was a limited company of very
small means. Disputes arose and P filed an application under Section 20, 1940 Act against the vendors. The court
held that P not being a party to the arbitration agreement was not entitled to enforce it by an application under
Section 20, 1940 Act.78 Moreover the contract being for sale of land and buildings wholly outside the jurisdiction of
the court, the court could not entertain the application.79
Where the arbitration agreement was sought to be enforced against the Union of India which admittedly was not a
party to it on the ground that in view of the Indian Independence Rights, Property and Liability Order 1947, the
Union of India should be deemed to be a party, the court determined the question before making an order of
reference under Section 20, 1940 Act.80
A clause in an agreement provided that the purchaser could sue for specific performance or for any other available
relief. An arbitration proceeding by such party was held to be maintainable.81 The applicant was not the original
purchaser, but the assignee of the original purchaser. The right of the original purchaser was found to be of
assignable nature. The assignee's rights under the contract could not be denied to him on the ground that there
was no privity with him. A condition was attached to the interim injunction requiring the plaintiff to deposit certain
amount in court within the stated time otherwise the injunction would be vacated. This condition was held to be
unreasonable and in excess of legal authority.
Impleadment of proper parties
A party was allowed to be impleaded because he was a necessary party for complete adjudication of the case. He
was a party to an earlier proceeding which was dismissed for default. He being not a new party, the court said that
the rigour of limitation contemplated under Order 1, Rule 10 (5),
CPC and
S. 20 of the Limitation Act, 1963 which apply to impleadment of a new party were not applicable in the
circumstances of the case.82
Existence of Dispute
The parties could apply where a difference had arisen to which the agreement related. The existence of a dispute
was essential before a reference under Section 20, 1940 Act could be made.83 Unless disputes were clearly set
forth in the application the court could refuse to entertain an application under Section 20, 1940 Act. Particulars
given in the accompanying documents could not be regarded as sufficient.84 The order of reference under Section
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20, 1940 Act need not specify the disputes as in Section 23, 1940 Act.85 Where an arbitration agreement was
entered into between a college and the respondent who was then serving as a junior lecturer and a dispute arose
as to whether the latter had a prior claim to the post of assistant professor of mathematics to which a third party had
been appointed, an application by the college for reference of the dispute under Section 20, 1940 Act was
dismissed on the ground that the arbitration agreement was relatable to a dispute between the college and the
respondent relating to the post of junior lecturer and not to a dispute which was essentially a dispute between the
respondent and the third party with regard to the post of assistant professor of mathematics.86 A claim based on
custom, practice and assurance given by the department of forests that additional works would be allotted to the
contractor and the department's refusal to do so, was held to be not a dispute arising out of the contract and,
therefore, could not be referred.87
Only the court could decide whether the dispute was covered by the arbitration clause. The final decision on the
question of jurisdiction rested with the court and not with the arbitrator.88 Where a supplier claimed higher rates
because of an increase in excise duty, and the Government having refused, applied for reference, the court said
that the Government's failure to show how the dispute was not covered by the arbitration agreement was sufficient
to bring about a reference.89 If a party admitted that he was willing to pay and was withholding payment under an
obligation imposed by statute, there was not a dispute referable to arbitration under Section 20, 1940 Act.90
Before making an order of reference under Section 20, 1940 Act the court had to determine whether a previous
decision by an engineer employee of a party on some of the questions sought to be referred under Section 20,
1940 Act was given by him as arbitrator or whether it was made by him administratively. If it was given by him as
arbitrator, it would be final and binding and the court would make a reference of the remaining questions only.91
Where there was no evidence to show that the matters which were reserved for final decision of the engineer-in-
charge were actually decided by him, reference was made to the arbitrator who could also examine whether such
matters had been actually and finally decided or not. Where the contract provided that measurements recorded in
the measurement book would not be challenged before the arbitrator it was held that if the contractor alleged non-
payment without questioning the measurements book, it was a dispute for which appointment of arbitrator and
reference was to be ordered.
A dispute arises where there is a claim and a denial and repudiation of the claim. The existence of dispute was
essential for appointment of an arbitrator under Section 8, 1940 Act. Where out of the nine claims which were
sought to be referred, the Department referred only three claims, the refusal to refer the remaining six claims was
also a dispute and, therefore, it was held that an application under S. 20, 1940 Act was maintainable for bringing
about the reference of the remaining claims as well. In a building contract, the decision of an architect when
challenged constitutes a dispute about it. The way in which the tariff of charges for supply of electricity was to be
interpreted caused a dispute between the parties and was held to be a difference which could be referred to
arbitration and, therefore, the order of the court for making the reference was held to be valid.
A dispute about the interpretation of the price in a contract could be referred to arbitration under this section. A
dispute about interpretation of the terms of the agreement was held to be referable. A dispute as to the validity of
the dissolution of a partnership firm is within the competence of the arbitrator to decide.
A dispute as to which there is “no claim certificate” may be referred to arbitration and an order of reference to
arbitration is not a nullity on the ground that the contractor had executed a no claim certificate. The Supreme Court
summarised the effect of these decisions by saying: “In order to be valid claim for reference under S. 20, 1940 Act it
is necessary that there should be an arbitration agreement and secondly differences must arise to which the
agreement in question applied and thirdly the application must be within time as stipulated by S. 20, 1940 Act.”
Whether the claim still subsists inspite of the final payment is for the arbitrator to decide.
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On a settlement of the final bill, the existence of the no-claim certificate weakens the claim but it does not extinguish
the same and, therefore, the question whether there still subsists some claim is an arbitrable issue. Where the
arbitrator passed a non-speaking award to the effect that a dispute existed inspite of the objection of the State that
there had been a full and final payment, it was held that the objection of the State was implicitly ruled out. Where
the goods were to be supplied on the high seas which the respondents refused to do and offered to supply on ex-
godown basis, there was a dispute referable to arbitration under Section 20(1), 1940 Act.
Where the notice sent earlier to the petition mentioned all the disputes but the petition did not mention all the
disputes, the same was held to be not fatal to the petition and, therefore, the court directed the appointment of an
arbitrator. The court cited a case wherein it was held that it is a rule of prudence and not a rule of law that details of
dispute should be mentioned in the plaint. If the dispute can be gathered from the plaint the requirement is satisfied.
The fact that the petitioner had not given full details of the claim or had presented overlapping claims was not a
ground for declining an order of reference.
Agreement must be in writing
Only an arbitration agreement in writing can be filed. Before the agreement is filed, the agreement must be
produced in court. If the agreement is lost a document which is secondary evidence of the agreement may be filed.
1. Smith and Service & Nelson & Sons v. Re,

(1890) 25 QBD 545 per Bowen LJ; H. Sawyer v. Louis Dreyfus,
(1912) 20 IC 504 : 5 Sind LR 1; Doleman & Sons v. Ossett Corporation,
(1912) 3 KB 257 .
2. Gascoyne v. Edwards, (1826) 1 Y&J 19 : 148 ER 569.
3. Aka Aiyappa v. Nandula Paraiya, 3 Mad HCR 82 per Holloway, J.
4. Pestonji Nussrwanjee v. D. Maneckjee & Co., (1868) 12 MIA 112.
5. Ramji Ram v. Salig Ram, 14 CLJ 188; Nagaswamy Naik v. Rangaswamy Naik, 8 Mad
HCR 46.
6. Aitken Spence & Co. v. Fernando,

(1903) AC 200 .
7. Ismail v. Hans Raj,

AIR 1955 Raj 153 ; Sanday Patrick & Co. v. Ram Ratan,
(1899) 7 IC 590 4 Sind LR 14. Man Chand Dhiman & Co. v. Union of India,
(1989) 2 Arb LR 40 (Del), where there was no contrary provision in the agreement
nor leave of the court was taken, withdrawing the matter from the arbitrator was held to be ineffective. The court
extended time B. Balreddy v. Jt. Registrar of Coop. Societies,
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AIR 1955 Hyderabad 238 , the provisions of the Hyderabad Coop Societies Act,
being inconsistent with S. 5 [of the repealed 1940 Act], the latter was not applicable.
8. Reliable Water Supply Service of India v. Union of India,

AIR 1971 SC 2083 : (1972) 4 SCC 168.
9. Union Textile Traders v. Shree Bhawani Cotton Mills,

AIR 1970 SC 1940 [
LNIND 1969 SC 336 ]:
(1970) 2 SCR 429 [
LNIND 1969 SC 336 ]. The decision was under S. 5 of the 1940 Act.
10. Froia Nacional de Petroleiros v. Skibs Aktieselskapet Thorsholm, (1957) 1 Lloyd's Rep 1.
The court said that there was no power in the court to revoke the authority of an arbitrator against the will of the party
appointing him.
11. Bhuwalka Bros. v. Fatehchand Murlidhar, 87 Cal LJ 71.
12. Ocean Knight Company Ltd. v. The MMTC,

(2005) 1 RAJ 410 (Del).
13. Coley v. Decosta, ILR 17 Cal 200.
14. James v. James and Randall,

(1889) 22 QBD 669 .
15. Scott v. Van Sandau,

(1841) 1 QB 102 per Dinman CJ.
16. Amar Chand Lalit Kumar v. Shree Ambika Jute Mills Ltd.,
AIR 1966 SC 1036 [
LNIND 1962 SC 215 ]at 1042 :
(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] at 969. Followed in Panchu Gopal Bose v.
Board of Trustees Port of Calcutta,
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]at 1617 :
(1993) 4 SCC 338 [
LNIND 1993 SC 391 ]applied to debar arbitration proceedings where the claimant
had been sleeping over his rights for over ten years. Indian Farmer and Fertiliser Coop Ltd. v. Duggal Constn Co.,
(1997) 1 Arb LR 436 (Del), arbitration is a method for settlement of disputes and the
parties should not be relieved of a tribunal they have chosen because of the feeling that the decision may go against
the particular party. Burn Standard Co. Ltd. v. Mcdermott International Ltd.,
AIR 1997 Cal 45 [
LNIND 1996 CAL 76 ]: (1996) Supp Arb LR 284, the arbitration clause in a technical
collaboration agreement provided for arbitration by International Chamber of Commerce according to its rules, the rules
provided for deposit of fee in advance, revocation of authority of the arbitrator was sought on the ground that the rules
provided for exorbitant fee, not allowed, the agreement was entered into with full notice of rules and also approved by
the Government. Section 12 of the 1940 Act which gave the court certain powers on the termination of the authority of
an arbitrator has been deleted from the 1996 Act.
17. Panchu Gopal Bose v. Board of Trustees Port of Calcutta,,

AIR 1994 SC 1615 [
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Page 51 of 115
LNIND 1993 SC 391 ]:

(1993) 4 SCC 338 [
LNIND 1993 SC 391 ]. The court followed Amarchand v. Shri
Ambika Jute Mills,
AIR 1966 SC 1036 [
LNIND 1962 SC 215 ]:
(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] and cited Paul v. Joseph,
AIR 1948 Mad 512 [
LNIND 1947 MAD 249 ]where it was held that majority of arbitrators signing an
award makes a valid award; Dharmun Singh v. Surat Singh,
AIR 1925 Oudh 712 , an arbitrator walked away after a difference and did not sign,
majority of arbitrators however signed, held to be award. This is now specially reognised by S. 31(2) by providing that
the signatures of the majority of the members of the arbitral tribunal shall be sufficient provided reasons for the omitted
signatures are stated.
18. Jones & Wexoes (India) v. Union of India,

(1990) 1 Arb LR 156 (Del).
19. S.S. Den of Airlie Co. Ltd. v. Mitsui & Co. Ltd.,
(1912) 106 LT 451 at p. 454 per Vaughn William LJ; Scott v. Van Sandau,
(1841) 1 QB 102 per Dinman CJ. Stockport Metropolitan Borough Council v. O’
Reily, (1983) 2 Lloyd's Rep at p. 78.
20. Re. Gerard (Lord) and London and North Western Rly. Co.,
(1895) 2 QB 455 .
21. Phipps v. Ingram, (1935) 5 Dowl 669 at p. 918. Because otherwise the party would be
taking chances, see M. Subramanya Shastri v. Dr. Chandrasekhara Shastri,
AIR 1995 Kant 115 [
LNIND 1994 KANT 235 ], the party made an application at a time when there were
adverse findings against him by the arbitrator.
22. Devi Narain v. Harish Chandra,

AIR 1981 Raj 67 : 1980 Raj LW 452.
23. Gibraltar v. Kenny,

(1956) 2 QB 410 :
(1956) 3 WLR 466 .
24. Madura Mills Co. v. Krishna Aiyar,

AIR 1937 Mad 405 [
LNIND 1936 MAD 362 ].
25. Faviell v. Eastern Counties Rly. Co.,

(1848) 2 Ex 344 : 154 ER 525; Forwood v. Watney, 49 LJQB 447.
26. Gerard (Lord) and London and North Western Rly. Co. v. Re,
(1895) 1 QB 459 .
27. Gaya Prasad v. Muthu Lal Buddha Lal,

AIR 1925 All 202 ; 78 IC 1050.
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28. S.S. Den of Airlie Co. Ltd. v. Mitsui & Co. Ltd.,
(1912) 106 LT 451 ; Bhuwalka Bros v. Fateh-chand Murlidhar,
ILR (1951) 2 Cal 115 : 87 CLJ 71 :
AIR 1952 Cal 294 ; Amarchand Lalit Kumar v. Shree Ambica Jute Mills Ltd.,
(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] :
AIR 1966 SC 1036 [
LNIND 1962 SC 215 ]at p. 1042; Bombay Fire Insurance Co. v. Ahmedoy
Habilbhoy, ILR 34 Bom 1; Bhuwalka Bros v. Fatehchand Murlidhar,
(1951) 2 Cal 115 .
29. City Centre Properties (I.T.C. Pensions) Ltd. v. Tersons Ltd.,

(1969) 2 All ER 1121 at pp. 1125, 1126 distinguishing Taunton
Collins v. Cromie,
(1964) 2 All ER 332 .
30. Bhumalka Bros v. Fatehchand Murlidhar,

ILR (1951) 2 Cal 115 :
AIR 1952 Cal 294 .
31. Amarchand Lalit Kumar v. Shree Ambica Jute Mills,

(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] :
AIR 1966 SC 1036 [
LNIND 1962 SC 215 ]; James v. James and Randall,
(1889) 22 QBD 669 at p. 674; Kewalram Totaldas v. Dewan Chand,
AIR 1928 Sind 195 ; Gaya Prasad v. Mathu Lal Budha Lal,
AIR 1925 All 202 . Executive Engineer v. M.K. Jain,
(1990) 2 Arb LR 87 (P&H), no revocation allowed only because 4 months passed
without award, there must be chance of miscarriage of justice.
32. M.H. Tejmi v. Kulsum Bai,

AIR 1967 Bom 300 [
LNIND 1965 BOM 69 ]: 1966 Mad LR 1110; Bhuwalka Bros. v. Fatehchand
Murlidhar,
(1951) 2 Cal 115 ; Goverdhandas Vishindas v. Ramchand Maujimal,
(1918) 47 IC 783 at p. 790; Bombay Fire Insurance Co. v. Ahmedbhoy,
(1910) ILR 34 Bom 1.
33. Belcher v. Roedean School Site and Buildings Ltd.,

(1901) 85 LT 468 at p. 471 per Mathew, LJ.
34. City Centre Properties (I.T.C. Pensions) Ltd. v. Mathew Hall & Co. Ltd.,
(1969) 1 WLR 772 .
35. Bombay Fire Insurance Co. v. Ahmedbhoy,

(1910) ILR 34 Bom 1.
36. James v. Attwood, (1839) 7 Scott 843 per Tendal, CJ.
37. Forwood v. Watney, 49 LJQB 447.
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Page 53 of 115
38. Amarchand Lalit Kumar v. Shree Ambica Mills,Jute

(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] at p. 969 :
AIR 1966 SC 1936 ; Gaya Prasad v. Mathu Lal Budha Lall,
AIR 1925 All 202 . Secy to Govt., Transport v. M. Mudaliar,
AIR 1988 SC 2232 [
LNIND 1988 SC 419 ]:
(1989) 1 Arb LR 50 : 1988 Supp SCC 651, where none of the relevant grounds was
made out; the court followed International Authority of India v. K.D. Bali,
(1989) 2 JT 2 SC 1 :
(1988) 2 SCC 360 [
LNIND 1988 SC 198 ] :
AIR 1988 SC 1099 [
LNIND 1988 SC 198 ].
39. Reliance Investment Co. Ltd. v. Union of India,

AIR 1957 Cal 151 [
LNIND 1956 CAL 106 ].
40. Sarkar & Sarkar v. State of WB,

AIR 1992 Cal 365 [
LNIND 1991 CAL 180 ]at 368 :
(1993) 1 Arb LR 169 .
41. Gopal Chand v. Punjab State,

(1991) 2 Arb LR 297 (P&H).
42. Drew v. Drew, (1955) 2 Macq 1.
43. European and American Steam Shipping Co. v. Croskey, (1860) 8 CB (NS) 397 : 141 ER
1219. Where the proceedings had already lingered on for two years and the end was still not in sight, a demand by the
arbitrator for revision of his fee was not in itself a ground for revoking his authority unless there was some evidence of a
reasonable apprehension of bias or legal misconduct, Maharashtra state Electricity Board v. A.S. Joshi,
(1991) 1 Arb LR 126 (Bom).
44. Consolidated Construction Co. v. State of Orissa,

AIR 1980 NOC 31 Ori : (1979) 48 Cut LT 138.
45. Indian Iron & Steel Co. v. T.D. Kumar & Bros,
AIR 1982 NOC 40 (Cal), it was further held that the matter could not be referred to
the same tribunal though different persons might constitute it; Union of India v. Somnath Chadha & Co.,
(1985) Arb LR 75 (Del), sitting over the matter for more than 21 months, removed.
Under
S. 25(c) of the Arbitration and Conciliation Act 1996 , the tribunal has the discretion to continue the
arbitral proceedings and make the award even if a party, without sufficient cause, fails to appear at an oral hearing or to
produce documentary evidence.
46. Amiraj Construction Co. v. State of Maharashtra,

(1988) 1 Arb LR 278 (Bom).
47. Pratt v. Swanmore Builders Ltd.,, (1980) 2 Lloyd's Rep 504. Altos India Ltd. v. Goyal
Gases Ltd.,
(1996) 1 Arb LR 454 (Del), there was reasonable ground for the petitioner to
Navneet Krishn
Page 54 of 115
apprehend that the arbitrator would be biased. Parties may not be permitted to walk out of their contract easily, but
there must be a clear contract. Panel of arbitrators not clearly constituted.
48. Bansidhar v. Sital Prasad, ILR 29 All 13.
49. Mahamed Wahiduddin v. Hakiman,

(1902) ILR 29 Cal 278.
50. Ghulam Mohammad Khan v. Gopaldas Lal Singh,

AIR 1933 Sind 68 ; Motharam Daulatram v. Daulatrama Mayadas,
AIR 1925 Sind 150 .
51. Bhuwalka Bros. v. Fatehchand Murlidhar, 87 CLJ 71; Kalinga Otto (Pvt.) Ltd. v. Charanjit
Kochhar,
ILR 1972 Cut 580 :
AIR 1972 Ori 172 [
LNIND 1971 ORI 93 ]; Tolaram Nathmal v. Birla Jute Manufacturing Co. Ltd.,
ILR (1948) 2 Cal 171 at. 196. Leave to revoke the authority of the arbitrator was
allowed because of the proved possibility of bias, Koshy v. Ker SEB,
(1983) Arb LR 271 (Ker) :
AIR 1984 Ker 23 [
LNIND 1983 KER 139 ].
52. Gangaram Gurnah v. Sumangal Bhikaji,

AIR 1933 Sind 347 ; Govardhandas Vishindas v. Ramchand Maujimal, 12 Sind LR
41 :
(1918) 47 IC 783 .
53. Gaya Prasad v. Mathulal Budha Lal,

AIR 1925 All 202 .
54. Roshan Lal Sethi v. Chief Secretary, AIR 1971 J&K 91. In such cases the objective test
of bias which has to be adopted was stated by the Court of Appeal in Hagop Ardahalian v. Unifert International SA,
(1984) 2 Lloyd's Rep 24 CA, on appeal from (1984) 1 Lloyd's Rep 206 : In such cases the objective test was : did there
exist grounds from which a reasonable person would think that there was a real likelihood that the arbitrator could not
or would not fairly determine the safe port issue on the basis of the evidence and arguments to be adduced before him?
and the suggestion that mere lack of confidence which no reasonable person would, in the relevant circumstances,
experience should be a basis for setting aside the award was quite unacceptable. Tracomin SA v. Gibbs Nathaniel
(Canada) Ltd., (1985) 1 Lloyd's Rep 586, for an arbitrator, while still seized of judicial functions, to sit in Court behind
the counsel for one party and next to the solicitor for that party was wrong; it will be still more wrong for him to appear to
be participating in the instructions of the counsel for one party. Bremer Handelsgesellschaft MBH v. Ets Soules et Cie,
(1985) 2 Lloyd's Rep 199 (CA), here the arbitrator was an employee of intermediate traders and in reference to the
question of bias, the court said : On the facts and the evidence Bremer had totally failed to prove their case. The true
view of the law was that Mr. Scott's fitness to retain his position should be judged in the light of all the evidence brought
forward at the hearing. There was nothing to suggest that Bremer had been treated unfairly in the past nor there was
any risk appreciable to the reasonable man that they would be so treated in the future.
55. P.M. Paul v. Union of India,

(1989) 2 Arb LR 215 :
AIR 1989 SC 1034 [
LNIND 1989 SC 18 ]: 1989 Supp (1) SCC 368, a retired Supreme Court judge was
appointed in his place. Award of escalation was held to be good because the time for performance was extended.
56. Union of India v. P.M. Imbichibi,

AIR 1998 Ker 72 : 1997 (Supp) Arb LR 491. The court considered
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Page 55 of 115
State v. Natesan,
(1997) 1 Ker LT 888 [
LNIND 1997 KER 114 ] :
(1997) 2 Arb LR 675 and Pioneer Shipping Complex P. Ltd. v. Shilpi Construction
Contractors,
(1989) 2 Ker LT 214 .
57. Koshy v. K.S.E. Board,

AIR 1984 Ker 23 [
LNIND 1983 KER 139 ]:
1983 Arb LR 271 .
58. Jiwan Kumar Lohia v. Durgadutt Lohia

AIR 1992 SC 188 at 190 :
(1992) 1 SCC 56 . The court was disturbed by the fact that in ordering the removal
of the arbitrator the High Court used disparaging remarks against the retired judge arbitrator. Noble Engg. Works v. HP
State Electricity,
(1995) 1 Arb LR 373 (HP), no irregularity in procedure, adequate opportunities
provided to parties, parties who appeared before the Departmental arbitrator not allowed to allege bias only because of
connection with Department.
59.
(1987) 4 SCC 611 [
LNIND 1987 SC 964 ] :
AIR 1987 SC 2386 [
LNIND 1987 SC 964 ]; followed in R.C. Verma v. R.S. Thapar, (1992) 2 Arb LR, 77
Delhi; Union of India v. P.M. Imbichibi,
AIR 1998 Ker. 72 : 1997 (Supp) Arb LR 491.
60. Sachinandan Das v. State of W.B.,

(1991) 2 Arb LR 106 Cal :
AIR 1991 Cal 224 [
LNIND 1990 CAL 285 ].
61. International Airport Authority of India v. K.D. Bali,

AIR 1988 SC 1099 [
LNIND 1988 SC 198 ]:
(1988) 1 Arb LR 408 ; Secretary, Govt Transport Deptt. Madras v. Manuswami,
AIR 1988 SC 2232 [
LNIND 1988 SC 419 ]:
(1989) 1 Arb LR 50 : 1988 Supp SCC 651. One of the points made by the Supreme
Court in K.D. Bali case was that the arbitrator's refusal to record evidence after a certain date was not an expression of
bias. Yet another ruling was that the arbitrator is not bound to give reasoned order at every stage of proceeding and,
therefore, rejection of preliminary points without a speaking order was not an expression of bias; greater length of
arguments for a minor claim as compared with a major claim; shifting venue because of local disturbances, the parties
not protesting; earlier provision of hotel accommodation on the contribution of both parties, but only one making the
contribution because the other backed out, held poor tactics to establish bias; non-consideration of counter-claim
alleged at a stage when the arbitrator had not yet taken up that matter, no bias.
62. Sheo Narain v. Bala Rao, 1932 All LJ 331 :

AIR 1932 All 348 .
63. P. Radhakrishnan v. M.A. George,

(1989) 2 Arb LR 259 (Ker) . The court relied upon Secretary to Govt, Transport-
Deptt, Madras v. Munaswamy,
AIR 1988 SC 2232 [
LNIND 1988 SC 419 ]:
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Page 56 of 115
(1989) 1 Arb LR 50 : 1988 Supp SCC 651 to the effect that the apprehension must
be based upon cogent material. ShivRam v. Ram Rakha Mal,
AIR 1951 Peseu 45 , failure to make award within time does not by itself put an end
to the agreement. Mckenzies Ltd. v. State of Mysore,
AIR 1978 Kant 89 , the court should be convinced of the chanes of miscarriage of
justice.
64. Ahmed Abdulla Moosa v. Cassum Ahmed Barwadia,

AIR 1934 Bom 388 .
65. Bombay Fire Insurance Co. v. Ahmedbhay Habibhoy, ILR 34 Bom 1.
66. Prafulla Chandra v. Panchanan Karmakar,

AIR 1946 Cal 427 : 50 CWN 287.
67. James v. Attwood, (1839) 7 Scott 843.
68. P. Srirangu Patra v. State of Orissa,

AIR 1982 NOC 122 Ori : (1982) 53 Cut LT 478.
69. Metropolitan Saloon Omnibus Co. Re,

(1860) 1 LT 294 , see also
Section 630, Companies Act, 1956 .
70. East and West India Dock Co. v. Kirk and Randall,
(1887) 12 AC 738 .
71. Tabernacle Permanent Building Society v. Knight,

(1892) AC 298 at p. 301.
72. Bombay Fire Insurance Co. v. Ahmedbhoy Habibhoy, ILR 34 Bom 1.
73. Hart v. Duke,

(1862) 32 LJQB 55 : 9 Jur (NS) 119; Bombay Fire Insurance Co. v. Ahmedbhoy
Habibbhoy, ILR 34 Bom 1.
74. Bhuwalka Bros v. Fatehchand Murlidhar,

ILR (1951) 2 Cal 115 :
AIR 1952 Cal 294 .
75. Balabux v. Luxman, 57 CWN 863.
76. Amarchand Lalit Kumar v. Shree Ambica Jute MillsLtd.,

(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] :
AIR 1966 SC 1042 at p. 973 approving Dwarkadas & Co. v.
Keshardeo Bubna,
ILR (1948) 1 Cal 190 .
Navneet Krishn
Page 57 of 115
77. Amarchand Lalit Kumar v. Shree Ambica Jute

Ltd., Mills
(1963) 2 SCR 953 [
LNIND 1962 SC 215 ] :
AIR 1966 SC 1042 ; Balabux Agarwala v. Lachhminarayan Jute Mfg. Co., 51 CWN
863.
78. Bhuwalka Bros. v. Fatehchand Murlidhar, (1951) 87 CLJ 71.
79. Ithaka The,

(1939) 3 All ER 630 .
80. M.H. Tejani v. Kulsum Bai,

AIR 1967 Bom 300 [
1966 Mah LJ 1110 [
81. Kunj Lal v. Banwari Lal,

AIR 1918 Pat 83 .
82. 436 (1982).
83.
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]:
(1993) 2 Arb LR 97 :
(1993) 4 SCC 338 [
LNIND 1993 SC 391 ].
84. (1993) 2 Arb LR 97 :

(1993) 4 SCC 338 [
LNIND 1993 SC 391 ] :
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]at 1621.
85. Justice Bachawat, Law of Arbitration, 552 [2nd edn 1987] : (1993) 2 Arb LR 97 :
(1993) 4 SCC 338 [
LNIND 1993 SC 391 ] :
AIR 1994 SC 1615 [
LNIND 1993 SC 391 ]at 1620.
86. Hope (India) Ltd. v. Mining and Allied Machinery Corpn. Ltd.,
AIR 1979 Cal 39 [
LNIND 1978 CAL 128 ]: 82 CWN 1018.
87. James v. James and Bendall,

(1889) 22 QBD 669 at 674 and as quoted in Russel On Arbitration, 126 (18th
edn.).
88. Competent Constructions Co. v. State of H.P.,

(1994) 2 Arb LR 493 (HP).
Navneet Krishn
Page 58 of 115
89. Virendra Swarup v. Krishna Swarup, (1994) Supp (2) SCC 337 :
(1994) 2 Arb LR 139 (SC).
90. Clark v. Stocken, (1836) 2 Beng NC 651 : 132 ER 251; Gul Mohd. Bhat v. Fata Bibi, AIR
1966 J & K 122.
91. Nagaswamy Naik v. Rangaswamy Naik, 8 Mad HCR 46; Coley v. Decosta, ILR 17 Cal
200; Shori Lal v. Shardari Lal,
AIR 1963 Punj 165 .
92. Soorajmull Nagarmull v. Asiatic Trading Co.,

AIR 1978 Cal 239 [
LNIND 1978 CAL 38 ]at p. 245.
93. Nisha Gupta v. Dolphin Builders,

(1987) 2 Arb LR 356 (Del).
94. Union of India v. Bahadur Singh,

AIR 1963 Ass. 195 .
95. Juggilal Kamalapat v. General Fibre Dealers Ltd.,

AIR 1962 SC 1123 [
LNIND 1961 SC 387 ]: 1962 Supp (2) SCR 101.
96. Hindusthan Steel v. Appeejay,

AIR 1967 Cal 291 [
LNIND 1966 CAL 70 ]; Sonelal v. Lalta Prasad,
AIR 1955 MB 91 . The agreement itself could be superseded only if it was shown
that resort to the terms of the contract would cause prejudice and manifest injustice to one of the contracting parties,
Union of India v. P.M. Paul,
AIR 1985 Ker 206 : (1986) 1 Arb LR 66.
97. Kallipalli Subbayya v. Kallipalli Venkatadri, (1941) 2 Mad LJ 393 at p. 395. Where the
parties settled their partition matters even before an arbitrator was appointed and all that the arbitrator did was to
suggest the best way of allotting shares, it was held that the revocation of the reference did not have the effect of
nullifying the partition effected by the parties, K. Panchapagesa Ayyar v. K. Kalyansundaram Ayyar,
AIR 1957 Mad 472 [
LNIND 1956 MAD 66 ].
98. 50 CWN 287 :

AIR 1946 Cal 427 .
1. Union of India v. S. Mohinder Singh,

AIR 1979 All 343 at p. 34.
2. Gul Mohd. Bhat v. Fata Bibi, AIR 1966 J&K 122.
3. Shori Lal v. Sardari Lal,

AIR 1963 Punj 165 .
Navneet Krishn
Page 59 of 115
4. Union of India v. Bahadur Singh,

AIR 1963 Ass 195 .
5. Union of India v. Mohinder Singh

AIR 1979 All 342 .
6. Sarkar & Sarkar v. State of WB,

AIR 1992 Cal 365 [
LNIND 1991 CAL 180 ]:
(1993) 1 Arb LR 169 . The court relied on Bakhwater Singh Balkissan v. Union of
India,
AIR 1988 SC 1003 : (1988) 2 SCC 293.
7. Bhaiyalal Gharatia v. Sawai Singhai Pannalal,

AIR 1944 Nag 152 ; Union of India v. S. Mohinder Singh,
AIR 1979 All 342 .
9. Reliable Water Supply Service of India v. Union of India,

AIR 1971 SC 2083 : (1972) 4 SCC 168. Union of India v. S. Mohinder Singh,
AIR 1979 All 342 : Kalinga Otto (P.) Ltd. v. Charanji Kochhar,
ILR 1972 Cut 580 :
AIR 1972 Ori 172 [
10. Indian Rare Earths Ltd. v. Unique Builders Ltd.,

(1987) 1 Arb LR 87 (Ori).
11. Louis Dreyfus & Co. v. Arunachala, ILR 58 IA 38 :

AIR 1931 PC 289 affirming
AIR 1928 Mad 107 [
LNIND 1927 MAD 308 ]. O.N.G.C. v. Western Company of North America,
(1990) 2 Arb LR 289 :
AIR 1990 Bom 276 [
LNIND 1989 BOM 120 ], a party asked the arbitrator to make the award in the form
of a special case for the opinion of the court, but the arbitrator refused to do so, giving exhaustive reasons, the power of
the arbitrator being discretionary, the award was not vitiated; International Airports Authority v. K.D. Bali,
AIR 1988 SC 1099 [
LNIND 1988 SC 198 ]:
(1988) 2 SCC 360 [
LNIND 1988 SC 198 ]; where a party wrote to the other that he would not be able to
supply the balance of the goods and though it was a question of law whether this letter amounted to a repudiation of the
contract, the award was not set aside because no effective application for a special case had been made because the
arbitrators were never informed of the points of law upon which a special case was required to be stated. Palmer &
Hooker, Re,
(1898) 1 QB 131 followed. Gale & Co. v. Marshall & French,
(1921) 9 Lloyd's Rep. 19.
12. Bombay Fire Insurance Co. v. Ahmedbhoy Habibbhoy, ILR 34 Bom 1; Sewdatrai
Narsaria v. Tata Sons Ltd., 27 CWN 494 :
AIR 1921 Cal 576 ; Kodumal Kolumal v. Volkart Bros.,
AIR 1918 Sind 35 .
13. Adamji Lakmanji v. Louis Dreyfus & Co.,

AIR 1925 Sind 83 ; Nanalal M. Verma & Co. v. Ambalal,
Navneet Krishn
Page 60 of 115
AIR 1956 Cal 476 [

LNIND 1956 CAL 85 ]. Union of India v. Allied Construction Co.,
AIR 1982 Ori 283 : (1982) 54 Cut LT 363, refusal to state special case, no
misconduct; State of Orissa v. Prathamakhandi Labour Contract Coop. Societies Ltd.,
AIR 1983 Ori 254 ; 1983 Arb LR 101, refusal to try limitation as a preliminary issue
and state a special case, no misconduct.
14. Czarni Kow v. Roth Schmidt & Co.,

(1922) 2 KB 478 . Accordingly, where an application for a special case was
properly made and raised bona fide questions of law and the applicants were entitled to have the award in the form of a
special case, the arbitrators were guilty of legal misconduct in refusing to state a special case. Manasseh v. Jacks &
Co., (1921) 6 Lloyd's Rep. 368; Martens Re & Co. Ltd. v. Godfrey & Co., (1919) 1 Lloyd's Rep 308 where also the
award was remitted back for stating a special case; Czarni Kow Ltd. v. Roth Schmidt & Co.,
(1992) 2 KB 478 :
(1922) All ER Rep 45 (CA), setting aside because of refusal to state a special case.
15. Clive Mills Ltd. v. Sewalal Jain,

AIR 1957 Cal 692 [
LNIND 1957 CAL 135 ].
16. Mitrovitch Bros & Co. v. Hickson & Partners, 14 Lloyd's Rep. 164. See further
Zwanen Berg Ltd. v. Mc Callum & Sons, 13 Lloyd's Rep 350 ch : 14 Lloyd's Rep. 350, where the arbitrator committed a
legal wrong in not stating a special case, the court refused to interfere because there was no point of law in the case
upon which the arbitrator ought to have been asked to state a special case; but where there was a point of law, a
refusal to state a special case was held to be a legal misconduct. Potts v. Macpherson Train & Co., 27 Lloyd's Rep 445;
Refusal to do so would be the denial of a statutory right, General Rubber Co. Ltd. v. Ilessa Rubber Maatschappij, 88
Lloyd's Rep. 362 the court will not interfere where under the construction put upon the contract, the arbitrator takes the
view that no legal case is involved, Walker Bros. v. Cashmore, 24 Lloyd's Rep 32 : 26 Lloyd's Rep 100.
17. Czarnikow Ltd. v. Roth, Schmidt & Co.,

(1922) 2 KB 478 .
18. Food Corpn of India v. Carras (Hellas) Ltd., (1980) 2 Lloyd's Rep 577 QB (Com Ct).
Intermare Transport, Gmbh. v. International Copra Export Corpn. (The Rose-Isle), (1982) 2 Lloyd's Rep 589 QB (Com
Ct) refusal to state special case over demurrage and counter-claim, held procedural mishap; as for confidential reasons
stated by the arbitrator, the court laid down: The submission by the shipowners that the court was entitled to look at the
“reasons” for the award which had been published separately from the awards and contained a declaration that they did
not form part of the award would be accepted in that although there were circumstances in which the public interest
required that notwithstanding the private contract of the parties that they would treat such reasons confidentially, still
they might be disclosed to the court; on the other hand, there was a strong public interest that arbitrators, if they chose,
ought to be free to publish reasons of a confidential nature and the parties should be free, if they chose, to accept
reasons on that basis. Where the public interest in favour of disclosure to the court overrode the general public interest
that confidential reasons might be published for the interest of the parties without endangering the rule that there had to
be an end to litigation was a matter for decision in each case. If it had arisen in the present case, it would have been
held that public interest did not require the court to look at the reasons for the purpose of investigating a possible
misunderstanding between the arbitrator and the shipowners’ legal advisers.
19. Peter Lind & Co. Ltd. v. Constable Hard & Co. Ltd., (1979) 2 Lloyd's Rep 248 QB (Com
Ct).
20. Sreelal Mangulal v. J.F. Madan, ILR 52 Cal 100 :

AIR 1925 Cal 599 .
21. Knight and Tabernacle Permanent Building Society, Re

(1891) 2 QB 613 .
Navneet Krishn
Page 61 of 115

(1891) 2 QB 613 .

(1891) 2 QB 613 .
24. Union of India v. South India Corporation (Pvt.) Ltd.,

AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh WR 198.
25. Sohan Lal Ruia v. Aminchand,

AIR 1973 SC 2572 [
LNIND 1973 SC 245 ], 2577 :
(1973) 2 SCC 608 [
LNIND 1973 SC 245 ].

AIR 1973 SC 2572 [
LNIND 1973 SC 245 ], 2577 :
(1973) 2 SCC 608 [
LNIND 1973 SC 245 ].
27. British Westinghouse Electric & Manufacturing Co. Ltd. v. Underground Electric Railways
Co. of London,
(1912) AC 673 .
28. Knight & Tabernacle Permanent Building Society, Re

(1899) 2 QB 613 ; Adamji Lakmanji v. Louis Dreyfus & Co.,
AIR 1925 Sins 83 Jullundur Ex-service-men Motor Transport
Coop. Society Ltd. v. General Assurance Society, AIR 1978 P&H 336 : (1978) 2 P&H 175, arbitrator not bound to
accept opinion nor guilty of misconduct if he did not accept it and he was also not bound to give reasons.

AIR 1973 SC 2572 [
LNIND 1973 SC 245 ], 2577 :
(1973) 2 SCC 608 [
LNIND 1973 SC 245 ].
30. Adamji Lakmanji v. Louis Dreyfus & Co.,

AIR 1925 Sind 83 ; Union of India v. South India Corporation (P.) Ltd.,
AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh WR 198.
31. Pilgrim Shipping Co. v. State Trading Corporation of India, The Hadjitsakos, (1975) 1
Lloyd's Rep 356. Some of the principles were stated by Lord Denning Mr in Halfdan Greig & Co. A/S v. Sterling Coal
Etc.,
(1973) 2 All ER 1073 :
(1973) 2 WLR 904 : (1973) 1 Lloyd's Rep 296 CA : (1) whether an arbitrator or
an umpire should state a special case was a matter for his discretion and he could refuse where the issues were on
matters of fact but he should state a case when a point of law arose which was (i) real and substantial and open to
serious argument and appropriate for decision by a court of law (as distinct from a point which depends on special
expertise of the arbitrator or umpire); (ii) clear-cut and capable of being accurately stated as a point of law; (iii) of such
Navneet Krishn
Page 62 of 115
importance that its resolution was necessary for the proper determination of the case; (2) If the point of law was only as
to the construction of a particular document or if it was only as to the proper inference to be drawn from the proved
facts or if only a small sum was in dispute (provided it was not so small as not to justify the time or money being spent
on it) those were not grounds for refusing to state a case. Bremer Handelsgesell & Chaft M.B.H. v. Deutsche Conti
Handel sg ell Schaft etc., (1984) 1 Lloyd's Rep 397, special case being stated without a question of law being stated or
without a question of law being involved, no effect.
32. Nicoban Shipping Co. v. Alam Maritime Ltd., (1980) 2 Lloyd's Rep 107 QB (Com Ct).
33. Federal Commerce & Navigation Ltd. v. Suisse Atlantique Societe Di Armement SA,
(1982) 2 Lloyd's Rep 110.
34. Zim Israil Navigation Co. v. Effy Shipping Corporation, The Effy, (1972) 1 Lloyd's Rep 18.
35. Daulatram Rameshwarlal v. European Grain and Shipping Ltd., (1971) 1 Lloyd's Rep
368, 371.
36. Union of India v. South India Corporation (P.) Ltd.,

AIR 1960 AP 346 [
LNIND 1959 AP 210 ]: (1960) 1 Ardh WR 198; Rallis India Ltd. v. R.V. Manickam
Chetty & Co.,
AIR 1962 Mad 351 [
LNIND 1961 MAD 185 ]. Transamerican Shipping Corpn. v. Tradan Export Sh,
(1980) 1 Lloyd's Rep 107 QB (Com Ct), here the award was remitted to enable the arbitrator on a mixed question of law
and fact to give the court the benefit of further background facts from which the court might be able to draw inferences
as a matter of law.
37. Trade and Transport Inc. v. Lino Kaium Kaisha, The Angelia,
(1973) 2 All ER 144 .
38. Trade and Transport Inc. v. Lino Kaium Kaisha, The Angelia,
(1973) 2 All ER 144 .
39. Windsor Rural District Council v. Otterway & Try.,

(1954) 3 All ER 721 ; Clive Mills Ltd. v. Sewalal Jain,
AIR 1957 Cal 692 [
LNIND 1957 CAL 135 ].
40. Windsor Rural District Council v. Otterway & Try.,

(1954) 3 All ER 721 ; Clive Mills Ltd. v. Sewalal Jain,
AIR 1957 Cal 692 [
LNIND 1957 CAL 135 ]; Jagadishwarayya v. Tejalinga,
AIR 1950 Hyd 66 ; Ratna v. Vijarnga,
AIR 1926 Mad 762 [
LNIND 1926 MAD 7 ]; Kanhai Lal v. Narain Singh,
AIR 1915 Lah 253 .
41. Tersons Ltd. v. Stevenage Development Corporation,

(1965) 1 QB 37 :
(1963) 3 All ER 863 :
(1964) 2 WLR 225 ; Oricon Woven-Handelsgesellschaft Mbh v. Intergran N.V.,
(1967) 2 Lloyd's Rep 82, 98.
Navneet Krishn
Page 63 of 115
42. Oricon Woven-Handelsgesellschaft Mbh v. Intergran N.V., (1967) 2 Lloyd's Rep 82, 98.
43. Pagnan (R.) and Fratelli v. Corbistrial Ltd., (1969) 2 Lloyd's Rep 129, 143.
44. Rallis India v. R.V. Manickam Chetty & Co.,

AIR 1962 Mad 351 [
LNIND 1961 MAD 185 ]: 75 Mad LW 216.
45. Fidelitas Shipping Co. Ltd. v. V/O Exportchleb,

(1966) 1 QB 630 , 645 :
(1965) 2 All ER 4 :
(1965) 2 WLR 1059 . The ratio of the judgment in this case was that the court
decided (contrary to umpire's view) that shipowners’ claim for demurrage was excluded by cesser clause; that the issue
having been decided by the court it could not be re-opened before umpire, in that it was a case of “issue estoppel” and
that, therefore, the umpire was precluded from further considering question of whether charterers had waived the
cesser clause.
46. Windsor Rural District Council v. Otterway & Try,

(1954) 3 All ER 721 :
(1954) 1 WLR 1494 .
47. Strathlorne Steamship Co. Ltd. v. Andrew Weir & Co., (1934) 50 Lloyd's Rep 185, 189;
North & South Western Junction Ry. Co. v. Brentforrd Union Assessment Council,
(1888) 13 AC 592 .
48. Tsakiroglou & Co. v. Nobless Thoii

Gmbh,
(1960) 2 All ER 160 :
(1960) 2 QB 348 ; Companies De Naviera Nedelka S.A. v. Tradex International
S.A. The Tres Flores,
(1973) 3 All ER 967 affirming (1972) 2 Lloyd's Rep 384.
49. Antco Shipping Co. Ltd. v. Seabridge Shipping Co. Ltd.,

(1979) 1 WLR 1103 :
(1979) 3 All ER 186 : (1979) 2 Lloyd's Rep 267 (CA).
50. Ibid. For text of English Act, 1950,see Appendix 34.
51. Glafki Shipping Co. S.A. v. Pinios Shipping Co. (No. 1) (The Maria) (1982) 1 Lloyd's Rep
257.
52. Olympia Oil & Cake Co. v. Mac Andrew, Moreland & Co.,
(1918) 2 KB 771 ; Stockdale & Doel v. Mann & Cook, 9 Lloyd's Rep 65.
53. 12 Lloyd's Rep. 353; (CA) 13 Lloyd's Rep. 421.
54. Williams v. Manisselian Freres, (CA) 17 Lloyd's Rep. 72 : 29 Com Cases 42.
Navneet Krishn
Page 64 of 115
55. (1973) 1 Lloyd's Rep 296.
56. Granvias Oceanicas Armadora S.A. v. Jibsen Trading Co. (Kavo Peiratis (QB) (Com.
Ct.)) (1977) 2 Lloyd's Rep 344 Cols 451-453.
57. Knige v. Fines, (1661) 1 Sid 59 : 82 ER 968.
58. Pedley v. Goddard, (1796) 7 Term Rep 73 : 101 ER 861.
59. Illustration to
Section 15 of Arbitration Act of 1899.
60. Baillie v. Edinburgh Oil Gas Light Co., (1835) 3 Cl & Fin 639 : 6 ER 1577 (HL).
61. Nickels v. Hancock, (1855) 7 De GM&G 300 : 44 ER 117.
62. Olympia Oil & Cake Co. Ltd. v. Mc Andrew Co. Ltd.,
(1918) 2 KB 771 .
63. Hare v. Fleay,

(1861) 11 CB 472 : 138 ER 557; see also Manindra v.
Mahananda, 15 Cal LJ 360.
64. Lawrence v. Hodgson, (1826) 1 Y&J 16 : 148 ER 568.
65. Rainforth v. Hamer, (1855) 25 LT (OS) 247.
66. Renusagar Power Co. v. General Electric Co.,

(1991) 1 Arb LR 274 :
AIR 1991 SC 351 : 1991 Supp (1) SCC 155.
67. Sohan Lal Gupta v. Asha Devi Gupta, :

(2003) 3 Arb LR 141 :
AIR 2004 SC 856 [
LNIND 2003 SC 730 ]:
(2003) 7 SCC 492 [
LNIND 2003 SC 730 ] :
(2003) 3 RAJ 252 .
68. Ram Bharosey v. Peary Lal,

AIR 1957 All 265 [
LNIND 1956 ALL 167 ]: 1957 All WR 177; Ramkrishnamma v. Vattikunda
Lakshmihbayamma,
AIR 1958 AP 497 ; Anandi Mal v. Chand, ILR 27 All 459. In K.C. Bhatia v. Urban
Improvements Co. P. Ltd.,
(1989) 2 Arb LR 308 (Del), the arbitrator made his award on Aug 6, 1987 and
notified the parties the same day demanding his costs. He purchased stamps on Aug 22, 1987 and retyped the award
bearing date of Aug 6. It was held that he became functus officio on Aug 6 and had no power to get the award retyped.
The court followed Rikhabdass v. Ballabhdas,
Navneet Krishn
Page 65 of 115
AIR 1962 SC 551 [

LNIND 1961 SC 356 ]: 1962 Supp (1) SCR 475. The court cited
Orden v. Palmer, (1870) 6 Ch A 22 to the effect that when the arbitrator had signed a document for his award, he was
functus officio and could not of his own authority remedy any mistake. The court distinguished Johri
Mal Gupta v. M.C.D., suit No. 330 A/74 decided on April 9, 1979, where the original award was treated as a draft and
was ordered to be retyped on receipt of stamp paper. The court did not follow R. Dasratha Rao v. K.
Ramaswamy Iyengar,
AIR 1956 Mad 134 [
LNIND 1955 MAD 168 ]because that was supposed to be overruled by
Rikhabdas decision.
69. Parashramka Commercial Co. v. Union of India,

(1970) 2 SCR 136 [
LNIND 1969 SC 300 ] :
AIR 1970 SC 1654 [
LNIND 1969 SC 300 ]; Ram Bharosey v. Peary Lal,
AIR 1957 All 265 [
LNIND 1956 ALL 167 ].

(1970) 2 SCR 136 [
LNIND 1969 SC 300 ] :
AIR 1970 SC 1654 [
LNIND 1969 SC 300 ]; Frick India Ltd. v. Executive Engineer, Project PH Div.,
AIR 1975 PH 19 : 76 Punj LR 312. Lachman Das v. Veer Finance Co. Ltd.,
AIR 1983 Del 397 [
LNIND 1982 DEL 336 ]:
(1983) 23 DLT 231 [
LNIND 1982 DEL 336 ] :
1983 RLR 109 .
71. Khaja Moinuddin v. Uppulu Veerajah,

AIR 1971 AP 318 [
LNIND 1970 AP 34 ].

AIR 1970 SC 1654 [
LNIND 1969 SC 300 ]para 5 :
(1970) 2 SCR 136 [
LNIND 1969 SC 300 ] :
(1969) 2 SCC 694 [
LNIND 1969 SC 300 ].
73. Seth Sambhu Nath v. Surja Devi,

AIR 1961 All 180 [
LNIND 1959 ALL 146 ].
74. Bollaram George v. Kadpak Lingiah,

AIR 1961 AP 457 [
LNIND 1960 AP 180 ]: 1961 Ardh LT 622.
75. District Co-operative Development Federation v. Ram Sumujh Tewari,

AIR 1973 All 476 . Nafees Begam v. Hikmatullah Md Safi,
AIR 1984 Bom 62 : 1983 Arb LR 357, relying upon Ramulu v. N. Appalaswami,
AIR 1987 AP 11 and Parashramka Commercial Co. Ltd. v. Union of India,
AIR 1970 SC 1854 : (1969) 2 SCC 694.
Navneet Krishn
Page 66 of 115
76. Seth Ramrihpal Surya v. Ajmer Traders,

ILR (1962) Raj 820 :
AIR 1963 Raj 87 [
LNIND 1962 RAJ 45 ]. Where subsequently to partners’ signatures on the award, a
notice was given to them, it was held that time ran from the date of notice, Chhotu Khan v. Jeewan Khan,
AIR 1984 Raj 110 : 1984 Paj LW 190.
77. Chouthmal Jivrajjee Poddar v. Ram Chandra Jivrajjee Poddar,

AIR 1955 Nag 126 . In an English case the court said that the submission that time
should be calculated from the date of receipt of the copies of the award would be rejected in that it had been accepted
as good law for 140 years that time ran from the date upon which the award was made and published to the parties and
publication to the parties was completed on notice. Bulk Transport Corpn. v. Sossy Steamship Co. Ltd., (1979) 2
Lloyd's Rep 289 QB (Com Ct) ; Bulk Transport Corpn. v. Ifled Shipping Corpn., (1979) 2 Lloyd's Rep 289 QB (Com Ct).
78. Roberts v. Harrison,

ILR (1881) 7 Cal 333 ; John B. Peas v. Soomar,
AIR 1943 Sind 33 ; Dwarka Das v. Peary Lal,
AIR 1949 All 234 .
79. Champalal v. Samrath Bai,

(1960) 2 SCR 810 [
LNIND 1960 SC 16 ] :
AIR 1960 SC 629 [
LNIND 1960 SC 16 ]at p 631 para 4; State of Kerala v. T.A. Thomas,
AIR 1973 Ker 263 : Muhammad Hassen v. Mohd. Anwar Ahmed,
AIR 1968 Pat 82 ; Makhan Lal Lodh v. Union of India,
AIR 1976 Gau 65 ; Balkishan Gulzari Lal v. Panna Lal,
AIR 1973 Del 108 [
LNIND 1971 DEL 329 ]; Jayantilal Jamnadas v. Chhaganlal Nathoobhai,
AIR 1945 Bom 417 ; Mohd. Yusuf v. Mohd Hussain,
AIR 1964 Mad 1 [
LNIND 1963 MAD 60 ](FB); Dwarka Das v. Peary Lal,
AIR 1949 All 234 ; Nathuram Giwarchand v. Baijnath Manga Khanlal,
AIR 1959 MP 422 ; Dasrathrao B. v. E. Ramaswamy Iyengar,
AIR 1956 Mad 134 [
LNIND 1955 MAD 168 ]; Gendalal Motilal v. Mathuradas Ramprassad, AIR 191 Nag
32; Laxmi Prasad v. Gobardhan Das, AIR 1948 pat 171; O. Mohammad Yusuf Levai Saheb v. S. Hajee Mohammad
Hussain Rowther,
ILR (1963) Mad 922 [
LNIND 1963 MAD 60 ] :
AIR 1964 Mad 1 [
LNIND 1963 MAD 60 ](FB); Tata Keshavaiah Setty v. Ramayya Setty,
AIR 1969 Mys 361 , it was immaterial that the award was produced by the umpire
[substituted under 1996 Act with presiding arbitrator] at the instance of the parties unless the parties applied to the court
for production; Raghunandan Prasad v. Aiodhia Pd,
AIR 1982 Pat 212 : 1982 BLJR 392; Babu Nazir Ahmed v. Premsukh Shyam Sukh
& Sons,
AIR 1987 MP 240 [
LNIND 1987 MP 223 ]; Union of India v. Chadha Engineering Works,
(2009) 2 Arb LR 316 , 318 (Del), award filed by arbitrator at the request of one of the
parties,
Art. 119(a) of the Limitation Act, 1963 held applicable distinguishing Chowdhury and
Gulzar Singh v. Frick India Ltd.,
AIR 1979 Del 97 [
LNIND 1978 DEL 120 ].
80. Puppala Ramulu v. Nagidi Angindi Appalaswami,

AIR 1957 AP 11 ; Rahmatulla v. Vidya Bhusan,
AIR 1963 All 602 [
LNIND 1962 ALL 85 ]. Once the award was already filed in the court, limitation was
Navneet Krishn
Page 67 of 115
no longer applicable, Ram Lakhan Mahto v. Mukhdeo Mahto,

AIR 1982 Pat 19 : 1982 BLJR 30.
81. District Co-operative Development Federation v. Ram Samujh Tewari,

AIR 1973 All 476 at p 479.
82. Durga Prasad Saraogi v. Ocean Accident and Guarantee Corporation, Appeal No. 5 of
1959 decided on 10-5-1960 (Calcutta High Court). Moti Ram v. Mangal Singh,
ILR (1971) 2 Del 451 [
LNIND 1971 DEL 230 ], award filed after seven years not barred.
83. Radha Kishan v. Madhu Krishna,

AIR 1952 All 856 [
LNIND 1952 ALL 117 ].
84. Jai Kishan v. Ram Lal Gupta,

AIR 1944 Lah 398 ; Puppala Ramulu v. Nagidi Angidi Appalaswami,
AIR 1957 AP 11 . L Ganga Ram v. L. Radha Kishan,
AIR 1955 Punj 145 .
85. Roberts v. Harrison, ILR 7 Cal 333; Hoora v. Abdul Karim,

AIR 1970 Raj 22 . Where the award was filed at the instance of a party,
Article 119(a) of the Limitation Act, 1963 applied, Government of Kerala v. V.J.
Chacko,
(1995) 2 Arb LR 50 (Ker).
86. Balkrishna Gulzari Lal v. Panna Lal,

AIR 1973 Del 108 [
LNIND 1971 DEL 329 ]:
(1972) 2 Punj LR 112 (Del). J.B. Enterprises v. State of Kerala,
(1990) 1 Arb LR 30 :
AIR 1990 Ker 65 [
LNIND 1989 KER 380 ]what Art 119(a) contemplated was the period of limitation for
an application to be filed in court by any of the parties to compel the arbitrator to file the award in the court,
Parassramka Commercial Co. Ltd. v. Union of India,
AIR 1970 SC 1654 [
LNIND 1969 SC 300 ]:
(1969) 2 SCC 694 [
LNIND 1969 SC 300 ]. Gurbax Singh v. Punjab Mandi Board,
(2004) 1 RAJ 20 :
AIR 2004 SC 1269 [
LNIND 2003 SC 1117 ]:
(2004) 1 Arb LR 73 , to the same effect; Municipal Committee, Nawanshahr v.
Stylish Sanitary Traders, 2006 (Suppl) Arb LR 160, 161 :
2007 (5) RAJ 344 (P&H), notice of award sent on 23.12.1985, application for
making award rule of court filed on 18.11.2006, held time barred being beyond 30 days.
87. Bankey Lal v. Chhotey Mian,

AIR 1931 All 453 : ILR 53 All 672; Abdul Samad v. Union of India,
AIR 1957 Pat 447 .
88. Dwarka Das v. Peary Lal,

AIR 1949 All 234 .
Navneet Krishn
Page 68 of 115
89. Patel Motibhai Naranbhai v. Dinubhai Motibhai Patel,

AIR 1996 SC 997 [
LNIND 1996 SC 57 ]:
(1996) 2 SCC 585 [
LNIND 1996 SC 57 ] followed in North India Light Weight Steels
Pvt. Ltd. v. Hindustan Insecticides Ltd.,
(2006) 3 Arb LR 589 , 594 :
(2006) 3 RAJ 612 (Del); Kailash Nath Gupta v. Brij Mohan, 2007 (4) All LJ (NOC)
553, award made after 16 years not made Rule of Court, such award was also noted to be a mock award and not
intended to be acted upon.
90. Kirpal Singh Khurana v. Union of India,

(1993) 2 Arb LR 371 and 498 (Del).
91. Urmil Malik (Smt) v. National Savings Orgn.,

(1991) 2 Arb LR 11 Del : (1991) 2 DL 306.
92. Jagdish Chandra Nargotra v. Munshi Ram,

(1991) 2 Arb LR 54 (J&K).
93. Tarapade Dey v. Distt. Registrar,

AIR 1987 Cal 107 [
LNIND 1986 CAL 212 ]:
(1987) 1 Arb LR 236 .
94. Nemi Chand Sowcar v. Kesarimull Sowcar,

AIR 1929 Mad 31 [
LNIND 1928 MAD 240 ]. Non-signing was a curable defect. The time could be
extended for the purpose, State of West Bengal v. Sree Sree Ma Engg.,
AIR 1987 SC 2229 [
LNIND 1987 SC 636 ]:
(1987) 2 Arb LR 194 :
(1987) 4 SCC 452 [
LNIND 1987 SC 636 ].
95. The Act did not contemplate an oral award, Satya Pal v. Ved Prakash,
AIR 1980 All 268 . Where the court directed the arbitrator to file his award within 30
days and he did keep the date in sending the award to the court by registered post, the time taken by the post office
was excluded, Durga Construction v. State of A.P.,
(1994) 2 Arb LR 88 (AP). Where the party contended that there was no arbitration
agreement and even then an award was filed the Supreme Court reduced the rate of interest to simple 16.5% and 18%
for period after the decree till payment, Rajasthan SEB v. Narmada Industries, 1994 Supp (3) SCC 458 :
(1995) 1 Arb LR 306 (SC).
1. Kumbha Mawaji v. Dominion of India,

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]:
1953 SCR 878 [
LNIND 1953 SC 50 ]. An arbitrator had not to file an application for the purpose,
Industrial Development Corpn. of Orissa Ltd. v. Jajodia Overseas P. Ltd.,
AIR 1979 Ori 1 [
2. Hindustan Construction Co. v. Union of India,

AIR 1967 SC 526 [
LNIND 1966 SC 255 ]:
Navneet Krishn
Page 69 of 115
(1967) 1 SCR 843 [

LNIND 1966 SC 255 ].

AIR 1967 AP 457 . Vikram Construction Co. v. Union of India,
(1986) 2 Arb LR 260 (Del), filing of an attested copy was held to be not sufficient.
4. Benabu & Co. v. Produce Brokers Co., 7 Lloyd's Rep. 45; (CA) 8 Lloyd's Rep. 111.
5. Girdhar Prasad v. Ambica Prasad Thakur,

AIR 1969 Pat 218 .
6. Gangaram Chhapolia & Co. v. Bhagirathi Pradhan,

(1989) 2 Arb LR 26 (Ori); Janki Rice Mills v. Dwarika Prasad Asharfi Lal, 1964 All
CJ 724.
7. State of Kerala v. V.P. Muralidharan Nair,

(1991) 1 Arb LR 307 :
AIR 1991 Ker 89 . The court noted Pravakar Baral v. Lakshmidhar Naik,
AIR 1987 Ori 100 [
LNIND 1986 ORI 176 ]:
(1987) 1 Arb LR 331 , arbitrator not entitled to rewrite his award on a stamped paper
after becoming functus officio.
8. AP State Trading Corporation v. SG Sambandan & Co., 2006 (Suppl) Arb LR 220, 229 :
(2006) 2 RAJ 320 :
(2006) 2 Andh LT 139 (AP-DB), the entire record, including the award, should be
made available to the court.
9. Narsingh Chumder Dwan v. Nuffar Chandra Dutta,

(1890) ILR 17 Cal 832, 839; Engineering Construction Corpn. Ltd. v. Madras Port
Trust,
AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ].
10. 1. See for instance B.K. Parida & Bros v. Utkal Weavers Co-op
Spinning Mills Ltd., 2007 (Suppl) Arb LR 57, 58 :
(2009) 1 RAJ 138 (SC).
11. Union of India v. Khemchand Raj Kumar,

ILR (1973) 1 Cal 529 ; Ramtaran Das v. Adhar Chandra Das,
AIR 1953 Cal 646 [
12. Maharaja Joymangal Singh v. Mohan Ram Marwari, (1869) 8 Beng LR 319, 323, 419 : 12
WR 397.
13. Natha Subrahmanyam v. Menta Subramaiah & Sons,

AIR 1959 AP 199 [
LNIND 1958 AP 38 ]at p. 200.
Navneet Krishn
Page 70 of 115
14. Amir Begum v. Badruddin,

AIR 1914 PC 105 : ILR 36 All 336 (PC).
15. Sampat v. Kissan,

AIR 1929 Nag 264 .
16. Makhan Lal Kodh v. Union of India,

AIR 1976 Gau 85 .
17. Shivlal Prasad v. Union of India,

AIR 1975 MP 40 : 1974 MPLJ 795. See however — Union of India
v. Surinder Kumar Khosla & Co.,
(2008) 152 DLT 782 , no power to issue a notice where the depositions and
documents filed in arbitration proceedings which are requirements of S. 14(2) are not lodged with the Court.
18. Board of Trustees, Paradeep Port Trust v. Badio Foundation Engg.,

AIR 1978 Ori 60 : 45 Cut LT 106.
19. Mafracht v. Parnes Shipping Co., (1986) 2 Lloyd's Rep 405 QB (Com Ct). Another
decision showing no misconduct or procedural mishap, Overseas Fortune Shipping Pvt. Ltd. v. Great Eastern Shipping
Co. Ltd., (1987) 1 Lloyd's Rep 270 QB (Com Ct.).

AIR 1945 Nag 117 at p. 119; Gendalal Motilal v. Mathuradas Ramprasad,
AIR 1951 Nag 32 . See AP State Trading Corporation v. SG
Sambandan & Co., 2006 (Suppl) Arb LR 220, 229 :
(2006) 2 RAJ 320 :
(2006) 2 Andh LT 139 (DB) (AP)(DB), the manner in which the award came before
the court is not very material.

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 316 para 8 :
1953 SCR 878 [
LNIND 1953 SC 50 ].
22. Rahmatullah v. Vidya Bhusan,

AIR 1963 All 602 [
LNIND 1962 ALL 85 ]: 1963 All LJ 147. Ram Lakhan Mahto v. Mukhdeo Mahto,
AIR 1982 Pat 19 : 1982 BLJR 30, the arbitrator handed over the award to one of
the parties, the party was deemed to have the implied authority of the arbitrator to file it. Om Prakash v. Dev Raj,
(1996) 2 Arb LR 177 (P&H), where the original award was lost, filing of photo copy
in evidence was held to be not illegal.
23. Basappa Veerappa Karni v. Chanabasappa Shidappa Angadi,

AIR 1960 Mys 190 .
24. Union of India v. Chadha Engineering Works,

(2009) 2 Arb LR 316 , 320 (Del).
Navneet Krishn
Page 71 of 115

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 315 para 5.
26. Frick India Ltd v. Executive Engineer PH Div.,, AIR 1975 P&H 39, 44.
27. Kanhaiy Lal Dubey v. Awinash Talwar,

AIR 1972 All 237 : 1972 All LJ 92.

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]at p. 316 :
1953 SCR 878 [
LNIND 1953 SC 50 ] ; Banarasi Das v. Om Prakash,
AIR 1957 Punj 301 ; Shriram Harcharandas v. Cotton Seed Forward Managing
Association Ltd.,
AIR 1954 Nag 236 .
29. Rahmatullah v. Vidya Bhusan,

AIR 1953 All 602 ; Ram Lakhan Mahato v. Mukhaes Mahato,Arbitration Journal, Vol
II pt III 653.
30.
AIR 1993 SC 2629 [
LNIND 1993 SC 490 ]:
(1993) 2 Arb LR 266 .
31. Food Corporation of India v. E Kuttappan,

AIR 1993 SC 2629 [
LNIND 1993 SC 490 ]:
(1993) 2 Arb LR 266 distinguished on this point in
Oil and Natural Gas Corporation Limited v. Nippon Steel Corporation Limited,
(2006) 4 Arb LR 171 , 190 :
AIR 2007 SC 327 [
LNIND 2006 SC 924 ]:
(2007) 1 RAJ 166 :
(2007) 2 SCC 382 [
LNIND 2006 SC 924 ], there is a difference between “knowledge of award” and
“notice of filing”, and only the latter results in initiating the limitation period.
32. Following Kumbha Mawji v. Dominion of India,

AIR 1953 SC 313 [
LNIND 1953 SC 50 ]:
1953 SCR 878 [
LNIND 1953 SC 50 ].
33. Anandi Lal Poddar v. Keshavdeo Poddar,

AIR 1949 Cal 549 ; Federal Republic of Germany v. S. Dey & Association,
AIR 1976 Cal 290 at p. 297; Ebrahim Kassam v. Northern India Oil Industries,
AIR 1951 Cal 230 ; R.K. Misra v. Kundanlal Sahai,
AIR 1949 Nag 349 ; Hoora v. Abdul Karim,
AIR 1970 Raj 22 ; Khatiza Beg Deo v. I.B. Abowath,
AIR 1927 Raj 197 .
Navneet Krishn
Page 72 of 115
34. R.K. Misra v. Kundanlal Shahai,

AIR 1949 Nag 349 .
35. (Sm) Hoora v. Abdul Karim,

AIR 1970 Raj 22 ; Federal Republic of Germany v. S. Dey & Association,
AIR 1976 Cal 290 , 297. It being a ministerial act, an award made by more than one
arbitrators could be filed or could cause to be filed by any of them, Shah Hansraj Veljee v. Shah Maganlal Veljee,
AIR 1980 Bom 237 [
1979 Mah LJ 530 [
LNIND 1979 BOM 20 ]; Central Warehousing Corpn. v. B.M. Lal Chowdhry,
(1984) Arb LR 111 (Cal), actual filing could take place at any time after intimation to
the court.
36. Ram Narain Rai v. Lalji Rai,

AIR 1929 Pat 178 .

AIR 1953 SC 313 [
LNIND 1953 SC 50 ], 316 para 7 :
1953 SCR 878 [
LNIND 1953 SC 50 ]Ibid.
38. Kumbha Mawji v. Dominion ofIndia,

AIR 1953 SC 313 [
LNIND 1953 SC 50 ], 316 para 7 :
1953 SCR 878 [
LNIND 1953 SC 50 ], at pp. 314, 418; Volkart Bros. v. Acharajram Sahi,
AIR 1931 Sind 160 : 34 IC 1182.
39. Panchanan Dey v. Union of

India, 63 CWN 382;
AIR 1959 Cal 80 . Enkay Construction Co. v. D.D.A.,
(1987) 2 Arb LR 86 (Del), the court had power in such a case to make an order for
filing of award under
S. 151 CPC (inherent powers).
40. Walaiti Ram Gupta v. Union of India,

(1995) 1 Arb LR 338 :
(1995) 32 DRJ 674 (Del).
41. R.V. National Joint Council for the Craft of Dental Technicians (Disputes Committee),
(1953) 1 QB 704 ,
(1953) All ER 327 , Balkishen Gulzari Lal v. Pannalal Sud,
AIR 1973 Del 108 [
LNIND 1971 DEL 329 ].
42. Balwant Singh v. Pratap Singh Jwala

Singh, AIR 1968 P&H 265 :
ILR (1968) 1 Punj 574 ; Mohd. Yusuf v. Mohd. Hussain,
AIR 1964 Mad 1 [
LNIND 1963 MAD 60 ]:
ILR (1963) Mad 927 : (1963) 2 Mad LJ 287 (FB).
43. Parasramka Commercial Co. v. Union of India,

AIR 1970 SC 1644 ; (1969) 2 SCC 136; Union of India v. Hanuman Prasad &
Brothers,
Navneet Krishn
Page 73 of 115
(2000) 3 RAJ 86 :
(2001) 8 SCC 476 :
(2000) 8 JT 330 :
(2001) 8 SLT 523 (1) :
(2000) 7 Supreme 69 :
(2000) 2 Arb LR 667 (SC), delay of two months 22 days was held to be excusable
under S.
Section 5 of the Limitation Act, 1963 .
44. Chief Enginner, Southern Army v. Ltd. Col. Hari Kirat Singh,
AIR 1960 Mys 205 .

ILR 1945 Nag 323 :
AIR 1945 Nag 117 .

AIR 1953 SC 313 [
LNIND 1953 SC 50 ], 316, Para 7 :
1953 SCR 878 [
LNIND 1953 SC 50 ].
47. Promode Kumar Mittal v. B C Mittal,

AIR 1977 Cal 340 [
48. Parasramka Commercial Co. v. Union India, of

AIR 1970 SC 1654 [
LNIND 1969 SC 300 ]:
(1969) 2 SCC 136 ; Lalchand Dipchand v. Gulba Laxman, 28 Bom LR 511 :
AIR 1926 Bom 312 ; Ramkrishnomma v. Vottikunda Lakshmibayamma,
AIR 1958 AP 497 : Muhammad Hussain v. Lallu, (1917) 15 OC 294 : 17 IC 430;
Ram Kumar v. Khushaichand Ganeshdas,
AIR 1928 Nag 166 ; Rangaswami v. Muthusami, (1887) 11 Mad 144.
49. Thakur Singh v. Kandhai,

AIR 1935 All 852 : 1935 All LJ 986.
50. Rangaswami v. Muthusami, (1887), ILR 11 Mad 144; Chaturbhuj Das v. Ganesh Das
Ram,
(1898) ILR 20 All 474; Srikishen Rochumal v. Relumal Partomal,
AIR 1916 Sind 79 ; Ranjit Chandra Talukdar v. Bissay Ram,
AIR 1926 Cal 1018 ; Mahi Ram v. Ram Asray,
AIR 1921 Oudh 148 (1); Punnoo Ram v. Nebh Raj,
AIR 1930 Lah 228 ; Gurudutt Mal v. Basantamal Pannalal,
AIR 1925 Lah 619 : Dinokott Ramayya v. Papayya, (1943) 2 Mad LJ 152. Susama
Acharya v. Baikunthanth,
AIR 1987 Ori. 180 [
LNIND 1986 ORI 193 ].
51. R.D. Gupta v. Union of India,

(1971) 3 SCC 817 . J.N. Construction v. NDMC,
(1994) 1 Arb LR 197 (Del) objections filed within time.
Navneet Krishn
Page 74 of 115
52. Dewan Singh v. Champat Singh,

AIR 1970 SC 697 : 1970 2 SCR 903; Chouthmal Jivrajjee Poddar v. Ramchandra
Jivrajjee Poddar,
AIR 1955 Nag 124 at p. 131; Misri Lal v. Bhagwati Prasad,
AIR 1955 All 573 [
LNIND 1955 ALL 62 ]. C.C. Subbaraya Setty v. C.V. Anantha Narayana Setty,
AIR 1996 Kant 41 [
LNIND 1995 KANT 297 ]:
(1995) 24 Arb LR 382 (Kant), no material to show that the applicant got the
imformation about the filing of the award, hence 30 days would run from the date on which he was actually served with
notice. The court also held that new plea for setting aside on the ground of misconduct could not be filed after the
expiry of the period for filing objections to the award. The court followed Pavi Electrical Industries v.
B.D.K. Alloy P. Ltd.,
ILR 1993 Kant 3412 . Where the court said that what mattered was not the form of
notice or mode of service, but this that service should be by the court. Secretary to Govt. of Karnataka v. V. Harish
Babu
AIR 1996 SC 3421 [
LNIND 1996 SC 1024 ]:
(1996) 5 SCC 400 [
LNIND 1996 SC 1024 ], notice mandatory. United Transport Company. v. Khatoon
Begum,
(2007) 3 Arb LR 274 :
AIR 2007 Chhat 77 : (2007) 3 RAJ 634 : 2007 Cg LJ 272, limitation to start running
from the date of notice by the court on the parties.
53. Rangaswami v. Muthusami,

(1887) ILR 11 Mad 144; Chaturbhuj Das v. Ganesh Ram, ILR 20 All 474; Punnoo
Ram v. Nebh Raj,
AIR 1930 Lah 228 ; Ranjit Chandra Talukdar v. Bissay Ram,
AIR 1926 Cal 1018 ; Gurudutta Mall v. Basantamal Pannalal,
AIR 1925 Lah 619 ; Ganeshmal v. Kesoram Cotton Mills Ltd.,
AIR 1952 Cal 10 [
LNIND 1951 CAL 1 ].
54. Kewal Singh Akbar v. Baldeo Singh Akbar,

AIR 1957 Nag 57 ; Bollaram George v. Kadpak Lingiah,
AIR 1961 AP 457 [
LNIND 1960 AP 180 ]. Chhabila Singh v. Sumitra Devi,
(1986) 2 Arb LR 277 (Pat), the opposite party was aware of the date of filing and
also of the adjournment of the case from time to time, the plea of “no notice of award” could not succeed. Secretary to
Government of Karnataka v. V. Harishbabu
(1996) 2 Arb LR 276 :
AIR 1996 SC 3421 [
LNIND 1996 SC 1024 ], Government pleader had taken notice from the arbitrator,
notice mandatory.
55. Pasori Associated Construction Co. v. Union of India,

AIR 1975 Gau 17 . Notice given by any person other than the court would not
satisfy the requirement notice by of the court, Sree Sree Ma Engineering & Co. v. State of W.B.,
AIR 1986 Cal 370 [
LNIND 1985 CAL 143 ]:
(1987) 1 Arb LR 236 , the court said that the starting point of limitation was the date
of service of notice issued by the court under S.14(2) (1940 Act). Punjab & Haryana Marketing Federation v. Hamira
Rice Trading Co.,
(2006) 2 Arb LR 234 , 235 (P&H), proceedings between parties in which arbitrator
also party, S. 14(2) satisfied where arbitrator produced the award and other records before the trial court, limitation to
be construed from this date.
56. Bhola Nath Mullick v. Mahadeo Mullick,

AIR 1952 Cal 226 [
LNIND 1951 CAL 230 ]; Union of India v. Radhanath Nandi,
Navneet Krishn
Page 75 of 115
AIR 1961 Ori 143 : ILR (1961) Cut 278; State of U.P. v. Texmaco Ltd.,
2008 (1) Arb LR 605 (All)(DB).
57. Indian Royon Corpn. Ltd. v. Rauna & Co. P.Ltd.,

AIR 1988 SC 2054 [
LNIND 1988 SC 362 ]:
(1988) 2 Arb LR 441 . The court relied on Nilkantha Somanna Ninga Shetti v.
Kashinath Somanna Singa Shetti.
AIR 1962 SC 666 [
LNIND 1961 SC 219 ]:
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] and Dewan Singh v. Champat Singh,
AIR 1970 SC 967 [
LNIND 1969 SC 581 ]:
(1970) 2 SCR 903 [
LNIND 1969 SC 581 ].

AIR 1961 AP 457 [
LNIND 1960 AP 180 ]: 1961 Ardh LT 622.
59. Chaturbhuj Sohanlal v. Clive Mills Ltd.,

AIR 1964 Cal 241 [
LNIND 1963 CAL 138 ]; Kewal Singh Akbar v. Baldeo Singh Akbar,
AIR 1957 Nag 57 .
60. State of Bihar v. Leason & Contracts,

AIR 1983 Pat 101 : 1983 Pat LJR 98. Shri Raj Eshwar v. Aarohi Builders P. Ltd.,
(1996) 2 Arb LR 202 (Del), oral notice. Satish Chandra Goel v. Suresh Chandra
Goel (1996), AD (Del) 387, advocate who appeared was not properly authorised, hence no notice.

AIR 1961 AP 457 [
LNIND 1960 AP 180 ]: 1961 Ardh LT 622; Union of India v. Surinder Kumar Khosla
& Co.,
(2008) 152 DLT 782 , no power to issue a notice where the depositions and
documents filed in arbitration proceedings which are requirements of S. 14(2) are not lodged with the Court.
62. Maniram Bibi v. Asareddi, 43 CWN 824. To give start to the period of limitation notice had
to be by the court and not party, Union of India v. Union Builders,
(1985) Arb LR 627 (Cal).
63. State of West Bengal v. Mondring Bros,

AIR 1984 Cal 14 [
LNIND 1983 CAL 30 ]. The party received letter informing him of the filing, limitation
began from that day. The award did not become infructuous or futile in such a case, hence use of inherent power,
Virendra Singh v. D.D.A.,
AIR 1988 Del 189 [
LNIND 1987 DEL 364 ]:
(1988) 2 Arb LR 252 , dissenting from Hoora v. Abdul Karim,
AIR 1970 Raj 22 and Amod Kumar Verma v. Hari Pd Burman,
AIR 1958 All 720 and distinguishing Kumbha Mawji v. Dominion
of India,
AIR 1988 Del 189 [
LNIND 1987 DEL 364 ].
Navneet Krishn
Page 76 of 115
64.
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] :
AIR 1962 SC 666 [
LNIND 1961 SC 219 ].
65. The court cited the meaning of the expression ‘notice’ as given in the Oxford Concise Dictionary.
66.
(1988) 2 Arb LR 441 :
AIR 1988 SC 2054 [
LNIND 1988 SC 362 ]:
(1988) 4 SCC 31 [
LNIND 1988 SC 362 ].
67. Shrinath Brothers v. Century Spinning and Mfg. Co. Ltd.,

AIR 1966 Bom 488 .

(1949) All 631 . Service received by wife was held to be good service of notice,
Simon Anthony v. Raj Kumar, (1990) 1 Aus LR 134 (Del).
69. Chandrabhan Belotia v. Ganapatrai & Sons,

AIR 1944 Cal 127 at p. 129.
70. Chandrabhan Belotia v. Ganapatrai & Sons,

AIR 1944 Cal 127 at p. 129.

AIR 1949 All 234 at p. 235.
72. Motor & General Finance Ltd. v. C.N. Gangadaran,

(1991) 1 Arb LR 237 (Del).
73. Inder Khanna & Sons v. Union of India,

(1991) 1 Arb LR 411 (Del); Popular Electric Works v. Union of India,
(1991) 1 Arb LR 413 (Del), notice not invalid because it did not carry a copy of the
plaint there being no plaint in such cases, award made rule of the court with 12% future interest.
74. Nitya Ranjan Chatterjee v. Chitta Ranjan Chatterjee,

(1990) 2 Arb LR 280 :
AIR 1990 Cal 311 [
75. Hans Construction Company v. Delhi Development Authority,

(2006) 1 Arb LR 151 , 154 :
(2006) 1 RAJ 225 (Del).
76. Shiv Kumar Agarwala v. Jai Prakash Agarwala,

(2005) 3 Arb LR 201 , 205 :
Navneet Krishn
Page 77 of 115
AIR 2005 Pat 153 : (2005) 3 RAJ 580 :

(2005) 2 Pat LJR 416 following Nilkantha
Sidramappa Ningashetti v. Kasinath Somanna Ningashetti,
AIR 1962 SC 666 [
LNIND 1961 SC 219 ]:
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ].
77. Nilkantha v. Kashinath,

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 para 8 :
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] ; Saroj Bala Bose v. Jatindra Nath Bose,
AIR 1927 Cal 619 : 45 CLJ 458; Bhola Nath Roy v. Bata Krishna Roy,
AIR 1927 Pat 135 ; Gayan Singh v. Harbilas,
AIR 1930 All 711 ; Ram Bharosey v. Peary Lal,
AIR 1957 All 265 [
LNIND 1956 ALL 167 ]. Sitaram Giri v. Badri Pd. Radhey Shyam,
(1983) Arb LR 39 (All), no proof of notice was available. The court also held that 30
days were to be computed from the date on which an ex parte order was set aside; Naresh Kumar Gupta v. Nav Bharat
Tomer Group Housing Society,
(1994) 1 Arb LR 337 (Del), objections filed within time from proven date of service.

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 :
(1962) 2 SCR 551 [
LNIND 1961 SC 219 ] ; followed in Bahadur Singh v. Fuleshwar Singh,
AIR 1969 Pat 8 where the court added that service of a notice would include
informal or constructive service. Chhotelal v. Jamnadar,
AIR 1963 MP 20 [
LNIND 1962 MP 139 ]: Valchand Dipchand v. Gulba Laxman, 28 Bom LR 511 :
AIR 1926 Bom 312 . State of Orissa v. Govind Chaudhury,
AIR 1972 Ori 76 ; Devandas Kishnani v. Nanikram Kishnani,
AIR 1993 Bom 76 [
LNIND 1992 BOM 51 ], the duly authorised advocates of the petitioner had
knowledge of the filing of the original as well as modified awards, held sufficient notice. The decision of the MP High
Court in Union of India v. Pirthipal Singh & Co.,
AIR 1988 MP 191 [
LNIND 1987 MP 274 ]:
(1988) 2 Arb LR 6 which was to the effect that “if, however, inspite of such informal
information or otherwise knowledge to the party of the filing of the award, the court chooses to issue a notice to be
served upon the parties, it was the date of the service of notice which shall be the starting point of limitation,.” was held
to be in conflict with the ratio of the judgment of the Supreme Court in Indian Rayon Corpn. Ltd. v. Raunaq & Co. P.
Ltd.,
AIR 1988 SC 2054 [
LNIND 1988 SC 362 ]:
(1988) 4 SCC 31 [
LNIND 1988 SC 362 ]; Chhabila Singh v. Sumitra Devi,
(1986) 1 Arb LR 60 (Pat), notice included informal constructive notice etc., Sree
Sree Ma Engg. Co. v. State of W.B.,
(1986) 2 Arb LR 253 (Cal), time begins to run from the date of receipt of notice;
Anand Electrical Store v. State of Punjab,
(1985) Arb LR 417 (P&H), thirty days are available from that date. Union of India v.
Satyawati,
1996 (1) JT 674 :
(1996) 1 Arb LR 388 (SC) :
(1996) 7 SCC 740 [
LNIND 1996 SC 91 ], no objections filed within time. Patel Motibhai Naranbhai v.
Dinubhai Motibhai Patel,
AIR 1996 SC 997 [
LNIND 1996 SC 57 ]:
(1996) 2 SCC 585 [
LNIND 1996 SC 57 ], arbitrator filing award after six years, incomprehensible,
Navneet Krishn
Page 78 of 115
statutory remedies must be availed of without unnecessary delay followed in North India Light Weight
Steels Pvt. Ltd. v. Hindustan Insecticides Ltd.,
(2006) 3 Arb LR 589 , 594 :
(2006) 3 RAJ 612 (Del) and Kailash Nath Gupta v. Brij Mohan, (2007) 4 All LJ
(NOC) 553; General Marketing and Mfg. Co. Ltd. v. Union of India,
(1996) 1 Arb LR 585 (Del), requesting the other party to pay the amount awarded
with 10% interest is not a notice for the purposes of the section, Ratan Singh Gehlot v. Union of India,
(1995) 24 Arb LR 265 (Raj), matters of limitation National Insurance Co. v. Amal
Kanti Das,
AIR 1998 Gau 1 [
LNIND 1997 GAU 44 ]:
(1998) 1 Arb LR 249 , starting point of limitation.
79. Hari Chand v. Lachhman Das,

AIR 1948 EP 11 : 50 Punj LR 57.
80. Engineering Construction Corporation v. Madras Port Trust,

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ]. Hasan Ali Abdulalli v. Shantilal Bhaidas Marfatia,
AIR 1962 Guj 317 [
LNIND 1962 GUJ 6 ], notice received otherwise than through court not enough to
give start to the period of limitation. Oil and Natural Gas Corporation Limited v. Nippon Steel Corporation Limited,
(2006) 4 Arb LR 171 , 190 :
AIR 2007 SC 327 [
LNIND 2006 SC 924 ]:
(2007) 1 RAJ 166 :
(2007) 2 SCC 382 [
LNIND 2006 SC 924 ], letter of Prothonotary or Senior Master cannot be regarded
as an act of court over-ruling Oil and Natural Gas Corporation Limited v. Nippon Steel Corporation
Limited,
(2006) 3 Arb LR 238 :
(2006) 2 RAJ 224 (Bom)(DB); K.A Mahboob Basha v. K.A. Mohamed Ibrahim,
(2008) 1 Arb LR 286 :
(2008) 4 RAJ 88 : (2007) 4 Mad. LJ 1109 (Mad), notice sent by counsel is not
sufficient to start limitation.
81. United Builders v. Union of India,

AIR 1978 JK 85 : 1977 Kash LJ 451.

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ]; Chairman of the Board of Trustees of the Port of
Visakhapatnam Port Trust v. Gurucharan Singh,
(2004) 1 Andh LT 195 (DB) :
(2004) 1 Arb LR 319 (AP); Hans Construction Company v. Delhi Development
Authority,
(2006) 1 Arb LR 151 , 154 :
(2006) 1 RAJ 225 (Del), limitation to commence from date of notice and not from
the date the judicial file is inspected in the court.

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ]. Where notice issued on May 28, 1984 was served on
March 3, 1985, the date of service was held to be the starting point of limitation, Subhas Agarwal Agency v. Bhilwara
Synhetics,
(1990) 2 Arb LR 118 (Del).
84. Hansanalli Abdulalli Malabari v. Shantilal Bhaidas Marfstia,

AIR 1962 Guj 317 [
Navneet Krishn
Page 79 of 115
LNIND 1962 GUJ 6 ]. This should now be taken in the light of the supreme court
decision in Indian Rayon Corpn. Ltd. v. Raunaq & Co. P. Ltd.,
AIR 1988 SC 2054 [
LNIND 1988 SC 362 ]:
(1988) 4 SCC 31 [
LNIND 1988 SC 362 ] Where no notice was given to the party by the court under S.
14(2), nor copy of award was sent to the party, rejection of application for setting aside on the ground of limitation was
held to be not proper. V.V. Pushpakaran v. P.K. Sarojini,
AIR 1992 Ker 9 [
LNIND 1990 KER 254 ].

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ]; Oil and Natural Gas Corporation Limited v. Nippon Steel
Corporation Limited,
(2006) 4 Arb LR 171 , 182 :
AIR 2007 SC 327 [
LNIND 2006 SC 924 ]:
2007 (1) RAJ 166 :
(2007) 2 SCC 382 [
LNIND 2006 SC 924 ]over-ruling Oil and Natural Gas Corporation
Limited v. Nippon Steel Corporation Limited,
(2006) 3 Arb LR 238 :
(2006) 2 RAJ 224 (Bom)(DB), mere fact that a solicitor firm is on the panel of
advocates of a party does not determine its representative capacity.
86. Oil and Natural Gas Corporation Limited v. Nippon Steel Corporation Limited,
2006 (4) Arb LR 171 , 190 :
AIR 2007 SC 327 [
LNIND 2006 SC 924 ]:
(2007) 1 RAJ 166 :
(2007) 2 SCC 382 [
LNIND 2006 SC 924 ], counsel was acting as a representative of the arbitrator and
not in his capacity as counsel of the party following Ramalinga Reddy v. Superintending Engineer,
1999 (Suppl) Arb LR 440 (SC) :
(1999) 9 SCC 610 ; Deo Narain Choudhury v. Shree Narain Choudhury,
(2001) 1 Arb LR 296 (SC) :
(2000) 8 SCC 626 [
LNIND 2000 SC 1388 ] ; Bharat Coking Coal Ltd. v. L.K.Ahuja,
(2004) 1 Arb LR 652 :
(2004) 5 SCC 109 [
LNIND 2004 SC 1517 ] :
(2004) 2 RAJ 1 over-ruling Oil and Natural Gas
Corporation Limited v. Nippon Steel Corporation Limited,
(2006) 3 Arb LR 238 :
(2006) 2 RAJ 224 (Bom)(DB).
87. Oil and Natural Gas Corporation Limited v. Nippon Steel Corporation Limited,
(2006) 4 Arb LR 171 , 190 :
AIR 2007 SC 327 [
LNIND 2006 SC 924 ]:
2007 (1) RAJ 166 :
(2007) 2 SCC 382 [
LNIND 2006 SC 924 ]distinguishing Food Corporation of India v.
E Kuttappan,
AIR 1993 SC 2629 [
LNIND 1993 SC 490 ]:
(1993) 2 Arb LR 266 over-ruling Oil and Natural
Gas Corporation Limited v. Nippon Steel Corporation Limited, (2006) 3 Arb LR 238 :
(2006) 2 RAJ 224 (Bom)(DB).
Navneet Krishn
Page 80 of 115
88. Anguri Devi v. Bal Ram Ganpat Rai, AIR 1960 P&H 204.
89. Lachmandas v. Veer Finance Co.,

AIR 1983 Del 397 [
LNIND 1982 DEL 336 ]:
(1983) 23 DLT 231 [
LNIND 1982 DEL 336 ].
90. Parasramka Commercial Co. v. Union of India,

AIR 1970 SC 1654 [
LNIND 1969 SC 300 ];
1970 SCR 116 ; State of West Bengal v. A. Mondal,
AIR 1984 Cal 12 [
LNIND 1983 CAL 172 ]:
1984 Arb LR 310 .

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 para 8 :
(1962) 1 SCR 551 ; State of West Bengal v. Lalit Mohan Das,
AIR 1976 Cal 406 [

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 para 8 :
(1962) 1 SCR 551 ; Shahdad v. Mohd. Abdulla Mir,
AIR 1967 JK 120 .
93. Nikahtha v. Kashinath,

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 para 9 :
(1962) 1 SCR 551 .
94. Binod Bihari Singh v. Union of India,

AIR 1993 SC 1245 : (1993) 1 Arb LR 313 :
(1993) 1 SCC 572

AIR 1993 SC 1245 : (1993) 1 Arb LR 313 :
(1993) 1 SCC 572 Following Kumbha Mawaji v.
Dominion of India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ].

AIR 1993 SC 1245 : (1993) 1 Arb LR 313 :
Dominion of India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ].

AIR 1993 SC 1245 : (1993) 1 Arb LR 313 :
Navneet Krishn
Page 81 of 115
Dominion of India,
AIR 1953 SC 313 [
LNIND 1953 SC 50 ], p. 668; Bhola Nath Roy v. Bata Krishba Roy, AIR 1927 pat
135; Saraj Bala Bose v. Jatindra Nath Bose,
AIR 1927 Cal 619 : 45 CLJ 458.
98. Nilkanth v. Kashinath,

AIR 1962 SC 666 [
LNIND 1961 SC 219 ]at p. 668 at p. 668 :
(1962) 1 SCR 551 ; Hari Chand v. Lachman Das,
AIR 1948 EP 11 ; Kewal Singh Akbar v. Baldeo Singh Akbar,
AIR 1957 Nag 57 .
1. Bankey Lal v. Chhotey Miyan,

AIR 1931 All 453 : Abdul Samad & Sons v. Union of India,
AIR 1957 Pat 447 .
2. Dwarkadas v. Peary Lal,

(1949) All 631 .
3. Dwarkadas v. Peary Lal,

(1949) All 631 .
4. Ram Narain v. Baijnath, ILR 29 Cal 36, 38.
5. Uma Dutta Nemani v. Chandrae G. Kadam,

AIR 1947 Bom 94 .
6. Muhammad Esoof v. V.S. Subramanyam,

AIR 1957 Mys 78 ; Choteylal v. Jamnadas,
AIR 1963 MP 20 [
LNIND 1962 MP 139 ].

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ]at p. 385.
8. Sobhachand Bhutoria v. Hurry Bux Deora, 23 CWN 280: ILR 46 Cal 721 :
AIR 1919 Cal 224 : D.B. Das v. Dayalal & Sons,
AIR 1933 Rang. 38 .
9. Johurimal Jugalkishore v. Kashi Prasad Jhajharia,

(1942) 2 Cal 160 .
10. National Projects Construction Corpn. Ltd. v. B.B. Verma, (2006) 4 All LJ 236(DB),
pursuant to S.
Section 14 of the Limitation Act , time spent in bona fide pursuit of a lis before an incorrect forum is
excluded for the purposes of limitation; EE Construction Division PWD v. Swatantar Lal,
(2005) 2 Arb LR 484 , 486 :
Navneet Krishn
Page 82 of 115
(2005) 3 RAJ 186 (P&H), time spent in erroneously pursuing application for making
award rule of court before Bhatinda was excluded in determining whether subsequent application before Manas court
was time barred.

(1993) 1 Arb LR 313 :
AIR 1993 SC 1245 : (1993) 1 SCC 572.
12. At p 1251.
13. This was emphasised in G Ramegowda v. Special Land Acquisition Officer, Bangalore,
(1988) 2 SCC 142 [
LNIND 1988 SC 164 ] :
AIR 1988 SC 897 [
LNIND 1988 SC 164 ]; Banarsi Das v. Seth Kanshi Ram,
(1969) 1 SCR 316 :
AIR 1963 SC 1165 [
LNIND 1962 SC 226 ]. The Supreme Court in Collector, Land Acquisition v. Katiji,
AIR 1987 SC 1353 [
LNIND 1987 SC 899 ]:
(1987) 2 SCC 107 [
LNIND 1987 SC 899 ] also emphasised that the court should adopt a liberal
approach to do substantive justice to parties by disposing matters on merits; in Shanti Devi v. Bhan Raj,
1989 Raj LR (note 81 ) the court observed that the ruling in the above cited Katiji
case cannot be used as a magic word to be applied in all cases and in all situations. The court must be satisfied that
the applicant has a sufficient cause for not making the application within the prescribed period but should adopt a liberal
approach in examining the circumstances of the case; Nitya Ranjan Chatterjee v. Chitta Ranjan Chatterjee,
(1990) 2 Arb LR 280 :
AIR 1990 Cal 311 [
LNIND 1990 CAL 74 ], one month time allowed by the court for filing written
statement, delayed objections ruled out; Government of A.P. v. Durgaram Pd,
AIR 1984 AP 14 [
LNIND 1983 AP 116 ]: (1983) Ardh LT 172 and Executive Engineer v. Construction
India,
AIR 1982 Ori 18 [
LNIND 1981 ORI 67 ], applicability of S.
Section 5, Limitation Act, 1963 to condonation of delay;Bodhraj Sabharwal v. Shri Ram Sinha,
AIR 1994 NOC 278 (Del), delay caused by the party's failure to meet his counsel,
not condoned.
14. The plea was founded on the observation in Madras Port Trust v. Hymanshu International,
(1979) 4 SCC 176 :
AIR 1979 SC 1144 that resort to the plea of limitation by a Government or public
authority to defeat the just claim of a citizen is not fair and such practice should be deprecated.
15. No condonation was allowed where there was no sufficient cause for it within the meaning of S.
Section 5 of the Limitation Act, 1963 ;Kanishka Builders v. Union of India,
(1990) 2 Arb LR 197 (Del); procedure of working in Govt offices is irrelevant for the
purpose of considering sufficient cause within the meaning of S. 5; State of Bihar v. Dhajadhari Rai,
AIR 1985 Pat 187 ; S.K. Enterprizes v. D.D.A.,
(1994) 1 Arb LR 50 :
(1994) 53 DLT 595 (Del); Patel Kanti Bhai v. Shambubhai,
(1990) 1 Arb LR 342 :
AIR 1990 SC 1335 : (1990) 3 SCC 154.
16. State of West Bengal v. Bengal Builders,

(1989) 2 Arb LR 272 (Cal); Bhagat Construction Co. v. D.D.A.,
(1994) 1 Arb LR 296 (Del), delay condoned on sufficient cause shown by
supplementary audit.
Navneet Krishn
Page 83 of 115
17. Weis & Co., Ltd. v. Peters, Rushton & Co., Ltd., (1922) 10 LI L Rep. 312 (CA).
18. Bulk Transport Corpn. v. Sissy Steamship Co. Ltd., (1979) 2 Lloyd's Rep 289 QB (Com
Ct). Another case where extension was allowed because no prejudice would be done to the other party was Ismail v.
Polish Ocean Lines, (1977) 2 Lloyd's Rep 134 QB (Com Ct).
19. Industria De Oleos Pacaembu v. N.V. Bunge, (1982) 1 Lloyd's Rep 490 QB (Com Ct).
20. K. Prakash Rao v. Singareni Collieries Co. Ltd.,

(1995) 1 Arb LR 507 (AP).

AIR 1968 Mad 335 [
LNIND 1967 MAD 183 ].
22. Nawab Usmanali Khan v. Sagarmal,

AIR 1965 SC 1798 [
LNIND 1965 SC 61 ]:
(1965) 3 SCR 201 [
LNIND 1965 SC 61 ].
23. Hansraj Gupta v. Dehra Dum Mussoorie Electric Tramways Company, ILR 54 All 1067 :
60 IA 18 at p. 19
AIR 1933 PC 63 : Bhagwat Singh v. State of Rajasthan,
AIR 1964 SC 444 [
LNIND 1963 SC 225 ]at pp 445, 446 :
(1964) 5 SCR 1 [
LNIND 1963 SC 225 ].
24. Provash Chandra v. Ashutosh Mukherjee, ILR 56 Cal 79 :

AIR 1930 Cal 258 .
25. Rajmal Giridharilal v. Maruti Shivaram, ILR 45 Bom 329 : 22 Bom LR 1377 :
AIR 1921 Bom 389 : Ganpat Kinuset v. Vithal Bhukan,
AIR 1942 Bom 59 : Ramkrishna v. Somlingam,
AIR 1969 AP 492 : Dipchand Vakhatchand v. Madhusudan,
AIR 1957 Bom 269 [
26. Ram Chandra v. Jasoda,

AIR 1930 Oudh 89 : ILR 5 Luck 678.
27. Bhima Ram v. Bhagat Thakurdas,

AIR 1933 Pesh 18 : Hot Chand v. Kishan Chand,
AIR 1924 Sind 23 .
28. Ghulam Rasul v. Pamandas Dewandas,

AIR 1927 Sind 103 .
Navneet Krishn
Page 84 of 115
29. Rajmal v. Mahesh,

AIR 1921 Bom 389 (Schedule II
CPC ).
30. Behari Lal v. Khan Chand,

AIR 1918 Lah 83 .
31. Malhotra & Co v. Shukhdayal,

AIR 1928 Sind 169 Confirming Jai Narain
Babulal v. Narayandas,
AIR 1922 Sind 6 (case under Section 14 of the Indian
Arbitration Act , 1899);Gurbux Singh v. Sant Ram,
AIR 1929 Lah 533 (case under, Schedule II
CPC ).
32. Govind Naryan Prabhu v. Venkatesh Laxman Kamat,

AIR 1927 Bom 259 .
33. Gurbaksh Singh v. Sant Ram,

AIR 1929 Lah 533 (case under Schedule II para 20).
34. Dilu Ram v. Mukand Lal, 15 IC 57. The court has to follow the procedure prescribed by
the Act in the matter of filing of award and making it a rule of the court, Subhash Theatre v. Parvati Fitons,
(1986) 1 Arb LR 361 (MP).
35. Excomm Ltd. v. Ahmed Abdul Quasi Bamaodah, (1985) 1 Lloyd's Rep 403 (CA).
36. State of Kerala v. Joseph Anchiloss,

(1989) 2 Arb LR 176 (Ker). The court conducted a vast survey of authorities on the
extent of possible interference in reasoned and unreasoned awards and the abuses hidden behind unreasoned awards
coming up to the Supreme Court decision in Continental Construction Co. Ltd. v. State of M.P.,
AIR 1988 SC 1166 [
LNIND 1988 SC 150 ]:
(1988) 3 SCC 82 [
LNIND 1988 SC 150 ] and Food Corporation of India v. Great Eastern Shipping Co.
Ltd.,
AIR 1988 SC 1198 [
LNIND 1988 SC 192 ]:
(1988) 3 SCC 291 [
LNIND 1988 SC 192 ] as emphasising that arbitrators should be required to state
reasons. M.L. Dalmiya & Co. Ltd. v. International Airport Authority of India Ltd.,
(1994) 2 Arb LR 520 :
(1994) 31 DRJ 537 [
LNIND 1994 DEL 693 ] (Del), refusal to interfere in the interpretation of the contract
by the arbitrator, the arbitrator prescribed the date of the award as the date for converting the money into foreign
currency. Digvijay Cement Co. Ltd. v. Union of India,
(1998) 3 RAJ 358 (Del) :
(1998) 2 Arb LR 317 , no apparent error found, award enforced.
37. State of A.P. v. Chevireddi Venkat Krishna Reddy,

(1998) 1 RAJ 520 (AP).
38. Moti Mahal Theatres Ltd. v. Seth Babulal Chekkani,

AIR 1955 Punj 109 .
Navneet Krishn
Page 85 of 115
39. K.C. Mehra v. Union of India,

AIR 1960 HP 20 .
40. Hirday Narain Tandon v. Kashi Pd. Tandon,

AIR 1983 All 187 .
41. Roshan Lal Kuthiala v. Radha Krishna Kuthiala,

AIR 1972 HP 137 , the order did not have the effect of setting aside, but only this
that the award was not filed since the filing was by the arbitrator without the request of the parties, the latter could begin
all over again under Sections 14 and 17, 1940 Act.
42. Bharatiya Trading Co. v. Controller of Stores, AIR 1974 P&H 193 :
1974 Cur LR 70 .
43. Balu Mal v. J.P. Chandani,

AIR 1977 Raj 14 [
LNIND 1976 RAJ 44 ]:
1976 Raj LW 416 . Rashool Bux Mom v. State of Rajasthan
(1996) 2 Arb LR 539 (Raj) award returned for registration.
44. Food Corpn. of India v. Great Eastern Shipping Co. Ltd.,

AIR 1988 SC 1198 [
LNIND 1988 SC 192 ]:
(1988) 3 SCC 291 [
LNIND 1988 SC 192 ].
45. Bharat Coking Coal Ltd. v. C.K. Ahuja,

(1995) 2 Arb LR 66 : 1995 Supp (1) SCC 744, objections were not filed within time
after inspecting the award in the Registry of the Supreme Court. See further Commentary under S. 42 under the
heading “Comment”.
46. Madhao Deshpande v. Madhav Dharamadikaree,

AIR 1988 SC 1347 [
LNIND 1988 SC 248 ]:
(1988) 2 Arb LR 290 :
(1988) 3 SCC 511 [
LNIND 1988 SC 248 ].
47. Abdul Quim Md Ismail v. F. C. I.,

(1986) 2 Arb LR 61 (Del); I.T.C v. George Joseph Fernandes,
(2004) 3 Arb LR 530 :
(2005) 10 SCC 425 [
LNIND 2004 SC 1160 ] :
(2005) 3 RAJ 283 , where arbitrator filed award in the Supreme Court under
misconception that it was the correct court for filing the award, court on an application ordered the registry to transfer
the award to the court at Vishakhapatnam (which had jurisdiction) for filing.
48. Juggilal Kamlapat v. General Fibre Dealers Ltd.,

AIR 1962 SC 1122 at pp. 1126, 1127 para 8 : 1962 Supp (2) SCR 101.

AIR 1962 SC 1122 at pp. 1126, 1127 para 8: 1962 Supp (2) SCR 101; Baranagar
Navneet Krishn
Page 86 of 115
Jute Factory Ltd. v. Hulaschand Rupchand, 62 CWN 734 :

AIR 1958 Cal 490 [
LNIND 1958 CAL 73 ]; Katihar Jute Mills v. Jute Mfg. Co.,
AIR 1958 Cal 501 [
LNIND 1958 CAL 74 ]; Morgan Walker & Co. v. Khardah & Co.,
AIR 1959 Cal 169 [
LNIND 1958 CAL 75 ]; Rallis India Ltd. v. B.V. Manickam Chetti & Co.,
AIR 1962 Mad 351 [
LNIND 1961 MAD 185 ]:
AIR 1956 Mad 369 [
LNIND 1961 MAD 185 ]; Gulab Rai Girdharilal v. Firm Bansilal Hansraj,
AIR 1959 Punj 102 ; Jessa Ram Fateh Chand v. Union of India,
(1975) Punj LR 61 (Del).
50. B.S. Jaireth v. S.P. Sinha,

AIR 1994 Cal 68 [
LNIND 1993 CAL 177 ]at 70:
(1994) 1 Arb LR 354 .

AIR 1962 SC 1122 at p. 1126 para 8: (1962) Supp (2) SCR 101. The observation in
Satish Chandra Bose v. Pati Ram Agarwala,
AIR 1921 Pat 161 that on setting aside the award, the court is bound to supersede
the reference is not good law.
52. At p 1123.
53. Mordue v. Palmer,

(1870) LR 6 Ch 22; Parbati v. Durga Devi,
AIR 1928 Lah 170 .
54. Juggilal Kamlapat v. General Fibre Dealers, (1962) Supp (2) SCR : 101
AIR 1962 SC 1123 [
LNIND 1961 SC 387 ]; State of West Bengal v. Dilip Kumar Saha,
AIR 1983 Cal 213 [
LNIND 1982 CAL 102 ].
55. Juggilal Kamlapat v. General Fibre Dealers, (1962) Supp (2) SCR 101 ;
AIR 1962 SC 1123 [
LNIND 1961 SC 387 ].
56. Harries v. Thomas, (1836) 2 M&W 32 : 150 ER 656.
57. Rikhab Kumar v. Trivedi & Co.,

ILR (1929) 51 All 874 .
58. Pran Nath v. State of J&K,

AIR 1972 JK 11 .
59. Deesons Engineers Co. v. C.P. Engineering Co., AIR 1973 P&H 242 :
1972 Cur LR 699 .
Navneet Krishn
Page 87 of 115
60. Teja Singh Inder Singh v. Union of India

(1989) 2 Arb LR 229 (P&H). Union of India v. Lakshmi Ice Factory, AIR 1964 J&K
10 :
1963 Kash LJ 151 , unless the reference is superseded the original agreement
would remain intact.
61. Brahmadeo Choudhury v. National Insurance Co. Ltd.,

AIR 1983 Pat 4 .
62. Union of India v. S.S. Samal,

AIR 1961 Ori 88 .
63. Rallis India Ltd. v. B.V. Manickam Chetti,

AIR 1962 Mad 351 [
LNIND 1961 MAD 185 ]: 75 Mad LW 216.
64. B. Subbamma Naidu v. B. Siddama Naidu,

(1962) 1 SCR 784 [
LNIND 1961 SC 156 ] :
AIR 1962 SC 671 [
LNIND 1961 SC 156 ].
65. Manganese Ore (India) Ltd. v. Ram Bahadur Thakur Ltd., 2006 (Suppl) Arb LR 315, 324 :
(2007) 5 RAJ 484 :
(2006) 4 Bom CR 152 [
LNIND 2006 BOM 482 ] (Bom)(DB).
66. Kovur Parvathamma v. Kovur Subbamma,

AIR 1935 Mad 342 [
LNIND 1935 MAD 19 ].
67. Hari Chand v. Inder Sen, (1934) All LJ 473 :

AIR 1934 All 95 .
68. Satish Chandra Bose v. Pati Ram Agarwala, 6 Pat LJ 287 :

AIR 1921 Pat 161 .
69. Wilson & Son and Eastern Countries Navigation Co., Re,
(1892) 1 QB 81 ; James Mackintosh & Co. v. Scindia Steam Navigation Co., ILR
47 Bom 250, 253 :
AIR 1922 Bom 444 : 24 Bom LR 853; Mayalal Bishindas v. Sanday Patrick,
(1911) 12 IC 662 : 5 Sind LR 97; Ramnath Narendranath v. Nanjee Shamjee & Co.,
AIR 1953 Cal 787 [
70. Hari Shankarlal v. Shambhu Nath,

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]at p. 80:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].
Navneet Krishn
Page 88 of 115
71. Ganesh Chandra Misra v. ArtatranaMisra,

ILR (1964) Cut 685 :
AIR 1965 Ori 17 [
LNIND 1964 ORI 60 ]; Ambar Ali v. Ataur Rahman,
AIR 1963 Assam 22 . It is submitted that the decision in Kamta Prasad Nigam v.
Ram Dayal,
AIR 1951 All 711 [
LNIND 1951 ALL 65 ]that the parties could not by mutual agreement enlarge the
time was unsound.
72. Ramnath Narendranath v. Nanjee Shamjee Co., &

AIR 1953 Cal 787 [
LNIND 1953 CAL 95 ]; Baranagore Jute Factory v. Halaschand Rupchand, 62 CWN
734 :
AIR 1958 Cal 490 [
73. Heeralal Agarwalla & Co. v. Joakim Nahapiet & Co., ILR 55 Cal 648 : 31 CWN 730 :
AIR 1927 Cal 647 .
74. Fazalally Jivaji Raja v. Khimji Poonji & Co., 36 Bom LR 1005 :
AIR 1934 Bom 476 .
75. Union of India v. Nath Behari Sharma,

AIR 1957 Pat 697 at p. 700.
76. Union of India v. Allied Trading Co.,

AIR 1956 Punj 7 .
77. Teamco (Private) Ltd. v. T.M.S. Mani,

AIR 1967 Cal 168 [
78. Keshavsingh Dwarkadas Kapadia v. Indian Engineering Co.,

(1971) 2 SCC 706 [
LNIND 1971 SC 435 ] :
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ].
79. India Hosiery Works v. Bharat Woollen Mills Ltd.,

AIR 1953 Cal 488 [
80. Bhartu Kuri v. Tarachand Mohanlal,

AIR 1962 Punj 173 : 63 PLR 924.
81. Ganeshi Lal v. Banwari Lal & Co.,

AIR 1959 Punj 593 : 61 PLR 392.
82. India Hosiery Works v. Bharat Woollen Mills

Ltd.,
AIR 1953 Cal 488 [
LNIND 1953 CAL 23 ]; Teamco (Private) Ltd. v. T.M.S. Mani,
Navneet Krishn
Page 89 of 115
AIR 1967 Cal 168 [

LNIND 1966 CAL 37 ]; Sat Pal Anand v. R.K. Ahuja, AIR 1973 P&H 197 : 75 Punj Lr
454.
83. India Hosiery Works v. Bharat Woollen Mills

Ltd.,
AIR 1953 Cal 488 [
LNIND 1953 CAL 23 ]; Teamco (Private) Ltd. v. T.M.S. Mani,
AIR 1967 Cal 168 [
LNIND 1966 CAL 37 ]; Sat Pal Anand v. R.K. Ahuja, AIR 1973 P&H 197 : 75 Punj
LR 454.
84. National Small Industries Corporation Ltd. v. National Metal Craft,

AIR 1981 Del 189 [
LNIND 1981 DEL 3 ]:
1981 RLR 337 .
85. Union of India v. D.P. Singh,

AIR 1961 Pat 228 . Followed in State of Rajasthan v. D.P. Singh,
ILR 28 Raj 660.
86. Heeralal Agarwalla & Co. v. Joakim Nahapiet & Co., ILR 55 Cal 648 : 31 CWN 730
AIR 1927 Cal 647 .
87. Eye and Leicester Corporation, Re,

(1892) 1 QB 136 ; Prabhat General Agencies v. Union of India,
AIR 1971 SC 2298 [
LNIND 1970 SC 412 ]:
(1971) 1 SCC 79 [
LNIND 1970 SC 412 ].
88. Mayalal Bishindas v. Sanday Patrick, 5 Sind LR 97 :

(1911) 12 IC 662 ; Sanday Patrick v. Mayalal Bishindas 4 Sind LR 10 :
(1909) 7 IC 588 .
89. Ram Chandra v. Continental Stores and Agency, ILR 10 Luck 268 :
AIR 1935 Oudh 26 .
90. Teamco (Private) Ltd. v. T.M.S. Mani,

AIR 1967 Cal 168 [
91. Subal Chandra Bhar v. Khan Mohd Ibrahim, 47 CWN 570 :

ILR (1943) 2 Cal 298 :
AIR 1943 Cal 484 .
92. Eyre and Leicester Corporation, v. Re,

(1892) 1 QB 136 at p. 141.
93. Hoora v. Abdul Karim,

AIR 1970 Raj 22 at p. 24:
1969 Raj LW 363 .
Navneet Krishn
Page 90 of 115
94. Bates v. Townley,

(1847) 1 Ex 572 : 154 ER 243.
95. Sukhlal v. Mamchand,

AIR 1945 Lah 34 : 46 PLR 343.
96. Eyre and Leicester Corporation, Re

(1892) 1 QB 136 at p. 141.
97. Chuni Lal v. Madho Ram, 13 CWN 97 :

ILR (1909) 36 Cal 388 ; Bright v. Durnell, (1836) 4 Dowl 756 : Ty & Gr 576;
Nathmull Tolaram v. Killa & Co.,
AIR 1961 Cal 65 [
LNIND 1959 CAL 57 ]; Vinayak Vishnu Sahasrabudhe v. B.G. Gadre,
AIR 1959 Bom 39 [
ILR (1959) Bom 87 [
LNIND 1958 BOM 30 ]overruled in Modern Builders v. Hukmatrai
N. Vadirani,
AIR 1967 Bom 373 [
1967 Mah LJ 532 [
1. Union of India v. Karsandas Jethabhai & Co.,

AIR 1979 Guj 183 : 18 Guj LR 342; Ram Kishore v. Raj Narain Dubey,
AIR 1963 All 23 [
LNIND 1961 ALL 163 ]; Jawala Prasad v. Amar Nath,
AIR 1951 All 474 [
LNIND 1950 ALL 192 ].
2. Shambhu Nath v. Hari Shankar Lal,

AIR 1954 All 673 [
LNIND 1954 ALL 10 ]: (1956) All LJ 332; United Printing and Building Works v.
Kishori Lal,
AIR 1956 Cal 593 [
LNIND 1956 CAL 94 ]; Tikaram Khubchand v. Hansraj Hazarimal,
AIR 1954 Nag 241 ; Union of India v. Allied Trading Co.,
AIR 1956 Punj 7 ; Modern Builders v. Hukmatrai N. Vadirani,
AIR 1967 Bom 373 [
LNIND 1966 BOM 56 ]; Chowdhury and Gulzar Singh v. Frick India Ltd.,
AIR 1979 Del 97 [
LNIND 1978 DEL 120 ]dissenting from Ram Kishore v. Raj Narain
Dubey,
AIR 1963 All 28 ; Chacko v. Chacko,
AIR 1959 Ker 149 [
LNIND 1958 KER 199 ]; Baikuntha Misser v. Gouri Shankar Tewari,
AIR 1967 Pat 235 ; Sheoramprasad Ram Narayanlal v. Gopalprasad
Parmeshwardayal,
AIR 1959 MP 102 [
LNIND 1958 MP 128 ]; Chouthmal Nathuram Joshi v. Bhagwandas Zutalal,
AIR 1973 Bom 337 [
LNIND 1972 BOM 80 ]; Louis Dreyfus & Co. v. Hemandas Hotchand,
AIR 1940 Sind 37 ; Bombay Co. Ltd. v. National Jute Mills Co. Ltd.,
ILR (1912) 39 Cal 669 . Where under a construction contract, the time limited was
that of 14 days only and no action was taken within that time after the architect's certificate, the Court refused to extend
the specified time because the party should have been fully aware of the importance and effect of the certificate.
Emson Contractors v. Protea Estates, (1988) 4 Construction LJ 119 : (1988) CLY 223.
Navneet Krishn
Page 91 of 115
3. Surjit Singh Majithia v. Girijit Singh Majithia,

(1991) 1 Arb LR 201 (Del).
4. Termarea S.R.L. v. Rederiaktibola Get Sally (Dalny) (QB (Com. Ct.)), (1979) 2 Lloyd's
Rep. 439
(1979) 1 WLR 1320 : (1979) 2 All E.R. 989. For text of English Act, 1950,see
Appendix 34.
5. Cassell, Re, (1829) 9 B & C 624 : 109 ER 232 : Keshavsing Dwarkadas Kapadia v.
Indian Engineering Co.,
(1971) 2 SCC 706 [
LNIND 1971 SC 435 ], 711, 712 :
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ]; Hewitt v. Penny, (1753) Say 99 : 96 ER 816.
6. Wells v. Cooke, (1818) 2 B&Ald 218 : 106 ER 347; Young v. Miller, (1824) 3 B & C 407 :
107 ER 784; Harris v. Mitchell(1704) 2 Vern 485 : 23 ER 911.
7. Hewitt v. Penny, (1753) Say 99 : 96 ER 816.
8. Cassell Re, (1829) 9 B&C 624 : 109 ER 232.
9. European & American Steam Shipping Co. v. Croskey, (1860) 6 CB (NS) 397 : 141 ER
1219.
10. Pescod v. Pescod,

(1887) 58 LT 76 .
11. Ford v. Jones, (1832) 3 B&Ad 248: 110 ER 93.
12. Hopper, Re,

(1867) LR 2 QB 367; Morgan v. Bolt, (1863) 1 New Rep 271 : 11 WR 265; Neale v.
Ledger, (1812) 16 East 51 : 104 ER 1008.
13. European and American Steam Shipping Co. v. Croskey, (1860) 6 QB (NS) 397 : 141
WR 1219.
14. Pescod v. Pescod,

(1887) 58 LT 76 .
15. Cassell, Re, (1829) 9 B&C 624: 109 ER 232.
16. There was no question of the period of limitation taking start before the date of effective notice, Shovana
v. Birendra Kumar Bhowmick,
AIR 1969 Cal 167 [
LNIND 1968 CAL 62 ]. Delay in entering upon reference amounted to neglect to act
for the purposes of S. 8(1)(b), Act of 1940 (repealed) Uchhaba Pradhan v. Union of India,
AIR 1980 NOC 62 (Ori) : (1979) 48 Cut LT 615. National Small Scale Industries
Navneet Krishn
Page 92 of 115
Corpn. v. V.K. Agnihotri,

(1997) 2 Arb LR 86 (Del), an arbitrator could not proceed after expiry of four months
without seeking extension.
17. Swinford, Re, (1817) 6 M&S 226 : 105 ER 1227; Raj Bahadur Motilal (T.) Chamaria v. Sri
Kissan Beriwalal, Case No. 223 of 1948 decided on 26. 1. 1949 (Cal).
18. Chandra Mohan Chaudhury v. Godawari,

AIR 1972 Pat 340 .
19. Hari Shanker Lal v. Shambhu Nath,

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]at p. 85:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].
20. Ramnath Narendranath v. Nanjee Shamjee &

Co.,
AIR 1953 Cal 787 [
LNIND 1953 CAL 95 ]; Baranagore Jute Factory v. Hulaschand Rupchand,
AIR 1958 Cal 490 [
LNIND 1958 CAL 73 ]: 62 CWN 734.
21. Ganesh Chandra Misra v. Artatrana Misra,

AIR 1965 Ori 17 [
ILR (1964) Cut 685 ; Food Corporation of India v. Ram Lubhaya, 2006 (Suppl) Arb
LR 352, 359 :
(2007) 5 RAJ 519 (P&H), if proceedings are ex parte, consent of the appearing
party must be taken.

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].
24. Food Corporation of India v. Ram Lubhaya, 2006 (Suppl) Arb LR 352, 359 : (d) 5 RAJ
519 (P&H), it is not open to the arbitrators at their own pleasure without the consent of the parties to the agreement to
extend time for making award.
25. AP State Trading Corporation v. SG Sambandan & Co., 2006 (Suppl) Arb LR 220, 226 :
(2006) 2 RAJ 320 :
(2006) 2 Andh LT 139 (DB) (AP)(DB), a power of extension of time period for
passing the award vests only with the court.
26. State of Punjab v. Hardayal,

AIR 1985 SC 920 [
Navneet Krishn
Page 93 of 115
LNIND 1985 SC 121 ]:

(1985) 2 SCC 629 [
LNIND 1985 SC 121 ], overruling the decision of P&H High Court, followed in
Housing Board Haryana v. National Construction Co.,
(1991) 2 Arb LR 191 (P&H). Extension of time by mutual consent in writing not
allowed to be challenged at a late stage.
27. Bokaro & Ramgur Ltd. v. Dr. Prasun Kumar Banerjee,

AIR 1968 Pat 150 : ILR 46 Pat 1256 (FB)overruling Lakhmir Singh
v. Union of India,
AIR 1957 Pat 633 ; Hawksworth v. Brammal, (1839) 5 My&C 281 : 41 ER 377;
Palmer v. Metropolitan Ry. Co.,
(1862) 31 LJQB 259 ; Tyerman v. Smith, (1856) 6 E&B 719 : 119 ER 1033; Patto
Kumari v. Upendra Nath Ghosh, 4 Punj LJ 265 :
AIR 1919 Pat 93 ; Ganesh Chandra Misra v. Aratatrana Misra,
AIR 1965 Ori 17 [
ILR (1964) Cut 685 ; Shambhu Nath v. Surya Devi,
AIR 1960 All 180 ; Sheoram Prasad v. Gopal Prasad,
AIR 1959 MP 102 [
LNIND 1958 MP 128 ]:
(1959) MPLJ 87 ; Ganesh Chandra Misra v. A. Misra,
ILR 1964 Cut 685 :
AIR 1965 Ori 17 [
28. Asharam Agarwala v. Union of India,

AIR 1982 NOC 310 (Sikkim); Indian Oil Corpn v. Indra Sood,
(1995) 1 Arb LR 102 (Del), 4 months to be counted from date when new incumbent
entered upon the reference.
29. New Okhla Industrial Development Authority v. Tandon Construction Co.,

(1991) 1 Arb LR 375 (All).
30. Iossifoglu v. Coumantaros,

(1941) 1 KB 369 ; Bajranglal Laduram v. Ganesh Commercial Co.,
AIR 1951 Cal 78 [
LNIND 1949 CAL 56 ]: 55 CWN 147; Hari Shanker Lal v. Shambhu Nath,
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ] :
AIR 1962 SC 78 [
LNIND 1961 SC 235 ]per Raghubar Dayal, J.
31. Baker v. Stephens,

(1867) LR 2 QB 523; Ramnath Agarwalla v. Goenka & Co., 77 CWN 317 :
AIR 1973 Cal 253 [
LNIND 1972 CAL 188 ](FB)overruling Bajranglal Laduram v.
Ganesh Commercial Co.,
AIR 1951 Cal 78 [
LNIND 1949 CAL 56 ]: 55 CWN 147; Sardar Mal Hardat Rai v. Sheo Baksh Sri
Narain,
AIR 1922 All 106 ; Nand Kishore Goswami v. Bally Co-operative Credit Society
Ltd., 47 CWN 478 :
(1943) 2 Cal 431 ; Harish Chandra Saxena v. Union of India,
ILR (1966) 1 Punj 1 ; M. George v. Raju M. Mathew,
AIR 1978 Ker 17 [
LNIND 1977 KER 32 ]; Soneylal Thakur v. Lachhminarain,
AIR 1957 Pat 395 : ILR 36 Pat 773; Kalinga Otta (P) Ltd. v. Charanjit Kochhar,
AIR 1972 Ori 172 [
Navneet Krishn
Page 94 of 115
LNIND 1971 ORI 93 ]: (1972) 2 Cut WR 748; Abdul Majid v. Bahawal Baksh,
AIR 1950 Lah 174 ; Jolly Steel Industries Pvt. Ltd. v. Union of India,
AIR 1979 Bom 214 [
LNIND 1978 BOM 52 ]; Ramsahai Sheduram v. Harishchandra Dulichand,
AIR 1963 MP 143 [
LNIND 1962 MP 135 ];
(1963) MPLJ 121 . Gujarat Water Supply Sewerage Board v. Unique Erectors,
(1989) 1 Arb LR 126 :
AIR 1988 Guj 233 [
LNIND 1988 GUJ 88 ], arbitrator entered upon the reference only when he applied
his mind for the first time to the dispute to be resolved by him and not when he first issued a notice calling upon the
parties to present their cases; Ramanath Agarwalla v. Goenka & Co.,
AIR 1973 Cal 253 [
LNIND 1972 CAL 188 ]observed that an arbitrator might have to do various
ministerial acts, but that did not amount to entering upon the reference. It was only when he first applied his mind that
he entered and this was essentially a question of fact in each case; Bebubhai Vanmalidas v. Prabodh Pran,
AIR 1956 Bom 146 [
LNIND 1955 BOM 76 ], he had to do some act which was referable to his position as
an arbitrator. He must take upon himself and exercise the functions as an arbitrator; Prakash Lal v. Shori Lal,
(1985) Arb LR 36 (Del), where the arbitrator happened to close prematurely and
resumed again, the period was computed from the date of resumption. A.P. State Trading Corporation v. S.G.
Sambandan & Co., 2006 (Suppl) Arb LR 220, 227 :
(2006) 2 RAJ 320 :
(2006) 2 Andh LT 139 (DB) (AP)(DB), arbitrator did not apply judicial mind to the
merits when disposing off preliminary objections, entered into reference only after all objections disposed off; Municipal
Corporation of Delhi v. Eastland Switchgear (P) Ltd., 2007 (Suppl) Arb LR 259, 264 :
(2007) 3 RAJ 8 :
(2007) 140 DLT 633 (Del), arbitrator did not enter reference until he held the first
hearing and applied his mind, letter sent by the arbitrator to the parties prior to this would be irrelevant.
32. Bharati Mukherjee v. Shiva Trading Co,

AIR 1983 Cal 416 [
LNIND 1982 CAL 249 ]; APSRTC v. P. Venkata Reddy,
AIR 1999 AP 110 [
LNIND 1998 AP 523 ], meaning of entering on reference and running of time for
making award.
33. Baring Gould v. Sharpington Combined Pick and Shovel Syndicate,

(1899) 2 Ch 80 at p. 91.
34. Baring Gould v. Sharpington Combined Pick and Shovel Syndicate,

(1899) 2 Ch 80 at p. 91.

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]at p. 81;
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]at pp. 80, 81;
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ] ; Baring Gould v. Sharpington Combined Pick and Shovel
Syndicate,
(1899) 2 Ch 80 .
Navneet Krishn
Page 95 of 115
37. Girdharilal Bansal v. Chairman, Bhakra Beas Management Board, Chandigarh, AIR 1985
(P&H) 219. Followed in Punjab S.E.B. v. S.E., Electric M.T.C.,
(1987) 2 Arb LR 51 (P&H).
38. Sardar Mal Hardat Rai v. Sheo Baksh Rai Sri Narain,
AIR 1922 All 106 : ILR 44 All 432.
39. Ghasi Lal Todi v. Biswanath Kerwal,

AIR 1964 Cal 466 [

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].

AIR 1962 SC 78 [
LNIND 1961 SC 235 ]:
(1962) 2 SCR 720 [
LNIND 1961 SC 235 ].
42. Ambarali Barlaskar v. Ataur Raeman Barlaskar,

AIR 1963 Assam 22 : ILR (1963) 15 Assam 12.
43. Morphett, Re, (1845) 2 Dow & L 967.
44. Oriental Fire and General Insurance Co. Ltd. v. Murlidhar Gopikishan P. Ltd.,
(1985) Arb LR 387 Cal :
AIR 1985 Cal 301 [
LNIND 1985 CAL 62 ]; Union of India v. Rattan Lal Brij Mohan,
(1995) 1 Arb LR 478 Delhi.
45. Keshav Singh Dwarkadas Kapadia v. Indian Engineering Co.,

(1971) 2 SCC 706 [
LNIND 1971 SC 435 ] :
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ]affirming : 71 Bom LR 312
AIR 1969 Bom 227 [
LNIND 1968 BOM 115 ].
46. Keshav Singh Dwarkadas Kapadia v. Indian Engineering Co.,

(1971) 2 SCC 706 [
LNIND 1971 SC 435 ] :
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ]affirming : 71 Bom LR 312
AIR 1969 Bom 227 [
LNIND 1968 BOM 115 ].
47. Iossifoglu v. Coumantaros,

(1941) 1 KB 396 (CA).
Navneet Krishn
Page 96 of 115
48. N. Chellappan v. Kerala State Electricity Board,

(1975) 1 SCC 289 [
LNIND 1974 SC 379 ] :
AIR 1975 SC 230 .
49. Winteringham v. Robertson,

(1858) 27 LJ Ex 301 .
50. Cudliff v. Walters, (1839) 2 Mood & Rob 232.
51. Tunno & Bird, v. Re, (1833) 5 B & Ad 488 : 110 ER 870.
52. Kalinga Otto (P.) Ltd. v. Charanjit Kochhar,

AIR 1972 Ori 172 [
LNIND 1971 ORI 93 ]: (1972) 2 Cut WR 748.
53. Keshav Singh Dwarkadas Kapadia v. Indian EngineeringCo.,

(1971) 2 SCC 706 [
LNIND 1971 SC 435 ] :
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ]affirming 71 Bom LR 312 :
AIR 1969 Bom 227 [
LNIND 1968 BOM 115 ].
54.
AIR 1972 SC 1538 [
LNIND 1971 SC 435 ]at 1544
(1972) 1 SCR 695 [
LNIND 1971 SC 435 ] :
(1971) 2 SCC 706 [
LNIND 1971 SC 435 ].
55. Allen Pering and John Keymer, v. Re,

(1835) 111 ER 406 (KB).
56. Dalling v. Matchett,

(1740) 125 ER 1138 (CP).
57. Abu Hamid Zahir Ala v. Golam Sarwar,

AIR 1918 Cal 865 .
58. 9th edn, 1906 : 235 (20th edn, 1982) where it is added that all the arbitrators should execute the award at
the same time and place, otherwise the award could be invalidated or remitted for correction.
59. Followed in J. Kuppuswami Chetty v. B.V. Anantharamier, (1947) 1 Mad

LJ 297 :
AIR 1948 Mad 40 [
LNIND 1947 MAD 44 ]; Mamidi Appayya v. Yedan Venkatswami,
AIR 1919 Mad 877 .
Navneet Krishn
Page 97 of 115
60.
AIR 1992 SC 1932 [
LNIND 1992 SC 511 ]:
(1992) 2 Arb LR 391 :
(1992) 4 SCC 671 [
LNIND 1992 SC 511 ].
61. Year of edition not given : See 241 (20th edn, 1982).
62. Citing Winteringham v. Robertson,

(1858) 27 LJ EX 301 where the two arbitrators were not agreed on important points
and the umpire who sat with them throughout saw no likelihood of their agreeing, his award was held to be valid.
63. Eurrestra Industries Ltd. v. Karnataka Soaps & Detergents Ltd.,

AIR 1992 Bom 352 [
(1992) 2 Arb LR 286 .
64. 241 (20th edn, 1982).
65. (1839) 2 M&Rep 232 : 62 R R 296.
66. Magnum Films v. Golcha Properties,

AIR 1986 Del 320 [
LNIND 1985 DEL 333 ]:
(1986) 2 Arb LR 79 .
67. Winteringham v. Robertson,

(1858) 27 LJ Ex 301 ; Proboth Kumar Sarkar v. Union of India,
AIR 1953 Cal 385 [
LNIND 1951 CAL 125 ]: 56 CWN 439; F.W. Berk & Co. Ltd. v. Knowles and Foster,
(1962) 1 Lloyd's Rep 430; Chandra Bhan Harbhajanlal v. State of Punjab,
AIR 1977 SC 1210 [
LNIND 1977 SC 97 ]:
(1977) 2 SCC 715 [
LNIND 1977 SC 97 ].
68. Tollit v. Saunders, (1821) 9 Price 612 : 147 ER 198.
69. Tasker v. Kerry, (1733) 2 Barn KB 317 : 94 KB 525.
70. Wicks v. Cox, (1847) 11 Jur 542.
71. State of Mysore v. R.J. Shah & Co.,

AIR 1969 Mys 237 .
72. Orion Compania Espanola de Seguros v. Belfort Maatschappij Voor Algomane

Verzekgringecn, (1962) 2 Lloyd's Rep 257.
Navneet Krishn
Page 98 of 115
73. Orion Compania Espanola de Seguros v. Belfort Maatschappij Voor Algomane

Verzekgringecn, (1962) 2 Lloyd's Rep 257.
74. Lang v. Brown, (1855) 25 LT (OS) 297.
75. Schedule I paragraph 8 read with Section 3. State of Punjab v. Surrinder Nath,
AIR 1960 Punj 623 ; costs are in the discretion of the arbitrator, Eastern & North
Eastern Frontier Ry Co-op Bank Ltd. v. B. Guha & Co.,
AIR 1986 Cal 146 [
(1985) Arb LR 253 ; R.S. Builders v. D.D.A.,
AIR 1995 Del 10 [
LNIND 1994 DEL 464 ]:
(1994) 1 Arb LR 418 , arbitrator can award costs of proceedings; Manjit Johl v.
Dentam Modern Breweries Ltd.,
(1994) 2 Arb LR 167 : AIR 1994 J&K 56, estimate of costs at Rs. 6000 by the
arbitrator, upheld.
76. Mansfield v. Robinson,

(1928) 2 KB 353 .
77. Hawkins v. Rigby, (1860) 8 CB (NS) 271 : 141 ER 1169; Westwood, Baillie & Co. v. Cape
of Good Hope Government,
(1886) 2 TLR 667 .
78. Rahim v. Shabban,

AIR 1935 Sind 200 .
79. Prebble and Robinson, v. Re,

(1892) 2 QB 602 ; Stephens, Smith & Co. and Liverpool & London & Globe
Insurance Co., v. Re, (1892) 36 Sol J 464; Govind Singh Pratab Singh v. Pohumal Khusiram,
AIR 1945 Sind 71 .
80. Union of India v. J.P. Sharma,

AIR 1982 Raj 245 : 1982 Raj LW 216.
81. Rose v. Redfern,

(1861) 10 WR 91 .
82. Lloyd Del Pacifico v. Board of Trade, 37 Lloyd's Rep 103.
83. Rolimpex Centrala Handlu Zagranicznego v. Haji E. Dossa & Sons Ltd., (1971) I Lloyd's
Rep 380.
84. Fernley v. Branson, (1851) 20 LJ QB 178 : Barnes v. Braithwait & Nipon, (1857) 2 H&N
569 : 157 ER 234 Re : Coombs & Freshfield & Fernley,
(1850) 4 Ex 839 : 154 ER 1456.
85. Llandrindod Wells Water Co. v. Hawksley,

(1904) 20 TLR 241 ; 68 JP 242.
Navneet Krishn
Page 99 of 115
86. Hicks v. Richardson, (1791) 1 B&P 98 : 126 ER 796.
87. Schofield v. Allen, (1904) 48 Sol J 176.
88. Government of Ceylon v. Chandries (No.1),

(1963) 2 WLR 1097 :
(1963) 2 QB 327 :
(1963) 2 All ER 1 (1963) 1; Lloyd's Rep 213.
89. Gilbert & Wright, Re,

(1904) 68 JP 148 : 20 TLR 164.
90. Thoburn v. Barnes,

(1867) LR 2 CP 384; Mohd. Akbar Khan v. Attar Singh, 49 CWN 802 :
AIR 1945 PC 170 ; Erich Schroeder, The (1974) 1 Lloyd's Rep 192. Eastern &
North East Frostier Ry. Coop Bank v. B. Guha & Co.,
(1985) Arb LR 253 (Cal), arbitrator had full discretion to award costs. Messrs Ltd. v.
Heidner & Co., (1960) 1 Lloyd's Rep 500 : (1961) 1 Lloyd's Rep., the arbitrator held the sellers to be not liable yet asked
them to pay 2/3 of the costs, the award was remitted for reconsideration as to costs. Lewis Emanuel & Son Ltd. v.
Sammut, (1959) 2 Lloyd's Rep 629, where the court did not interfere in the discretion as to costs. Matheson & Co. v.
V/o Exportchleb, (1963) 2 Lloyd's Rep. 270. Another case in which the successful claimant was ordered to pay costs,
the court said that on the authorities, before an order that successful parties should pay costs could be made it must be
shown by persons seeking that order that there was material on which the discretion could be exercised in the way that
it was and that, in this case, there was no material on which the arbitrator could so order. Dineen v. Walpole, (1969) 1
Lloyd's Rep 261 (CA). The court disapproved the view expressed in Heaven & Kesterton Ltd. v. Sven Widacus A/B,
(1958) 1 Lloyd's Rep 101 :
(1958) 1 WLR 248 and distinguished Perry v. Stopher,
(1959) 1 WLR 415 where two references were heard together, it was considered
to be a wrong exercise of discretion to make order of costs on amalgamated basis unless the parties had so agreed,
Wilh, Wilhelmsen v. Canadian Transport Co., (1980) 2 Lloyd's Rep 204 and Canadian Transport Co. v. Unimarine,
(1980) 2 Lloyd's Rep 204 QB (Com. Ct.). It was a legitimate exercise of discretion by the arbitrators in dealing with the
matter to make an award founded simply on a proportion of each party's costs rather than upon the actual amount of
costs incurred by each party and the award as to costs would not be interfered with simply on the ground that they had
proceeded on the basis of proportions as explained in their reasons. Polish Ocean Lines v. Ismail (The Ciechocinek)
(No. 2) (QB (Com. Ct.)) (1980) 1 Lloyd's Rep. 97. For earlier proceedings see (1976) 1 Lloyd's Rep. 489 : (1975) 2
Lloyd's Rep. 170. An award was remitted for reconsideration because without any powerful justification costs were
awarded not according to the event, Patroclos Shipping Co. v. Societe Secopa, (1980) 1 Lloyd's Rep 405 QB (Com Ct).
Where each party was partly successful there was nothing wrong in the order that each party was bear his own costs
and to pay half the cost of the award, Blue Horizon Shipping Co. v. ED&F Man Ltd., (1979) 1 Lloyd's Rep 475 and
(1980) 1 Lloyd's Rep 17 (CA). Award of costs to the loser, the matter remitted, Tramountana Armadora v. Atlantic
Shipping Co., (1978) 1 Lloyd's Rep 391 :
(1978) 2 All ER 870 . Eleftheria Niki Compania Naviera Ltd. v. Eastern
Mediterranean Ltd., (1980) 2 Lloyd's Rep 252, where the court said that although it would have been perfectly proper
for the umpire to have dealt with the costs in a different manner from that in which he did, it could not be said that the
umpire was wrong in exercising his discretion as he had done, or that the circumstances justified remission to him for
further consideration of the costs, and the notice of motion failed. Unimarine S.A. v. Canadian Transport Co. Ltd.,
(1982) 1 Lloyd's Rep. 484; Canadian Transport Co. Ltd. v. Gerrads Redert, (1982) 1 Lloyd's Rep 484; Gerrads Redert
v. Ceres Hellenic Shipping Enterprises, (1982) 1 Lloyd's Rep 484 QB (Com Ct), unusual award as to costs required
explanation.
91. Heaven and Kesterton Ltd. v. Sven Widaeus A/B,

(1958) 1 All ER 420 :
(1958) 1 WLR 248 , no misconduct in discretion as to costs.
92. Centrala Morska Importowo Exsportwa v. Cia Nacional De Navegacao SARL, (1975) 2
Lloyd's Rep 69 at pp. 71, 72.
Navneet Krishn
Page 100 of 115
93. Stotesbury v. Turner,

(1943) KB 370 ; Smeaton Hanscomb & Co. Ltd. v. Setty (Season I), Sons & Co.
(No. 1),,
(1953) 2 All ER 1471 ; Erica Schroeder, The (1974) 1 Lloyd's Rep. 192; Lewis v.
Haverfordwest Rural District Council,
(1953) 2 All ER 1599 :
(1953) 1 WLR 1486 . The court considering whether or not to remit an award as
to costs is not concerned with what in fact moved the arbitrators to reach their conclusion as to costs but is solely
concerned with whether there is material upon which the arbitrators could have justified their order; and where the
Board of Appeal could have justified its order as to costs the court would not be entitled to interfere with that order.
Warinco A. G. v. Andre & Cie, (1979) 2 Lloyd's Rep 298.
94. Heaven and Kesterton Ltd. v. Establishments Francois Albiac et Cie, (1956) 2 Lloyd's
Rep 316; Perry v. Stopher,
(1959) 1 All ER 713 :
(1959) 1 WLR 415 .
95. Lewis v. Haverfordwest Rural District Council,

(1953) 2 All ER 1599 . These principles were followed in L.
Figuiredo Navegacas S.A. v. Reederei Richard eli, (1974) 1 Lloyd's Rep 192 (QB), here the successful party was
ordered to pay his own costs and half the costs of the award which was held to be wrong, but because the other party
had paid the full costs of the award no further order was considered necessary. The court found on the detailed
affidavits and documents submitted no ground on which the umpire was justified, in the exercise of his discretion in
departing from the general principle that costs follow the event. Mocatta, J. restated the principles in terms of the
following propositions : “First, an arbitrator, like a Judge, in dealing with costs must exercise the discretion vested in him
judicially. . . . . Secondly, there is no need for an arbitrator, if he so exercises his discretion as to depart from the
general rule, to state why he does so in his award. On the other hand, in all probability, in most cases where an. . .
arbitrator does so act, it would save costs if he were to state his reasons in his award. In that event the parties would
not be put to the expense of trying to ascertain what his reasons were and possibly moving the court to set aside the
award. . . . . Thirdly, if the award does depart from the general rule as to costs, but bears on its face no statement of the
reasons supporting that departure, the party objecting to the award in that respect may bring before the court such
evidence as he can obtain as to the grounds or lack of grounds, bearing upon the unusual exercise of discretion by the
arbitrator. . . Fourthly, the above propositions . . . apply to all categories of awards as to costs . . . Fifthly . . . there is, of
course, a burden of proof upon the party seeking to set aside an award in relation to the decision of an . . . arbitrator in
relation to costs, or seeking to have the award remitted so that the arbitrator . . . may deal with the costs in a way other
than that in which he originally dealt with them.” The remedies against an award on the matter of costs are a bit
different under the
Arbitration and Conciliation Act, 1996 .See Sections 38 and 39.
96. Heaven and Kesterton Ltd. v. Establishments Francois Albiac et Cie, (1956) 2 Lloyd's
Rep 316.
97. Demolition & Construction Co. Ltd. v. Kent River Board, (1963) 2 Lloyd's Rep 7.
98. Subraj & Co. v. Housing Board, H.P.,

AIR 1982 NOC 115 (HP) : (1981) HP 387.
1. Anglo-Saxon Petroleum Company, Ltd. v. Adamastos Shipping Company, Ltd., [1957] 1

Lloyd's Rep 79. For another judgment of his Lordship on the matter of costs where the remission sought turned out to
be unnecessary see Universal Cargo Carriers Corpn. v. Pedrocitati,
(1958) 2 All ER 563 (CA).
2. Aiden Shipping Co. Ltd. v. Interbulk Ltd., (1986) 2 Lloyd's Rep 117 (HL)Interbulk Ltd. v.
I.C.C.O.(The Vimeira) (No.2) (1986) 2 Lloyd's Rep 117, the court said that the word “party” includes persons on whom
notices of the proceedings have been served or are so deemed by virtue of Court Rules or statutory provisions. A
Navneet Krishn
Page 101 of 115
tribunal has no jurisdiction to order costs to a non-party see Russel On Arbitration, 306 (21st edn, 1997) where it is
observed on the basis of S.
Section 61(1)of the Arbitration Act , 1961 (UK) that an arbitral tribunal can award costs only “as
between the parties.”
3. Samuel J. Cohl Co. v. Easter Mediter Ranean Martime Ltd. (The Silver Fir) (CA), (1980)
1 Lloyd's Rep. 371.
1. Motor & General Finance Ltd. v. U.N. Mohan,

(1988) 2 Arb LR 45 (Del).
2. Trilok Chand Garg v. State of M.P.,

(1989) 1 Arb LR 164 (MP)considering the effect of Madhya Pradesh
Madhyastham Adhikaran Adhiniyam, 1983; Jupiter Chit Fund P. Ltd. v. Dwarka Deish Dayal,
AIR 1981 All 251 considering the effect of UP amendment.
3. Wazir Chand Mahajan v. Union of India,

(1967) 1 SCR 303 [
LNIND 1966 SC 178 ] at p. 308 :
AIR 1967 SC 990 [
LNIND 1966 SC 178 ]; Orissa Co-operative Insurance Society v. Chandanlal
Agarwal, (1973) 1 Cut WR 949; Ravu Venkata Surya Rao v. Ravu Venkata Rao,
AIR 1963 AP 286 [
LNIND 1962 AP 53 ]; Godhu Mal v. Ganga Hasso Mal,
AIR 1958 All 26 [
LNIND 1957 ALL 13 ]. A composite application under sub- section 8, 1940 Act and
S. 20, 1940 Act was not maintainable, India Suppliers and Exports Co. v. Union of India,
(1991) 1 Arb LR 144 (Del); Pir Mohd Shafi v. Cantt Road, AIR 1987 J&K 21 :
(1989) 1 Arb LR 410 a composite application under S. 20, 1940 Act for filing of
agreement and at the same time under S. 33, 1940 Act for setting aside the award was not possible.
4. Karnataka Housing Board v. Vaijnath Tubewells Ltd.,

AIR 1995 Karnt 126 a reference under the section was held to be invalid because it
was made without recording a finding whether the agreement or reference which was disputed was really valid or not;
the court also did not approve an order that the matter be referred to arbitrator giving time to the defendant to exercise
his choice regarding arbitrator. Subhash Ronghta v. D.D.A.,
(1989) 2 Arb LR 28 (Del), where all the conditions were satisfied and the court
appointed an arbitrator and made a reference. Motor and General Finance Ltd. v. Hira Pd. Kesri
(1989) 2 Arb LR 44 (Del) all conditions of reference satisfied. Brij Lal Suri v. State of
U.P.,
AIR 1954 All 393 , the approach of the courts was that the parties should adhere to
their chosen machinery before resorting to any other course and in finding out the suitability of arbitration as remedy the
court could look into the parties’ averments and pleadings. Gulabchand Rawatmal v. Sarangpur Cotton Mfg. Co. Ltd.,
AIR 1959 Bom 158 [
LNIND 1957 BOM 195 ], an arbitration clause in a sale of goods contract not
extinguished by the fact that on default by the buyer to pay the price, the seller had resold the goods having the
statutory right to do so. Vijayanagar Industrial Workers Housing Coop Society Ltd. v. State of Karnataka,
AIR 1998 Kant 361 [
LNIND 1998 KANT 38 ]demand for reference in a housing agreement. Gammon
India Ltd. v. Sheth Estate Developers Ltd.,
(2006) 2 Arb LR 194 , 202 : (2006) 1 Guj LR 541 (Guj), judicial conscience of the
court has to be satisfied as to existence of a written arbitration agreement.
5. Neither details of the claim nor evidence in support of it were necessary at the initial stage. Only the claim
should be specified. A difference could be shown even after signing of no claim certificate, Mehta & Co. v. Union of
India,
AIR 1984 NOC 132 (Del) :
1983 RLR 467 .
Navneet Krishn
Page 102 of 115
6. B.L. Grover v. Union of India,

AIR 1980 (Del) 45 [
LNIND 1979 DEL 182 ], a recount of the requirements of the section. Sushil Sharma
v. Vijay Narain Pandey,
AIR 1996 (Del) 116 [
LNIND 1995 DEL 662 ], multistory construction contract, arbitration clause, court
issued directions for appointment of arbitrator.
7. Naraindas v. Vallabhdas,
AIR 1929 Sind 1 ; State of Rajasthan v. Ferro Concrete Construction (India) P. Ltd.,
(1991) 2 Arb LR 232 (Raj). Chief Engineer directed to constitute panel as required
under the contract.
8. Division Manager, Railway Electrification v. Srinivasa Engg. Works, 2007 (Supp) Arb LR
386 (AP)(DB), court has no power to rule upon the merits of the claim in proceedings under S. 20 of the old Act, and is
required to only decide whether it is a fit case for referring the parties to arbitration.
9. General Manager, Northern Railway v. Sarvesh Chopra,

(2002) 4 SCC 45 [
LNIND 2002 SC 161 ] :
AIR 2002 SC 1272 [
LNIND 2002 SC 161 ]:
(2002) 1 Arb LR 506 :
(2002) 1 RAJ 521 followed in Union of India v.
Raunaq International Ltd.,
(2008) 2 Arb LR 297 :
(2008) 3 RAJ 266 :
(2008) 4 SCJ 414 .
10. Hari Om Properties P. Ltd. v. B. Dutta,

(1991) 1 Arb LR 107 (Del)Sulochna Uppal v. Surinder Sheel Bhakri,
AIR 1991 Del 138 [
LNIND 1990 DEL 270 ], a petition for enforcement of an agreement to sell was not
allowed.
11. See Commentary under S. 11 under the heading “Position subsequent to ‘Patel Engineering'”.
12. Sunder Kukreja v. Mohan Lal Kukreja,

(2009) 2 Arb LR 404 , 408 :
AIR 2009 SC 2108 [
LNIND 2009 SC 685 ]:
(2009) 2 RAJ 320 :
(2009) 4 SCC 585 [
LNIND 2009 SC 685 ] :
(2009) 4 JT 457 .
13. Ram Vallab Tibrewalla v. Dwarka Das & Co.,

(1966) 1 SCR 689 [
LNIND 1965 SC 211 ] :
AIR 1966 SC 402 [
LNIND 1965 SC 211 ]; Bhima Rao v. Bhagwat Thakurdas Tikkalal & Sons,
AIR 1933 Pesh 18 ; Deesons Engineering Co. v. C.P. Engineering Co.,
AIR 1973 PH 243 . The section did not envisage an independent action or a regular
civil suit. The intendment of the legislature seemed to be to make a reference to the arbitrators and to direct them to
proceed with the matter in accordance with the provisions of the Act. Mutcheria Ramanath Rao v. T. Venkata Krishna
Sastry,
Navneet Krishn
Page 103 of 115
AIR 1962 AP 381 [

LNIND 1961 AP 159 ]: (1962) 1 Ardh WR 137.
14. Kokil Singh v. Ramasrey Prasad, ILR 3 Pat 443 :

AIR 1924 Pat 488 ; Dinkarrai Lakshmi Prasad v. Yeshwantrai Hariprasad, ILR 54
Bom 197 :
AIR 1930 Bom 98 ; Hira Ram v. Ram Dutt,
AIR 1935 Lah 59 .
15. Ram Vallabh Tibrewalla v. Dwarka Das & Co.,

AIR 1966 SC 402 [
LNIND 1965 SC 211 ]para 13 :
(1966) 1 SCR 689 [
LNIND 1965 SC 211 ].
16. Ghulam Khan v. Muhammad Hassan, ILR 29 Cal 167 : LR 29 IA 517.

(1966) 1 SCR 689 [
LNIND 1965 SC 211 ] :
AIR 1966 SC 402 [
LNIND 1965 SC 211 ]para 6.

(1966) 1 SCR 689 [
LNIND 1965 SC 211 ] :
AIR 1966 SC 402 [
LNIND 1965 SC 211 ]para 6; Jameel Ahmed Mirza v. New India Assurance Co. Ltd.,
AIR 1998 J&K 108 :
(1999) 1 Arb LR 150 , an application to sue as an ingident person giving sufficient
details of claim can be construed as an application for reference of the dispute to arbitration.
19. Venkata Surya Rao v. Venkata Rao,

AIR 1963 AP 286 [
LNIND 1962 AP 53 ]: (1962) 2 Andh WR 326; Deeson's Engineers Co. v. C.P.
Engineering Co.,
AIR 1963 Punj 242 .
20. Ram Ugrah Pande v. Achraj Nath Pande, ILR 38 All 85 :

AIR 1915 All 369 .
21. Ram Ugrah Pande v. Achraj Nath Pande, ILR 38 All 85 :

AIR 1915 All 369 .

(1966) 1 SCR 689 [
LNIND 1965 SC 211 ] :
AIR 1966 SC 402 [
LNIND 1965 SC 211 ]para 6. It was not necessary that the parties should exhaust
the remedy of seeking reference out of court, Jindal Refrigerations v. H. P. Horticultural Produce Mktg and Processing
Corpn.,
(1986) 2 Arb LR 65 (Del); an application under the section was dismissed when the
matter was already referred by the opposite party, Mukesh Kumar v. National Building Corpn. Ltd.,
(1986) 2 Arb LR 341 (Del).
Navneet Krishn
Page 104 of 115
23. Union of India v. Om Prakash,

AIR 1976 SC 1745 [
LNIND 1976 SC 150 ]:
(1976) 4 SCC 32 [
LNIND 1976 SC 150 ]; Mangal Prasad v. Lachman Prasad,
AIR 1964 All 108 [
LNIND 1963 ALL 114 ](FB) :
ILR (1964) 1 All 34 : (1963) All LJ 693 (FB).
24. Sailabala Biswas v. Akshaya Kumar Routhray,

AIR 1981 Ori 198 [
LNIND 1981 ORI 53 ]: (1981) 52 Cut LT 203.
25. Basaoo v. Jagannath, ILR 6 Luck 591 :

AIR 1931 Oudh 127 .
26. Shri Vallabh Pitte v. Narsinghdas Govindram Kalani,

ILR (1962) Bom 743 [
LNIND 1962 BOM 58 ] :
AIR 1963 Bom 157 [
LNIND 1962 BOM 58 ]: 65 Bom LR 29.
27. Goodwill India Ltd. v. T.M. Razak,

(1988) 2 Arb LR 20 (Del) The same was the situation and a similar order was
passed in Motor & General Finance Ltd. v. Dwarika Nath Upadhyay,
(1988) 1 Arb LR 243 (Del).
28. West Bengal Essential Commoditie s Supply Corporation Ltd. v. International Trading
Corporation of India, 88 CWN 793 :
(1985) Arb LR 111 :
AIR 1984 Cal 313 [
29. Cement Corporation of India v. Surendra Kumar Subhash Chand,

(1990) 2 Arb LR 142 (P&H).
30. Khederan Ram v. Sharda Pd.,

AIR 1986 All 34 [
LNIND 1985 ALL 76 ]: 1985 All WC 374, the court said that since an application did
not have the effect of dissolution and in addition there being nothing to show misappropriation or mismanagement,
there was no question of appointing receiver, following Indian Oil Corpn. v. Kishore Bandhu, 1978 All
LJ 176 where also it was held that proceedings under S. 20, 1940 Act are not in the nature of a suit.
31. Municipal Committee of Fazilka v. Fazilka Electric Supply Co.,

AIR 1947 Lah 309 . Saw Pipes Ltd. v. DESU, (1994) 2 Arb LR (Del) dispute as to
excess billing referred under this section read with S.
Section 52 of the Electricity Act , 1910 with a direction that there would be no disconnection till
arbitrator's decision and that future bills should be paid regularly.
32. Brij Mohan Sharma v. The Chancellor,Lucknow University,

AIR 1961 All 331 [
LNIND 1960 ALL 152 ](Court appointed an arbitrator where the Chancellor of the
Lucknow University refused to appoint an arbitrator under Section 44 of the Lucknow University Act).
Navneet Krishn
Page 105 of 115
33. Jagat Mitter Saigal v. Kailash Chandra Saigal,

AIR 1983 (Del) 134 dissenting from Iqbal Singh v. Ram Narain,
AIR 1977 All 352 ; Paras Ram Darshan Lal v. Union of India,
AIR 1979 Del 135 [
LNIND 1979 DEL 14 ]; Ramji Ram v. Durga Das, 81 Punj LR 873 Following
Jagadish Chandra Gupta v. Kajaria Traders (India) Ltd.,
AIR 1964 SC 1882 [
LNIND 1964 SC 166 ]: (1964) All LJ 971; Musarrat Jahan v. Swapan Kumar Poddar,
AIR 1994 Cal 5 [
LNIND 1993 CAL 258 ]at 9 :
(1994) 1 Arb LR 164 ; H.B. Vittala Kamath v. Krishna Motor Service,
AIR 1994 Kant 181 [
LNIND 1994 KANT 2 ]. Premlata v. Ishar Dass Chaman Lal,
AIR 1995 SC 714 [
LNIND 1995 SC 36 ];
(1995) 2 SCC 145 [
LNIND 1995 SC 36 ] :
(1995) 1 Arb LR 321 an application under S. 20, 1940 Act, by partners of
unregistered firm for accounts and dissolution, allowed; Santosh Kumar Banerjee v. Sidesware Banerjee,
(1993) 2 Arb LR 182 (Cal), petition for accounts only and for receiver by an
unregistered firm not allowed; Ram Kumar Agarwal v. Ram Kishan Tayal Fauji,
(1991) 2 Arb LR 101 :
AIR 1991 MP 188 [
LNIND 1990 MP 130 ]; in the case of an unregistered firm, disputes could be
referred without the intervention of the court, Rampa Devi Bishambhar Nath Puri V. UFI,
AIR 1976 All 19 .
34. Chandulal Hathibhai Shah v. Champaklal Ambalal Parikh,

AIR 1994 Bom 16 [
LNIND 1993 BOM 393 ]:
(1994) 1 Arb LR 172 . Though the partner seeking reference had also given notice
of dissolution, it did not appear that he was really seeking dissolution, Girdhari Lal v. New Bharat Finance Co., AIR
1981 J&K 82 a certificate signed by the Registrar would be necessary; a certificate signed by an Assistant Registrar
was rejected and the firm was considered as unregistered, J&K Partnership (Registration of Firms) Rules, 1996 (Smvt)
Rules 5 and 9; Kelson Constructions v. Versha Spinning Mills Ltd.,
(1994) 1 Arb LR 385 [
LNIND 1993 DEL 676 ] (Del) application of unregistered firm rejected, subsequent
registration could not revalidate the proceeding; Ram Avtar Gupta v. Jeoti Pd,
(1987) 1 Arb LR 352 (Del), differences in partnership matters, referred. H.B. Vittala
Kamath v. Krishna Motor Service,
(1994) 2 Arb LR 26 :
AIR 1994 Kant 181 [
LNIND 1994 KANT 2 ], application of unregistered firm for dissolution and accounts
allowed. Another similar proceeding was allowed in Premlata v. Ishar Dass Chamanlal,
AIR 1995 SC 714 [
LNIND 1995 SC 36 ]:
(1995) 2 SCC 145 [
LNIND 1995 SC 36 ].
35. Musarrat Jahan v. Swapan Kumar,

AIR 1994 Cal 5 [
LNIND 1993 CAL 258 ]at 9 :
(1994) 1 Arb LR 164 . In Babulal Dhandhania v. Gautam & Co.,
AIR 1950 Cal 391 the High Court was of the view that cases outside the exceptions
of S.
Section 69, Partnership Act, 1932 could be referred without the intervention of the court, but even so
the problem of enforcement would remain.
36. General Enterprises v. Jardine Handerson Ltd.,

AIR 1978 Cal 407 [
LNIND 1977 CAL 235 ]at 418.
Navneet Krishn
Page 106 of 115
37. Fraud must be connected with the issue. West Bengal Comprehensive Area Development Corpn. v.
Sasanka Sekhar Banerjee,
AIR 1985 Cal 290 [
1985 Arb LR 230 . Pragati Engg P. Ltd. v. T.N. Water Supply & Drainage Board,
AIR 1992 Cal 139 [
(1992) 2 Arb LR 143 , it is not necessary that the arbitrator should decide the matter
of fraud. Ganesh Chandra Dey v. Kamal Kumar Agarwalla,
AIR 1971 Cal 317 [
LNIND 1970 CAL 165 ]where the court held that in a suit for dissolution of
partnership on the just and equitable ground, the dispute relating to dissolution should be decided by the court and the
proceeding should not be stayed inspite of the arbitration clause.
38. Rampa Devi v. Bishambar Nath Puri,

AIR 1976 All 19 .
39. Sohan Lal Bansal v. Arjunmal Dudani,

AIR 1967 Raj 85 [
LNIND 1966 RAJ 56 ]:
1967 Raj LW 272 . The court followed Diala Ram v. Nihali Bai,
AIR 1936 Pesh 96 ; Dulari Devi v. Rajendra Prakash,
AIR 1959 All 711 [
LNIND 1959 ALL 24 ]and did not follow Abdul
Ghani v. Siraj-ud-din,
AIR 1939 Lah 154 .
40. Wardman Finance Corpn. v. Ghulam Ad Lone,

AIR 1982 NOC 142 J&K :
1981 Kash LJ 34 .
41. Uttam Wires and Machines Ltd. v. State of Rajasthan,

AIR 1990 Del 72 [
LNIND 1989 DEL 265 ]. The court relied on State of U.P. v. Sardul Singh Kulwant
Singh,
AIR 1985 All 67 [
LNIND 1984 ALL 248 ]:
1985 Arb LR 189 , provision for disputes to be put up before the chief engineer for
final adjudication was held to be an arbitration clause though the word “arbitration” was not employed; Sushila Seth v.
State of M.P.,
AIR 1980 Del 244 [
LNIND 1980 DEL 54 ], where also there was a similar provision; G.L. Textiles v.
Union of India,
(1980) 2 Arb LR 258 (Del), reference ordered, valid agreement; Parijat Chemical
Industries v. Union of India
(1980) 2 Arb LR 292 (Del), filing and appointment of arbitrator ordered because the
agreement was not denied; Subash Chand Verma v. D.D.A.,
(1988) 2 Arb LR 294 (Del), to the same effect; R.S. Avtar Singh & Co. v. Bharat
Heavy Electricals,
(1988) 2 Arb LR 296 (Del), umpire appointed as agreed to by parties; Motor and
General Finance Ltd. v. V.M. Thampy,
(1987) 1 Arb LR 18 (Del), a matter of hire-purchase referred; Jindal Refrigerations
v. H.P. Horticultural etc. Corpn.,
(1987) 1 Arb LR 23 (Del) reference through court could be sought to persona
designate; Motor and General Finance Ltd. v. Chowdhary Jagdish Chand,
(1987) 1 Arb LR 27 (Del), hire purchase. Hire purchase containing arbitration
clause, default in payment of instalments, matter referred to arbitration. MGF (India) Ltd. v. BOC Properties Ltd.,
(1997) Arb LR 540 (Del). Motor & General Finance Ltd. v. T.J. Joseph,
(1997) 2 Arb LR 200 (Del), default in instalments; Goodwill India Ltd. v. Vijay
Kumar,
Navneet Krishn
Page 107 of 115
(1997) 1 Arb LR 628 (Del), default in instalments, transfer of goods to another,

referred to arbitration. Motor General Finance Ltd. v. Ram Niwas Sharma,(1996) Supp Arb LR 531 (Del), ex parte
reference against a defaulting hire-purchaser; also in Motor & General Finance Ltd. v. C. Mohammed(1997) Supp Arb
LR 533 (Del). Motor & General Finance Ltd. v. R.N. Sharma,
(1996) 1 Arb LR 557 (Del) default in instalments, reference.
42. R.N. Pattiwar v. State of Maharashtra,

(1988) 2 Arb LR 332 (Bom), following State of U.P. v. Tipper
Chand,
AIR 1980 SC 1522 : (1980) 2 SCC 341; State of Maharashtra v. Ranjeet
Construction,
(1986) Mah LJ 401 [
LNIND 1985 BOM 207 ], as to how parties understood their contract clauses; A.V.
Industries v. Tripathi Chitra Mandir,
(1987) 1 Arb LR 30 (Del), ex parte reference order; Agro Engineering Enterprises v.
D.D.A.,
(1987) 1 Arb LR 85 (Del), the party who did not appear could be directed to file
agreement; Motor and General Finance v. Manoranjan Singh,
(1987) 1 Arb LR 170 (Del), under dispute hire-purchase agreement; Motor and
General Finance Ltd. v. Raisuddin,
(1987) 1 Arb LR 180 (Del), party not appearing, ex parte reference; another similar
case, Motor and General Finance Ltd. v. Bajrang Lal Gupta,
(1987) 1 Arb LR 204 (Del). Sharma Timber Works v. Union of
India,
(1987) 1 Arb LR 172 (Del), contractor's final bill neither paid nor referred, the court
ordered reference; Ashok Kumar Chhabra v. Urban Improvement Co. Ltd.,
(1987) 1 Arb LR 206 (Del), reference by court order; Motor and General Finance
Ltd. v. T. Mohan,
(1987) 1 Arb LR 207 , one respondent did not appear, the other had no objection for
reference to named arbitrator reference ordered; Motor and General Finance Ltd. v. C. N. Gangadharan,
(1987) 1 Arb LR 226 (Del), another case of non-appearance of opposite party; so
was the case in Motor and General Finance Ltd. v. Hari Har Singh,
(1987) 1 Arb LR 260 (Del); Instalment Supply P. Ltd. v. Sushila Sharma,
(1987) 1 Arb LR 262 (Del), dispute, non-payment of instalments; Crompton
Greaves Ltd. v. Union of India,
(1987) 1 Arb LR 279 (Del), parties consenting to reference by court; Motor and
General Finance Ltd. v. M.K. Kuttappan,
(1987) 1 Arb LR 294 (Del), disputes under hire-purchase; Motor and General
Finance Ltd. v. Ajit Kumar Mishra,
(1987) 1 Arb LR 395 (Del), hire-purchase; Amar Nath Malhotra v. D.D.A.,
(1987) 2 Arb LR 152 , order of reference because agreement admitted, following
Ved Prakash Mittal v. Union of India,
AIR 1984 Del 325 [
LNIND 1984 DEL 148 ]; Ranutral P. Ltd. v. DESU,
(1987) 2 Arb LR 157 (Del) reference ordered. Goodwill India Ltd. v. Elizabeth
Thomas
(1996) 2 Arb LR 378 (Del), ex parte reference ordered. Ismaco Engg & Finance Ltd.
v. Piyush Sewing Machine Emporium,
(1996) 2 Arb LR 422 (Del) another hire-purchase, ex parte reference. India Lease
Development Ltd. v. Satish Kumar Singh,
(1996) 2 Arb LR 468 (Del), ex parte reference under hire-purchase agreement.
Goodwill India Ltd. v. T. Bala Chandran,
(1996) 2 Arb LR 615 (Del), hire-purchase business, exparte reference. Maya Motor
Co. v. Hari Kishan Sharma,
(1996) 2 Arb LR 700 (Del) hire-purchase, ex parte reference. Charat Singh & Co. v.
Manjit Singh,
(1987) 2 Arb LR 338 (Del) hire-purchase; Goodwill India Ltd. v. K.F. Abdul Jabbar,
(1987) 2 Arb LR 354 (Del), hire-purchased goods seized by the seller in bad shape,
claim against hirer referred; Vishwa Nath Khanna v. Ram Sarup Rastogi & Sons.,
(1986) 1 Arb LR 108 (Del) contention of one party that the agreement had become
infructuous because of the efflux of time, allowed to be referred; Motor and General Finance Ltd. v. Bombay Bulk
Carriers,
(1986) 1 Arb LR 111 (Del), compensation for delay in payments, referred; Manohar
Singh Sahney v. D.D.A.,
(1986) 1 Arb LR 114 (Del), denial of claim where agreement admitted was not
Navneet Krishn
Page 108 of 115
material, the matter referred; Jagdish Manchanda v. Union of India,

(1986) 1 Arb LR 214 (Del), all conditions for reference satisfied; Surana
Commercial Co. v. F.C.I.,
(1986) 1 Arb LR 214 (Del); disputes relating to cancellation of contract, bank
guarantee, security deposit and damages on account of breach, referred; Punjab Paint Colour and Varnish Works v.
Union of India,
(1986) 1 Arb LR 216 (Del), agreement admitted, disputes referred, the arbitrator
could decide whether the claim was time barred; Bhagat Ram v. Union of India,
(1986) 1 Arb LR 261 (Del), conditions of reference satisfied, its question was
whether rescission of the contract was justified; Madan Mukesh v. Union of India,
(1986) 1 Arb LR 263 (Del), contract admitted, dispute referred; Goodwill India Ltd.
v. Trilochan Singh,
(1986) 1 Arb LR 341 (Del), dispute out of hire-purchase referred; Motor and
General Finance Ltd. v. Shivji Pande
(1986) 1 Arb LR 343 (Del), hire-purchase disputes; Sukh Darshan Singh v. Dehra
Auto Financiers,
(1986) 1 Arb LR 359 (All), hire-purchase matters; Sahni Enterprises v. New
Filmistan Cinema,
(1986) 1 Arb LR 411 (Del), reference rejected, disputes unconnected with
agreement; Sushil Kumar Gupta v. Anil Kumar Gupta,
(1986) 1 Arb LR 416 (Del), reference with mutual assent; Prahlad Singh v. Union of
India,
(1986) 1 Arb LR 428 (Del), agreement through tender containing arbitration clause,
disputes referred; A.S. Sachdeva & Sons. v. M.C.D.,
(1986) 1 Arb LR 444 (Del) agreement proved, matter referred; Rathi Udyog Ltd. v.
National Building Construction Corpn Ltd.,
(1986) 1 Arb LR 451 (Del) counter-claim had to be referred when it was in the ambit
of the agreement; R.S. Amar Nath & Co. v. Union of India,
(1986) 1 Arb LR 455 (Del) :
(1986) 2 Arb LR 45 ; refusal of certain payments, wrongful deductions, referred;
Global Contract Services v. Union of India,
(1986) 1 Arb LR 469 , non-inclusion of certain payments in the final bill is a dispute,
referred; Motor and General Finance Ltd. v. Ajay Kumar,
(1986) 1 Arb LR 472 ; Fixopan Engineering P. Ltd. v. Union of India,
(1986) 2 Arb LR 1 (Del) once an agreement was proved all the disputes covered by
it could be referred; Virendra Kumar v. Union of India,
(1986) 2 Arb LR 5 (Del), consensual reference; Goodwill India Ltd. v. Umed Singh,
(1986) 2 Arb LR 28 (Del), the possession of the vehicle delivered under hire-
purchase was in dispute, the arbitrator could decide this question; Jaipal Singh v. Guru Nanak Investment Co.,
(1986) 2 Arb LR 340 (Del). Suresh Kumar Mehta v. F.C.I.,
(1986) 2 Arb LR 41 , petition withdrawn from Nagpur, allowed at Delhi, the arbitrator
could decide which party was in the wrong and also the counter-claim; Jugal Kishore Vats v. Sarita Sharma,
(1986) 2 Arb LR 57 (Del), dispute as to possession of plot of land referred, suit
stayed; Nonit Ram Rajput v. D.D.A.,
(1986) 2 Arb LR 339 (Del); Government being a party, reference to arbitrational
Tribunal, State of Orissa v. Neelgiri Co-op Housing Society
(1985) Arb LR 119 (Ori); another similar reference, State of Orissa v. Rama
Chandra Sahu,
(1985) Arb LR 122 (Ori); Usha India Ltd. v. Mahanagar Telephone Nigam Ltd.,
(1994) 2 Arb LR 321 (Del), reference of dispute as to telephone bill.
43. Hans Construction Co. v. D.D.A.,(1996) Supp Arb LR 420 (Del); Kelkar and Kelkar v.
Indian Air Lines,
(1996) 2 Arb LR 381 (Bom), full and final settlement, no dispute, no arbitration;
relying upon State of Maharashtra v. Nav Bharat Builders, 1994 Supp (3) SCC 83P.K. Ramaiah & Co. v. NTPC, (1994)
Supp 3 SCC 126 :
(1994) 1 Scale 1 .
44. K. Sasidharan v. Kerala State Film Development Corpn.,

(1994) 2 Arb LR 86 SC :
AIR 1994 SC 2534 : (1994) 4 SCC 135.
Navneet Krishn
Page 109 of 115
45. Ganesh Das v. Kesho Das,

AIR 1919 Lah 140 : 50 C 637; Godhu Mal v. Ganga Husso Mal,
AIR 1958 All 26 [
46. Nga Tha Zan v. Nga Kyaw Kaing,

AIR 1917 UB 6 : 38 IC 577.
47. Moheshuddin v. Kabiruddin, ILR 47 Cal 713 :

AIR 1921 Cal 818 : 26 CWN 246.
48. International Building and Furnishing Co. v. Indian Oil Corpn.,

(1995) 1 Arb LR 548 (Del).
49. Hoshiarpur Azad Transport Co. Ltd. v. Sutlej Land Finance P. Ltd.,
(1995) 2 Arb LR 422 (P&H).
50. British India General Insurance Co. v. United Indian General Finance (P.) Ltd.,
AIR 1971 Del 26 .
51. Dhanrajmal Gobindram v. Shamji Kalidas & Co.,

AIR 1961 SC 1285 [
LNIND 1964 SC 398 ]at p. 1294 para 26
(1961) 3 SCR 1020 [
LNIND 1964 SC 398 ] . Where the arbitration clause was scored out from the tender
and other documents, it could not be used for bringing about a reference. A new machinery was constituted under the
new standardised documents. State of Kerala v. C. Abraham,
(1989) 1 Arb LR 286 :
AIR 1989 Ker 61 [
LNIND 1988 KER 395 ]. The court distinguished State of Kerala v.
Joseph,
(1983) Ker LT 583 . Looking at the complications caused by matters like this, the
court said [at p. 294,
(1989) 1 Arb LR 286 ] : “Time was when arbitration received much acclaim. There
has been in later times, disillusionment and disappointment.” Edmund D Avies, J. referred to in Price v. Milner,
(1966) 1 WLR 1235 . The following extract from the judgment demonstrates the
change in the feelings : “Many years ago, a top-hatted old gentleman used to parade outside these Law Courts carrying
a placard which bore the stirring injunction : “Arbitrate, don't litigate”. I wonder whether the ardour of that old gentleman
would not have been dampened somewhat had he survived long enough to learn something about the present case.”
State of J&K v. Kewal Krishna Gandotra,
(1988) 2 Arb LR 327 (J&K), agreement not proved; Executive Engineer,
Municipality Jammu v. Inderjit Singh, (1988) Kashmir LJ 99; dispute arising out of delay in providing site, referred,
Madan Lal Khurana v. M.C.D.,
(1987) 2 Arb LR 270 (Del).
52. M.C. Katoch v. Union of India,

(1989) 1 Arb LR 302 (Del).
53. Union of India v. Himco (India) Ltd.,

AIR 1962 Cal 441 [
LNIND 1961 CAL 164 ]distinguishing Damodar Shah v. Union of
India,
AIR 1959 Cal 526 [
LNIND 1959 CAL 64 ], as to when and how contract was concluded through
tenders.
Navneet Krishn
Page 110 of 115
54. Burn Standard Co. Ltd. v. Mc Dermott International Inc.,

AIR 1991 SC 1191 [
LNIND 1991 SC 188 ]:
(1991) 1 Arb LR 380 SC :
(1991) 2 SCC 669 [
LNIND 1991 SC 188 ] . Permission was needed for the validity of the agreement
and the court found that the permission was there, Executive Engineer, Municipality, Jammu v. Inderjeet Singh,
(1989) 1 Arb LR 98 : AIR 1988 J&K 72, the court must decide this question by
considering the points raised by the parties.
55. Karnataka Housing Board v. Vaijanath Tubewells Ltd.,

AIR 1995 Kant 26 .
56. Saibalini Devi v. Dipti Bikash,

AIR 1969 Pat 222 .
57. Saibalini Devi v. Dipti Bikash,

AIR 1969 Pat 222 .
58. Union of India v. S.N. Das & Bros.,

AIR 1962 Cal 82 [
59. Parbati v. Durga,

AIR 1928 Lah 170 . Even in the absence of a formal contract a reference could be
made if the parties had agreed in writing informally. R.K. Sharma v. N.D.M.C.,
(1995) 1 Arb LR 298 (Del), in this case the formal requirement of S. Section 47 of
the Punjab Municipal Act was not complied with, but otherwise there was a concluded contract through the acceptance
of a tender.
60. Chief Engineer, Betwa River Board v. L.N. Garg,

AIR 1995 All 44 [
LNIND 1994 ALL 293 ].
61. Luis De Ridder Ltd. v. Nivose Societa Dt Navigazione, 53 Lloyd's Rep 21 . A/S Det
Dansk-Franske v. Compagnie Translatlantiques S/A, (1965) 2 Lloyd's Rep 353, time limits not extended because of no
hardship being caused to the defendant.
62. C.T. Chako v. Kerala S.E.B.,

(1990) 1 Arb LR 43 (Ker) ; following R.G. Ins. Co. v. Pearey Lal,
AIR 1952 SC 119 [
LNIND 1952 SC 9 ]at 121 the test was whether the recourse to the contract would
be necessary; Chris, Brown Ltd. v. Cenossenchaft,
(1953) 2 All ER 1039 matters of jurisdiction of arbitrator have to be proved
affirmatively; Sarvesh Chopra v. G.M. Northern Rly,
(1989) 1 Arb LR 224 (Del), matters not excepted, referred; Ram Manchanda v.
Union of India,
(1986) 1 Arb LR 218 (Del), claim not within excepted matters, referred. The same
was the position in Kailash Chand Jain v. Union of India,
(1986) 2 Arb LR 320 (Del); reference was ordered where nothing was pointed out
against it, Champa Lal v. Union of India,
(1986) 2 Arb LR 342 (Del); matters not excepted by the agreement, arbitrable, Asia
Engineering Co. v. L.I.C.,
(1983) Arb LR 399 (Kant). Meter disputes about the quantity of energy consumed
Navneet Krishn
Page 111 of 115
were for the inspector to decide and not arbitrable, Shriram Industrial Enterprises Ltd. v. M.C.D.,
(1995) 1 Arb LR 92 (Del).
63. K. Abdulla Haji v. State of Kerala,

(1990) 1 Arb LR 322 (Ker); State of Kerala v. Joseph
(1983) Ker LT 583 ; State of Kerala v. Siby Verghese,
(1987) 1 Ker LT 860 .
64. R.N. Kumar v. R.K. Soral,

AIR 1988 SC 1205 [
LNIND 1988 SC 228 ]:
(1989) 1 Arb LR 198 :
(1988) 2 SCC 508 [
LNIND 1988 SC 228 ] . The court referred to Babulal Marwari v.
Tulsi Singh,
AIR 1940 Pat 121 , whether a new contract replaced the old was a question of fact
in each case.
65. R.K. Soral v. R.N. Kumar,

(1987) 2 Arb LR 154 (Del). M.P. Jain v. Bennett Coleman & Co. Ltd.,
(1997) 2 Arb LR 94 (Del), new agreement did not intend to substitute the earlier
agreement, the arbitration clause in the earlier agreement remained effective.
66. Supreme Co-op. Group Housing Society v. H.S. Nag & Associates,
(1996) 1 Arb LR 580 (Del).
67. Radha Construction Co. v. New Delhi

(1989) 1 Arb LR 331 (Del).
68. Vipinbhai R. Parekh v. G.M. Western

Rly,
AIR 1984 Guj 41 [
LNIND 1983 GUJ 132 ]:
1983 Arb LR 198 . Pawan Kumar Jain v. Pradeshya Industrial and Investment
Corpn. of U.P.,
AIR 1998 All 57 [
LNIND 1997 ALL 1009 ], recovery proceedings initiated only against the guarantor
were held to be not illegal. The contract contained a clause to that effect. Kamal Devi v. Prabhat Chand,
(1997) 2 Arb LR 89 (Del), mode of compromise explained. It should be in writing
and signed by parties. The court followed Garpreet v. Chatur Bhuj Goel,
AIR 1988 SC 400 [
LNIND 1987 SC 853 ]:
(1988) 1 SCC 270 [
LNIND 1987 SC 853 ], Krishna Motor Service v. H.B. Vittala Kamath
AIR 1996 SC 2209 [
LNIND 1996 SC 2248 ]:
(1996) 2 Arb LR 1 :
(1996) 10 SCC 88 [
LNIND 1996 SC 2248 ], firm dissolved by mutual consent, no question of referring
any issue to arbitration.
69. Kesar Enterprises v. Union of India

(1994) 2 Arb LR 136 (Del).
70. Superintending Engineer v. Kehar Singh,

(1994) 2 Arb LR 148 LR 148 (AP), the court also held on facts that where payment
Navneet Krishn
Page 112 of 115
was withheld interest for the period was a sufficient compensation and the court would not interfere in the interest so
awarded by the arbitrator.
71. C.G. Therborg v. Union of India,

AIR 1968 Del 292 [
LNIND 1967 DEL 151 ].
72. Sunderlal Haveliwala v. Bhagwati Devi,

AIR 1967 All 400 [
LNIND 1965 ALL 117 ].
73. Indian Mutual General Insurance Society v. Himalaya Finance & Construction Co.,
AIR 1974 Del 114 [
1973 RLR 430 .
74. Antony D'Cruz v. B. Ramdas,

AIR 1979 Ker 209 [
(1972) 2 Ker 419 .
75. Mehtab Singh Jai Singh v. National Fire and General Insurance Co.,
AIR 1963 Punj 103 : (1963) 33 Com Cases 830.
76. Mehtab Singh Jai Singh v. National Fire and General Insurance Co.,
AIR 1963 Punj 103 : (1963) 33 Com Cases 830.
77. Anwarul Hassan Khan v. Ali Mohammed, (1961) All LJ 73 :

AIR 1961 All 558 [
LNIND 1960 ALL 171 ].
78. Sayaji Mills v. Aradhan Investments Ltd.,

(1980) 1 CWN 1 ; Re :Franklin and Swaythling's Arbitration V. HFJD
(1929) 1 Ch 238 .
79. Sayaji Mills v. Aradhan Investments Ltd.,

(1980) 1 CWN 1 ; Re :Franklin and Swaythling's Arbitration V. HGJF
(1929) 1 Ch 238 .
80. Union of India v. Chaman Lal Loona & Co.,

(1957) SCR 1039 :
AIR 1957 SC 652 [
LNIND 1957 SC 48 ].
81. R.K. Associates v. Channappa,

AIR 1993 Kant 247 [
LNIND 1992 KANT 153 ]:
(1992) 2 Arb LR 481 . The court cited Shyler v. Woolf,
(1946) All ER 54 (CA) :
(1946) Ch 320 and R Ussel o N A Rbitration, 69 (19th edn) [p 169 of 20th edn.,
1982] where the proposition is thus stated : “An arbitration clause will bind a valid assignee of a contract containing it;
Navneet Krishn
Page 113 of 115
and the presence of an arbitration clause will not normally cause a court to hold that a contract is not assignable. The
benefit of such a clause will, however, not pass to the assignee of a debt arising out of the contract containing it”.
82. Kunj Behari v. K.D. Churiwala & Sons,

AIR 1990 Del 137 .
83. Where the contract was cancelled because the contractor gave no response to work orders and his
earnest money was forfeited and even then he showed no concern in the matter. Hence there was no dispute any more
for which he could subsequently demand arbitration. Ram Krishna Singhal v. Executive Engineer,
(1991) 1 Arb LR 154 (Del) : (1991) 1 Del 275; the awarding of pro-offered additional
work to another contractor before the pro-offerce commenced work, not a breach of contract, Krishna Kumar Madhok v.
Union of India,
(1988) 1 Arb LR 248 (Del) :
AIR 1982 Del 332 [
LNIND 1982 DEL 45 ]: (1980) 1 Del 164; not merely entitlement to money but also
dispute, Inder Singh Rekhi v. D.D.A., (1988) 2 J T 6;
AIR 1988 SC 1007 [
LNIND 1988 SC 191 ]:
(1988) 2 SCC 338 [
LNIND 1988 SC 191 ]; Sitaram Goel v. M.B. Kanpur,
AIR 1958 SC 1036 [
LNIND 1958 SC 88 ]: 1959 All J 106; Food Corporation of India v. Joginderpal
Mohindarpal, (1989) 2 JT SC 89 :
AIR 1989 SC 1263 [
LNIND 1989 SC 134 ]. The applicant had to show what the dispute was and how it
was covered by the arbitration agreement. A failure in this respect would disentitle him, Mukand Iron & Steal Works Ltd.
v. Union of India,
(1989) 2 Arb LR 306 (Del) ; D.B. Gupta Contractors P. Ltd. v. P.N.B.,
(1989) 2 Arb LR 399 (Del) claim of compensation for delay caused by the opposite
party is a dispute. Pradeep Kumar Kalra v. D.D.A.,
(1989) 2 Arb LR 414 (Del), the claim was for refund of security deposit, unpaid
balance under the contract, amount payable on account of statutory increase, damages for breach of contract and
interest, further details about these disputes need not be given, application competent. Nanalal Verma Co. Ltd. v.
Alexandra Jute Mills Ltd.,
(1989) 1 Arb LR 235 : AIR 1989 (Cal), excuses in payment is repudiation, genuine
dispute; Bengal National Textile Mills Ltd. v. M.J. Textile Agencies, AIR 1981 P&H 226, disputes whether goods
actually supplied, referable; Nagina Enterprise v. D.G.S.D.,
(1988) 2 Arb LR 134 (Del), dispute as to quality of goods supplied, referable; Urmil
Malik v. National Savings Organisation,
(1988) 2 Arb LR 136 (Del), premature termination of an agency and consequential
loss is connected with the agreement, dispute referable; S.K. Sarawagi & Co. v. M.M.T.C. Ltd.,
(1988) 2 Arb LR 138 (Del) :
(1988) 35 DLT 39 (SN), dispute as to impact of devaluation on rate of payment,
agreement that an award under a similar another dispute would be applied, refusal to do so, cause of action then
arises, dispute referable; Manmohan Singh Harmohinder Singh v. Hotel Corpn. of India,
(1987) 1 Arb LR 212 (Del), dispute as to the duration of the agreement, referred;
Anjani Lal v. F.C.I.,
(1987) 2 Arb LR 77 (Del), whether higher rates were incorporated into the
agreement by an oral agreement made subsequently, held arbitrable dispute and, therefore, referred; Perfect Pac Ltd.
v. Union of India,
(1987) 2 Arb LR 227 (Del), where the petitioner has proved his case, the court can
ex parte appoint or order appointment of arbitrator v. P. Bhalla v. National Seeds Corpn.,
(1986) 1 Arb LR 346 (Del), contractor failing to supply, department purchasing at
his risk and cost, purchase still not complete, reference for assessment of damages not premature; Ravi Engineering
Works v. Narang Steel Rolling Mills,
(1994) 2 Arb LR 73 (P&H), electricity bills of the period of the lease but received
after the lease was over, dispute as to liability to pay referred. Coronation Constructions P. Ltd. v. Gujarat Heavy
Chemicals P. Ltd., Arb LR (Suppl 24) 368 (Del), where the dispute is arbitrable and where the existence of the dispute
between the parties is proved, the court has to refer the matter.
84. Rai Bahadur Basakha Singh & Sons (Contractors) Pvt. Ltd. v. Indian Drugs and
Pharmaceutical Ltd.,
AIR 1979 Del 220 [
Navneet Krishn
Page 114 of 115
LNIND 1979 DEL 1 ]; followed in Moolchand Shamlal v. F.C.I.,

(1991) 1 Arb LR 151 (Del); Sidhu Construction Co. v. Y.W.C.A.,
(1989) 1 Arb LR 231 (Del); Villayati Ram Mittal v. Union of India,
AIR 1981 Del 313 [
LNIND 1981 DEL 180 ].
85. Kundanlal v. Mehtab Ram, AIR 1980 P&H 182 : (1980) P&H 216.
86. Principal, Regional Engineering College v. S.N. Bambrao,

AIR 1978 JK 19 .
87. J&K State Forest Corpn v. Abdul Karim Wani,

(1989) 2 Arb LR 145 :
AIR 1989 SC 1498 [
LNIND 1989 SC 201 ]:
(1989) 2 SCC 701 [
LNIND 1989 SC 201 ].
88. Jagan Nath Phoolchand v. Union of India,

AIR 1982 Del 93 [
LNIND 1981 DEL 133 ]:
(1982) 20 DLT 280 . Food Corporation of India v. P.L. Juneja,
AIR 1981 Del 43 [
LNIND 1980 DEL 108 ], court's function to decide whether the dispute was within
the four corners of the agreement and not that of the arbitrator. M.C. Katoch v. Union of India,
(1988) 2 Arb LR 94 (Del), performance could not commence because the site was
not made available in time, the contractor claiming his expenditure incurred after the agreement, held, the arbitration
clause was wide enough to cover a dispute arising before commencement. The Govt. was directed to appoint arbitrator;
where the clauses covered the area of controversy and was not falling within excepted matters and some clauses
required interpretation, it was held that the matter could be referred to arbitration, Suratgarh Goods Handling Shramik
Thela Sahakari Samiti Ltd. v. Union of India,
(1988) 2 Arb LR 317 (Del). Standard Ocean Carriers v. Union De Remorquage etc.,
(1986) 2 Lloyd's Rep 609 QB (Com. Ct.). Salvage operators arrested the ship for their services, guarantee given for
securing release, dispute referred, held, reference did not include wrongful arrest.
89. Central Distillery and Breweries Ltd. v. Union of India,

(1988) 2 Arb LR 41 (Del).
90. Antony D. Cruz v. B. Ramadas,

AIR 1979 Ker 209 [
(1979) 2 Ker 419 .
91. Heavy Electric (India) Ltd. v. Pannalal,

AIR 1973 MP 7 [
LNIND 1972 MP 5 ]at p. 10 :
1973 MPLJ 26 ; DK Jain v. Union of India,
(2005) 3 Arb LR 568 , 570 :
(2005) 3 RAJ 649 (Del), some claims fell under purview of ‘excepted matters’
clause, only the remainder were referred to arbitration in a petition filed under S. 20following General
Manager, Northern Railway v. Sarvesh Chopra,
(2002) 1 Arb LR 506 :
(2002) 4 SCC 45 [
LNIND 2002 SC 161 ] :
AIR 2002 SC 1272 [
LNIND 2002 SC 161 ]:
(2002) 1 RAJ 521 .
Navneet Krishn
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End of Document
Navneet Krishn
PART V PROVISIONS OF 1940 ACT WHICH DO NOT FIND PLACE IN 1996 ACT
PART V PROVISIONS OF 1940

ACT WHICH DO NOT FIND PLACE IN 1996 ACT
9. Court having jurisdiction in matter to which agreement related
Where proceedings under Section 20, 1940 Act in the court of civil judge were converted into a suit and, thereafter,
transferred to the court of additional district judge, an application under Section 41(b), 1940 Act before the civil
judge after the transfer was not maintainable. Where an agreement provided that all proceedings would be filed
before the competent civil court at Fazilka, it was held that an application under S. 20, 1940 Act would have to be
filed before that court and nowhere else because such an application was in the nature of a civil proceeding. A
clause in a partnership deed provided that “all disputes shall be decided by the arbitrator at Calcutta.” An
application under S. 20, 1940 Act in Berhampore was not allowed.
Jurisdiction, a matter for court to decide
In an application under S. 20, 1940 Act the court had to see whether there was an arbitration agreement between
the parties and whether the dispute disclosed by the parties was covered by the agreement. It was a trite
knowledge that the arbitrator derived his power from the reference which furnished the source and prescribed the
limits of his authority. He could not enlarge the scope of the reference by construing the agreement in a particular
manner.
The court cited the following passage from Russel on Arbitration :
“It can hardly be within the arbitrator's jurisdiction to decide whether or not a condition precedent to his jurisdiction has been
fulfilled. It has indeed several times been said bluntly that an arbitrator has no power to decide his own jurisdiction.”
This legal position is couched almost in identical works like Halsbury's Laws of England:
“An arbitrator (and subsequently any umpire) obtains his jurisdiction solely from the agreement for his appointment, it is
never open to him to reject any part of that agreement, or to disregard any limitations placed upon his authority, as, for
example, a limitation on his right to appoint an umpire, nor can he confer jurisdiction upon himself by deciding in his own
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favour some preliminary point upon which his jurisdiction depends. Nevertheless he is entitled to consider the question
whether or not he has jurisdiction to act in order to satisfy himself that it is worth while to proceed, and an award which
expressly or impliedly refers to such a finding is not thereby vitiated.”
Similarly, in May v. Mills it was observed by Coleridge J that :
It had always been held that no court of limited jurisdiction could give itself jurisdiction by a wrong decision, collateral to the
merits of the case as to facts upon which the limit to its jurisdiction depends.
10. Application registered as a suit
The application was registered as a suit under sub-section (2) of Section 20, 1940 Act. Though registered as a suit,
the application was not a suit. The application did not require leave under clause 12 of the Letters Patent though
part of the cause of action arose outside the jurisdiction of the original side of the High Court.
Section 10 of the Code of Civil Procedure did not apply to a proceeding under Section 20, 1940 Act for
the proceeding was not a suit. The provisions of Order 34 Rule 5 of the
Code of Civil Procedure did not apply to a decree on an award made on a reference under Section 20,
1940 Act. The decree on such an award was not a preliminary mortgage decree. Nor was a proceeding under
Section 20, 1940 Act a suit for the purpose of levy of pleader's fees.
Order 2, Rule 2 of
CPC would prevent bringing into the suit additional claims. The petitioner stated in his application that
he reserved his right to bring in additional claims which would come to light on seeing the records of the
Department. The arbitrator turned down the request for additional claims. The arbitrator's stand was upheld by the
High Court. The court noted that the Supreme Court had categorically held that all disputes and claims available to
a party should be raised at the first instance and if any such claim or dispute is not so raised, then raising such
claims subsequently would be barred by the above cited
CPC provisions.
Since the application was not a suit in the fullest sense of the word, the provisions of the
Civil Procedure Code in respect of disposal of a suit on a preliminary point only after framing of issues
regarding maintainability were not applicable. The suit did not remain alive after an order was made, because it was
a final disposal of the suit.
11. Sufficient cause for not making order of reference
On the application being filed, the court issued notices to the opposite parties under sub-section (3) and where no
sufficient cause was shown the court made an order of reference under sub-section (4). The words of sub-section
(4) left a wide discretion in the court to consider whether an order filing the agreement should be made and a
reference made accordingly. It was neither considered necessary nor desirable to lay down in general terms what
would be sufficient cause which would entitle a court to refuse to make the order. The court had to decide on the
facts of each case whether sufficient cause had been made out. Sufficient cause was not limited to the kind of
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causes referred to in Section 20(1), 1940 Act, namely. that (a) there was no subsisting arbitration agreement, and
(b) that the dispute was not covered by the agreement. The court could refuse the application for any other
sufficient cause. The court could decline to make an order of reference under Section 20, 1940 Act when the
dispute required investigation into a charge of fraud or when it would be inequitable to make the order, e.g., when
the arbitrator though not partial to one party did not command the confidence of the other party or if the arbitrator
could not be impartial or where the conduct of the parties showed that they had abandoned and cancelled the
agreement, or the arbitration clause was embodied in a document which contravened provisions of law. Where
certain allegations of fraud were made against a party and the party charged with fraud desired that the matter
should be tried in open court that was sufficient cause for the court not to order an arbitration agreement to be filed
and not to make an order of reference. But it was not every allegation imputing some kind of dishonesty particularly
in matters of accounts which would persuade a court to take the matter out of the forum which the parties
themselves had chosen. An allegation that the accounts of the partnership were not correct, charges of sale of
goods at rates lower than the market rates and apprehension of sale of goods at rates lower than the market rates
and apprehension of misappropriation of the goods by some of the partners were not considered sufficient cause.
Where some of the partners entered into an arbitration agreement for reference of disputes in connection with the
partnership accounts without joining one partner whose share in the firm was admitted there was no reason why the
disputes between the partners who were parties to the arbitration agreement was not to be referred to arbitration
under Section 20, 1940 Act. The arbitrator would be at liberty to give an award leaving out the share of the non
joining partner the extent of which was not in dispute. When disputes in respect of a partnership business were
referred to arbitration under Section 20, 1940 Act, a person not joining in the reference could not be made a party
before the arbitrator.
The fact that the dispute between partners would involve question of law was no ground for refusing to refer it under
Section 20, 1940 Act, unless the question of law was so difficult and complicated that it required decision by the
court and not by the arbitrator. The mere fact that the named arbitrator was an employee of a party was not a
sufficient cause for not making an order of reference to arbitration. The discretion under Section 34, 1940 Act, to
refuse stay was wider and was more readily exercisable than the discretion under Section 20, 1940 Act to refuse to
make an order of reference. Conduct of the applicant showing his intention not to go to arbitration and his prayer for
changing the name of the arbitrator was sufficient cause for not making an order under Section 20. The court could
refuse to grant relief under Section 20, 1940 Act to a party who was guilty of laches or undue delay or such as to
lead to an inference of abandonment of the reference but mere delay could not be sufficient. The burden of showing
sufficient cause was on the respondent.
Matters sub-judice
Section 20, 1940 Act could be invoked when the agreement of arbitration was already there before the suit. If so, it
was not material that there was a pending suit between the same parties elsewhere on the basis of the same
agreement. All that the court could to see in such a case was that the whole of the subject-matter of the proposed
reference was not the subject-matter of the suit in the other High Court. In such a case there was no likelihood of a
conflict of findings as the two proceedings were not parallel. Section 35, 1940 Act would not be attracted where
claims sought to be referred were not relating to or affecting the claims in the other suit. A subsequent modification
of some aspects of the agreement not touching the arbitration clause was not to be taken into account.
12. Acceptance of payment under final Bill
The final bill was accepted by the contractor without prejudice to his rights. There was no settlement between the
parties prior to acceptance of the final bill. The corporation admitted the existence of a dispute. The matter was
sought to be referred to arbitration. But the plea of settlement in terms of the final bill was, raised by the Corporation
only when a clarificatory letter was issued. The Supreme Courtupheld the finding that there were triable issues so
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as to invoke jurisdiction under S. 20 of the 1940 Act.
13. Order of reference [ Section 20(4), 1940 Act]
The powers and duties of the court under sub-section (4) of Section 20, 1940 Act were of two kinds. The first was
the judicial function to consider whether the arbitration agreement should be filed or not. Once that was done and
the court had acceded that the agreement must be filed, the first part of the powers and duties was over. It was
significant that an appeal lay under Section 39, 1940 Act only against the decision on this part of the sub-section.
Where the court directed the filing of the arbitration agreement in court with the modification that the arbitrator would
be a person not designated in the agreement, the order amounted to an order refusing to file the arbitration
agreement and was appealable under Section 39 clause (1), 1940 Act. An order under Section 20, 1940 Act
allowing the application was not a decree and the appeal was not incompetent because it was not accompanied by
a copy of the decree. When the agreement contained effective machinery for appointment of arbitrators including
substituted arbitrators, the court was not debarred from making an order of reference where the arbitrator had not
yet signified his willingness to act.
After the first part of the powers and duties of the court under sub-section (4) of Section 20, 1940 Act were over,
there followed the ministerial act of reference to the arbitrator or arbitrators. If the parties did not agree the court
could be required to make a decision as to who should be selected and that could be a decision either judicial or
procedural or even ministerial. While considering the question of referability of the dispute, the court had not to
express any opinion on the merits of the dispute.
The reference had to be in accordance with the terms of the agreement. The court acted with material irregularity if
it did not do so.
If the arbitrator under a reference without intervention of court had already started arbitration proceedings or if for
some reason he could not complete the arbitration proceedings or if he had allowed the time to make the award to
expire the court would dismiss an application under Section 20, 1940 Act.
Where the arbitrators had already made the award the court would not make an order of reference under Section
20, 1940 Act. The proper course was to file the award under Section 14, 1940 Act, and to enforce it by decree even
if the award was made after the application under Section 20 was filed but before it was disposed of.
Where the parties proceeded to arbitration under Chapter II without the intervention of the court and the arbitrator
had closed the arbitration proceedings on the expiry of the time to make the award without making an award, the
court could not make the order of reference under Section 20, 1940 Act. Expiry of the time to make the award did
not end the arbitration proceedings since the court could extend the time.
Ex parte Order
Where under a hire-purchase transaction a default was made by the hire-purchaser and all the requirements of
making a reference by appointment of arbitrator as required by the terms of the agreements and S. 20, 1940 Act
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were satisfied, an ex parte reference was held to be valid.
Order of Reference without appointing Arbitrator
An order of reference without assuring that there was an arbitrator or without appointing an arbitrator was not a final
order and, therefore, a revision from it would not lie. It is at the most a direction to the parties to nominate an
arbitrator so as to enable the court to appoint him and to make a final order.
Order of Reference res judicata
Where the dispute raised in a successive reference had already been decided in an earlier reference, it was held
that such successive application was barred by the earlier adjudication. Section 20, 1940 Act, the court said, did not
contemplate successive references on the basis of the same dispute. Where in an earlier reference the Supreme
Court directed the payment of a certain amount in full and final satisfaction of the matter under dispute, a second
reference over the same claim was held to be not possible.
Order of Reference requiring Statement of Reasons
The court had the power under the section while making reference to require the arbitrator to make a reasoned
award.
14. Order filing arbitration agreement
Where no sufficient cause was shown, the court would make an order of reference under sub-section (4) to the
arbitrator appointed by the parties whether in the arbitration agreement or otherwise or where the parties could not
agree upon an arbitrator, to an arbitrator appointed by the court.
The agreement was filed when the court was satisfied that agreement was binding upon the parties with respect to
the disputes which had arisen existed and required to be made a rule of court. The word “filed” did not mean that
the agreement should be physically filed in court. The word “file” in Section 20, 1940 Act was used in the sense of
acting upon the agreement and not the mere producing physically in court. An order that the dispute be referred to
arbitration without ordering the filing of the agreement was held to be not sustainable. The court had to decide the
question of the existence or validity of the agreement and the same could not be left to the decision of the arbitrator.
The court alone could exercise that power. It was the judicial function of the court to decide whether the agreement
had to be filed in the court or not. The court had also to decide the arbitrability of the claims. The court accordingly
set aside an order for straightaway reference to arbitration without considering the arbitration clause.
The court was not bound to refer only the disputes raised by the petitioner but having regard to all the
circumstances refer also the disputes raised by the respondent to arbitration.
Navneet Krishn
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Ex parte order of reference
Where the party was duly served but neither appeared nor filed a reply, the court found it to be a fit case for having
recourse to Order 8, Rule 10,
CPC and to proceed ex parte for allowing the petition and directing the party to file the agreement in
court and to appoint an arbitrator.
15. Appointment of arbitrator
The court could appoint an arbitrator, if the parties could not agree to appoint one or to fill up a vacancy in the office
of the arbitrator when the post of the managing director who was to appoint the arbitrator was abolished or if the
post of Chief Engineer who was to arbitrate was vacant. Where the Secretary to the Government was authorised to
appoint the arbitrator and the application under Section 20, 1940 Act was made without requesting him to make the
appointment, the application was treated as a request for the appointment.
The court had to appoint two arbitrators and not one only where the arbitration agreement provided for appointment
of two arbitrators in a case where the value of the subject-matter of the reference was over Rs. 50,000. Where the
agreement was that if the dispute involved a certain amount, a Gazetted Officer was to be appointed as an
arbitrator. The Court, however, appointed a retired District Judge and directed the parties to appoint arbitrators in
consonance with the clause in the contract.
The party in default who was to appoint an arbitrator but who did not appoint one did not lose his right to be
consulted by court on the selection of an arbitrator.
Where the arbitration agreement provides for exhaustive and adequate machinery for appointment of an arbitrator
by another person but that person had not made any appointment the court could appoint an arbitrator but as it had
to consider the feasibility of making an appointment according to the terms of the agreement and should make a
request to that person to make the appointment.
If the arbitration agreement provided for appointment of the arbitrator by a person designated in the arbitration
agreement the court would consider the feasibility of the appointment according to the terms of the agreement and
would make a request to the persona designata to make the appointment.
Even if the power of appointment of arbitrator was vested in a party, the court could appoint an arbitrator where that
party had not appointed an arbitrator. This approach was also adopted by the Calcutta High Court in Misti
Enterprises v. Britania Engineering Products and Services Ltd. The relevant clause provided that
every dispute was to be referred to the sole arbitrator of the person to be appointed by the chairman and managing
director of the company. He was called upon to do so but no reply was received against the letter of request.
Reminders also remained unheeded. The defence raised against the application for appointment and reference was
found by the court to be frivolous. A retired High Court judge was appointed and the matter was referred to him. The
court followed Union of India v. Prafulla Kumar Sanyal. In this case the clause provided
that every dispute was to be referred to a sole arbitrator to be appointed by the resident of India or if he was
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unwilling to act, to any person appointed by him. No such appointment was made by the President and the court
said that it was not obligatory to make reference only to the President's nominee. The court could find out whether
the parties agreed to an arbitrator and, if not, the court could appoint an arbitrator of its choice. The court also relied
upon a Full Bench decision of the High Court of Delhi, where A.B. Rohatgi J. said:
“The clause provides for an agreed method. The method is the appointment by a named appointer. This agreed method or
machinery must be invoked. But if the arbitration machinery fails because the chief engineer does not appoint, the court has
power to fill the gap. The court steps in the chief engineer's stead. Section 20(4) [1940 Act] confers upon the court a
general residual power to appoint an arbitrator when the parties do not agree upon the arbitrator. The purpose of the
section is to effectuate the intention of the parties. If the arbitrator is not appointed by the agreed appointer, such a case is
contemplated by the authors of S. 20(4).”
Where the company which had to make the appointment was not very keen or prompt in appointing a sole arbitrator
as required by the agreement, it was held that the court could exercise its jurisdiction under S. 20, 1940 Act to
appoint an arbitrator. But the court should first call upon the parties to proceed in accordance with their agreement
and put their trust on the designated arbitrator unless it could be shown that he would be biased against one party
or the other.
An order of appointment of an arbitrator for reference of disputes with the Union of India passed in proceeding
under Section 20 (4), 1940 Act, to which the Union of India was not a party and under an agreement which was not
executed by it was invalid and the award made on the reference was without jurisdiction.
When the arbitration agreement provided for a reference to the sole arbitration of an arbitrator appointed by the
chairman or managing director of the company with power to appoint another arbitrator in case of the arbitrator
appointed by him being transferred or vacating his office or being unable to act and stipulated that no person other
than a person appointed by the chairman or managing director shall act as arbitrator and if for any reason that was
not possible the matter was not to be referred to arbitration at all, the court cannot appoint an arbitrator under
Section 20(4), 1940 Act, on refusal by the managing director to appoint an arbitrator as the power of the court to
appoint an arbitrator was excluded by the express agreement, but the court may compel the persona designata to
appoint an arbitrator. If the designated holder of office was found unfit or biased the court could appoint another
arbitrator.
Sub-section (4) of Section 20, 1940 Act, provided for appointment of arbitrator by court and consequently Section 8,
1940 Act, did not apply at the stage of the initial appointment of arbitrator in proceedings under Section 20, 1940
Act. The application under Section 20, 1940 Act was maintainable though the notice for appointment of an arbitrator
required by Section 8, 1940 Act, was not given. In the undermentioned case it was held that the court could appoint
an arbitrator under Section 8, 1940 Act even at the initial stage of the proceeding under Section 20, 1940 Act.
Where one of two arbitrators appointed by the court refused to continue as arbitrator, the vacancy could be filled
under Section 8(1)(a), 1940 Act, only and not under 20, 1940 Act.
Where the power of selection of an arbitrator or arbitrators and umpire was placed in the hands of the chairman of
the board of directors of the East India Cotton Association Ltd. the court could under sub-section (4) send the
agreement to him after it was filed in court to be dealt with by him. Once this was done the Bye-Laws of the
Association laid down the procedure for appointment of the arbitrator or arbitrators and that procedure even if
inconsistent with the Act prevails.
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Unlike Section 20, 1940 Act, Section 8, 1940 Act did not empower the court to make an order of reference to the
arbitrator. Under Section 8 it was for the party to refer the dispute to the arbitrator after the court had appointed him.
The court could not appoint a Government servant as an arbitrator without the previous sanction of the State
Government as required by the State Government Servant Conduct Rules. The Court could not select a person as
an arbitrator from the panel of names without applying its mind to ascertain his suitability as arbitrator.
An agreement of lease provided for the appointment of an arbitrator in case of any dispute. A dispute arose
because the quantum of damages ascertained by the lessor was disputed by the lessee. The lessee was given the
opportunity to suggest an arbitrator but failed to do so. The court thereupon appointed an arbitrator as suggested by
the lessor. After all this, the lessee moved in and asked for stay on the ground that there was no such agreement
and even if it was there it was not admissible in evidence. His move was held to be not sustainable.
“Unconnected with the work”
An agreement provided for the appointment of a “superintending engineer, Irrigation Deptt., who should be
unconnected with the work.” The Supreme Court held that the effect of the clause was that the person to be
appointed must belong to the field of irrigation because only he would have technical knowledge to understand
matters but that he should not be connected with the particular contract which was under dispute.
Party having option to appoint compellable
Where under a clause in a contract, option was with one of the parties to appoint an arbitrator, it was held that such
party was compellable to appoint and refer the matter to the appointee.
An application was made to the court for filing the arbitration agreement without making an application to the
Central Government in terms of the agreement for appointing an arbitrator. It was held that the Government could
treat the application to the court as an application to it and could refer the matter on that basis. The application
could not be said to be premature.
Retirement of Office holder Appointee
Where with the consent of the parties’ disputes between them were referred to arbitration by the managing director
of the petitioner company and he entered upon the reference, it was held that he could continue to conduct the
proceedings even after his retirement.
Court's Power to appoint in Special Circumstances
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On the special circumstances of a case the court could appoint another arbitrator than the one mentioned in the
arbitration agreement. Where an arbitrator was removed for misconduct, the suit under Section 20, 1940 Act,
became revived giving the court the power to appoint another arbitrator.
16. Limitation
An application under Section 20, 1940 Actwas not governed by

Article 181 of the Limitation Act , 1908 which by judicial construction was confined to applications under
the
Code of Civil Procedure , but it was governed by
Article 137 of the Limitation Act, 1963 . Limitation was three years from the date when the right to apply
accrued. The right to apply accrues on the date when the cause of action arises. A claim to a share of the value of
the goodwill of a dissolved partnership arises on the date of the dissolution of the partnership and the right to apply
under Section 20, 1940 Act, accrued on the date of the dissolution. Limitation for an application under Section 20,
1940 Act arose on that date and not on the date of the notice demanding arbitration. A demand for arbitration and
its refusal are not necessary ingredients for the accrual of the right to apply under Section 20, 1940 Act.
However, there was authority for the opposite view. Where a contract was rescinded by a party, the right to apply
under Section 20, 1940 Act accrued to the other party when demand for arbitration was made by him and limitation
ran from that date. Where after the rescission of the contract a penalty was imposed upon the contractor for his
breach as provided in the contract, it was held that the period started running from the date of the imposition and
not from the date of rescission of the contract. A contract was repudiated on April 20, 1982. The petitioner lodged
claim on Aug 8, 1984 which was not settled till the date of filing the suit on May 30, 1985. This was held to be within
limitation. The court said that limitation began when the claim was refused and not when the contract was
terminated. Limitation under a time bar clause in an insurance policy providing for forfeiture of all benefits under the
policy, if an action or suit was not commenced within three months of the rejection of a claim made by the insured,
starts from the date when the repudiation of the claim was actually conveyed to the insured. Whether the claim was
barred by limitation by a time bar clause providing for a special period of limitation or by limitation under the
Limitation Act was for the arbitrator to decide. The court could not enter into the merits of
the controversy and decline to make an order under Section 20, 1940 Act on the ground that the claim was barred
by limitation. Thus it was clear that the plea of limitation had to be taken before the arbitrator and it was for the
arbitrator to decide that question. The right to apply accrues when the right is asserted and there is a clear and
unequivocal denial of the right. The dispute as to the refund of price arose when there was refusal by one party to
make the refund as claimed by the other party. In a contract for hiring transport services of which there was a
breach so that an alternative transport had to be arranged, it was held that the claim amount could be known only
when the alternative operator submitted his bill after completing the work and the difference of costs and expense
was taken out. The cause of action arose when the difference was claimed from the original contractor and the
same was denied by him. The Court followed the decision of the Supreme Court in Union of India v. L. K. Ahuja
where after reconciling the decisions in Kerala State Electricity Board v. T. P. K. K. and Wazirchand
Mahajan v. Union of India the Supreme Courtobserved that in order to be entitled to ask for a
reference under S. 20, 1940 Act there must be an entitlement to money and a difference or dispute in respect of the
same. It will be entirely wrong to mix up the two aspects, namely, whether there was any valid claim for reference
under S. 20, 1940 Act and, secondly, whether the claim which was to be adjudicated by the arbitrator was barred by
lapse of time. The second was a matter which the arbitrator would decide unless on admitted facts a claim was
found at the time of making an order under S. 20to be barred by limitation. The court concluded by saying that in
order to be a valid claim for reference under S.
Section 20 of the Arbitration Act , 1940 (repealed) it was necessary that there should be an arbitration
agreement and secondly difference must arise to which the agreement applies and thirdly the claim must be within
time as stipulated in S. 20, 1940 Act.
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Where there was a difference between the contractor and the State over the demand to make good the loss caused
by retendering, it was held that the cause of action arose on the date of the service of the demand notice. The right
to apply under S. 20, 1940 Act arose on that date. An application filed 9 years thereafter was hopelessly time-
barred.
In a suit by a contractor for his claim against a corporation, the latter raised a counter-claim which was denied by
the contractor and the suit having been referred to arbitration, the arbitrator made his award ignoring the counter-
claim. The corporation then applied under S. 20, 1940 Act, for referring the matter of counter-claim to arbitration. It
was held that the period of limitation started running from the date of the denial of counter-claim by the contractor in
the suit and not from the date of the award.
Survival of Arbitration Clause after Expiry of Contract
Where the contract containing the arbitration clause had expired it would depend upon the nature of the claim which
arises afterwards whether the arbitration clause would be applicable or not. This was the question in a case in
which a lease was terminated, possession of premises was handed over to the lessor and the accounts were also
finally settled. An electricity bill received afterwards became the source of dispute. It was held that the same could
be referred to arbitration. The court said that although the contract was a closed chapter, there was something
which was connected with the contract but arose in the aftermath and, therefore, the arbitration clause survived till
that dispute was disposed of in the manner prescribed by the contract, namely, arbitration.
The right to apply under Section 20, 1940 Act accrued when the contract was repudiated and not from the date of
the issue of the notice for appointment of an arbitrator.
17. Accrual of right to seek reference
In the facts of the case, it was held, that right to seek reference would accrue when there existed a referable
dispute. Time-barred claim could not be referred to an arbitrator.
It was also held, that if the contract contained an arbitration clause, the process of adjudication would be through
the medium of arbitration.
Condonation of Delay
Where an application was made in a wrong court thinking that it had jurisdiction because the tender was accepted
at that place, the application was returned for presentation before the appropriate court excluding the time spent in
petition before a wrong court and condoning the delay. Such condonation was not granted on the ground of the
pendency of a writ petition. Where the contract provided that the Government would be absolved of all responsibility
if the dispute was not referred within 90 days, it was held that the appellate court had no power to extend the time
when no such plea was made before the trial court.
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A clause in the arbitration agreement provided that a petition could be filed only after making bona fide attempt to
resolve the differences by mutual consultation. A notice was issued by the appellant on 17-4-1990 to the
respondent telling them that they would take legal action against them. The respondent sent his reply on 17-5-1990.
The tenor of the notice did not show any desire for effective mutual consultation. It did not also amount to an
acknowledgement under S.
Section 18 of the Limitation Act , 1965. A petition filed on 30-11-1993 was held to be time-barred. But
the delay was condoned under S.
Section 5 of the Limitation Act . The court felt that having regard to the nature of the suit, the delay
was not wilful. But even so the court imposed costs of Rs. 20,000 for granting condonation.
Contract providing Period of Notice
Where the contract provided that the claim must be notified to the Engineer-in-Charge within 10 days from the date
of issue of orders etc which were under question, a failure to do so would debar the claimant from seeking an order
of reference.
Amendment for raising Plea of Limitation
Where claims and counter-claims were filed by the parties, the plaintiff sought amendment of his counter-claim for
adding the plea of limitation which was not allowed by the arbitrator, the High Court allowed amendment. The court
said that in a suit for reference the defendant can take all the pleas available to him for his defence. The arbitrator
should not have disallowed the plaintiff to raise the plea of limitation by amendment at the initial stage of the
proceeding.
Limitation for Court to decide
The question whether an application under S. 20, 1940 Act, for order of filing and reference was within the period of
limitation was for the Court to decide.
Resjudicata
The petitioner was awarded construction work in 1980. On arising of dispute, the matter was referred to arbitrator
and award was published on 31-1-1987 in a sum of Rs. 20,10,488/- together with interest in favour of the petitioner.
The petition under S. 20 was filed in 1987 invoking principles of res judicata. It was held, that fresh award inherently
decided the claim of petitioner for work done as per contract. Second reference would be barred by constructive res
judicata. It was also held, that limitation for filing an application under S. 20 was 3 years and the time began to run
from the period ‘when right to apply accrued’. Cause in action in substance denoted and determined the starting
point of limitation which in turn depended upon facts and circumstances of each case. Hence, the petition was not
barred by limitation.
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18. Application of other provisions to proceedings under S. 20(5), 1940 Act
After the order of reference was made, the arbitration had to proceed in accordance with and was to be governed
by the other provisions of the Act so far as they could be made applicable. The expression “other provisions of the
Act” referred to provisions applicable to proceeding before arbitrators and not before the court.
19. Amendment of proceeding under Section 20, 1940 Act
The court could not allow an amendment of a proceeding under Section 20, 1940 Act so as to convert it into a suit.
The proceeding under Section 20, 1940 Act though registered as a suit was not a suit. To allow the amendment
would be to subrogate a different proceeding and would prejudice the respondent as a new suit could be barred by
limitation. The Kerala High Court distinguished this case from the case before it in Food Corporation
of India v. P.A. Ahammad Ibrahim. The court said that there was difference only of relief in a suit under
S. 20, 1940 Act and a regular suit. The cause of action is the same. Consequently the only effect of the amendment
could be that instead of allowing relief by referring the matter to arbitration, the court itself would adjudicate upon
the dispute. The limitation would be reckoned not from the date of amendment. The court had the inherent power to
do so even if the application was not covered by Order 6, Rule 17,
CPC . An amendment was allowed where two bills were submitted after the application and it was
necessary that they should be added to the claim for one-time disposal.
Where after filing one suit for referring to arbitration certain disputes, another suit was filled for referring more
disputes under the same agreement, the same was held to be barred under Order 2 Rule 2,
CPC because this provision applies to arbitration proceedings in terms of S. Section 41 (a)of the
Arbitration Act 1940 (repealed). Where the parties to the agreement had changed their
position under a long-term commercial agreement for sale of machinery and the dispute was about the date of
expiry of the agreement, an amendment on this point was not allowed because the date of expiry would depend
upon interpretation of the agreement and no prejudice would be caused to the plaintiff even if the amendment
sought was not allowed.
Effect of incomplete reference to the arbitrator
In the event that a petition under S. 20 of the 1940 Act fails to list all the claims sought to be arbitrated and the court
refers only the claims listed, the arbitrator would be justified in considering only the claims so referred. In order to
raise additional claims before the arbitrator, the correct course for the claimant to pursue would be to file for a
review of the original order of reference or to seek a supplementary reference.
20. Jurisdiction of arbitrator under order of reference
The arbitrator could not enlarge the scope of the order of reference. He could not entertain fresh claims made
before him without a fresh order of reference. He exceeded his jurisdiction if he did so and the award was liable to
be set aside. On the basis of this authority it was held in Ruby Plastic Industries v. Food Corporation of India
that where proceedings were between the petitioner and Union of India and the Union also participated in the
proceedings, the substitution by the arbitrator at a subsequent stage of the FCI for the Union despite objections by
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the petitioner and entertaining the claim of FCI which was not a party to the reference was held to be beyond the
jurisdiction of the arbitrator. The court said that even if the contract made by the Union was for the benefit of FCI,
the latter was not a party to the reference. The arbitrator acted beyond the scope of his reference and his award
was liable to be set aside.
An observation in the order of reference that there is a certain dispute which would have to be decided by the court
did not amount to a direction and the arbitrator need not decide the question unless it was one sided.
A non-speaking award allowed some of the claims and rejected the counter-claims. Objections that the award was
incomplete because it left some issues undecided and that the arbitrator exceeded his jurisdiction were not
entertained. The court said that when terms of reference were settled before the court in an application under S. 20,
1940 Act and the arbitrator was called upon to decide those issues, a party could not subsequently say that the
arbitrator had exceeded his jurisdiction or that the reference was beyond the terms of the contract.
21. Proceedings after order of reference
After the order of reference is made, the proceedings before the court under Section 20, 1940 Act came to an end.
After the award was filed, a separate application for setting aside the award could be made before the court. Any
application subsequent to the order of reference e.g., for removing of the arbitrator had to be made to the court
where the original application under Section 20, 1940 Act was filed. A reference made by the court could be
recalled only by the court. An application could be made to the court for setting aside the order of reference. The
court did not become functus officio for this purpose. The order of reference defined the limit of the authority and
jurisdiction of the arbitrator. The arbitrator acted beyond the scope of his authority in awarding loss of profit which
was not claimed in the application under Section 20, 1940 Act, but was put forward before him for the first time.
Where after the appointment of arbitrator and reference to him the matter remained pending for three years and the
party applied for the amendment of his application, it was held that the moment an application was finally decided,
the court became functus officio. The aggrieved party could file an appeal under S. 39, 1940 Act. The application
was not maintainable.
Where after the reference, conciliation through the arbitrator and a committee of experts was accepted under
coercion, a new suit for filing of arbitration agreement and appointment of arbitrator was allowed.
22. Power to pass interim orders
After the application under Section 20, 1940 Act was made, the court had power under Section 41(b), 1940 Act
read with the Second Schedule to appoint a receiver and to pass interim orders for preservation and safety of the
subject matter of the dispute, or of injunction. The relief could be granted before the orders of reference was made.
If there was prima facie case the court could grant interim relief. Where this was necessary to do so on a prima
facie case, the court granted an injunction restraining the defendant during the pendency of the proceeding from
alienating the property about which the plaintiff had under the contract the right to seek specific performance.
Where a billing dispute for supply of electricity was referred to arbitration and though there was evidence of
tampering with the meter, the court issued an interim order that the supply should not be disconnected during the
pendency of the matter. Where after the award of a contract and a dispute, the awarding authority encashed the
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bank guarantee and the matter was referred to arbitration at the application of the contractor, the court ordering
refund of the guarantee money to the contractor, it was held that this was not a proper interim order and said that
this power should be used in very exceptional circumstances.
Encashment of a bank guarantee was restrained till the award was made a rule of the court on the petitioner's
undertaking that he would keep the guarantee alive till then.
23. Registration of award
In the view of the High Court of Delhi an award given by an arbitrator who was appointed by the court in a suit was
not required to be registered compulsorily.
24. Jurisdiction
In Union of India v. Electronic Controls and Instrument Engineers, admittedly the work in question was to be carried
out at Patiala, which was to be supervised by the Executive Engineer stationed at Patiala and the tenders were also
called at Patiala, as such the entire cause of action arose at Patiala, which was not within the jurisdiction of Delhi
High Court. As all matters connected with an arbitration agreement, award and regarding conduct of arbitration
proceedings can be initiated only in a court within whose territorial jurisdiction the cause of action has arisen, the
decisions of the learned Single Judge holding Delhi High Court also to be having jurisdiction on account of
“residence of the appellant” was liable to be set aside.
An application for making the award a rule of the court could only be filed in the court which made the reference.
Whre there were two contracts between the parties and though both of them fell under Calcutta jurisdiction, one of
them contained a forum selection clause enabling parties to select their jurisdiction, the Calcutta High Court held
that in the interest of certainty and for avoidance of conflict and scramble, the court should have jurisdiction over
both contracts.
The forum selection clause of the agreement provided that “the City Civil Court at Madras shall be the only court
which shall have jurisdiction to enforce the arbitration award obtained under this clause”. One party filed the
application at Calcutta and the High Court entertained it and passed an order. An application was filed at Madras for
removal of the arbitrator, which the court refused to entertain because the Calcutta High Court had assumed
jurisdiction. These decisions were not challenged. The award was filed at Calcutta. The Supreme Court refused to
interfere in the matter.
25. Filing of award in wrong court
Where an award was filed in a wrong court and a notice was issued by the court, the same was held to be not a
valid notice for the purposes of
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Article 119(a) of the Limitation Act, 1963 .
26. Appeal
Section 20, 1940 Act did not figure in the list of appealable orders under S. 39, 1940 Act. However, an order under
clause 12 of Letters Patent cannot always be construed as an order under the
Arbitration Act . An appeal was allowed against an order granting leave to file application under S. 20,
1940 Act. The question of an order under the
Arbitration Act would arise only when leave was granted to file an application unders. 20, 1940 Act.
Before that stage there was no proceeding before the High Court under that Act. The court further held that leave
under clause 12 of Letters Patent was necessary to file an application under S. 20 of the Act, 1940 (repealed).
Where an application under S. 20 was rejected on the ground that the cause of action was barred by limitation and
an appeal under S. 39 (1940 Act) was rejected by the High Court on the same ground, it was held by the Supreme
Court that the rejection of the case under S. 20 on the ground of limitation tantamounted to refusing the filing of an
arbitration agreement, and, therefore, an appeal against the decision deserved to be applied.
A single judge, dealing with an application under S. 41 (1940 Act), granted an absolute stay of recovery of amount
awarded. An appeal against this order was filed before the Supreme Court. The order was set aside and substituted
with the order that the respondent should deposit 50% of the total dues in three monthly instalments and that, if
there was a default, recovery could be effected. After this order of the Supreme Court, the court said that the
pending matter under S. 20 should be disposed of accordingly.
REFERENCE OF SUITS
Section 21 of the Arbitration Act , 1940 has been deleted from the
Arbitration and Conciliation Act, 1996 . The literature on the provision has been retained here for ready
reference in the interest of pending cases.
S. 21. Parties to suit may apply for order of reference.— Where in any suit all the parties interested
agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time
before judgment is pronounced apply in writing to the Court for an order of reference.
1. Conditions for applicability of Section 21, 1940 Act (repealed)
Where the parties to a litigation desired to refer to arbitration any matter in difference, in that case all proceedings
were under the supervision of the court. The agreement to refer and the parties’ application founded on it had to
have the con-currence of all concerned and actual reference was the order of the court so that no controversy could
arise as to the regularity of the reference up to that point.
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Two conditions had to be satisfied before an application for a reference in suit could be made. All the interested
parties must agree to obtain an order of reference and the subject-matter of the reference must be any matter in
difference between the parties in the suit. When these two conditions were satisfied the application for reference
could be made at any time before the judgment was pronounced.
There could be no valid reference of the subject-matter of a pending suit without an order of court under Section 21,
1940 Act (repealed). Apart from the provisions of Section 21, 1940 Act (repealed), the court had no inherent power
to make a reference of disputes in a pending suit. The court had no power of its own motion to order a reference
and it could do so only if the provisions of the Act were complied with.
Disputes which could arise in future could not be referred under Section 21, 1940 Act (repealed).
Reference by Appellate Court
An appellate court had no power under the

Arbitration Act , 1940 Act (repealed) to make a reference to arbitration and it made no difference that
the reference was made in the course of a review proceeding, since the review proceeding was filed before the
District Judge as an Appellate Court. The learned judge as a Court of Appeal exercised a jurisdiction not vested in
him or acted with material irregularity in the exercise of his jurisdiction and, therefore, the judgment and decree
following on that reference pronounced by him must be set aside.
Contrary view was taken by the Patna High Court. The court said that the word “court” as defined in S. 2 included
the appellate court also and consequently, therefore, an order of reference could be passed by an appellate court
also. The court also felt that the word “suit” in S. 21, 1940 Act (repealed) did not have the effect of excluding
“appeal” A similar view had been taken by the Madras High Court.
Rajasthan High courtwas of the view that an appellate Civil Court in exercise of its appellate
jurisdiction had got co-extensive powers with those of an original Court except as limited by special provisions
contained in the
Civil Procedure Code . Such portion of the subject-matter of a suit as was also the subject-matter of an
appeal fell within the jurisdiction of an appellate Court and questions forming the subject-matter of a reference
relating to such subject-matter of appeal lay within the competence of an appellate Court. An appellate Court
should, therefore, be considered to be a ‘court’ within the definition of the term as contained in S. 2(c) of the Act,
1940 Act (repealed). There was no reason to put a restricted meaning on the term ‘Court’ so as to limit its
application to an original court only. There appeared no reason to give a restricted meaning to the term ‘suit’ in
Section 21, 1940 Act (repealed) so as to deprive the parties to an appeal to get the benefit of the provisions of the
Act. The term ‘suit’ as used in S. 21, 1940 Act (repealed) of the Act should be construed in its wider sense as
including an appeal. The provision of S. 21, 1940 Act (repealed) was clear so as to authorise an appellate Court to
refer the subject-matter of an appeal to arbitration if all the parties to the appeal applied in writing to the Court for an
order of reference.
2. Interested parties
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All the interested parties had to agree and apply for the order of reference. “All the parties interested” meant all the
parties interested at the time of the reference, in any matter of difference which is sought to be referred, that is, in
the specific dispute to be referred to arbitration.
The word “interested” was added to the

CPC, 1908 to give effect to the decision in Pitam Mal v. Sadiq Ali. Parties who never put in any
appearance in the suit and between whom and any of the parties to the arbitration there was in fact no matter of
controversy was not a party interested. Where only some of the parties to the suit applied for a reference of matters
in difference in the suit, the court could refer such matter, provided the same could be separated from the rest of the
subject-matter of the suit. Unless they could be separated, the court had no jurisdiction to make a reference at the
instance of some of the parties. An award in an arbitration in a suit for partition of a joint Hindu family was held to be
not invalid merely because the transferers from a co-partner whose interest was protected by the order given by the
arbitrator were not parties to the submission. It is quite immaterial if all the defendants were not parties to the
reference. The award bound the parties to the reference.
It seemed that in England the court had inherent power to make an order of reference in a pending suit.
In a suit against three defendants jointly to recover a debt, a defendant who unconditionally admitted the plaintiff's
claim was not a party interested. But it might be otherwise if he admitted liability to the extent of two-thirds of the
claim or if he absented himself. A defendant was not interested if he admitted liability. It depended on the nature of
the suit, the defence, if any, and the conduct of the parties whether the defendant was interested. One test as to
whether a party was interested was whether he was a necessary or proper party who could be joined under the
provisions of Order I, Rule 10 of the
Code of Civil Procedure , but it had been pointed out that a necessary party was not always an
interested party. In a suit against the surviving partners and the legal representatives of a deceased partner of a
firm to recover from them a sum of money jointly and severally, all the defendants were interested parties and a
reference without the consent of two of the legal representatives of a deceased partner who did not enter
appearance was invalid. Where the issue was between all the plaintiffs on the one hand and all the defendants on
the other hand, a reference was illegal unless all the parties applied for an order of reference. Where parties have a
common interest all had to join. In a suit for dissolution of partnership or for accounts of a dissolved partnership all
partners including minors who were admitted to the benefits of the partnership and the legal representatives of a
deceased partner. were prima facie interested parties, and must join in the reference but if some of them were not
interested in the dispute sought to be referred,e.g., if a partner had retired and there was no dispute between him
and the other partners, a reference could be made without joining him. In a suit to realise a debt against a Hindu
father and his two sons jointly and severally, a reference between the plaintiffs and the father without joining the
sons was invalid. In a suit to recover a debt due from the deceased against his legal representatives, all the legal
representatives were interested parties.
In a suit by the endorsee of a promissory note against the executant and the endorser of the note, the endorser was
a necessary party though no relief was claimed against him and a reference by the endorsee and the executant of
the note without joining the endorser of the note was invalid. In a suit by the mortgagor against the insolvent
mortgagee and his official assignee claiming that the mortgage stood redeemed and discharged and for accounts
and recovery of the title deeds, the insolvent mortgagee was an interested party though he disappeared because of
bankruptcy proceedings against him and a reference on the application of the mortgagor and the official assignee
without joining the insolvent mortgagee was invalid. In a suit by one of the co-mortgagors for a declaration that the
mortgage stood discharged and redeemed, a reference without joining the defendant co-mortgagor who was
supporting the plaintiff was invalid.
A person who had transferred the property in dispute in the suit was not an interested party. A tenant in possession
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of the property was not a person interested in a suit in which the title to the property was disputed between a person
claiming to be the owner and the landlord or of the tenant. In a suit by a reversioner against two separate
alienations of two separate properties for a declaration that the alienists were void, a reference at the instance of
the plaintiff and one of the alienists without joining the other alienists was valid as the non-joining alienists were not
interested in the dispute referred. In a suit for possession of the property, a Hindu widow in possession of the
property in lieu of maintenance was not a necessary party.
In a suit by a claimant under Order 21 Rule 58 of the

Code of Civil Procedure objecting to the attachment of a property, the judgment debtor claiming the
property to be his, was an interested party and a reference between the claimant and the judgment debtor without
joining him was invalid. If there were several judgment debtors, one of them who did not claim any interest in the
property was not an interested party.
A defendant against whom relief was claimed and who was interested in the dispute was an interested party,
though he remained ex parte. Merely because the defendant was ex parte, he did not cease to have an interest in
the suit.
Whether an ex parte defendant or a pro forma defendant against whom no relief was claimed was an interested
party depended upon the facts of each case and no general rule could be laid down.
3. Agreement of all interested parties essential condition
The foundation of the jurisdiction to make an order of reference in a suit was an agreement made by the parties
interested. If there was no such agreement the order of the court was without jurisdiction. and the award given on
such reference was invalid. Subsequent consent of the parties and ratification could not clothe the court with
jurisdiction retrospectively or validate the order of reference. The award was invalid not only against the non-joining
parties but also against the parties who joined in the reference and must be set aside as a whole. The objection
could be taken by a party who joined in the reference. But in case of an arbitration without intervention of court, no
question of jurisdiction of the court arose and if a reference was made by unauthorised person, ratification by the
person on whose behalf the reference was made would validate the reference.
A reference to arbitration through court by one partner alone could not be legalised by subsequent ratification and
acquiescence of the other partners. Production of documents before the arbitrator in obedience to a summon was
not acquiescence in the order. The objection as to the invalidity of the order of reference could be raised even in
revision.
Where the claim in the suit was for the recovery of a sum of money from all the partners of a firm jointly and
severally, no reference could be made at the instance of the plaintiff and one of the partners only for this could lead
to contradictory findings by the arbitrator and the court both with regard to the liability and the quantum of the claim.
4. Necessity of application
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The foundation of the jurisdiction of the court to make the order of reference was an application by the parties for
such an order. If an order was made by the court without such an application the order was held to be without
jurisdiction and invalid. The application need not be in writing or signed. It could be oral. The objection as to
absence of an application in writing could be waived. The authority to the pleader to apply for an order of reference
could be oral.
The signature of a person on a written application would be deemed to be not only in his own capacity, but also in
his capacity of the guardian at litem of a minor party. Where the rules framed by the High Court required a petition
to be in writing, mere filing of an agreement was not sufficient ; the court would not make the order of reference
unless a petition had been filed. The absence of signature of a party on the application did not conclusively show
that he was not a party to the reference.
5. Application to specify disputes
The application should clearly set forth what were the disputes on which the arbitrator was required to arbitrate. If
the whole case was referred, the points in dispute need not be specified, for it will then be presumed that the parties
were referring all the disputes including the question of costs, and the question whether the suit was maintainable
and the decision of the arbitrator even if erroneous was binding on the parties. The objection that the petition was
vague would not be entertained in second appeal if inspite of the vagueness the parties and the arbitrator were well
aware what disputes were referred.
The parties could move more than one application instead of joining in one application provided they all agree to
refer the same disputes in suit to arbitration and the method of arbitration is the same. A party could withdraw from
the application to refer before the order of reference was passed by the court.
The parties could file the application before a commissioner to take evidence for presentation to the court and an
order of reference made by court on the application was valid.
6. Suit
The application had to be made in a suit. A suit is ordinarily a civil proceeding instituted by the presentation of a
plaint. It includes a proceeding initiated by an originating summons and a proceeding deemed to be a suit by any
particular Act,e.g., Section 121 of the Agra Tenancy Act or Section 12 of the U.P. Agriculturists Relief Act and
includes an appeal. It does not include execution proceedings. An order made on reference under an execution
proceeding and an award made under it was invalid. But the award could be treated as an adjustment of the
execution proceedings if the conditions of
Section 47, Arbitration Act , 1940 (now repealed) were complied with. Restitution proceedings under
Section 47 of the Code of Civil Procedure , an application for review and proceedings for the filing of an
award were not suits. The suit must be pending when the order of reference was made. It was not pending during
the period of time prescribed for the filing of the appeal because of the possibility of an appeal being filed.
7. Who may refer
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Minor, guardian-at-litem, Order 32 Rule 7 of

CPC
A minor is not capable of contracting and cannot enter into an agreement. His consent to refer disputes in a suit
could be given only by his next friend or guardian-at-litem for the suit who could not enter into an agreement on his
behalf with reference to the suit without the leave of the court expressly recorded in the proceedings under Order 32
Rule 7 of the
Code of Civil Procedure . An agreement to refer disputes in a suit is an agreement within the meaning
of the Rule. Any such agreement entered into without the leave of the court so recorded was voidable against all
the parties except the minor but could not be avoided at the instance of the adult parties. The minor could have the
award on the reference set aside either in a separate suit or by applying for review in the same suit. The necessity
of the reference had to be judged with reference to the circumstances existing on the date of the reference and not
with reference to subsequent events. At the time of granting the leave it was the duty of the court to be satisfied that
the reference would be for the benefit of the minor. It was the practice of the Court of Chancery to ascertain whether
the reference would be for the benefit of the infant. Leave should not be granted if the arbitrator was interested in
the subject of the dispute. The power of the manager of joint Hindu family of which the minor was a member was
controlled by the provisions of Order 32, Rule 7
CPC . While acting as a next friend or guardian-at-litem of the minor he could do what another next
friend or guardian-at-litem could not do. The power of the manager of the Court of Wards established under the
Bengal Court of Wards Act, 1870 or the Bombay Court of Wards Act, 1905 was not so controlled. Order 32, Rule 7
of
CPC does not apply to an agreement out of court to refer disputes which are not the subject-matter of
a pending suit or to an agreement not to oppose the passing of the decree on the award made on such a reference.
A person having a limited interest in the subject-matter of the reference could not give the arbitrator authority to
alienate a more extensive interest in the property than he himself had.
Counsel, advocates and attorneys
Counsel and advocates have implied power to compromise in all matters connected with the suit and not collateral
to it without obtaining the authority of the client in the absence of any express limitation on their power by the client.
This power extends to referring the case to arbitration. The authority is limited to issues in the suit. Counsel has no
implied authority to make a compromise out of court; but the compromise was not bad because the matter was
considered in the Bar Library or in the corridors of the court. The court will set aside the compromise if his authority
was limited even if the limitation was unknown to the other party where the compromise was entered into by
mistake or if there is some palpable error.
A solicitor or attorney has implied authority to refer a suit to arbitration by virtue of his position as agent in relation to
his client and his authority is limited to the issues in the suit but counsel cannot refer the suit on his instructions
given out of court.
A pleader has no authority to refer a suit to arbitration without the express authority of the client. If an unequivocal
authority is given by the power of attorney, it is not necessary to obtain the specific consent of the client. An
authority in general terms is not sufficient. An authority to do all things necessary for the conduct of the case on
behalf of his client includes an authority to refer the disputes in the suit to arbitration. A pleader cannot make a
reference against the express instructions of his client. A pleader cannot delegate his authority to make a reference
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to another pleader. A reference by a pleader without a specific authority in writing as required by

Section 526 of the Code of Civil Procedure , 1882, was held not to vitiate the award. A duly authorised
pleader may sign the application for reference on behalf of his client and if he does so, the client need not sign it. If
a client well knowing that a reference had been without his authority acquiesced in it, he was to not be permitted to
question the award, but it has been held that there could be no ratification of an unauthorised reference by court
and an award on such reference is invalid.
If the parties apply at any time before judgment is pronounced the court was bound to make an order of reference.
The trial court could not make an order of reference when only some issues had been remitted to it for a finding.
While an appeal was pending from a preliminary decree, both the trial court and the appellate court were each
possessed of the matters in dispute in part and it is open to either court to make an order of reference of all the
matters in dispute between the parties. Where the appeal case was referred to arbitration, the subject-matter of the
reference was the whole dispute and not merely the matter of the appeal.
Trustees
It is not within the competence of a trustee to refer a matter in which the trust is interested without obtaining the
concurrence of the co-trustees because it is necessary for a valid reference that all the interested parties should join
the application for reference.
8. What disputes may be referred
Proceedings for appointment of the guardian of a minor, proceedings in the insolvency jurisdiction including
proceedings for adjudging a person insolvent under the Insolvency Act, proceeding for winding up of a company,
and proceedings for the grant of a probate or revocation of the probate of a will by the court in its probate
jurisdiction cannot be referred to arbitration for all these proceedings are not suits and they involve disputes in
which the public are interested and the trial of these matters cannot be delegated to a private tribunal.
All suits cognisable by a civil court which may be settled by compromise including a suit for declaratory relief and
mandatory injunction may be referred to arbitration.
Matrimonial disputes including disputes as to terms of separation between husband and wife, dissolution of
marriage including dissolution of marriage under the
Dissolution of Muslim Marriages Act, 1939 , a suit for a declaration that the main defendant is the
plaintiff's wife and an injunction restraining the other defendants from giving her away in marriage to another
person, a suit for future maintenance and residence may be referred.
With regard to suits for restitution of conjugal rights one view is that such suits may be referred to arbitration ; on the
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other hand, the Lahore High Court held that the whole suit can not be referred but that some matters in dispute as
are distinct from the whole suit can be referred and that the court may on consideration of the award by the
arbitrator decide whether or not to grant restitution of conjugal rights.
Disputes in a suit which the parties litigated in their own right and each of them claimed that he was entitled to the
Math could be referred to arbitration where there was nothing to show that the Math was of the nature of a public
charity and there was no prayer for the appointment of a trustee to a vacant office. Disputes between two branches
of a family of their respective rights to act as trustee of a public charity may be lawfully compromised and referred to
arbitration provided the interests of the members of the public interested in the temple are not jeopardised by the
compromise or the award.
A mosque is a public religious trust. An award which determines which party is entitled to the use of the mosque
without determining the tauliat or the right to its management is valid. Under the Muslim law only a Kazi can appoint
a trustee of a public religious trust and a dispute as to which of the claimants should be appointed a mutawalli of the
wakf cannot be referred. But a suit for a declaration that the plaintiff is the mutawalli of a mosque and an injunction
restraining the defendants from interfering with his rights may be referred to arbitration.
Where a dispute between the Shebaits of a deity and a pujari who was liable to be removed for misconduct which
was to be judged by certain respectable persons of the village, the decision of the body constituted in accordance
with the agreement between the parties was to be taken to be operative if the proceedings were regularly
conducted. So far as Hindus are concerned there is no Ecclesiastical Church and no Ecclesiastical Court and there
is nothing to prevent the civil court from determining such a question and from holding that the pujari has been
removed on sufficient grounds.
9. All questions in suit could be referred
Where one of the questions in the suit was whether the case was excluded from the cognizance of the civil court by
Section 77 of the Punjab Tenancy Act and the whole case was referred to arbitration, the arbitrators had power to
decide the question of jurisdiction and the award could not be challenged on the ground of error of law. The
arbitrators are judges of fact as well as of law. In a suit for partition of property one of the disputes was with regard
to the jurisdiction of the court regarding movables and other properties outside British India and the whole suit was
referred to arbitration and the arbitrator made an award partitioning the properties, it was held that the arbitrator
must be taken to have decided the question of jurisdiction and no exception could be taken to the award.
Where the whole case was referred to arbitration, the arbitrator could award costs of the suit. The arbitrator could
direct that each party should pay his own costs notwithstanding that there is a direction by the appellate court that
the costs were not to follow the event.
In a suit for recovery of dues for supply of material with escalated costs and interest, the whole matter was referred
to arbitration but the question of limitation was not referred although mentioned in the suit; the objection that the
claim was barred by limitation was overruled. When the whole of the subject-matter was referred but not the
question of limitation, it could well be presumed that the party gave up the plea of the bar of limitation. The court
said that the parties could always agree not to press a particular issue. The court did not interfere in the award, nor
in the matter of interest, because the reference was in a pending suit.
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10. Only questions in suit could be referred and be subject-matter of award
The court had no power to refer to arbitration any question between the parties to the suit other than those in
question in the suit or any question in which anyone not a party to the suit was concerned. The order of reference
was made in pursuance of Sections 21 and 22 of the Act, 1940 (repealed) and in the exercise of the power thereby
given to the court to refer to arbitration matters in difference in a suit defined by it in the order of reference. The
court did not exceed in jurisdiction by referring the matters in dispute in the suit and “all matters and proceedings
connected therewith” as those words were merely ancillary in relation to the suit and was in the nature of a final
prayer for general relief. The court could refer only the matter in difference in the suit and between the parties to the
suit.
It was incumbent upon the arbitrators acting under the order of reference to comply strictly with its terms. An award
made otherwise than in accordance with the authority conferred by the order was an award which was “otherwise
invalid” and it could accordingly be set aside under Section 30(a).
An agreement to refer disputes was not bad because the parties agreed to refer not only the disputes in the suit but
also other disputes if it contained a clause that the arbitrators would report to the court their decision on the subject-
matter of the suit only.
In a suit by A against B, C. D. F. and K for dissolution of a partnership business carried on by the members of a
Hindu family, no written statement was filed by any defendant and by an order of court all matters in difference in
the suit between the parties to the suit were referred to arbitration. The partnership deed provided that the partners
were A, B, C, D and a son to be adopted by F, widow of E. It was proved that K was adopted as a son by F, widow
of E. There were many disputes between the members of the family and one of the members was not a party to the
suit. Some of the disputes were not either raised or were foreshadowed in the plaint. In some of the disputes R who
was not a party to the suit was interested. Before the order of reference, all the parties to the suit as also R agreed
to refer to arbitration all matters in dispute amongst them including the disputes in the suit. The award dealt with the
disputes in the suit as also disputes which were not the subject of the suit and disputes with R who was not a party
to the suit. The Privy Council held that it was impossible to uphold an award in relation to a suit the conclusions of
which were plainly coloured, if not dictated by the view taken by the arbitrator of other questions between the
parties or some of them to which the suit had no reference. The award was invalid and was set aside.
The arbitrator could not allow a party to a suit to amend the pleadings in the suit. Where an arbitrator acting under
an order of reference in a suit for partition of property allowed an amendment claiming adjustment of moneys spent
for improvement of the property and made an award directing partition of the property and payment of the money
spent, the award to the extent it directed payment of the money was held to be invalid and was struck out.
After the order of reference was made, the parties could not by agreement without any order of court confer upon
the arbitrator a power not originally conferred on him by the order of reference.
If the parties intended to refer to arbitration the dispute in suit as also other disputes which were not the subject-
matter of the suit and they desired that the proceedings in suit should become merely ancillary to the arbitration,
they could achieve the result by applying to court and obtaining an order that the proceedings in the suit should be
stayed.
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If the arbitrator treated a person who was not a party to the suit as a party to the reference and decided a dispute
between such person and the parties to the suit or any of them the award was invalid.
If a suit which was merely declaratory was referred to arbitration the arbitrators were not entitled to divide the
property between the different claimants.
If in a suit the court formulated the points which the arbitrator was called upon to decide, the arbitrator could frame
additional issues if the circumstance, so required, but he was not justified in framing and deciding points which had
already been decided by the court.
Where in a suit the plaintiff claimed partition of two immovable properties and the defendant alleged that they had
been previously partitioned and that a money lending business and some paddy were left unpartitioned but did not
ask for their partition, an award dealing with the money lending business was held to be invalid.
Where the plaintiff mortgagee claimed ejectment of the defendant mortgagor from the mortgaged property and rent
under a lease deed and the defendant disputed the claim for ejectment and alleged that the relationship of landlord
and tenant did not subsist as he had made an oral transfer of the property to his sister, an award of redemption of
the property was held to be invalid.
Disputes in a partition suit were referred to arbitration. The only dispute in the suit was whether the parties were
joint or separate and whether certain movables held by a defendant were liable to be partitioned. After the
reference, the parties to the reference agreed that certain parties to the suit who were not parties to the reference
be brought in for the purpose of division of properties. It was held that an award in accordance with such agreement
and with the consent of all the parties was not invalid.
The mere fact that the relief awarded is different from the relief claimed does not make the award invalid. Where the
plaintiff claimed that he was the real owner of the land and prayed for a decree for recovery of possession of the
land and the defendant claimed that the land belonged to him and the disputes in the suit were referred to
arbitration, the arbitrator could lawfully make an award giving the land to the plaintiff on condition that he should pay
a sum of money to the defendant.
The award was not invalid because it directed payment of a sum of money far in excess of the pecuniary jurisdiction
of the appellate court which made the order of reference. On the award being filed in court, the court should not
return the memorandum of appeal for presentation to the High Court, but should submit the record to the High Court
with a recommendation that the record be transferred to its own file and a decree be passed accordingly. Where all
kinds of disputes pending before the court including civil and criminal matters were referred to arbitration under
court order, it was held the award of the arbitrator was not liable to be set aside only because it contained directions
about certain shares and also made observations about a will. The participation of the parties in the arbitration
proceedings showed their acquiescence to the matters referred to the arbitrator. Because all the parties appeared,
it was not necessary for the arbitrator to notify the parties on individual basis.
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11. Reference without order of court
Where in a pending suit a private reference was made to arbitration without seeking order of the court and even
without its knowledge and an award was made by the arbitrator, a decree could be passed on the basis of such an
award under Order 23, Rule 3,
CPC even if all the parties interested in the suit did not consent to the award being filed as a
compromise or adjustment. The court said that Chapter IV was comprehensive and complete in itself and covered
all references to arbitrations in pending suits and Chapter II did not apply to such references by its own force.
S. 22. Appointment of arbitrator.— The arbitrator shall be appointed in such manner as may be
agreed upon between the parties.
Under Section 22, 1940 Act (repealed) the arbitrator was appointed in such a manner as could be agreed upon
between the parties. This section clearly showed that the parties had either to name the arbitrators or consent to the
arbitrators chosen by the court. Before appointing an arbitrator, the court had to give an opportunity to the parties to
appoint an arbitrator of their choice. The Act gave no authority to the court to force upon a reluctant party the
decision of any question in the case arbitrators selected at its discretion. Where the two parties could not agree on
nominating an arbitrator and the judge nominated one and one of the parties, six weeks after the nomination,
objected to the judge's nominee but did not request the judge to nominate, someone else, the appointment was
held to be good and binding upon both parties. If the party adduced evidence before the arbitrator and acted as if
he had been validly appointed as the arbitrator, he could not raise the objection after the award has been made.
The court could not compel an arbitrator to act against his will. The arbitrator had to give his free consent to
undertake the duties of adjudication.
1. Prima facie existence of dispute necessary
Before appointing an arbitrator, the court had to determine whether prima facie dispute existed between the parties
and that the dispute in question was not of frivolous nature. The framing of issues by the court for seeing whether a
dispute existed could not be found fault with. The court said :
“In order to determine whether the matter is referable to arbitrator, the court has prima facie to come to a conclusion that
there does exist a dispute and that the same is not frivolous. Frivolous disputes obviously cannot be referred to arbitration.
Therefore, in that context if the trial court has couched the issue in the fashion whether any bona fide dispute exists
between the parties, the trial court has not committed any jurisdictional error.”
S. 23. [1940 Act, (repealed)] Order of reference.—(1) The Court shall, by order, refer to the
arbitrator the matter in difference which he is required to determine, and shall in the order specify such time as it
thinks reasonable for the making of the award.
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(2) Where a matter is referred to arbitration, the Court shall not, save in the manner and to the extent provided in
this Act, deal with such matter in the suit.
1. Order of reference
Section 23, 1940 Act (repealed) provided that the court should by order refer to the arbitrator the matters in
difference which he was required to determine. The court had, therefore, to see whether a bona fide dispute
existed. A dispute of frivolous nature could not be referred. Where the trial court framed the issue in terms of finding
out whether a dispute existed, it was held that his order could not be faulted for that reason. Where the parties
agreed and applied, the court had no option but to refer the matter to the arbitrator. The order of reference though
not expressly made had been implied from the fact that the court granted numerous adjournments on being
informed by the parties that they had referred the case for arbitration. The application for reference should state the
matter in difference.
The order of reference should be served upon the arbitrator, but the omission to serve the order upon him did not
vitiate the award where the arbitrator was well aware of the terms of the reference.
Where the whole case was referred to arbitration, it was not necessary for the court to frame issues noting the
points in dispute between the parties and refer them specifically to the arbitrator. The question of jurisdiction could
also be referred.
A defect in an order of reference not affecting the arbitrator's jurisdiction or authority to make the award was not
fatal to the validity of the award.
After an order of reference to arbitration was made neither party could object to the form of issues or to the form of
proceedings anterior to the reference.
Section 23(1), 1940 Act (repealed) enjoins the court to fix in the order of reference such time as it thought
reasonable for the making of the award. The word “shall” in Section 23(1), 1940 Act (repealed) was mandatory. The
omission to fix the date was fatal and rendered the subsequent proceedings and the award a nullity. The defect was
not fatal if the court subsequently fixed the time.
If the court fixed the time for the filing of the award but not for making it, the award could be made before the time
so fixed. The court's power of fixing the time could not be delegated to the arbitrator. But it had been held that the
award was not invalid if the court left it to the arbitrator to make the award within a reasonable time. An award,
made within the time fixed by the court, but filed thereafter, was valid.
Section 23(1), 1940 Act (repealed) did not empower the court to fix the time for the filing of the award. An order of
the court fixing the time for the filing of the award had to be read as fixing the time for the making of the award. An
award made within time could be filed in court at any time thereafter.
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Where it was evident from the order that the dispute between the parties pending in the suit was referred and that
was how the arbitrator and the parties understood it and at no stage before the arbitrator the SEB raised the
objection that the arbitrator had no authority to go into the main dispute and that he must confine himself to the High
Court order under
S 26(6) of the Electricity Act , 1910, but having consented to the order of reference and having
participated in the proceedings before the arbitrator on the merits of the main dispute, it was not open to the SEB to
raise the objection and that too because the award had gone against it.
Reference of suit issues only
The parties wanted the arbitrators to decide and settle amicably not only the matters involved in the suit but also the
matters involved in a criminal case pending between them. But the court referred only the matters in dispute in the
suit. The reference was held to be valid. However, the arbitrator decided the other matters also. The decision in
respect of the other matters being severable from the rest (a decree for a certain sum of money in respect of the
referred matter) the court enforced only that part of the award which was on the reference.
2. Power of court after order of reference
After an order of reference was made the court had no power to amend the pleadings without the consent of both
parties. Where the plaintiff sued A, B and C upon a joint contract and failing to prove a joint contract before the
arbitrator sought to amend the pleadings by striking out the names of B and C, the court refused to amend the
pleadings or to insert in the order of reference a clause giving the arbitrator liberty to amend. Without an
amendment of the pleadings by the court the arbitrator would have no power to determine the question as proposed
or to amend the pleadings. The court could amend the order of reference which was not in accordance with the
agreement if there was some mistake or accidental omission or if some fraud was shown. The court would not
without the consent of both parties amend the order of reference by giving power to the arbitrator to amend the
pleadings so as to enable him to dispose of a matter arising out of the same transaction.
If the arbitration proved abortive the court could not make a fresh reference without the consent of the parties.
Section 23(2), 1940 Act (repealed) barred the court from dealing with a matter referred to arbitration after it had
been referred ; it did not prevent the court from giving certain powers to the arbitrator in the conduct of arbitration
proceedings, e.g., the power to make an interim award or awards. There was no provision in the Act (1940
repealed) enabling a party to withdraw from the agreement and confer the jurisdiction on the court again to proceed
with the suit. Where a certain matter before the court was properly referred, the arbitrator alone became seized of
the matter and it was incorrect for the court to assume jurisdiction and decide the points in controversy which had
been referred.
The parties to a suit compromised it by referring it to arbitration of a named arbitrator and a decree was passed in
accordance with the compromise. The named arbitrator refused to accept the office. It was held that on his refusal
to act, the court should have appointed another arbitrator though the party nominating the arbitrator declined to
assist the court by suggesting another name. The court could not proceed with the suit which was put an end to by
the compromise. The trial of the suit by the court was illegal and its decree was set aside on appeal. The rights of
the parties having been remitted to another tribunal could not be decided by the court except with the consent of the
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parties.
The court had no power to give the plaintiff permission to withdraw the suit with liberty to bring a fresh suit.
The moment the order of reference was made the jurisdiction of the court to deal with the merits of the matter
referred to arbitration became suspended and it revived only in the event of the reference being superseded under
Section 25, 1940 Act (repealed). After superseding the arbitration the court had to give the parties sufficient
opportunity to be present in court and produce their evidence. If the court dismissed the suit without doing so, it
acted with material irregularity and the order of dismissal was liable to be set aside in revision.
Section 25, 1940 Act (repealed) preserved the power of the court to deal with the matter referred to arbitration to
the extent and in the manner provided by the Act. The court could appoint an arbitrator or revoke his authority or
remove him under Sections 5, 11 and 12, 1940 Act (repealed). The court could bring the legal representatives of a
deceased party on the record of the suit, recall the reference in an appropriate case, authorise the arbitrator to
make an interim award, appoint an interim receiver, and refer the disputes to the umpire if the arbitrators did not do
so after they had disagreed or allowed their time to make the award to expire. After the award was made the court
could modify it under Section 15, 1940 Act (repealed), but the court could not enquire into the validity of a disputed
compromise.
By making the order of reference, the court did not part with its duty of supervising the proceedings of the arbitrator
acting under the order. By Section 25, 1940 Act (repealed) the provisions of the other chapters of the Act of 1940
(repealed) applied to arbitrations under the order as far as they could be made applicable. The court could in any of
the circumstances mentioned in Sections 8, 10, 11 and 12, 1940 Act (repealed) instead of filling up the vacancies or
making the appointment supersede the arbitrator for good cause. The court would not normally set aside its own
order of supersession of the reference. But the court would do so if an award was made before the order and was
filed afterwards.
If an award made on reference in suit was set aside the court could not of its own motion make an order of
reference of the disputes in the suit to arbitration.
3. Registration of awards made on reference in suits
An award made on reference in a pending suit was not compulsorily registrable because such an award, unless
made a decree of the court, was incapable of operating or purporting to create, declare or assign or extinguish or
limit any right to or in immovable property. It had no force, or validity and did not affect immovable property unless it
was incorporated in decree of the court. Being a part of the judicial proceedings it did not require registration. Unlike
a private award there was no provision which made an award made on a reference by the court valid and binding
unless made a decree of the court ; until then it had no independent existence.
4. Reference to the judge in the cause
The question whether the judge in the cause could act as an arbitrator was left open by the Supreme Court. Inspite
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of an agreement to submit to the decision of the judge, the judge could decide the case as a judge and not as an
arbitrator. The arbitrator must be a person other than the judge in the cause. Even though the judge purported to
decide the case as an arbitrator, he did not cease to be a court. The provision of the
Arbitration Act , 1940 (repealed) did not apply to him and it was not necessary that the reference to him
should be in writing. A presiding judge was not an arbitrator inspite of the word “arbitrator” used in the agreement
between the parties. A judge could decide a case pending before another court only as an arbitrator.
Where the parties agreed to accept the opinion of the judge on certain points requiring spot inspection and for that
reason led no evidence, the opinion of the judge that the defendant's business was not of an offensive nature could
be accepted as an evidence by the appellate court hearing an appeal from his decision.
A decision of a judge as an arbitrator with the consent of the parties was binding as if it were an award of an
arbitrator even though the judge as such had no jurisdiction over the matter in controversy. But this doctrine could
not apply when the judge was chosen as arbitrator not voluntarily but under great judicial pressure.
5. Deviation from cursus curiae and right of appeal
Where the court made an amendment of the pleadings which could not have been made except by consent of the
parties and the parties invited the court to make the amendment but there was no stipulation to give up their right of
appeal it was held that an appeal lay from the judge's decision. Unless there was an attempt to give the court a
jurisdiction which it did not possess or something occurred which was such a violent strain upon the procedure that
it was put entirely out of its course and a court of appeal could not properly review such departure, the deviation
from the cursus curiae did not deprive the parties of their right of appeal.
Where proceedings were taken out of the ordinary cursus curiae with the assent of the parties all subsequent
orders and decision of the court were in the nature of awards and not subject to appeal, e.g., when the court
decided disputed questions of fact on a special case with the consent of the parties or where the court bound to
refer questions of fact to the jury tried them with the consent of the parties. No appeal would lie where the matter
had been submitted to the judge personally as arbitrator, or where the parties agreed that the judge would
determine the right of the parties in a summary manner or that he would decide on the documentary evidence and
inspection of the locality or upon statements of counsel and not upon any evidence or upon the evidence on the
record the parties agreeing not to call any further evidence or an personal inspection or to decide the question of
title on the basis of the thakbasi map. Where at the request of the parties, the master to whom a case was referred
by the judge's order decided a matter which was not covered by the order it was held that an appeal lay to the judge
from his order and the parties did not intend to give up their reject of appeal.
POWER OF COURT TO ENLARGE TIME FOR THE MAKING OF AWARDS
The
Arbitration and Conciliation Act, 1996 does not carry any provision setting the time limit for the arbitral
tribunal for submitting its award. Hence, the provision of the repealed 1940 Act for extension of time has been
deleted from the 1996 Act. The original provision and the commentary under it has been retained here reference in
case of need.
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S. 28. Power to Court only to enlarge time for making award.
(1) The Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award
has been made or not, enlarge from time to time, the time for making the award.
(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all
the parties to the agreement, enlarge the time for making the award, shall be void and of no effect.
The court was vested with discretion to enlarge the time for the making of the award from time to time whether the
time for the making of the award had expired or not and whether the award had been made or not. The powers of
the court were vast and wide. The court stated the applicable principles to granting of extension. A great latitude
should be shown in grant of extension of time particularly when there is no fault in the conduct of parties. The power
should be exercised judiciously. Where no time for the making of the award had been fixed, no question of
enlarging the time by the court arose. The court could enlarge the time whether the reference was with or without
the intervention of court and whether the reference was under any other statute. The court could extend the time
any number of times. The “court” included the appellate and revisional court.Section 28, 1940 Act (repealed) vested
the court with very wide discretion. The discretion of court was exercised judicially after taking into account all
relevant circumstances including the length of the delay, whether the applicant was to be blamed for the delay and
the degree of his fault, whether the other party was responsible for the delay, whether both parties acquiesced in
the arbitration proceedings after expiry of the time, the conduct of the arbitrator, whether the enlargement would
work injustice to the other party and whether the case was otherwise fit for the grant of the indulgence. The courts
had always favoured enlargement of time for making the award, care had to be taken to see that long lapse of time
would not result in loss of valuable evidence. Though arbitration is a method of speedy justice but speed should not
be preferred at the cost of justice. In a case in which the court granted extension of time when the arbitrator had
done nothing for six years though one party was seeking his removal, the court cited a passage from its own earlier
decisions to the effect that “even from very early times, the courts have always favoured enlargement of time for
making the award even when one of the parties to arbitration expressed disinclination or even opposition to such
extension, where the party seeking such extension had not been guilty of condemnable delay or contumacious
conduct.” To ensure that justice is done, courts are open to fashioning conditional extensions keeping in mind the
equities in each case.
Where the arbitrator was seized of the matter and was examining whether the petitioner's claim was time-barred as
urged by the respondent, the court said that in the interest of justice as shown by the circumstances of the case,
extension of time should be granted. Where the parties participated in the proceedings for 57 months without any
protest, neither of them was allowed subsequently to oppose the extension of time.
The court hesitated to grant extension at late stage. Where a party attempted to stall proceedings whenever he
thought it necessary for him to do so, that was considered as a condemnable conduct causing delay and, therefore,
refusal to grant exten-sion of time at his instance was held to be justified. The enlargement could be made before or
after expiry of time. The power of court to enlarge time was not controlled by the arbitration agreement. The court
could enlarge the time of the umpire for making the award without deciding as to the validity or effect of the umpire's
appointment.
If the arbitrator asks for extension of time and there was no reason for suspecting wilful delay, collusion or bad faith
the normally enlarged the time. In an application for enlargement of time the court did not make an elaborate
enquiry into the merits of the case. At the time of making an order of reference the court had no power to pass an
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order depriving itself of its discretion to extend time under Section 28, 1940 Act (repealed).
The court's power to enlarge time was not limited by the arbitration agreement fixing a time limit and providing for
an alternative arbitration after the expiry of the time. The court could enlarge time though the award had been made
after the expiry of the time fixed for the making of the award. The words “whether the award has been made or not”
gave effect to the undernoted decisions in which such power was exercised. The undernoted decisions in which this
power was not recognised had become no longer law. The time could be extended after the award had been filed
and during the hearing of the petition under Sections 14 and 17, 1940 Act (repealed) after the parties had led
evidence on the merits. If the award was made after the expiry of the time, the proper course was to apply for
extension of the time under Section 28, 1940 Act (repealed). The court could extend time so long as the matter is in
the hands of the arbitrators and the umpire has not intervened. Time could be extended even after the making of
the award but not if the arbitrator proceeded further in the matter without being properly appointed and without any
new terms of reference and his jurisdiction was also challenged.
The arbitrator had no jurisdiction to make the award after the expiry of the time for its making and the award so
made was not binding on the parties. An award made after the expiry of time was not a nullity though it was liable to
be set aside. The court was not bound to set it aside and if the time was subsequently extended by the court, the
award was valid. The court could extend time though the Registrar of Bengal Chamber of Commerce was
authorised by its rules to constitute another court after the expiry of the time.
An order refusing to extend time on the mere ground that the award was made after expiry of time was set aside in
revision.
If the court declined to extend the time in a reference in a pending suit, the court had to fix a date for the hearing of
the suit and inform the parties.
Time could be extended by the court on an oral application and even suo motu without any application. The
application was in the nature of a reminder to the court to exercise its powers and was not subject to any limitation.
Extension was allowed as a matter of course unless the court was of the opinion that continuation of the arbitration
would result in miscarriage of justice. But the court could not if it thought fit enlarge time in the absence of any
request by either party. If enlargement of time was prayed for by the arbitrator, notice had to be given to the parties.
An award made within, but filed after time, was valid.
It had been held that the court could with the consent of the parties delegate its power of enlargement of time to the
arbitrator, but the delegated power could not be exercised after the expiry of the time originally fixed.
Instead of extending the time in a reference in a pending suit, the court could supersede the reference, or set aside
the award.
If the arbitrator applied for enlargement, notice of the application should be given to all the parties concerned. The
Jammu and Kashmir High Court had, on the other hand, held that where the arbitrator applied for extension notice
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to parties was not necessary. The court said: “The request for extension of time had been made not by the
respondent but by the arbitrator himself. This power could have been exercised by the court without issuing a
formal notice to the parties the extension of time by the court did not take away the right of the appellant to seek
either the supersession of the arbitrator or removal of the arbitrator. That being so, the extension granted by the
court for making the award could not be said to have taken away any vested legal right of the appellant nor did the
same in any manner invalidate the award so as to warrant any interference with the same.”
The court could not in the exercise of this jurisdiction consider whether there was a valid arbitration agreement or
not.
Where the case proceeded ex parte and a lot of time of lost in repeated attempts for service of notice, it was held
that judicial discretion could be exercised by the High Court to extend time for making the award ex post facto.
Acting with reasonable despatch
A party was not allowed to oppose an application for extension of time for the reason that the arbitrator had not
been acting with reasonable dispatch just only because some delay was caused in the appointment of a local
commissioner for taking measurement of the work done. Some delay was due to the fact that the person appointed
for the purpose initially hesitated in accepting the work.
Extension with retrospective effect
A party volunteered before the arbitrator for extension of time and therefore the arbitrator went on working but
subsequently the same party opposed the application. The court said that such conduct amounted to reprobate and
approbate at the same time and was to be ignored. Time to make and publish the award was granted with
retrospective effect.
Extension of time awaiting forensic report
Where everything else had been completed including evidence but the proceedings were not closed because the
report of the forensic expert was being awaited on documents which came to light during arguments, the High Court
set aside the order of the trial judge and allowed extension of time for a period of 4 months from the date.
Plea of fraud, misrepresentation
Plea of fraud or misrepresentation was not to be considered in connection with an application for extension of time.
That was for the arbitrator such a plea could not be a ground for denying extension of time.
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1. Application for extension
The High Court of Delhi declined to extend time where no application for extension of time was filed and the delay
was due to adjournments sought by the claimants. No time limit was fixed for the award and there was also the
failure to pass the award within the statutory period. The award being not within time and no case having been
made out for extension of time, it was set aside.
The umpire was not denuded of his right and jurisdiction to enter upon the reference and pass his award even if an
application for extension of time was pending before the court.
Where an award could not be announced within the prescribed time limit of four months and therefore the parties
applied to the Court for enlargement of time, the refusal by the Court to grant extension was depricated, particularly
when the parties were participating in the proceedings willingly and did not protest against extension.
Where the application for extension of time was filed and the notice of it was duly served on the opposite party, but
the latter filed no reply, nor raised any objection in the course of arguments and although there were some
objections as to the award but this fact was not agitated that the award was published beyond the prescribed time,
the application was for extension of time was allowed with no order as to costs.
Limitation for filing application
The limitation period for extension of time is three years. An application made within 13 months was held to be
within time. The Court had the discretion to extend. Where the opposite party was not able to show any reasons for
not extending time despite several adjournments, the Court allowed extension even after expiry of the period.
An application for extension of time was dismissed where it was made after a gap of 14 months. Four months had
already expired. The arbitrator had become functus officio. There were no cogent reasons for late filing. The court
held that the petitioner could not be said to have made out a case for extension of time.
No period of limitation was held to be applicable to proceedings under S. 28. Where the parties consented to
extension of time, but there was no follow up action, a new application for extension was allowed.
Court cannot compel arbitrator
The Court had the power to enlarge time for making an award, but it could not compel the arbitrator to enter into the
reference or to apply their minds to the dispute. While the court could extend time, the parties could not waive the
statutory period of limitation.
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Retirement of office-holder arbitrator and extension of time
Where a Government officer was appointed arbitrator by virtue of his office and he retired from that office without
completing his award, the Supreme Court held that it was not proper to give him extension of time. He ceased to be
arbitrator on his retirement from Government office. The court said:
“We are of the view that the arbitrator who had been appointed by the Government ceased to be the arbitrator on his
retirement from Government service. In terms of the conditions of the agreement the Union of India is competent to appoint
a new arbitrator. Accordingly we set aside the impugned orders of the High Court and the courts below.
The parties are directed to appear before the new arbitrator to be appointed by the Union of India. The arbitrator shall
complete the proceedings expeditiously. We make it clear that the proceeding before the earlier arbitrator and the records
furnished to him prior to the date of his retirement will form part of the proceedings and records before the new arbitrator.”
This decision could be contrasted with Pan Atlantic Group Inc v. Hassneh Insurance Co. of Isreal. An arbitration
clause connected with insurance matters required the arbitrators to be “disinterested executive officials of insurance
companies.” When an arbitrator was appointed he was working for a reinsurance company and thus qualified, but
before the hearing he retired and took up a position as a consultant to a firm of solicitors. The appointment was held
to be valid. The court said that the purpose of the clause was to ensure that the right sort of persons sit as
arbitrators, rather than to ensure that those appointed should “keep their hand in.” The context of the clause
indicated that qualifications were to be ascertained at the stage of appointment and the requirement was not a
continuing one.
Application by Legal Representatives
An application by legal representatives through general power of attorney for substitution and enlargement of time
was rejected because the power of attorney was not properly stamped. The rejection was held to be unjustified.
Appointment of New Arbitrator
Where the arbitrator was expressing his inability to complete the award in time and the court appointed another
arbitrator in his place asking him to complete the work expeditiously, it was held that the time for making the award
was implicitly extended.
2. Appeal
An order under the section was not appealable. The Calcutta High Courthas held that an order under the section
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refusing extension of time would in effect amount to supersession of arbitration proceedings. Such an order came
within the ambit of S. 39(1)(i), 1940 Act. An appeal against such order was, therefore, maintainable.
3. Revision
Arbitrator cannot file for revision
The arbitrator cannot file a revision petition against an order refusing to enlarge the time since he is not an
“interested party”. In this context, it has been held by P.S. Narayana J–
“As per the agreement for arbitration the arbitrator is to conduct the arbitration within a specified time and make the award.
If he was not able to do that and the Court refuses to enlarge the time he will have to leave it there. It is not the arbitrator's
job to fight out the matter and get an extension of time. Whether the parties to the arbitration will suffer if the time for
making the award is not enlarged, this again cannot be the concern of the arbitrator. He can rest content that the parties will
take care of themselves. By no stretch of imagination the arbitrator who is a person disinterested in the dispute, can be
aggrieved by the order of the Court refusing to enlarge time for making the award. In this view, the arbitrator cannot be a
person aggrieved by the order of the Court refusing to enlarge time.”
4. Power of arbitrator to extend time [sub-s. (2)]
Any provision in an arbitration agreement authorising the arbitrators or umpire to extend without the consent of the
parties the time to make the award is void and of no effect. But the arbitrators may extend the time with the consent
of the parties either expressed in the arbitration agreement or subsequently. Apart from the power conferred by
Section 28 the arbitrators or umpires had no power to extend time. Only the court had the power under the section.
The court had the power under S. 28(2) to extend time on the joint request of the parties. The arbitrator was
perfectly justified in continuing the proceedings and the award could not be questioned on that ground.
The conduct of the arbitrator in extending time in accordance with the provisions of the section was not allowed to
be described as a misconduct of proceedings in considering the application under S. 28. It could only be raised as a
ground for setting aside.
Section 16(2), 1940 Act (repealed) specially provided for extension of time fixed by the court for the submission by
the arbitrators or umpires of their decision after reconsideration of the award remitted to them under Section 16(1),
1940 Act (repealed).
Section 28, 1940 Act (repealed) did not confer power upon the court to entertain a petition for a declaration that the
arbitration agreement existed.
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Parties could extend time by mutual consent. Where a party voluntarily applied to the arbitrator for extension of
time, but subsequently questioned the validity of the extension before the Court, the Court said that the party's
conduct was hit by the principle of approbation and reprobation. The irregularity in the extension of time could be
regularised.
Where the arbitrator on the request of the opposite party granted adjournment to enable him to file his objections
and entered upon the reference after expiry of four months, it was held that proceedings had not become invalid for
that reason alone.
An extension of time by mutual agreement was not a fresh submission and arbitration could be held under an order
of reference where the time for the making of the award was enlarged by mutual consent.
5. Court's discretion to extend time notwithstanding arbitrator's contractual discretion to do so
The court's discretion was not negatived by a clause in the arbitration agreement enabling the arbitrator in his
discretion to extend time. The matter before the House of Lords was Comdel Commodities Ltd. v. Siporex Trade S
A, (No. 2). When a change in social conditions produced a novel situation, which was not in contemplation at the
time when a statute was first enacted, there could be no a priori assumption that the enactment did not apply to the
new circumstances. The undue hardship suffered by the operation of a restrictive contractual time-limit was
obviously more likely to arise when the arbitrator had no discretion to extend time, but could also result where the
arbitrator's discretion was too narrowly expressed to give effective relief from undue hardship or when the arbitrator
had failed to exercise his discretion to grant such relief. The factors to be considered in the exercise of discretion
were the circumstances in which delay occurred, the length of the delay and the degree of the party's fault in
relation to the delay. The court found on the facts that the party's hardship if the time-bar remained effective was to
be deprived of the opportunity to pursue a claim for the very large sum of U.S. $ 1.8 m whereas on the other hand
the delay had caused no prejudice to the other party.
6. Jurisdiction
An application could be filed in the court which had jurisdiction to entertain the award, i.e., where the cause of
action for resorting to arbitration had arisen. The cause of action did not arise at the place where the acceptance of
the tender was communicated or some of the cheques were received or notice for cancellation of the contract was
received.
7. Power of parties to extend time
Subject to statutory restrictions, the parties could by agreement regulate the time within which the arbitrator should
make his award. If the parties had not expressed any intention in the agreement, paragraph 3 of Schedule I, 1940
Act (repealed) stepped in and filled the gap. The term implied by this paragraph had no application if there was an
express agreement. Expressum facit cessare tacitum. Any agreement notwithstanding, the court had
the discretionary power of controlling the arbitration proceeding by removing the arbitrator if he was guilty of
unreasonable delay. Section 28(2), 1940 Act (repealed) imposed a further restriction on freedom of contract by
rendering void an arbitration agreement authorising the arbitrator to enlarge the time without the consent of the
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parties. Under the rules of the Bengal Chamber of Commerce the arbitration tribunal selected by the parties has
four months time to make the award. If the tribunal allows its time to make the award to expire, the Registrar may
select another tribunal which has another four months time to make the award. Thus the time of the Chamber acting
through the successively constituted tribunals is not the rigid period of four months. The time fixed by paragraph 3
of Schedule I, 1940 Act (repealed) had no application to say that the rules of the Chamber were a device to get
round Section 28 (2), 1940 Act (repealed) and that it was void.
Where the arbitrator passed award after the expiry of time without obtaining extension, the Supreme Court held that
the conduct of the parties was a major factor and, therefore, time should be deemed to have been extended. Where
the parties could extend time under their consent for one year, the court said that any further extension of time by
the parties could at best amount to an alteration of the conditions of their agreement.
In the absence of any such conduct on the part of the parties, award passed after the expiry of time and there being
no extension by the court was held to be ineffective.
8. Effect of order for enlargement of time
The effect of an order of enlargement was that the extended time was to be treated as if it was made by consent of
the parties and had been originally inserted in the arbitration agreement to ratify what had been provisionally done
by the arbitrator. The award was treated as if it was made under the original submission. The enlargement of time
by mutual consent did not amount to a new submission.
A surety for the performance of the award was discharged by extension of time for the making of the award by order
of court.
In the undermentioned cases an order of extension of time though not made expressly was implied from other
orders of the court made after the expiry of time.
If the parties agreed to abide by the award under a penalty and subsequently by mutual agreement they enlarged
the time for the making of the award, the penalty did not extend to an award made under the new agreement after
the time originally fixed had expired.
A time-barred award, whether partial or otherwise, had no effect unless it was validated by extension of time.
BAR OF SUITS CONTESTING ARBITRATION AGREEMENT AND AWARDS AND ENFORCING

AWARDS
S. 32. Bar to suits contesting arbitration agreement or award.— Notwithstanding any law for the
time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of
an arbitration agreement or an award, nor shall any arbitration agreement or award be [enforced,] set aside,
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amended, modified or in any way affected otherwise than an provided in this Act.
The section was amended by

Section 43 of the Specific Relief Act (Act No. 47 of 1947) with effect from 16-12-1963 by inserting the
word “enforced”. The amendment was not retrospective and did not bar suits filed before 1.4.61.
1. Analysis of section
The section consisted of two parts. The first part barred suits for decision upon the existence, effect or validity of an
arbitration agreement or award on any ground whatsover. The second part provided that an arbitration agreement
or award was not to be enforced, set aside, amended or modified or in any way affected otherwise than as provided
in the Act of 1940, (repealed). Section 32, 1940 Act (repealed) contemplated cases in which the award was invalid
or illegal. It did not include cases where the arbitrators went completely out of their jurisdiction in making certain
allotments of properties in favour of third parties beyond the terms of the reference. A suit for declaration and title
on the basis of such an award could not be maintained. Such an award could be completely ignored.
The main object of Sections 32 and 33, 1940 Act (repealed) was to prevent agonizing and futile delays in the
enforcement of arbitration agreements and awards from baseless suits challenging their existence and validity. The
conjoint effect of Sections 31, 32 and 33, 1940 Act (repealed) was to entrust the decision of the relevant disputes to
the specified court and to require the parties to bring such disputes for the decision of the court in the form of
petitions. Remedy by way was of regular suit was barred.Sections 32 and 33 did not purport to deal with the suit for
a declaration that there was never any contract or that the contract was void. These sections had very limited
application, namely where the existence or validity of arbitration agreement and not the contract containing the
arbitration agreement was challenged.
Section 32, 1940 Act (repealed) barred court from deciding matters covered by Section 33, 1940 Act (repealed). An
application under Section 33 contesting an arbitration agreement could not be stayed.
As a suit for a declaration that an arbitration agreement existed or was valid was barred by Section 32, 1940 Act
(repealed) and as an application for such declaration by a party affirming its existence or validity did not lie under
Section 33, 1940 Act (repealed), the court could entertain such an application in its inherent jurisdiction under
Section 33, 1940 Act (repealed).
A suit for any relief relating to the existence, effect or validity of an award was barred by Section 32, 1940 Act
(repealed).
A party who had not taken steps to have the award filed and dealt with under the appropriate provisions of the
arbitration Act , was not allowed to rely upon the award in answer to an action filed by the other party.
The position was different where the party putting forth the defence of the award to an action had performed the
award. The court said:“Neither these Sections [ Ss.31-33], (1940 Act repealed) nor any other provision of the
Arbitration Act , 1940 (repealed) precluded a defendant from putting forward an award which had been
fully performed by him, but which was not filed unders. 14, 1940 (repealed) and according to which judgment was
not pronounced or a decree given under S. 17 of the Act, (1940 repealed) in answer to the plaintiff's claim which
was the subject-matter of the reference and the award. The party was entitled to say that the unfiled award
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operated as a bar to the present action.”
This ruling was followed in Sayyaparaju Surayya v. Nekanti Anandayya, where the court added that
unless the party aggrieved by an award took steps challenging its validity, it was not open to him to dispute its
validity in any subsequent proceeding.
A person who had been a party to the arbitration agreement till the award was pronounced in his favour was barred
by the effect of Ss. 31-33, 1940 Act (repealed) from bringing a suit on the same cause of action. He could not
ignore the award or impeach its validity.
2. Res Judicata
The bar under S. 32 would apply to a party to the agreement or any person claiming under him. But persons who
were not parties to the agreement, or award or decree under it would be free to launch proceedings.They would not
be covered by the bar created by S. 32.
Award on oral submissions
In the absence of any proof of an agreement in writing between the parties to refer their dispute to arbitration, an
award delivered only on the basis of oral submissions was not treated by the court as an award.
3. Suit for permanent injunction
A suit for permanent injunction restraining some of the partners of a firm running a cinema hall from interfering with
the running of the hall was not the type of suit contemplated by S
s. 32 and
33 of the
Arbitration Act , 1940 (repealed). It was not a suit seeking a decision of the court upon the existence,
effect or validity of an arbitration agreement or award. Nor it was a suit to set aside or enforce an arbitration
agreement or award. Such a suit was not covered by these two sections of the
Arbitration Act of 1940 (repealed).
After an award in respect of a dispute in family settlement was made a rule of the court, a suit was filed for a
declaration and permanent injunction that some of the defendants were lawfully appointed as trustees. The filing of
such a suit was held to be not barred.
4. Suit to enforce award barred
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Section 32, of 1940 Act (repealed) barred a suit to enforce an award, as such a suit necessarily raised question as
to the existence, validity and effect of the award. The Nagpur and the Calcutta, High Courts held formerly that such
a suit lay but the section had been amended in 1963 and a suit to enforce the award became clearly barred.
A plea that a suit to enforce the award was not maintainable raised a pure question of law and could be raised for
the first time even in second appeal.
The section changed the previous law. Formerly a suit to enforce award or to recover the property or the money
awarded under it was maintainable. The award could be enforced by suit though an application for filing the award
was time barred. Any decision which did not have the effect of an award but which otherwise bound the parties was
to be enforceable by means of a regular civil suit.
Kapur, J. of the Punjab High Court surveyed authorities and concluded: “A review of these cases shows that
applications for the enforcement of the award are not confined to S. 14, 1940 Act, (repealed) alone, but such
applications were possible even outside that section, because S. 14, 1940 Act, (repealed) dealt with the filing of the
award by an arbitrator or an umpire and this section did not cover an application made by a party for the
enforcement of the award.”
5. Suit to enforce agreement based on award not barred
Where a partition award without being filed in court was acted upon and the parties by mutual agreement, express
or implied, agreed to accept and abide by the award the subsequent agreement gave rise to a new cause of action
and a suit to enforce the agreement or a partition based upon it was not barred by Section 32, 1940 Act (repealed).
The subsequent agreement to accept the award could be pleaded in defence to a suit for partition based on the
original cause of action. In setting up the defence that there had been a division of the property and the parties had
entered into possession of the properties allotted, the defendant was not seeking to obtain a decision upon the
existence, effect or validity of an award. He was merely seeking to set up a plea that the property was divided by
mutual consent; such a plea was not precluded by anything contained in the
Arbitration Act , 1940 (repealed).
A suit to settle a boundary alleging that negotiations for settlement through arbitration were pending was not a suit
to enforce an award.
6. Suit to challenge decree on award
After the decree on the award was passed, the validity of the arbitration agreement and the award could not be
challenged. But the validity of the decree could be challenged in execution proceedings on the ground that the court
had no jurisdiction to pass it.Sections 32 and 33, 1940 Act (repealed) did not bar a suit to challenge the decree on
the ground of suppression of notice. A suit claiming relief on the basis of a declaratory decree which was incapable
of execution was maintainable.
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7. Suit challenging decree based on award not barred
Section 32, 1940 Act (repealed) barred a suit on the award but it did not bar a suit to challenge a decree based on
the award. Where the court refused to stay a suit after rejecting the contention of the applicant that there was an
arbitration agreement upon which the subsequent award was based, the court had no jurisdiction to take
cognisance of the award passed in breach of the order passed under Section 34, 1940 Act (repealed). A decree
passed on the award was without jurisdiction and could be challenged by a suit.Sections 32 and 33, 1940 Act
(repealed) did not apply where the challenge was to the decree and not to the award. Where a decree was sought
to be attacked on the ground of fraud in the proceedings, it was held that a separate suit was maintainable to
challenge such a decree. In Ved Parkash v. Ram Narain Goel, it was held that after an award of an
arbitrator had been made a rule of court by consent of parties or after contest, no application would lie under
Section 33, 1940 Act(repealed) though if the decree passed was a nullity in the sense that it was passed without
jurisdiction, it could be possible to have it challenged under
Section 47 of the Code of Civil Procedure whenever and wherever it was sought to be enforced
against a party. In Sukumar Ghosh v. Tulsi Charan Ghosh it was held that though Section 32, 1940
Act (repealed) of the
Arbitration Act of 1940 (repealed) had barred any challenge to the award yet if there existed an
independent ground to challenge the decree passed on such an award such a challenge was not barred under
Section 32, 1940 Act (repealed). Similarly in the present case, the case of the plaintiff was that the award and the
decree were bogus and sham one and had been brought into existence for a specific purpose and were never
intended to be acted upon. So, the challenge to the award and the decree were independent of the contents of the
award. So, a separate suit was maintainable to enforce the substantive rights of the plaintiff. The plaintiff could
ignore the bogus and the sham award and the decree while seeking the substantive effect. So, the question of the
suit being barred under the provisions of Sections 32 and 33, 1940 Act(repealed) of the
Arbitration Act did not arise.
In Orient Transport Co., Gulabra v. Jaya Bharat Credit and Investment Co. Ltd. it was observed by the
Supreme Courtthat Section 32, 1940 Act(repealed) of the
Arbitration Act , 1940 (repealed) did not contemplate the case of a suit challenging the validity of a
contract merely because it contained an arbitration clause. It was held that Sections 32 and 33, 1940 Act (repealed)
had a very limited application, namely, where the existence or validity of an arbitration agreement and not the
contract containing the arbitration agreement was challenged. It was held that every person has a right to bring a
suit which is of a civil nature and the court has jurisdiction to try all suits of civil nature under
Section 9 of the Code of Civil Procedure and this right had not been taken away by
Section 32 of the Arbitration Act , 1940 (repealed).
8. Arbitration by party or agent or officer
If on a particular matter the contract provided for acceptance of opinion or decision of a party to the contract or third
party as in illustration (e) to Section 29 of the Contract Act, 1872 the contract could not be said to be vague and
uncertain, the agreement that liquidated damages for delay in payment would be levied at a certain percentage on
the value of the entire contract or on the value of the incomplete work as might be decided by head office of the
employer was not void for uncertainty.
A clause in a contract providing for decision of the chief engineer for the time being amounted to an arbitration
clause because the decision of dispute necessarily involved the hearing of the parties and this was the essence of
arbitration. The clause was not vague.
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Arbitration agreement is not required to be in any particular form. A mining lease between the Governor of a State
and the lessee relating to minor minerals provided that any doubt, difference or dispute arising out of the execution
of the lease deed touching the construction of the terms of the lease deed or any thing therein contained or any
matter or things connected with the lands or the working or non-working thereof or the amount of payment of any
rent or royalty reserved, it was the Governor whose decision should be final. The clause was held to provide for
reference of future disputes to the Governor. It was an arbitration agreement and not a provision for departmental
appeal.
A clause in a contract which contemplated parties, disputes and finality of decision constituted an agreement.
9. Court Fee
Court fee was leviable under Schedule II

Article 1(b) of the Court Fees Act . In U.P. it is leviable under Schedule II Article 18. An objection to the
award in the form of a written statement is exempt from court fee under Schedule II Article 19(1)(c). All objections
against the award under Sections 15, 16 and 30, 1940 Act (repealed) have to be filed under Section 33, 1940 Act
(repealed) and have to bear the court fee prescribed for application under Section 33, 1940 Act (repealed).
Valuation for the purpose of court fee determines the valuation for the purpose of jurisdiction. An applicant may give
his own valuation of an application which seeks a declaration relating to the existence or validity of the arbitration
agreement.
10. Stamp duty and registration
The validity of an award was allowed to be questioned where it had the effect of transferring properties and was not
registered.
ARBITRATION AGREEMENTS AND AWARDS TO BE CONTESTED BY APPLICATION
S. 33. Arbitration agreement or award to be contested by application.
Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or
validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court
and the Court shall decide the question on affidavits:
Provided that where the Court deems it just and expedient, it may set down the application for hearing
on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.
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1. Analysis of Section 33, 1940 Act (repealed)
Section 33 was new to the

Arbitration Act , 1940 (repealed). It was not retrospective. The section contemplated three kinds of
applications, namely : (i) challenging the existence of an arbitration agreement or award, (ii) challenging their
validity, and (iii) to have their effect determined.
Any party to the arbitration agreement contemplated by Section 33, 1940 Act (repealed) included a person who was
alleged to be party to it but who denied its existence.
The court had inherent jurisdiction under Section 33, 1940 Act (repealed) to entertain an application for a
declaration sought by the party who affirmed its existence that an arbitration agreement existed. A declaration that
an arbitration clause forming an integral part of a contract existed could be made though it did involve an incidental
declaration of the existence or validity of the main contract. The court could not dismiss an application made under
Section 33, 1940 Act (repealed) seeking affirmance of the contract on the ground that it was made under that
section as the application was clearly maintainable under Sections 31 and 32, 1940 Act (repealed) and could be
treated as made under them. Mere label would not defeat the appellant. In an application under Section 33, 1940
Act (repealed) the court was concerned only with the question relating to the arbitration agreement and the other
terms of the contract did not arise for consideration under it. An application to have the effect of the arbitration
agreement determined could be filed even during the pendency of the arbitration. The court was bound to find out
the questions on which the parties had joined issues so as to isolate those which were within the jurisdiction of the
arbitrator. The court could not dismiss the application not even on the ground that a decision may involve a
declaration as to the existence or validity of the contract containing the arbitration clause. General instructions
attached to tender documents carrying an arbitration clause and not objected to by the party resulted in the
agreement and, therefore, the reference was held to be validly made.
If the court came to the conclusion that the dispute was within the scope of the arbitration agreement, the merits of
the dispute were not within the scope of the enquiry and was to be left to the arbitrator for decision. Where the
contract had been rescinded, no reference was possible under such a contract. The court could look into the fact of
rescission but no such inquiry was necessary where it was an admitted fact that there had been rescission of the
contract by both the parties. A suit challenging the validity of the agreement was not barred by S. 32, 1940 Act
(repealed) merely because it contained an arbitration clause. A final settlement even though duly executed did not
put an end to the contract. If the party alleged that he signed under influence, it was a dispute for which reference
could be demanded. Where the court decided matters which were meant for the arbitrator to decide, it was held that
such part of the decision of the court below must be treated as non-existent.
If the contract did not exist or was void ab initio, the court would grant a declaration accordingly under Section 33,
1940 Act (repealed) but where the formation of a valid contract was admitted or proved, the question whether there
had been repudiation of the contract and whether any party had been discharged from performing it was for the
arbitrator to decide.
Section 33, 1940 Act (repealed) and not Section 31, 1940 Act (repealed) provided the remedy in respect of disputes
for which a suit was barred by Section 32, 1940 Act (repealed). If the question related to the existence or validity of
the arbitration agreement the proper procedure was to apply under Section 33, 1940 Act (repealed) for
determination of the question and not to apply under Section 5, 1940 Act (repealed) for revocation of the arbitrator's
authority. The net result of Ss. 32 and 33, 1940 Act(repealed) was that where a party wanted to challenge the
existence or validity of an arbitration agreement or that of an award, he could not proceed by means of a suit. He
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must make his application within the framework of the

Arbitration Act , 1940 Act (repealed). Where the arbitration remained abortive, it did not destroy the
original cause of action. This appeared from the following observation of the Bombay High Court: “The scheme of
the Act appears to be to bring all arbitrations under the control of the Court and treat them as effective only if a
decree were obtained on an award in accordance with the Act and to prevent the parties from agitating any
question relating to the existence, validity, or effect of an arbitration agreement or award in any manner other than
that provided in the Act. These sections [ Ss. 31, 32 and 33, 1940 Act (repealed)] did not by express language or by
implication provide that a suit on the original cause of action after an abortive or incomplete arbitration would not
lie.”
Factual findings were not open to challenge under S. 33.
Unfiled Award
An award which had not be filed and made a rule of the court under S. 14, 1940 Act (repealed) could not be used
as a defence to a suit on the same cause of action or subject-matter. An unfiled award was not allowed to be
pleaded as a defence to a suit to recover possession of property covered by the award.
The question before the Supreme Court in Tarapore & Co. v. Cochin Shipyard Ltd. was whether a claim for
compensation for loss caused by price rise of the imported equipment which was supplied under the contract was
within the scope of the arbitration clause in the contract. The Supreme Court observed that phrases such as “claim
arising out of contract” or “relating to the contract” or “concerning the contract” would, on proper construction, mean
that if it becomes necessary to have recourse to the contract to settle the dispute one way or the other then
certainly it can be said that it is a dispute arising out of the contract. Acting on this, the court held that the claim of
the contractor regarding compensation for excess payments made due to price escalation “arose out of or related to
the contract or was otherwise concerning works or execution thereof.” The court looked at the pleadings and said
that it appeared clearly that both the parties had the recourse to the contract which was admittedly entered into in
support of the rival conventions and, therefore, the claim made by the appellant would be covered by the arbitration
clause. The clause was of the widest amplitude. This conclusion was reaffirmed by the Supreme Court in another
case. Where also expressions of the same kind were used in an international commercial contract and it was held
that they being of the widest amplitude would enable the arbitrator to decide the question of the scope of the
agreement with a view to deciding whether the dispute in question was within the scope of the agreement. The
Supreme Courtdistinguished the expression “existence of the agreement” from its “effect.” While existence and
validity are for the court to decide, the “effect” means the scope of the agreement and this question can be decided
by the arbitrator. He could decide the arbitrability of the claim preferred before him. In this case the contract was
between a US Company and an Indian company. The contract used the expressions “arising out of” or “related to
this contract” in the arbitration clause. It was held that the parties clearly intended to refer the issue pertaining to the
effect (scope) of the arbitration agreement to the Court of Arbitration of International Chamber of Commerce. Under
S.
Section 16 of the Arbitration and Conciliation Act, 1996 , the arbitral tribunal has been authorised to
decide questions of existence and validity of the agreement also.
There was a fundamental difference between the scope and object of S. 30 and S. 33, 1940 Act (repealed). It was
not true to say that S. 33, 1940 Act (repealed) down a mere procedure and S. 30, 1940 Act (repealed) alone gave
grounds for setting aside or that S. 30, 1940 Act (repealed) was the genus and S. 33, 1940 Act (repealed) was its
species. Although S. 30(c) and S. 33 [both of the 1940 Act (repealed)] appeared to cover somewhat identical
grounds. The scope of the two sections was different. For applications under S. 30, 1940 Act (repealed) thirty days’
period was allowed whereas no time-limit was prescribed for an application under S. 33, 1940 Act (repealed). Under
S. 30, 1940 Act (repealed) the validity of the arbitration agreement could not be challenged, whereas under S. 33,
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1940 Act (repealed) it could be challenged even after the receipt of the award.
In a contract for construction of houses controversies arose as to the meaning of certain terms used in the contract.
The matter of the controversy was held to be referable to arbitration. Whether the dispute in question was within the
scope of the matters excepted from arbitration is referable.
Application contesting arbitration agreement could not be stayed.
The section did not indicate the court where an application under the section could be filed and, therefore, S. 2(c)
became applicable, namely the court having jurisdiction in the matter. Accordingly, an application was not allowed
at a place where the applicant was not able to show that even a part of the cause of action had arisen there.
2. Existence of arbitration agreement and validity of award
An application challenging the existence of arbitration agreement or validity of the award must be made under
Section 33, 1940 Act (repealed) irrespective of the ground of challenge except in cases where the existence of the
award was challenged. The non-existence or invalidity of the arbitration agreement in case of an award without
intervention of court and the non existence or invalidity of the reference in case of award on reference by court
could be a ground of such challenge. Where the agreement was valid, the court need not go into the validity of the
arbitration clause. The question of existence of arbitration agreement was to be decided by the court under S. 33.
Where the contention was that the agreement for transfer of shares was not in accordance with statutory provisions
and, therefore, it affected the arbitrator's jurisdiction, the court said that the arbitrator could not go further without
first deciding this question.
An agreement does not arise on the acceptance of a tender. Subsequent formalities such as execution of the
agreement and issuing of work order are equally important. In their absence there is no contract and no claim for
damages. Arbitration cannot be demanded.
The court had to pass its judgment on the existence of the agreement and it had no power to dismiss the
application and direct the parties to proceed under the
Specific Relief Act, 1963 . When the existence of a contract was to be gathered from a pile of
correspondence, it would have no application where the contract had to be formal, for example, as required by
Art.299 of the Constitution .
A party was not permitted to object to the validity of the agreement which he had accepted by saying that the
provision for the appointment of an employee arbitrator was not valid because he would naturally be biased towards
his employer. Where the correspondence between the parties disclosed that there was no concluded contract, the
question of giving effect to the arbitration clause would not arise.
J.N. Textiles v. Bon Chance, arbitration clause on Bills, on that basis reference was
made to Mercantile Association, held valid. Relying upon Tikhanlal Sewaram v. Jiwandas Desraj ;P.C. Agarwal v.
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K.N. Khosla.
Where Office of Contract exhausted
Where after the completion of the works the contractor submitted his final bill and accepted final payments on that
basis, the court held that the whole purpose of the contract was exhausted. The contract with its arbitration
agreement was no more operative. No reference was made for any further claim as to extra work and as escalation.
Objection to the award on the ground of the invalidity of the reference was covered by Section 33, 1940 Act
(repealed).
All the High Courts except the Patna High Court had held that an award was invalid on the ground of the invalidity
of the reference was “otherwise invalid” within the meaning of Section 30, 1940 Act (repealed) and that those words
were not to be construed ejusdem generis with the preceding words. But the contrary view was taken by the Patna
High Court.
Arbitrator's decision on his own jurisdiction
The arbitrator's decision on his own jurisdiction to arbitrate was not final and binding as ultimately the court had the
power under S. 33 to decide the question.
3. Limitation
The Bombay, Calcutta and Rajasthan High Courts had held that an application for challenging the existence or
validity of the arbitration agreement or reference was governed by
Article 158 of the Limitation Act , 1908 corresponding to
Article 119(6) of the Limitation Act, 1963 . TheDelhi High Court held that such an
application was not governed by that article. The Patna and Jammu and Kashmir High Courts held that there was
no period of limitation for the application. There was no limitation for an application challenging the factual existence
of the award or challenging the award filed in court as not being the original award but a substitution for it.
The period prescribed by

Article 119 of the Limitation Act, 1963 is that of thirty days and it began to run from the date of filing of
the award or the date of service of notice thereof by the court. The facts of a matter before theSupreme Court
revealed that the arbitrator forwarded his award in a sealed cover in the presence of the counsels of both the
parties on 23-2-1988, pursuant to an application filed on 19-2-1983. The objection petition was filed on 24.3.88, i.e.,
on the 31st day after filing of the award was made known to the parties on 23-2-1988. Since the day on which the
award was filed was not to be counted by virtue of the provision in S.
Section 12(1)of the Limitation Act , the objections were held to have been filed within time. The court
said:
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“Indisputably in the instant case no notice was issued by the court but the award was made known on 23.2.88. The point
seems to have been covered by this court in Indian Rayon Corporation Ltd. v. Raunaq & Co. P. Ltd. The
court observed:
The filing in the court is necessary and the intimation thereof by the Registry of the court to the parties concerned is
essential.
The fact that the parties have the notice is not enough. The notice must be served by the court. We reiterate again
that there must be (a) filing of the award in the proper court ; (b) service of the notice by the court or its officer to the
parties concerned, and (c) such notice need not necessarily be in writing. It is upon the date of service of such
notice that the period of limitation begins and as at present under clause (b) of
Article 119 of the Limitation Act , limitation expires on the expiry of 30 days of the service of that notice
for an applicant for setting aside of the award. The importance of the matter which need to be emphasised is the
service of the notice by the court. It is not the method of the service that is important or relevant”.
Where the party who wanted to file objections to the validity of an award failed to contact and instruct his lawyer
about his objections within the time after service of notice on him, it was held that the delay could not be condoned.
Delay in filing of objections could be condoned under
Section 5 of the Limitation Act, 1963 .
In a decision of the Supreme Court, it has been held that the limitation period would begin under
Article 137 of the Limitation Act, 1963 when the right to apply unders. 33 would accrue, namely when
the intention to invoke the arbitration clause is disclosed. In this case, a letter of January 8, 1990 was sent by the
respondent to the Registrar, Tribunal of Arbitration, invoking arbitration clause for settlement of disputes. Taking
into account the date on which the notice was received, a petition filed in March 1993 was held to be time-barred.
Where the arbitrator refused to take up the question of limitation as a preliminary issue and the party went to the
court and the Civil Judge himself decided the question instead of directing the arbitrator to do so, it was held that
everything said by the Civil Judge was non-est. The arbitrator should ignore it and decide the question of his own.
4. To have the effect determined
The word ‘effect’ in Sections 32 and 33 [both of the 1940 Act (repealed)] meant scope, tenor or drift.
If the court came to the conclusion that a dispute did not fall within the scope of the arbitration agreement, the court
had power to declare the effect of the arbitration and incidentally upon the validity of the contract.
Determination of the question whether a particular dispute felt within the scope of the arbitration agreement was
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determination of the effect of the agreement falling within Section 33, 1940 Act (repealed).
The court was not precluded from deciding the effect of arbitration agreement after the arbitrators had entered on
the reference.
A party who issued a certificate of full and final payment or a no claim certificate could still apply to the court to have
the effect of the certificate determined and if the matter was referred under S. 20, 1940 Act (repealed) the award
was not liable to be set aside only because there was a certificate of that kind.
Privity of contract
An agreement between co-operative housing society and a builder containing an arbitration clause could not be
used by a member of the society for loss caused to him by reason of delay in completion of construction.
Judge in one's own cause
Where a provision in the agreement was that in the event of breach of contract an officer of the Government would
assess damages and recover them as arrears of land revenue, it was held that the clause would operate only if the
breach of contract was admitted by the contractor because otherwise it would constitute the officer a judge in his
own cause both for the purpose of determining whether breach had taken place and whether how much
compensation would be payable. The other portion of the clause that damages would be recovered as arrears of
land revenue was held to be valid.
Jurisdiction
An application to have the effect of the agreement determined ended in the Supreme Court in terms of a
compromise between the parties and the appointment of an arbitrator. It was held that the Supreme Court must be
deemed to have retained control of the arbitration proceedings and, therefore, an application for setting aside the
award could be filed in the Supreme Court.
If the court has no jurisdiction, the parties cannot confer jurisdiction on it. A decree passed by a court without
jurisdiction is a nullity at law and this question can be raised anywhere and everywhere the decree is sought to be
enforced. Where the question of jurisdiction was not raised in a petition under S. 20 (1940 Act), nor decided or
determined by the court, the principle of res judicata was not attracted.
5. Form of objection
There was no prescribed form of application under Section 33, 1940 Act (repealed). A written statement and an
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application for inspection of record provided that they were filed within the prescribed period of limitation could be
treated as an application under Section 33, 1940 Act (repealed) if the necessary allegations were made in it. It was
sufficient if notice of the objection was given within time to the proper officer of the court.
6. Objection should be specific
An application under Section 33, 1940 Act (repealed) had to give particulars of the grounds of the objection. It was
not sufficient to say that the arbitrator had exceeded his authority or that the award was uncertain and not final but
the particular objection must be stated. The application should be specific as to in what respects the award was not
certain or not final and should give facts showing that the arbitrator had exceeded his jurisdiction. Rules of fairplay
and justice require that the facts which constituted misconduct had to be specifically pleaded. In the absence of
particulars, general allegations of misconduct were not sufficient. Where there was no specific allegation against the
validity of an award which awarded compensation to a building contractor against loss caused by delayed handing
over of the site, the award was made rule of the court, the court allowing future interest while pendente lite interest
as awarded by the arbitrator was upheld. Where a contract could not be executed in time due to the failure of the
respondents to fulfil their obligations under the contract and the arbitrators having awarded a sum of money as
compensation for the same, the award was held to be final. The court said that it could not sit in appeal over the
factual determination of the arbitrators that the respondents had caused hinderances in the performance by the
claimant. Objections regarding the validity of the reference or the award can be taken even after the award has
been filed.
The objections were held to be sufficiently stated if they appeared from the affidavits.
Preventing enforcement of award in foreign country
A contract between an Indian and American companies provided for arbitration under the Indian
Arbitration Act but that the venue of arbitration would be in London. The umpire rendered the award
there. The American company wanted to enforce it in New York. The Indian company applied for stay of such
proceedings there. The stay was granted subject to the condition that the Indian company paid to the American
company the undisputed part of the claim regardless of the outcome of the litigation pending in the Indian court. The
court said that it is no doubt true that the Supreme Court sparingly exercises the jurisdiction to restrain a party from
proceeding further with an action in a foreign court. But this is one of those rare cases where the court would be
failing in its duty if it obliges a company to face foreign proceedings which would be oppressive in the facts and
circumstances of the case.
7. Objection not raised at earlier stages
If the objection as to the competency of the arbitrator in entertaining a claim barred by limitation was not raised
before the arbitrator while making the reference, the objection could not be raised for the first time when the award
was filed in court. It could not be said about objections at the stage of arguments that they were objections to the
jurisdiction of the arbitrator. Even otherwise the objectors had by their conduct in participation of proceedings lost
their objections about lack of jurisdiction by acquiescence.
If an objection was not raised in the trial court, it could not be raised in the Appellate Court. Even if objections were
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filed, it did not follow that they were pressed in the trial court. A party could not be allowed to urge an objection quite
inconsistent with the objection filed by him.
If an objection went to the root of the jurisdiction of the arbitrator, the court could entertain it in revision even if no
objection was taken before the trial court or before the arbitrator.
A cross-objection is like an appeal. It is filed in the form of a memorandum. Provisions of Order 41, Rule 1 of
CPC , apply to cross-objections as well. Where there was no right of filing cross-objections under S. 39
(1940 Act) it could not be read into S. 41.
8. Procedure
The object of the section was to avoid delay and to require the parties to bring the disputes for the decision of the
court in the form of petitions and to empower the court to require all applications to set aside an award on
whatsoever ground to be made by motion on affidavit evidence, it being left to the court, if it thought necessary to
give facilities for oral evidence and for discovery and to require particulars from each party of his allegations. The
proviso to the section enacted that “where the court deemed it fit and expedient, it could set down the application for
hearing on other evidence also and it could pass such orders for discovery and particulars as it could do in a suit”.
Merely because some sorts of allegations were made in the petition in a strong language may not be a ground in
itself to set the petition down for recording evidence. The court had to address itself to the question whether it
deemed fit and expedient to dispense with the normal rule of deciding the petition on affidavits.
Section 33, 1940 Act (repealed) proceeded on the assumption that the application could be generally decided on
affidavits. The court could decide the validity of an award on affidavits or could set down the application for hearing
on oral evidence and order discovery and particulars in a proper case,e.g., where the validity of the contract
containing the arbitration clause was challenged on the ground that it was by way of wager or where fraud was
alleged or if the affidavits gave contradictory evidence, or where allegations of forgery or other complicated
questions of law or of fact were involved.
The court could not set aside the award unless the award was before the court, but there was authority for the
contrary view. The application was not to be dismissed if the award was filed in court during the pendency of the
application though it was not before the court when the application was made. Where the existence of the
arbitration agreement or an award was challenged, the award or the arbitration agreement need not be filed in
court.
Stages
Under this section, the court could examine the existence, validity or effect of an arbitration agreement at three
stages:
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(1) before commencement of arbitration proceedings;
(2) during their pendency, and

(3) after the award is made and filed in the court.
9. Practice
Limitation
The application under Section 33, 1940 Act (repealed) could be admitted after the expiry of the prescribed period of
limitation if the applicant satisfied the court that he had sufficient cause for not preferring it within such period.
Limitation Act 1963, Section 5 rendered obsolete the undernoted decisions given under
Section 5 of the Limitation Act 1908. Where the notice of the filing of the award was directed to be
served on the petitioner, Bharat Coking Coal Ltd. , but was served on
Coal India Ltd . and that caused delay in filing objections within time, it was held that there
was a sufficient ground for condonation of delay.
Amendment
An amendment of an application under Section 33, 1940 Act (repealed) was in the discretion of the court. Such
amendment had been allowed where it did not after the nature of the application and refusal to allow an amendment
had been set aside in revision. Where there had been a settlement between the parties after the original contract
and the only dispute raised was whether the original contract was wholly or partly satisfied, it was held that it was
not open to the contractor to make a new case that there was no subsequent agreement at all, though it was open
to him to take the point that the new contract was not enforceable because, e.g., it did not satisfy the requirements
of S. Section 175(3)of the Government of India Act, 1935 . The court said that if the facts are there in the pleadings,
a point of law can always be raised on those facts even if that point was specifically taken.
Remission, instead of setting aside
In a motion to set aside the award the court could remit the award to the arbitrator to enable him cure the defect
upon which the motion to set it aside was based.
Order 1, Rule 8
CPC
The provisions of Order 1, rule 8 of the

Code of Civil Procedure apply to proceedings to set aside the award. The applicant is entitled to make
use of the rule when the respondents are numerous and are in the same interest. Objections as to the validity of the
agreement under the section have the effect of seeking setting aside under S. 30, 1940 Act (repealed). If the court
refused to set aside, an appeal against the refusal would lie under S. 39, 1940 Act (repealed). The court had the
power under the proviso to admit oral or documentary evidence. The ruling of a single judge refusing oral evidence
Navneet Krishn
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for deciding whether a valid agreement had come into existence was held to be not proper. The court also held that
a clause as to exclusive jurisdiction of a particular court under the agreement would come into play only when the
validity of the agreement itself was established.
The court had power to allow or refuse to allow conversion of a suit into an application under Section 33, 1940 Act
(repealed).
Framing of issues not necessary
In dealing with objections against an award it was not necessary that the court should first frame issues and receive
evidence. If the objections were such that they could be dealt with by looking at the award and the accompanying
documents, the court could not receive evidence even on affidavits.
Petition for setting aside award
Where there was delay in filing of a petition for setting aside award, it was held, that s.
Section 5 of the Limitation Act, 1963 , could not be invoked.
10. New objections
In a case where an attempt was made to raise points before the court which were not raised before the umpire,
BRANDSON, J. said:
“I have been referred to two cases in Vol. 10 of Lloyd's List Law Reports, decided by the same Court of Appeal, the first of
them being Suzuki & Co. v. Burgett & Newsam, and Burgett & Newsam, and the other being Hudson's Bay
Company v. Domingo Mumbru Sociedad Anonima. In the one case it was held that in the circumstances of
the case a new point of law which was taken could properly be taken, but in the other case the same court held that in the
circumstances of that case the point of law which the counsel was attempting to take could not be taken. It is a matter that
cannot be dealt with as a general proposition. It must depend on the circumstances whether it is proper and fair to allow the
matter to be gone into. Here, it is obvious that if the point had been taken a variety of findings of fact would have to be
made, but no such point was taken and no such findings of fact appear. I think it would be improper to allow the point to be
raised now.”
11. Who could file objections
Objections against an award against a co-operative society could be filed with the leave of the court by the majority
of its members in the name of the society and by the minority of the members in their own names, if its managing
Navneet Krishn
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committee refused to file the objections. Leave of the court was not ordinarily refused.
Where the members of a joint family divided the family property in the terms of an award, and the member to whom
a property held by the family under a mortgage was allotted brought an action to recover the mortgage money. It
was held that the mortgagor's transferee had no right to resist the suit by saying that the award under which he
acquired his right was not filed in court and not converted into a decree. The partition, the court said, was by virtue
of their agreement in terms of the award which was valid even if the award itself could not have been enforced.
12. Parties
The parties to the reference are necessary and proper parties in proceedings under the section. A person who was
not a party to the reference could not be made a party to it on the ground that he was a son of a party.
An arbitrator is not normally necessary or proper party to the proceedings to set aside or remit the award except in
the case of misconduct or in a case in which he is personally affected by the proceedings.
13. Costs
An arbitrator could be directed to pay the costs of proceedings to set aside an award (i) if he appeared and took
part in the proceedings, (ii) if he had been guilty of such collusion as would entitle one of the parties to sue him and
the award was set aside on this ground even if he did not appear and take part in the proceedings. He would not be
directed to pay costs if he was guilty of technical misconduct only without any dishonest or corrupt motive and did
not take part in the proceedings. Merely attending by counsel or giving the court information which was thought to
be helpful would not involve the arbitrator in any risk of liability for the costs of the proceedings. If a party impugned
the conduct of the arbitrator in most technical respects and the charge failed, the arbitrators would be entitled to
costs if they appeared.
On an application to set aside the award, the court could not amend it and substitute its own decision for that of the
arbitrator except in special circumstances, e.g., where the dispute had been pending for a long time, or there was a
mistake in calculation and the award was a speaking award. Where the contract provided for penalty for delay in
construction but neither any penalty was levied nor any counter-claim was presented for the same before the
arbitrator, but the arbitrator himself deducted from the award an amount by way of penalty, it was held that this was
an apparent error which was open to correction by partly setting aside the award. The court said that the arbitrator
had no power to impose a penalty because it was not arbitrable, much less was he authorised or even competent to
calculate the amount of the penalty himself and deduct it from the claim. The court followed the Supreme Court
decision in Viswanath Sood v. Union of India where the Supreme Court having found that the penalty
was not arbitrable set aside the award to that extent.
An order under the section did not require a judgment and a decree could not be drawn up without judgment.
Accordingly, where the court did not write a judgment a decree for costs was held to be out of order.
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Grounds for setting aside an award
An award could be set aside only if there was prima facie evidence of misconduct of the arbitrator or patent violation
of law in conducting arbitration proceedings. Where no such allegation was made nor was there any evidence to
that effect, the award was justified and could not be set aside. Plea of non-consideration of counter-claim by the
petitioner was also unsustainable as a perusal of the award made it evident that counter-claim was considered by
the arbitrator in detail. Once the award was made as rule of the court, it was as good as money decree and
ordinarily no stay could be granted in such a case.
14. Misconduct
Where certain persons are appointed to act together as arbitrator, they are required to reach a decision jointly. It is
misconduct on an part of an arbitrator to sign the award form in blank without the decision process and for the other
arbitrators to endorse his action and accordingly the whole award was defective. But since the sellers had taken the
benefit of the award, they were not entitled to have it set aside. The requirement that arbitrators should sign the
award at the same time and the same place is no longer necessary in modern conditions. The Court of Appeal
explained in this case the proper procedure to be followed:
“The authorities showed that an arbitration conducted by a tribunal of several arbitrators necessarily required a joint
process of full and complete adjudication by all of them, so that the ultimate award represented the state of mind of all of
these at the time when they signed it. What one of them had done in the present case constituted a very serious instance of
technical misconduct. He did not participate in the award and was not a party to the award since he had signed it in blank
and the award would in the circumstances have been set aside; since the sellers had in fact taken the benefit of the award
and thereby affirmed that part of the award it was now impossible for them to apply for the award to be set aside.”
Lord Denning, M.R. said:
“Nowadays whenever an agreement or award or any other document was to be done by two or three jointly, the practice
was for one or the other to draw up a draft and send it to the other or others for their consideration and comments . . . . .
Once the draft is agreed. . . . it is then sent round and signed by each separately. Once all have signed it becomes the final
document. It is quite unnecessary for them all to meet together to sign it. . . . .Whenever all have signed each must be
regarded as having assented to it even though each signed it at a different time or place from the others. That principle
applies to an award of arbitrators just as it does to a written agreement or any other document to be executed by two or
three people.”
If an arbitrator wished to make an award on the facts supporting a claim which had not been advanced before him,
he should in the interest of fairness indicate to the parties to the arbitration that he was inclined to come to such
conclusion and give the parties the opportunity of dealing with the development and if necessary of calling any
evidence to deal with it but the failure of the arbitrator to do so did not necessarily be misconduct.
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Though the arbitrators have an overriding duty to act fairly as between the parties in all matters before them
regarding the conduct of the arbitration, basically they are the masters of their own procedure and failure to order
discovery of all relevant documents in the owner's possession may not necessarily be misconduct.
The rule in litigation that there could be no serial claims for damages based upon the same cause of action applies
to arbitration. But there can be serial arbitrations first to determine the question of liability and the second for the
remedies for the breach.
Non consideration of counter claim amounted to misconduct
Where the counter-claim of the respondent was not at all considered by the arbitrator, it was held, amounting to
misconduct. The objection had to be accepted. The award was set aside and remitted back to arbitrator for decision
afresh.
Cancellation of dealership on the ground of malpractice
The objector objected an award cancelling dealership of LPG on the ground of malpractice and circulation of
spurious gas cylinders, detected and confessed. In the objections, the petitioner pleaded that confession was
induced by officers of the petitioner and the arbitrator, it was held, that notwithstanding the confession of the
objector, a detailed reasoned award was pronounced, hence, there was no merit in the objections which were liable
to be dismissed and the award has to be made rule of court.
15. Agreement for foreign project
Where a bipartite as well as a tripartite agreement was executed in Indonesia and the work was also to be
performed in Indonesia and payments were to be made to the party in Japan on the basis of letters of credit, it was
held that the mere fact that an agreement between two parties to which the third was not a party was made in New
Delhi would not entitle any party to say that any part of the cause of action relating to the dispute about delay in
execution arose in New Delhi. Accordingly Delhi courts had no jurisdiction in the matter. It was not material for that
purpose that under the agreement the rights of the parties were to be governed by Indian laws.
16. Unprobated will
An award granted on the basis of an unprobated will which is not capable of vesting any title was held liable to be
set aside because of the apparent error.
17. Delayed award and proceedings
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Where the time limit of four months was fixed by the Government in the exercise of its statutory powers, it was held
that the arbitrator was not competent to extend the time with the consent of the parties. An order of the court under
S. 28(1), 1940 Act (repealed) was necessary. An award submitted after the limit was set aside. Directions were
issued to the arbitrator to decide the dispute and make award within three months by taking proceedings on day to
day basis. Proceedings had remained prolonged because of too many adjournments and also because of
substitution of arbitrator.
18. Agreement for unreasoned award and summary powers
Where reference was made with the consent of the parties under an agreement which gave to the arbitrator
summary powers and the liberty not to give reasons and the arbitrator submitted an award without statement of
reasons, it was held that the parties were precluded from challenging the validity of the agreement.
19. Power of judicial supervision and review
The section gives power to the court to fix a date for the hearing of the application and consideration of other
evidence. For this purpose the court can pass necessary orders for discovery and particulars. This power enables
the court to exercise a limited power of judicial supervision and review of the conduct of arbitration proceedings.
The need for limitation upon this power has been thus stated:
True it is, that formerly the court was careful to maintain its supervisory jurisdiction over arbitrations and their
awards. But that aspect of public policy has now given way to the need for finality. In this respect the striving for
legal accuracy may be said to have been overtaken by commercial expediency.
In keeping with these developments, the English

Arbitration Act, 1996 has maintained the position that the doctrine of judicial review is not applicable.
Section 5 of the Arbitration and Conciliation Act, 1996 confines judicial intervention only to the extent
permitted under the Act.
Jural relationship between parties
The State Trading Corporation of India (STC) entered into an agreement with a foreign buyer for export of leather
garments and an associated agreement with the objector who claimed to have manufactured goods as per asking
of the petitioner. Exports could not mature as the foreign buyer could not open a letter of credit. The objector
claimed to have made a distress sale incurring losses. The arbitrator held, discussing jural relationship between
parties, that the agreement between the objector and STC was a case of vicarious performance and not that of
buyer and seller. Therefore, the arbitator had analysed both the agreements and had rightly applied the law. It
would not within domain of the High Court to re-enter the agreements.
20. European Economic Community Law
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A similar rule exists in the EEC Law. In a case under EEC law the court ruled that an appeal could lie only with the
leave of the court on a point of law. The contract was for the sale of crude oil. When the vessel arrived for loading,
the same was refused because the oil was meant for Israel and such export was against the policy of UK
Government. The arbitrator's award was that there was nothing wrong in refusing an act which was against the
country's policy. No appeal was allowed without leave of the court.
Guidance was provided in this respect by the House of Lords in The Nema. The decision established
two rules according to which applications for leave to appeal were to be decided: Leave should be granted where
(1) the decision would add significantly to the clarity and certainty of English commercial law, and (2) a strong prima
facie case has been made out that the arbitrator had gone wrong. These two propositions should bring out the
result on the facts of each case. The court said :
“On a point of English law, an English judge can reasonably be expected to take a view, on reading an award and hearing
summary arguments, whether he considers an arbitrator's award to be right or wrong. It is very much harder task for him to
undertake on a point of Community law and harder still for him to do with any confidence of being correct. The cases show
that even where English judges have been confident that a point of Community law should be decided in one way, the
Court of justice of the European Communities has not infrequently decided it in the other.”
The binding effect of the Nema guidelines was considered in B.V.S. S/A v. Kerman Shipping Co. The
case arose out of the construction of a bill of lading. The goods covered by the bill were washed over-board during
the course of a voyage. The carrier was sued for the loss on the basis that it was his duty to insure the goods and
he had failed to do so. The arbitrator rejected the claim saying that the interpretation of the relevant clause showed
that the carrier was under no duty to insure the deck cargo. Leave of the court was sought for appeal against this
interpretation. Under S. Section 1(4)of the English
Arbitration Act , 1979 (now replaced by the
Arbitration Act, 1996 ) leave to appeal could be granted if the matter substantially affected the rights of
the parties. The court was of the view that the combined effect of Nema guidelines and the Rio Sun
was that leave to appeal should be granted if the court formed the view that the arbitrator was wrong and that it
would require a great deal of convincing that he was right. Leave was granted partly also for the reason that the
decision would clarify the application of the guidelines.
What the court saw as underlying the philosophy expounded in the The Nema and The Antaios was that there
always was a presumption in favour of finality and that rebuttal had always to be based upon at least a suspicion
that the arbitrator had gone wrong : being left in the frame of mind that the arbitrator might or might not have been
right, being left in real doubt in that sense, was not sufficient. The requisite degree of suspicion, however, might
vary according to the seriousness of the consequences of error to the parties and to the wider public.
21. Additional guidelines on discretion to grant leave
The effect of Section 1 (3)(b) of the [English]

Arbitration Act 1979 (now replaced by the
Arbitration Act, 1996 ) is to restrict the right of appeal to the High Court on a question of law arising out
of an award to cases (unless all the parties consent) where the court itself grants leave. There is the further
restriction in Section 1 (6A), added to the 1979 Act by Section 148(2) of the [English] Supreme Court Act 1981, to
the effect that leave of the High Court is required for an appeal to the Court of Appeal against a judge's grant or
Navneet Krishn
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refusal of leave to appeal under Section 1 (3)(b).
The following additional guidelines were provided in the decision in Petraco (Bermuda) Ltd. v. Petromed
International SA :
“First, the fact that the point which it is proposed to argue was not argued before the arbitrator is not an absolute bar to the
grant of leave to appeal. Second, it is, however, to be taken into account in the exercise of the general discretion provided
by Section 1(3). Third, where the failure to argue the point below has had the result that all the necessary facts are not
found, this will be a powerful factor against granting leave. Fourth, even in such a case it may in very special circumstances
be right to remit the award for further facts to be found with a view to granting leave. One cannot entirely exclude the
exercise of the discretion in that way in what would probably be a very unusual case. Fifth, if all the necessary facts have
been found, the judge should give such weight as he thinks fit to the failure to argue the point before the arbitrator. In
particular, he should have regard to whether the new point is similar to points that were argued, perhaps a variant of one of
those points or a different way of putting it on the one hand, or whether it is a totally new and different point on the other.”
The facts showed an inability on the part of the seller to provide the type of oil which he contracted to sell. In answer
to a claim for damages the sellers contended that the buyers had suffered no damage because even if the sellers
did have the type of oil which they contracted to supply, the buyers were not in a position to arrange for a ship to
take the load. The arbitrator's award was that though the ship nominated by the buyers was not available to them,
they had a real chance of making a timely substitution. The sellers applied for leave to appeal against this award.
The commercial court refused leave and on the authority of The Antaios the court gave no reasons.
But the court granted the leave to appeal against its own decision to the Court of Appeal. About this the court said :
“Where an appeal lies as of right, the court may quite readily entertain arguments of law which were not advanced in the
court below. Where, however, the parties have agreed to arbitration it seems to me that the court should not normally grant
leave to appeal so that a point of law may be canvassed which was not urged before the arbitrator, however important that
point may be. The desirability of speedy finality, which an arbitration agreement aims to achieve, militates against permitting
a second bite at the cherry.”
The Court of Appeal granted leave to appeal before the High Court.
22. Interpretation of “off hire” clause
A charterparty in the amended New York produce Exchange Form contained a clause to the effect “that in the event
of a loss of time by any cause whatsoever preventing the full working of the vessel the payment of hire shall cease
for the time thereby lost.” In a voyage the ship came across a small boat on which were crammed nearly 300
Vietnamese refugees. The master allowed them to board the ship. At the next port the ship was told to remain out-
side the port because the authorities there would not permit the refugees to land. The ship was allowed to enter the
harbor after a gap of time and on the condition that its human load would not leave the ship. The question was
whether that period should be regarded as “off hire” period. The majority of the arbitrators decided that the vessel
remained on hire throughout the period. Leave to appeal having been granted, the Commercial Court held on
appeal that the decision of the Taiwanese authorities not to permit the vessel into the harbor did not have the effect
of preventing the full working of the vessel and the decision of the arbitrators in this respect could not be said to be
Navneet Krishn
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wrong. The judge refused leave to appeal and the Court of Appeal also refused to do so. The Nema guidelines
would require to be satisfied and would require to be satisfied very fully. It has to be shown that either that the
conclusion on the law reached by the judge was plainly wrong or that there was a strong prima-facie case for saying
that he was wrong. On the facts, Neill LJ said that it seemed to him that there was no prima-facie case, let alone a
strong prima-facie case, for saying that the judges interpretation of the “off hire” clause was plainly wrong.
Interpretation of ‘Force majeure clause‘
In a contract for supplying antacid gel non supply, by the objector to respondent, was effected due to strike, the
respondent cancelled the contract and sought to recover damages and the arbitration award was in favaour of the
respondents, it was held, that as there was no ‘force majeure clause’ in the contract and conditions therefore were
not established, it was irrelevant. It could not be said that the award was without application of mind as the arbitrator
had considered the material documents evidencing last date of delivery, claim under strike period and the condition
requiring risk purchase, which was established, hence, the objections regarding frustation of contract and risk
purchase, were meritless and could not be sustained. The award was justified.
23. Quantum of damages
A ship did not arrive at the loading port in time. The charterers accordingly cancelled the charterparty reserving their
claim to damages for breach of contract. Their claim came before three experienced arbitrators who unanimously
awarded an amount which included interest and costs. What had happened was that because of the non-arrival of
the ship the charterers were unable to perform various contracts, of which the owners of the ship were not aware,
with the sub-purchasers of the cargo. The charterers had to settle the claims of such sub-purchasers. The cost was
high because the market was restricted and when it became known that the ship was going to be late the price of
LPG rose. The sum awarded by the arbitrators included damages arising out of the charterers’ inability to perform
their contracts with the sub-purchasers. The leave to appeal against this award was allowed by framing the
question of law : whether on the facts found the charterers were entitled to recover from the owners the damages
awarded by the arbitrators. The Commercial Court allowed the appeal and set aside the award. The charterers
were not able to get leave to appeal against this setting aside. The Appeal Committee of the House of Lords had
given leave to appeal. The object of this procedure was of achieving speedy finality in arbitration proceedings.
Legatt, LJ felt that the case was a proper one in which to give leave to appeal, but added : “This is one of these
uncommon cases in which in this court speedy finality should bow to legal finality.”
In India it had been held under the preceding Act of 1940 (repealed) that though there was no right of appeal
against orders under Sections 5 and 12, 1940 Act (repealed) it would be too far-fetched to suggest that such orders
are outside the purview of
Arts 226 and
227 of the
Constitution . The court said that it is ordinarily difficult to assume exclusion of judicial review altogether
of orders of subordinate courts and tribunals in the absence of clear and specific words to that effect. Words like
“final” or “final and conclusive” do not permit an inference that such orders are outside the supervisory or certiorari
jurisdiction of the High Court.
The provisions in the English

Arbitration Act, 1996 on this point are as follows:
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S. 69. Appeal on point of law.
(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and
to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An
agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the
court's jurisdiction under this section.
(2) An appeal shall not be brought under this section except—
(a) with the agreement of all the other parties to the proceedings, or
(b) with the leave of the court.
The right to appeal is also subject to the restrictions in Section 70(2) and (3),
(3) Leave to appeal shall be given only if the court is satisfied—
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award
(i) the decision of the tribunal on the question is obviously wrong, or

(ii) the question is one of general public importance and the decision of the tribunal is at least open to
serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the
circumstances for the court to determine the question.
(4) An application for the leave to appeal under this section shall identify the question of law to be determined and
state the grounds on which it is alleged that leave to appeal should be granted.
(5) The court shall determine an application for leave to appeal under this section without a hearing unless it
appears to the court that a hearing is required.
(6) The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse
Navneet Krishn
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leave to appeal.
(7) On an appeal under this section the court may by order—
(a) confirm the award
(b) vary the award,
(c) remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court's
determination, or
(d) set aside the award in whole or in part.
The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be
inappropriate to remit the matters in question to the tribunal for reconsideration.
(8) The decision of the court on an appeal under this section shall be treated as a judgment of the court for the
purposes of a further appeal.
But no such appeal lies without the leave of the court which shall not be given unless the court considers that the
question is one of general importance or is one which for some other special reason should be considered by the
Court of Appeal.
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Date and Time: 23 April 2020 13:49:00 IST

1. S. 35. Finality of arbitral awards

S. 35 Finality of arbitral awards

See also Notes under Section 31 as to the requirement of finality.

ENFORCEMENT OF DOMESTIC AWARDS

1. Russel On Arbitration, 21st edn., para 6-006, p. 252.

2. Hariah Hegde v. Rukmini Heggadlathi,

4. Sutherland & Co. v. Hannevig Bros Ltd.,

5. Sutherland & Co. v. Hannevig Bros Ltd.,

6. Re Grant Western Rly Co. and Postmaster-General,

8. Cf. Whitehead v. Tattersall, (1839) 1 Ad & El 491; Roland v. Hall, (1835)

10. Gueret v. Andouy,(1893) 62 LJ QB 633, CA.

13. Bremer Oelstransport Gmbh v. Drewry,

Insurance Co. Ltd.,

14. Thorpe v. Eyre, (1834) 1 Ad & El 926.

15. Ayscough v. Sheed, Thomson & Co.,

16. Pinnock Bros v. Lewis and Peat Ltd.,

17. Western Shipbreaking Corpn. v. Clare Haven Ltd.,(UK),

Under the new dispensation in the

1. UNCITRAL Model Law

Analytical Commentary on Draft Model Law

Article 35. Recognition and enforcement

Appropriateness of including provisions on recognition and enforcement of awards irrespective of their

Recognition of award and application for its enforcement, paragraph (1)

Conditions of recognition and enforcement, paragraph (2)

No filing, registration or deposit required, paragraph (3)

UNCITRAL Report on Adoption of Model Law

The Commission adopted the paragraph [Para 314].

The Commission adopted the paragraph [Para 315].

The Commission deleted the paragraph [Para 317].

3. Power of court to pass decree on award under 1940 Act

4. Power of the executing court

Grant of applicable statutory interest

5. Suo motu refusal

6. Events subsequent to award

7. Judgment and decree followed award

9. Unregistered partnership firm

10. Compromise after award

Article 158 of the Limitation Act , 1908.65

Since the coming into force of the

situation under the 1996 Act.

Set-aside award left unchallenged upon compromise

11. Declaratory award and decree

12. Conditions for passing of decree

13. Appeal from decree

Gauhati High Court 30 said that the

14. Proceeding against ex parte decree

In Alvel Sales Dujadwale Industries 42 a notice of filing of the award in

S. 115, CPC .45

Arbitration and Award by Court

16. Court fee on decree

17. Payment of Decretal Amount

Withdrawal of amount (Permissibility of deductions)

18. Decree operates as res judicata

19. Decision upon objections as res judicata

the principle of res judicata. 61

Further Suggested Reading (Res Judicata in Arbitration)

20. Appeal to Supreme Court and enforcement of award

21. Execution of decree

Injunction for Preventing other Proceedings

Enforcement of Part of Award

Execution against amounts secured in another arbitration

Compliance on exact terms