The Arbitration and

Conciliation Act,
1996

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What Is Arbitration?

 Arbitrate means to decide or determine.

 In case a dispute arises, the matter is

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Preliminary Information

 It extends to the whole of India: except that

 Came into force on 25th January 1996.

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Arbitration Agreement
 “Arbitration agreement” means an agreement by the
parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them
in respect of a defined legal relationship, whether
contractual or not.
 It may be a separate agreement or may be a clause
in the contractual agreement.
 Shall be in writing, i.e. signed by both parties,
letters, telex, telegram, email, etc.

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Composition Of Arbitral Tribunal
 Number of arbitrators: Any number, as long
as it is an even number, else a single
arbitrator may be appointed.
 Any nationality unless otherwise agreed by
the parties. Impartial and independent.
 Each party may appoint one arbitrator, and
the two appointed arbitrators shall appoint the
third arbitrator who shall act as the presiding
arbitrator.
 One or more experts may be appointed to
report on specific issues.
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 If one party fails to appoint arbitrator within 30
days, or if the two appointed arbitrators fail to
agree on the third arbitrator, then the Chief
Justice of High Court may appoint any person
or institution.
 Chief Justice of High Court will pay due
regard to any qualifications required of the
arbitrator by the agreement of the parties and
any other considerations required to appoint
an independent and impartial arbitrator.
 In case of International commercial
arbitration, CJ will be CJ of India

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Jurisdiction Of Arbitral Tribunals
 “Arbitral tribunal” means a sole arbitrator or a
panel of arbitrators.
 It can rule on its own jurisdiction, i.e. for
questions regarding existence or validity of
arbitration agreement. So arbitration clause is
an agreement that is independent of other
terms of contract.
 So if A.T. rules that contract is null and void,
that does imply invalidity of the arbitration
clause.

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Conduct Of Arbitral Proceedings
 The parties shall be treated with equality and each
party shall be given a full opportunity to present their
case.
 The parties are free to agree on the procedure to be
followed by the arbitral tribunal in conducting its
proceedings.
 Failing any agreement, the A. T. may conduct the
proceedings in the manner it considers appropriate.
 It has the power to determine admissibility,
relevance, materiality and weight of any evidence

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 Location may be decided by parties, failing
which, decision may be taken by A. T.
 The arbitral proceedings for a particular
dispute shall commence on the date on which
a request for arbitration is received by the
respondent.
 Any language/s; failing which A.T. may
decide.
 A.T. may order any documentary evidence to
be accompanied by translation.

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Claim And Defense
 Claimant shall (within certain time period):
 State facts supporting his claim
 Points of dispute
 Relief/remedy sought
 The respondent shall state his defense w.r.t these
particulars.
 Parties may submit all relevant documents, any
references or any other evidence.
 Any amends or supplements may be made to
claim/defense if permitted by A.T.

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Hearings And Written Proceedings
 A.T. may decide whether to conduct oral or written
proceedings.
 Parties shall be given sufficient advance notice of
any hearing/meeting of the arbitral tribunal for
inspecting documents, goods or other evidence.
 All statements/documents/applications/other
information supplied to the A.T. by one party shall
be communicated to the other party.
 Any expert report or evidentiary document on which
the A.T. may rely in making its decision shall be
communicated to the parties.

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 If claimant fails to communicate his claim,
A.T. will terminate the proceedings.
 If the respondent fails to communicate his
defense, proceedings will continue, without
assuming admission of claim.
 If a party fails to appear at an oral hearing or
to produce documentary evidence, the A.T.
may continue the proceedings and make the
arbitrat award on the evidence before it.

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Decision Making by A.T.
 If A.T. has more than one arbitrator, decision
will be made by majority of all its members.

 If authorized by the parties or all the

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Form And Contents Of Award

 An arbitral award shall be made in writing and

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 After the arbitral award is made, a signed
copy shall be delivered to each party.
 The A.T. may, make an interim award on any
matter.
 If arbitral award is for the payment of money,
the A.T. may include interest at reasonable
rate on whole or part of the sum, for whole or
any part of period between cause of action
and date of award.
 If not stated, interest will be 18%p.a. from
date of award to date of payment.

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 Cost of arbitration shall be fixed by A.T.
 A.T. will specify:
 Party entitled to costs
 Party which will pay costs
 Amount and method of calculating it
 Manner in which it shall be paid.
 Costs will include:
 Legal fees/expenses
 Fees/expenses of arbitrators/witnesses
 Fees of the institution supervising the arbitration.

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Recourse Against Arbitral Award
 An arbitral award may be set aside by the court only
if-
 (a) The party making the application furnishes proof that-
(i) A party was under some incapacity, or
(ii) The arbitration agreement is not valid under the law to which
the parties have subjected it or
(iii) The party making the application was not given proper notice
of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(iv) The arbitral award deals with a dispute 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
(v) The composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties

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  (b) The court finds that-
(i) The subject-matter of the dispute is not capable of
settlement by arbitration under the law for the time being
in force, or
(ii) The arbitral award is in conflict with the public policy of
India.
 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.

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 An application for setting aside may not be
made after three months have elapsed from
the of the arbitral award
 On receipt of an application the court may
adjourn the proceedings for a period of time,
in order to give the A.T. an opportunity to
take such action that will eliminate the
grounds for setting aside the arbitral award.

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