ARTICLE
Gracy Singh
20th Nov 2023
Arbitration and Conciliation Act,1996
1.Introduction
With a view to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and also to provide for a law relating to conciliation and related matters, a new law called Arbitration and Conciliation Act, 1996 has been passed.
The Arbitration and Conciliation Act, 1996 aims at streamlining the process of arbitration and facilitating conciliation in business matters. The Act recognizes the autonomy of parties in the conduct of arbitral proceedings by the arbitral tribunal and abolishes the scope of judicial review of the award and minimizes the supervisory role of Courts. The autonomy of the arbitral tribunal has further been strengthened by empowering them to decide on jurisdiction and to consider objections regarding the existence or validity of the arbitration.(1) agreement.
2. Important Definitions
2.1 Arbitration
Section 2(1) of the Act, defines the term arbitration as to mean any arbitration whether or not administered by a permanent arbitral institution.
2.2 Arbitrator
The term arbitrator is not defined in the Arbitration and Conciliation Act. But arbitrator is a person who is appointed to determine disputes between two or more parties by their mutual consent. He is an extra-judicial tribunal whose decision is binding on the parties.
2.3 Arbitral Institution
Arbitral Institution means an arbitral institution designated by the Supreme Court or a High Court under this Act. [Section 2(1)(ca)]
2.4 Arbitral Tribunal
Arbitral Tribunal means a sole arbitrator or a panel of arbitrators.[Section2(1)(d)]
2.5 International Commercial Arbitration
International Commercial Arbitration means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in for in India and where at least one of the parties is,
(1) An individual who is a national of, or habitually resident in, any country other than India; or
(2) A body corporate which is incorporated in any country other than India; or
(3) An Association or a body of individuals whose central management and control is exercised in any country other than India; or
(4) The Government of a foreign country [Section 2(1)(f)]
3.Process of Arbitration:-
Step 1:
(1) Claimant, appoints its arbitrator, pass the registration fee and files its request for arbitration.
(2) SCC, serve the Respondent the request for the arbitration.
(3) Respondent, pays it part on the advance on the cost.
Step 2:
(1) Claimant, pays its part of the advance on the cost.
(2) SCC, appoints a chairperson and determines the advance on the cost.
(3) Respondent, pays its part of the advance on the cost,
Step 3:
(1) SCC, directs arbitral tribunal on the case.
Step 4:
(1) Claimant, submits its settlement of claim in arbitral tribunal.
(2) Respondent, submits its statement of defence in arbitral tribunal.
Step 5:
(1) The Arbitral Tribunal, summons a party to a hearing.
Step 6:
(1) The Arbitral Tribunal, renders an award. (2)
4. Place of Arbitration:-
As per Section 20(1) the parties are free to agree on the place of arbitration and sub-section(2) states that if they fail to reach an agreement, the place of arbitration is determined by the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties. Section 20(3) introduces an option by providing that the arbitration/tribunal may, unless otherwise agreed by the parties, may meet at any place it considers appropriate for consultation among its members, for hearing witness, experts or the parties, or for inspection of documents, goods or other property.
5. Time Limit for Arbitral Award :-
As per Section 29A the award shall be made within a period of twelve months from the date of completion of pleadings.
As per Section 29B the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure.
The award under fast track procedure shall be made within a period of 6 months from the date the arbitral tribunal enters upon.
6. Number of Arbitrators:-
As per Section 10(1) of the Act, the parties are free to determine the number.
Failing the determination referred to in Section 10(1) above, the arbitral tribunal shall consist of a sole arbitrator.
7. Appointment of Arbitrators:-
According to Section 11(1) of the Act, a person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
Section 11(2) provides that subject to Section 11(6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
Section 11(3) states that failing any agreement referred to in Section 11(2) above, in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators, shall appoint the third arbitrator who shall act as a presiding arbitrator.
According to Section 11(3A) of the Act, the Supreme Court and the High Court shall have the power to designate, arbitral institutions, from time to time, which have been graded by the Council under section 43-1, for the purposes of the Act.
Section 11(4) provides that if appointment procedure in sub-section(3) applies and-
1. A party fails to appoint an arbitrator within 30 days from the receipt of a request to do so from the other party; or
2. The two appointed arbitrators fails to agree on the third arbitrator within 30 days from the date of their appointment, the appointment shall be made, on any application of the party. By the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations others than international commercial arbitration, as the case may be.
8. Conclusion:-
The purpose of the Arbitration and Conciliation Act,1996 was to develop a quick and cost effective means of resolving dispute. Arbitration is a common technique of resolving dispute in India. Arbitration in India is still expanding and has not yet reached the point where it can successfully address the requirement aggravated by business expansion.
Citation:-
1. ICSI, Jurisprudence and Interpretation of General Laws 312 ( Aarushi Gupta, Prashant Vihar, New Delhi )
2. Arbitration and Conciliation Act, 1996: A critique available at: https://www.legalserviceindia.com/legal/article-8206-the-arbitration-and-conciliation-act-1996-a-critique.html (last visited on 21st Nov 2023)
