Discharge of Agreement and its Effect on Arbitration Clause -Introduction

Background of Arbitration

In India, arbitration came to be known and given recognition when the Arbitration Act 1899 was enacted but its applicability only extended to Bombay, Madras and Calcutta. The provisions were given an extension to the remaining areas in Section 89 as well as Schedule II of the Code of Civil Procedure, 1908. However, it was observed that arbitration did not reap the expected benefits to the public at large and to meet the economic reforms in the country, the Arbitration Act was enacted in 1940. The previous Act along with the provisions in the Code of Civil Procedure was repealed.

The Act can be seen as a consolidation of the existing laws; however, there was no stipulated procedure pertaining to the enforcement of foreign awards. It was confined to the domestic territory and therefore, it did not achieve the purpose behind its enactment. In the case of Guru Nanak Foundation v Rattan Singh, 1981, Justice D.A Desai criticized the ineffectiveness and poor implementation of the Act. He explained how the complex, expensive and time-consuming court procedure involved to resolve disputes compelled jurists to switch to a more effective forum; however, the way the forum operates has invited harsh criticism from the courts.

The Arbitration and Conciliation Act, 1996 was then introduced with the objective of providing speedy dispute resolution. The Act covered international arbitration as well and was based on the UNCITRAL Model Law on International Commercial Arbitration. The Act, however, was met with criticism due to exorbitant costs, absence of a stipulated time period for making an arbitral award, interference by the court beyond a reasonable limit which went against the essence of the Act.

Subsequently, the Arbitration and Conciliation (Amendment) Act, 2015 was passed with a number of amendments. After taking into account the recommendations made by a committee headed by Justice B.N. Srikrishna, the Arbitration and Conciliation (Amendment) Act, 2019 was enacted. The Arbitration Council of India was instituted with the goal to promote ADR in India, boost the established arbitration in the country, and evaluate the functioning of the arbitral institutions and the arbitrators.

On November 4, 2020, the Arbitration and Conciliation (Amendment) Ordinance, 2020 was implemented with two major amendments. First, the enforcement of an arbitration award could be stayed unconditionally if the court can infer that the contract/agreement or the award was given fraudulently or under undue influence. Second, after much scrutiny and discourse, the qualifications and experience required for approving an arbitrator were deleted from the Eighth Schedule of the said Act.

What is Arbitration?

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

Arbitration is an out-of-court method for resolving a dispute between two parties. Arbitration takes place in front of a neutral decision-maker called an “arbitrator” (or in some cases, a group or “panel” of arbitrators) that will listen to each side and make a decision about the case.Arbitration has emerged as a way to preserve the relationships between two companies and resolve a dispute amicably. Arbitration typically provides a speedier resolution than proceeding in court. The limited right to appeal arbitration awards typically eliminates an appeal process that can delay finality of the adjudication.

Alternative Dispute Resolution (ADR) which is also referred to as appropriate or amicable dispute resolution is another way of resolving disputes between parties without taking them to the courts. While courts decide the outcome in a case, ADR resolves the dispute effectively, efficiently, and amicably. Arbitration is one of the prominent forms of ADR.

If your contract contains an arbitration clause, it might be compulsory to resolve your dispute through arbitration rather than going to court. If the clause makes arbitration compulsory and you attempt to take the case to court, the other party can apply to the court to have the proceedings stayed.

Arbitration is generally considered a more efficient process than litigation because it is quicker, less expensive, and provides greater flexibility of process and procedure. The parties often select the arbitrator and exercise control over certain aspects of the arbitration procedure.

It is commonly used in disputes that are commercial in nature. Parties who have inserted an arbitration clause in the contract can refer the dispute to arbitration. A significant difference of arbitration as compared to mediation is that one of the parties cannot withdraw from arbitration one-sidedly. The parties can select the venue, the language in which the proceedings take place as well as the applicable law so as to make certain that no party gets an undue advantage.

In some situations—particularly those with higher stakes or more complex disagreements—arbitration is preferred over mediation. Arbitration is a more formal dispute resolution process than mediation. Therefore, this practice is used when a legal matter has escalated to a more serious issue.Arbitrator listens to facts and evidence and renders an award. Mediator helps the parties define and understand the issues and each side's interests. Parties present case, testify under oath.

One does not technically need a lawyer for arbitration. It is, however, advisable to take legal advice as, depending on the complexity of the case, you might not be aware of all the issues at play. Resolving disputes can be quite adversarial in nature, and the outcome of arbitration is binding. Arbitrators respect the important role of judges in our legal system and most arbitrators do not consider themselves to be private judges. Rather than working for the government, arbitrators work to serve the parties by providing specialized, business practical legal expertise and private decision-making.

An arbiter can determine the outcome for any type or kind of dispute, while arbitrators can only decide disputes arising in the arbitration format, which has its own specific rules and procedures.Under Section 31, unless otherwise agreed by the parties, the cost of an Arbitrator shall be fixed by the Arbitral Tribunal.

Arbitration can be voluntary or mandatory. Voluntary arbitration is preferred as it preserves your legal rights. Mandatory arbitration, on the other hand, compels you to first submit to the arbitration process as a condition of buying or using a product or service before you take your case to court.Generally speaking arbitration decisions are for the most part private and confidential and they are published only if the parties and the arbitrator agree on making the decision available. There are a variety of commercially available services which publish those decisions.

The main difference between arbitration and litigation law is that court is involved in the case of litigation, as it is a lawsuit, whereas, in arbitration, a settlement between the parties is done outside of court. Essentially, litigation means taking a dispute to court. Both sides present their case before a judge or jury, who will then render a decision. Arbitration, on the other hand, is a private process in which both parties agree that an arbitrator (a neutral third party) will render a binding decision.

Can you object in arbitration?

An objection based on relevance may be stated simply as “that matter is not before the Arbitrator today.” Stating objections in such terms may also help you when you know that what is being said is objectionable, but you cannot recall the legal prohibition or specific rule that is applicable.

There are also some disadvantages of arbitration to consider: No Appeals: The arbitration decision is final. There is no formal appeals process available. Even if one party feels that the outcome was unfair, unjust, or biased, they cannot appeal it. This decision must be in writing. The decision is final and binding so the parties are expected to obey the arbitrator's decision. If they don't, they can be sued.The decision of a judge can be appealed, while the decision of an arbitrator is usually binding on both parties and has limited appeal rights.

Steps for Arbitration

Principal characteristics of Arbitration

Arbitration is consensual

Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

The parties choose the arbitrator(s)

Under the WIPO Arbitration Rules, the parties can select a sole arbitrator together. If they choose to have a three-member arbitral tribunal, each party appoints one of the arbitrators; those two persons then agree on the presiding arbitrator. Alternatively, the Center can suggest potential arbitrators with relevant expertise or directly appoint members of the arbitral tribunal. The Center maintains an extensive roster of arbitrators ranging from seasoned dispute-resolution generalists to highly specialized practitioners and experts covering the entire legal and technical spectrum of intellectual property.

Arbitration is neutral

In addition to their selection of neutrals of appropriate nationality, parties are able to choose such important elements as the applicable law, language and venue of the arbitration. This allows them to ensure that no party enjoys a home court advantage.

Arbitration is a confidential procedure

The WIPO Rules specifically protect the confidentiality of the existence of the arbitration, any disclosures made during that procedure, and the award. In certain circumstances, the WIPO Rules allow a party to restrict access to trade secrets or other confidential information that is submitted to the arbitral tribunal or to a confidentiality advisor to the tribunal.

The decision of the arbitral tribunal is final and easy to enforce

Under the WIPO Rules, the parties agree to carry out the decision of the arbitral tribunal without delay. International awards are enforced by national courts under the New York Convention, which permits them to be set aside only in very limited circumstances. More than 165 States are party to this Convention.

Forms of Arbitration

Advantages of arbitration in India

Mutual consent of both parties –

Arbitration can only take place when both the parties have given their consent and the contract includes an arbitration clause.

Unbiased procedure –

No party enjoys an undue advantage because of the fact that the parties are free to decide the relevant venue, language, and the applicable law.

Confidential procedure –

Any disclosure made by the parties in the proceedings and when the arbitration award is given is to be kept confidential.

Cost-effective procedure –

No exorbitant cost is charged from the parties making it common for parties to prefer arbitration over the traditional form of litigation.

Simple and informal procedure –

The parties do not have to separately hire an attorney to represent them and the outcome of the case can be adapted in compliance with the needs of both parties. The environment is comfortable and no formal mannerisms are used, making it easier for the parties to reach a suitable outcome.

Freedom to choose arbitrator –

The parties can select an arbitrator or agree to get an arbitrator with relevant exercise in the particular domain by the institution.

Freedom to choose arbitrator –

The parties can select an arbitrator or agree to get an arbitrator with relevant exercise in the particular domain by the institution.

Stipulated time period for giving an award –

The tribunal will give the award within a short tenure of twelve months from the last day of the pleadings in case of domestic arbitration. On the other hand, in internal commercial disputes, the time period is rather relaxed and no stipulated time period is allotted. Hence, there are no unnecessary delays in giving the award.

Binding decision –

The arbitration awards given are enforceable making the decision binding on the parties.

Position of control –

The parties have a position to control the outcome as they can directly participate in the decision-making procedure. In this way, the dispute is amicably resolved.

Kinds of arbitration

Unlike civil or criminal cases, a dispute is sent to the arbitration tribunal. The tribunal resolves the dispute and the final decision cannot be appealed, making it binding on both parties. No judicial proceedings are involved to ensure the swift resolution of the disputes. The following are the different types of arbitration as per the jurisdiction of the case:

Domestic arbitration

The arbitration which happens in India and both the parties to the dispute also belongs to India and the dispute is decided concerning the substantive law of India. In this type of arbitration process, the dispute must arise in India, and parties are subjected to the Indian jurisdiction.

International arbitration

The arbitration which takes place within the territory of India or outside India or it has any element which has foreign origin is termed as international arbitration. The facts and circumstances of the disputes between the parties decide that of which origin the law should apply to the dispute because of either a clause inserted in the agreement between the parties or the cause of action that arises from a foreign element relating to the dispute or to the parties. According to the circumstances that led to a case being filed foreign or Indian law would be applicable.

International commercial arbitration

According to Section 2(1)(f), international commercial arbitration can be understood as arbitration that takes place because of a dispute arising from a commercial contract where either one of the parties resides in a foreign country or is a foreign national; or the core management committee of an association, company or a body of individuals is controlled by foreign individuals.Under Indian law, the involvement of a foreign party would attract Part I of the Act, that is, it would come under the purview of international commercial arbitration. But it would be inapplicable in case the international commercial arbitration takes place outside the territory of India. By virtue of the 2015 Amendment Act, ‘company’ has been removed from the ambit of ICA. The Supreme Court scrutinized the scope of Section 2 (1) (f) (iii) in TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd., (“TDM Infrastructure”) wherein, even if a company is in foreign hands, it would be considered as an Indian company as it was incorporated in India. Therefore, companies that have Indian nationality and have been registered in India would be excluded from the ambit of foreign body corporate, regardless of the fact that the company is in foreign hands.

On the basis of the established procedure and rules, there are further three types of arbitration that have been recognized in India:

Ad-hoc Arbitration

Ad hoc arbitration refers to the process in which the parties mutually arrange the arbitration for the settlement of the dispute. The parties are free to submit their own set of rules and procedures as they don’t have to follow any set guidelines of any arbitration institution. The essence of the ad hoc arbitration is the geographical jurisdiction. Ad-hoc arbitration refers to when parties with mutual consent opt for arbitration to resolve the dispute. It is the most common form of arbitration used in India owing to reasonable costs and adequate infrastructure. Arbitration is conducted without having any institutional proceedings, that is, it does not comply with the rules of an arbitral institution. The parties have the option to choose the rules and the procedure to be followed. This form of arbitration can be used for international commercial transactions and domestic disputes. The jurisdiction is of utmost importance since a majority of the issues are resolved in conformity with the applicable law in respect to the seat of arbitration. An example of the same would be if the parties have agreed to keep the seat in India, the dispute would be resolved in lieu of the provisions of the Arbitration and Conciliation Act. The Act also provides that the arbitral tribunal or the parties can determine whether to receive assistance from an appropriate institution or individuals. In case the parties are unable to reach a consensus on the number of arbitrators, one arbitrator would be part of the tribunal after being appointed by the Chief Justice of a Supreme Court or the Chief Justice of a High Court.

Fast track Arbitration

Fast track arbitration is the remedy to the lengthy and tedious process of arbitration. The time is the main essence of fast track arbitration. In this process, all the methods which consume time in an arbitration process have been removed and the process is made much simpler. The arbitration process is also called private process as it is not similar to the court proceedings it takes place privately.

Fast track arbitration can be seen as an effective solution to solving the problems faced because of delays and time-consuming proceedings in other forms of arbitration. It does not involve any procedure that takes time and upholds the main objective or arbitration, that is, to resolve a dispute in a short period of time. In the provision of the Act, fast-track arbitration is given a stipulated time period of six months. The arbitrator only makes use of the written submission and unlike other forms of arbitration, one sole arbitrator is sufficient to resolve the dispute.

Institutional Arbitration

Institutional arbitration refers to the arbitration process which is carried out by an arbitration institution. These institutions have their own set of rules and give a framework for the arbitration to settle the dispute between the parties. It has its form of administration to assist in the process.In Institutional Arbitration, the parties are free to choose a particular arbitral institution in the arbitration agreement itself. The institution’s governing body or the parties can appoint one or more arbitrators from a panel of arbitrators that had been previously agreed upon. Part I of the Act gives parties the freedom to appoint an arbitrator to deal with a specific issue.

The institution selects one or more arbitrators who possess the skills and experience stipulated applicable in a given case when the parties do not appoint an arbitrator themselves. On the other hand, if the parties choose to appoint one, themselves they can choose from the list provided by the institution.It is mainly used by business organizations worldwide owing to a specific procedure being deployed as well as an efficient dispute resolution procedure provided by the institutions.

In M/S Nandan Biomatrix Limited vs D 1 Oils Limited, 2009, the parties had agreed to resolve any dispute arising from the agreement via institutional arbitration. The Supreme Court assessed the validity of the agreement and whether the absence of a specific institution would make the agreement invalid. It was held that the parties had expressly desired to settle the disputes through institutional arbitration, making the agreement between them valid.In arbitration, a neutral third party serves as a judge who is responsible for resolving the dispute.

The arbitrator listens as each side argues its case and presents relevant evidence, then renders a binding decision.
The disputants can negotiate virtually any aspect of the arbitration process, including whether lawyers will be present at the time and which standards of evidence will be used.
Arbitrators hand down decisions that are usually confidential and that cannot be appealed.
Like mediation, arbitration tends to be much less expensive than litigation.

Arbitration is a way to resolve disputes between the parties outside the courts and it is an alternative method of dispute resolution. There are two types of agreements under the arbitration process. The one is the agreements which states that, if any dispute arises then, it will be settled through the means of the arbitration process and other agreements which are entered after the disputes arise which states that the parties mutually agree to settle the dispute amongst themselves through the process of arbitration. The arbitrator is the authorized person who resolves the disputes between the parties and renders the arbitration award. The decision of the arbitrator is final and legally binding on both parties. Arbitration can be classified into two types, voluntary or mandatory arbitration or binding or non-binding. Arbitration can be made compulsory only when it is mentioned in legislation or when the parties impose on each other and enter into an agreement that all the future disputes be settled through arbitration. The arbitration which is not binding is similar to the ADR mechanism that is mediation in which the decision cannot be imposed on the parties. In arbitration, there are limited rights given to parties for review and appeal of the award given by the arbitrator.

(Indian Institute of Arbitration & Mediation) IIAM Arbitration Rules

The IIAM Arbitration Rules are a set of procedural rules covering all aspects of the institutional arbitration process, which the parties may agree to in part or in whole in order to help resolve their domestic or international disputes. The IIAM Arbitration Rules adopts the UNCITRAL Arbitration Rules 2010, which enables the IIAM Rules to administer arbitration at accepted global standards.

IIAM provides administrative assistance to the arbitral tribunal and parties by making available facilities, through the appointment of arbitrators, by getting involved in resolving procedural issues, acting as the registry and by providing a reasonable fixed schedule of fees, thereby ensuring smooth progress of the arbitral process in an efficient and time bound manner. IIAM Rules also provide for methods for expedited and innovative procedures like, Emergency Arbitrator, Arb-Med-Arb Procedure, fast-track procedure, Consolidation of proceedings and Concurrent hearings, Scrutiny of award etc., which would ensure fast, economic and efficient disputes resolution process. IIAM’s roles and functions are identified in Part-I of the Rules. The IIAM Arbitration Rules incorporates the UNCITRAL Arbitration Rules which are comprehensive, time-tested and internationally accepted.

The details of institutions globally which has adopted UNCITRAL Arbitration Rules 2010 is available at the UNCITRAL Website.Parties who wish to have arbitration under the IIAM Arbitration Rules may incorporate the IIAM model clause in their agreement. The model clause can be found under Schedule-8 of the Rules or in the official IIAM website.

If both parties are agreeable that the dispute can be resolved according to the IIAM Arbitration Rules, but there is no arbitration clause in their original agreement; then they may enter into an arbitration agreement in the form as specified in Schedule-9 of the Rules.

The IIAM Arbitration Rules has two Parts. Part-I consist of two sections, Section-1 deals with Domestic Arbitration and Section-2 deals with International Arbitration. Part-II specifies the UNCITRAL Rules. Modifications to the UNCITRAL Rules however appear under Part I of the Rules. Thus, for IIAM Institutional Arbitration, Part II of the Rules shall be read subject to Part I of the Rules.

Type of disputes that can be resolved by arbitration under the IIAM Arbitration Rules

Any civil, commercial, contractual or business disputes can generally be resolved through arbitration. As per general practice, matters involving moral questions or questions of public law cannot be resolved by arbitration. For instance, the following matters cannot be referred to arbitration (exclusions):

A party initiating a domestic dispute shall be required to submit the Request for Arbitration (Form A1), available in Schedule-11, to IIAM together with a copy of the Notice of Arbitration served on the Respondent in the manner required under Rule 2 of Part-I, along with the Registration fees.IIAM is the APCAM Centre for India and international arbitration are conducted as per the APCAM Arbitration Rules. This is done as per Rule 1(h). APCAM Arbitration Rules can be seen at https://apcam.asia/arbitration-rules.

Cost to arbitrate under the IIAM Arbitration Rules

IIAM Arbitration is very cost-effective, especially considering the time-bound manner in which the dispute is resolved and the effective administrative services offered for ensuring smooth the progression of the proceedings. The costs and expenses of arbitration will be governed by the IIAM Arbitration Fee Schedule. The current fee schedule of IIAM, mentioned in Schedule-10, shall be notified by IIAM from time to time or published in its official web site. Appendix-1, provide the fee schedule for domestic arbitration (for Claims more than 5 lakhs), Appendix-2 for small cause domestic arbitration (for Claims less than 5 lakhs), Appendix-3 for international arbitration, and Appendix-4 for miscellaneous charges.

	Fee Schedule
Appendix-1	For domestic arbitration (for Claims more than 5 lakhs)
Appendix-2	For domestic arbitration (for Claims less than 5 lakhs)
Appendix-3	For international arbitration
Appendix-4	For miscellaneous charges

For international Arbitration refer the APCAM Arbitration Fee Schedule.

Appointment of arbitrators

The arbitrator appointment under the IIAM Rules, assure that the arbitral tribunal is formed at the earliest, and confirms that the arbitral tribunal is neutral and efficient on international standards. In an unlikely case of any doubts, the parties are able to challenge the arbitrator and effective provisions are made in the Rules to address such challenge.There are no restrictions imposed and parties are free to appoint arbitrators of their choice. The parties and the arbitral tribunal can also agree upon a different arbitrator fee other than under the IIAM Fee Schedule as under Rule 21(c).

A regular arbitration under the IIAM Rules would be completed within 9 months from the date of appointment of the arbitral tribunal. The award would be rendered within 45 days. Under the fast-track procedure, the entire arbitration gets over within 6 months.

The provision for the appointment of Emergency Arbitrators (EA) is found under Schedule-2. Rule 10 and Schedule-2 allows the party in need of emergency interim relief to make such application along with EA Submission (Form A3) and the said application can be made concurrently with or after the filing of the Request for Arbitration, but not after the constitution of the arbitral tribunal.The emergency arbitrator shall act to determine all applications for emergency interim relief until the constitution of the proper arbitral tribunal. Emergency interim relief order or award granted by an emergency arbitrator shall have a binding effect on the parties.

The AMA or the Arb-Med-Arb Procedure under the IIAM Rules is an effective way by which the party can invoke arbitration and simultaneously try to resolve the dispute through mediation and if successful, make the outcome as an arbitral award or in case of failure of mediation, continue with arbitration. The Party can initiate AMA Procedure by filing the EA Submission (Form A3) along with an application for the said purpose. The AMA procedure helps to save time and also helps to make mediation settlement binding, especially in international disputes, as the mediation settlement would become enforceable under the New York Convention.

Arbitration under the IIAM Arbitration Rules is private and confidential. As per Rule 23, the arbitral tribunal, the parties and the IIAM shall keep confidential all matters relating to the arbitral proceedings. Article 28 of the IIAM Arbitration Rules specifies that hearings shall be held in camera unless the parties agree otherwise.

Scrutiny of award

This is a unique feature of the IIAM Arbitration Rules, which affords an opportunity for the parties to get a second opinion about the legality of the process so as to make sure that the award does not suffer any irregularity making it vulnerable to a challenge. This is especially useful, when the arbitral tribunal consists of technical arbitrators, who may not be experts in the field of law. This is not an appeal provision and the Scrutiny Board will not have any authority to interfere with the arbitral tribunal’s decision-making liberty.

Mediation

Mediation is a settlement effort, which utilizes the services of an impartial, third party mediator in an effort to reach a mutually acceptable agreement. Mediation provides an efficient, effective, speedy, convenient and less expensive process to resolve disputes with dignity, mutuality, respect and civility where parties participate in arriving at a negotiated settlement rather than being confronted with a third-party adjudication of their disputes. In mediation, ultimately the resolution is made by the parties and no decision is imposed on them, while in courts and other systems, the decision is taken by the Judge or Arbitrator and the decision is imposed on the parties, whether they like it or not. In mediation, since the decision is taken by both the parties, it is a “Win-Win” situation for both and they would happily comply with the decision rather than wasting time on appeals against an imposed decision. It helps to maintain ongoing relationships and resolve the dispute amicably. The very fact that it enables the parties to sit across the table and negotiate, participating in the process itself creates an atmosphere of harmony and peace.All types of civil and commercial disputes can be resolved through mediation, except certain special legislations like winding up of a company.

There is a general misconception that in mediation you have to compromise. Mediation is another dispute resolution process, just like any other one. The major difference being, it is an interest-based process, where the resolution is arrived at by the parties on a collaborative method to maximize mutual gain. Therefore, globally mediation is also referred as “Appropriate Dispute Resolution” (ADR). It is the only process which focuses on needs and relationships and seeks not only to resolve the underlying problem, but also to add value. Here, in fact dispute is considered as an opportunity. Internationally, opting for mediation is also considered as an expression of best governance and social commitment. Many MNC’s have signed the “Pledge to Mediate”, expressing their commitment to resolve dispute amicably to their potential business partners and clients.

Mediation can be initiated at any stage. It can be initiated at the beginning of a dispute or when the matter is before a court. It would always be better to initiate mediation at the beginning, as the parties would be less hostile. In fact, even the Supreme Court of India has said in a decision that mediation is the best form of dispute resolution and it should be taken at the earliest opportunity to stop the negative factor from growing and widening its fangs which may not be conducive to any of the litigants. The courts also encourage the parties to resolve their disputes through mediation. If a party initiates mediation and the other side does not attend, it will create an adverse impression against the party who refused to participate in mediation.

Even though we do not have a Mediation Act in India, mediation is accepted as a legally approved manner of dispute resolution in India. It is recognized under the Civil Procedure Code and courts refer matters pending before it to for mediation. Under the Arbitration & Conciliation Act, 1996, a settlement agreement made by the conciliator after the resolution of a dispute is equivalent to an arbitral award or a decree of a civil court. If a party subsequent to the settlement fails to comply with it, the other party could get the settlement agreement executed through a court in the same manner as a court decree. Mediation and Conciliation are terms often used interchangeably and in all practical aspects,the procedure is the same. As per the IIAM Rules, the parties on conclusion of mediation can agree to make the settlement agreement under the Arbitration & Conciliation Act, so as to give enforceability for the settlement.

Legal provisions based on which the outcome of mediation is made legal and binding

The relevant provisions under the Arbitration and Conciliation Act, 1996, relevant for mediation/conciliation are as follows:

Section 73 – Settlement agreement

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.
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.
When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Section 74 – Status and effect of settlement agreement

The settlement agreement shall have an 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.The entire mediation proceedings are confidential and whatever said during mediation is treated as confidential. This protection is provided by the agreement to mediate executed by the parties, as well as the Arbitration and Conciliation Act, 1996.

Section 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,

Views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
Admissions made by the other party in the course of the conciliation proceedings;
Proposals made by the conciliator;
The fact that the other party had indicated to accept a proposal for settlement made by the conciliator.

The IIAM Mediation Rules are a set of procedural rules covering all aspects of the institutional mediation process, which helps the parties and mediators to take maximum advantage of the flexible procedures available in mediation for the resolution of disputes quickly and economically. IIAM Mediation Rules also contains provisions for assisted deal-making or deal-mediation and also for project mediation. The Rules also contain provisions for online or offline mediation through “Peacegate”, the digital platform of IIAM. The IIAM Mediation Rules also contains the IIAM Mediators’ Code of Professional Conduct and IIAM Mediators’ Conduct Assessment Process, adopted based on the Code prescribed by the Asia Pacific Centre for Arbitration & Mediation (APCAM).

The IIAM Mediation Rules are a set of procedural rules covering all aspects of the institutional mediation process, which helps the parties and mediators to take maximum advantage of the flexible procedures available in mediation for the resolution of disputes quickly and economically. IIAM Mediation Rules also contains provisions for assisted deal-making or deal-mediation and also for project mediation. The Rules also contain provisions for online or offline mediation through “Peacegate”, the digital platform of IIAM. The IIAM Mediation Rules also contains the IIAM Mediators’Code of Professional Conduct and IIAM Mediators’ Conduct Assessment Process, adopted based on the Code prescribed by the Asia Pacific Centre for Arbitration & Mediation (APCAM).

IIAM Mediation is very cost-effective, especially considering the time-bound manner in which the dispute is resolved. The costs and expenses of mediation will be governed by the IIAM Mediation Fee Schedule. The current fee schedule of IIAM, mentioned in Schedule-4, shall be notified by IIAM from time to time or published in its official web site. There is separate fee schedule for Domestic Commercial Mediation, Domestic Family Mediation and Community Mediation. IIAM Community Mediation Service (CMS) is for disputes which are purely relationship based. International or cross-border mediations are conducted by IIAM under the APCAM Rules, which will help the parties to conduct mediation in any of the Asia-Pacific country members of APCAM under a single Rule and Fee schedule in all these countries.Even though as per the IIAM Mediation Rules, the mediator shall use his best endeavors to conclude the mediation within 60 days of his appointment, normally a commercial mediation gets over within 4 to 8 sessions.

Main alternative dispute resolution

The main forms of Alternate Dispute Resolution recognized in India are Arbitration, Lok Adalats and Conciliation/Mediation.As far as process of arbitration in India is concerned, there are two types- institutional and ad-hoc. Some of the institutes conducting institutional arbitration are as follows:

Indian Council of Arbitration;
Delhi International Arbitration Centre;
Mumbai Centre for International Arbitration
London Court of International Arbitration
FICCI
Singapore International Court of Arbitration

Other form of dispute resolution prevalent in India is Lok Adalat. Lok Adalat is an informal court convened to dispose of the matters through amicable settlement.The third widely practiced dispute resolution process is the Mediation/Conciliation. In mediation, either of the parties can mutually appoint a mediator or the court can refer the parties to mediation. One such centre conducting mediation proceedings is run by Delhi High Court by the name of "Samadhan".

In India, disputes are resolved by litigation where Courts adjudicate upon issues from the very inception of the disputes. The Supreme Court is the Apex Court and the Highest Judicial body in the country. The High Courts in their respective States act as the highest adjudicatory institutes at the State level, followed by District Courts at lower levels. Modes of Alternate Dispute Resolution, with minimal Court intervention, recognized by law, include Arbitration, Mediation, Conciliation and Judicial Settlement by LokAdalats.

It becomes pertinent to mention that steadily and uniformly, the Judiciary and the Legislature have been pressing for recognition of ADR as the choice of mode of dispute resolution between parties and all concerned parties are working towards building an amiable and conducive environment towards all modes of ADR.After the amendment of the Arbitration and Conciliation Act 1996 in 2015, the Saikrishna Committee Report recommended further amendments on the back of the 2015 amendments.

Consequently, the Arbitration and Conciliation (Amendment) Act 2019 has been passed. One of the outstanding features of Arbitration and Conciliation (Amendment) Act, 2019 is the establishment of an independent body namely the Arbitration Council of India.
In addition to Arbitration, the Supreme Court, in the case of Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd,(2010) 8 SCC 24 observed that that all cases relating to trade, commerce, contracts, consumer disputes and even tortious liability could normally be mediated. Following the same, the 2018 amendment to the Commercial Courts Act 2015 (Section 12A), made it mandatory for parties to exhaust the remedy of pre-institution mediation under the Act before instituting a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules 2018 (the PIMS Rules) have been framed by the government.

Thereafter, in the matter of MR Krishna Murthi v. New India Assurance Co. Ltd., [2019 SCC Online SC 315] the Supreme Court, asked the government to consider the feasibility of enacting an Indian Mediation Act to take care of various aspects of mediation in general.

What interim remedies are available before trial?

As regards arbitration, a party can invoke jurisdiction of a court for an interim remedy u/s 9 of the Arbitration and Conciliation Act 1996. Section 9 prescribes that a party to an arbitration agreement can invoke jurisdiction of a court prior to an arbitration proceeding and can seek an interim relief mentioned thereunder. However, it is also stipulated that a party cannot enjoy the interim relief for an infinite period any interim relief. As regards the matter when there is no arbitration agreement and the dispute is to be adjudicated by a civil court, for availing any interim remedy, a party has to first file a plaint/petition before the court and only thereafter the interim relief which is deemed appropriate by the court is granted. Order 39 of Code of Civil Procedure, 1908 envisages granting of interim injunction in such cases.It is pertinent to take note that, under order 39 itself, the court has the power to grant ex parte ad-interim relief to the plaintiff/petitioner in such proceedings.

International Arbitration in India

Arbitration is a way for parties to resolve disputes outside of the court system, and without going to trial. In an arbitration proceeding, an independent and neutral arbitrator hears evidence from both parties, applies the relevant law, and issues a decision known as an award. Arbitration decisions are binding. Arbitration is a way that people or companies can resolve disputes, instead of going through a traditional court system. Disputes can happen over many different things - a basic example of a dispute would be where person A thinks person B owes them money, but person B disagrees. In a court, a judge decides a dispute between people or companies (who are called the parties) by giving a written judgment. Arbitration works similarly, but instead of a judge, one or more persons (usually lawyers or professionals in a relevant industry, such as engineers) are appointed as arbitrators to decide the dispute. In arbitration, a judgment is called an award. Both judgments and awards are binding. This means that if a judgment or award says that party A owes money to party B, party A will be required by law to pay party B. One key aspect of arbitration is that all parties must agree to use arbitration. Usually, the parties will agree to use arbitration at the same time as they enter into a contract for whatever business they are going to do, and include an arbitration clause in the contract to reflect that agreement. Parties can, however, agree to arbitration when a dispute arises by making an arbitration agreement, even if their original contract did not contain an arbitration clause.

Different stages in arbitration

Unlike a court proceeding, the arbitration process is very flexible. As a result, the process will depend largely on what the parties and the arbitrators agree, taking into account what makes sense for the particular dispute. In broad terms, arbitration will consist of the following steps:

the party that wants to start the arbitration will make a written request for arbitration, setting out the details of their claim. This party is called the claimant because they are making a claim against the other party. The other party is called the respondent because they are responding to the claim and will usually provide a written response setting out their own position;

arbitrators are appointed to decide the dispute;

the parties are given an opportunity to argue their positions and provide evidence in support. Usually, this is done by the parties legal representatives, who may be internal representatives or external legal advisors. Legal representatives present their arguments through submissions, which can be written or oral (or both). When submissions are made orally, this is called a hearing, and is usually done in person, although it can also be by telephone or by videoconference;

having heard the parties arguments, the arbitrator(s) will decide the dispute, and make an award.

Advantages of international commercial arbitration

Enforceability

Without doubt, the most significant advantage of international commercial arbitration is the international enforceability of arbitral awards under various international agreements, the most important of which is the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 'Convention'). There are currently 156 countries that are Contracting States to the Convention, which requires courts of the Contracting States to give effect to private agreements to arbitrate and to recognize and enforce arbitral awards made in other States, although the Convention permits Contracting States to limit the latter obligations to awards made in the territory of other Contracting States. Thus, a party having obtained an arbitral award in a Contracting State may have that award enforced by the national courts of any of the other 155 Contracting States. This is a significant advantage in circumstances where a defaulting party does not have assets in the place where the dispute arose but has assets in another Contracting State. By contrast, there are relatively few international conventions on the enforcement of foreign judgments in effect, so that cross-border enforcement of judgments is much less certain and subject to more defenses, where it is possible at all.

Privacy / confidentiality

The arbitration process is private and, except as otherwise agreed, is confidential, as opposed to litigation, which is often public. Thus, it is frequently preferred by companies that want to protect their brand/image or their proprietary information or want to avoid a possible proliferation of litigation with third parties on the same issues.

Autonomy

Since it is based on the consent of the parties, arbitration allows the parties a degree of freedom and autonomy to agree on the governing law, the place of arbitration and the arbitral rules, which are generally less formal than those applicable to judicial proceedings. They may also supplement these basic elements of an arbitration agreement with provisions on such matters as discovery, the taking of evidence and remedies, as to which the expectation of the parties from different legal systems and traditions may not coincide.

Choice of arbitrators

Parties can specify the criteria for appointment, and can usually themselves appoint, nominate or at least have some input regarding the selection, of the arbitrators, according to the nature and circumstances of the dispute. If there are three arbitrators, each party normally appoints one and the two party-appointed arbitrators then jointly select the third arbitrator to act as the president of the tribunal. Thus, parties can choose an arbitrator who has expertise and experience relevant to the dispute at hand, even as to any technical issues involved.

Neutrality

Arbitration also affords parties some comfort in knowing that their dispute will be resolved in a neutral forum. In other words, it avoids any concerns of each or any of the parties regarding the submission of disputes to other parties’ national courts. It also avoids the arbitrary application by national courts of their own 'public policies' that may have no bearing on the relationship of the parties.

International Arbitration clause

When should arbitration be considered?

Before entering into any agreement or transaction, one should pay close attention to how any dispute may be resolved, whether by arbitration or otherwise, taking into consideration inter alia where enforcement maybe necessary. Even though very few parties anticipate disputes when negotiations are in progress, and business people invariably expect that any eventual difficulties can be settled by negotiation, it must be borne in mind that the provisions for dispute resolution create a default outcome that stands as an incentive to the parties to reach such settlements.

If it is decided that arbitration is an appropriate means of providing that incentive and of resolving any disputes that cannot actually be settled by negotiation, careful attention should be given to the drafting of the arbitration clause. The effectiveness of an arbitration agreement as a means to both of those ends will depend almost entirely upon the care with which the clause has been drafted.

Time and cost of arbitration

There are no clear answers as to whether arbitration is quicker and/or cheaper than litigation. In the case of arbitration, the parties must pay the fees and expenses of the arbitrator(s), any institutional administrative fees, and the costs of hiring hearing venues, transcribers of the proceedings and, if and as necessary, interpreters. These costs are on top of the parties own legal costs, which generally account for the majority of the costs of proceedings. However, arbitrators are generally granted wide discretion when awarding costs, which generally follow the event so that the prevailing party is able to recover its own costs in proportion to the extent to which its positions have been upheld, and arbitrators are not restricted by the costs schedules or tariffs by which courts are often bound in awarding legal costs. Most importantly, there is generally no right of appeal from a final award, which eliminates the risk of protracted appellate proceedings that frequently occur in litigation, adding both time and cost to resolution of the dispute. While some regard the lack of an appeal from an arbitral award as a disadvantage of arbitration, it generally results in a material shortening of the time required for final resolution. As in the case of court proceedings, the complexity of the dispute, the contentiousness of the parties and the length of proceedings will determine the time and costs involved in arbitration

Drafting an arbitration clause

Careful consideration must be taken when drafting an arbitration clause, which should be tailored to the nature of the contract and the contours of the most probable disputes. The key aspects that must be decided include the scope of the arbitration agreement, the applicable rules, arbitral institution (if any), number of arbitrators and place or 'seat' of the arbitration (which determines the applicable procedural law). There are also other matters which must be included in an arbitration agreement such as the language of the proceedings, confidentiality and governing law.

(A). Scope of the arbitration agreement

Among the most important issues is the scope of the arbitration agreement, meaning the description of the disputes to which it applies, which defines the jurisdiction of the arbitral tribunal. It is not necessarily the case that an arbitration clause will cover all potential disputes between the parties in relation to a particular transaction. However, unless there are particular issues, such as technical or valuation issues that are not essentially legal in nature and as to which the parties consider it preferable to provide for another means of resolving any disputes, the parties will normally want to use a 'broad' form of arbitration clause that covers any disputes under or in relation to the agreement or relationship in question. Such clauses have been interpreted by the courts as extending essentially to any claims or disputes that relate in any way to the transactions involved. It is worth noting that most sets of rules have model arbitration clauses that can be used as a starting point when drafting an arbitration clause specifying those rules. Using model clauses as a foundation can minimize the risk of any jurisdictional gaps that might result in non enforcement of the arbitration agreement or,worse yet, the setting aside of an award where the tribunal is found to have exceeded its jurisdiction.

(B). Place of arbitration

The place of the arbitration (the 'seat') refers to the place under the arbitration law or legal framework within which the arbitration takes place. For example, a choice of Singapore as the seat would mean that the Singapore International Arbitration Act 1994 will serve as the applicable procedural law governing the arbitration, including provision for any limited involvement of the Singapore courts that may become necessary to ensure effective operation of the arbitral process. While the seat of arbitration is usually the place in which hearings take place, that is not necessarily the case, as most arbitration rules leave it to the discretion of the arbitrators to hold hearings wherever they consider most convenient . When choosing a seat, the parties must consider what ramifications will follow. It is advisable wherever possible to choose a city such as London, New York, Paris, Hong Kong or Singapore that are recognized as 'arbitration friendly' locations. These places promote arbitration and generally respect the autonomy of the parties concerning matters such as selection of lawyers, the procedure to be followed and the language to be used. The arbitration law of these jurisdictions also provide for minimal intervention by the local courts, except to the extent necessary to enforce the arbitration agreements, facilitate the arbitration and, if and as required, enforce the resulting awards.

(C). Choosing the arbitral institution / institutional rules

The arbitration rules selected by the parties apply within the statutory framework provided by the arbitration law of the seat of arbitration. The latter, of course, prevails in the event of any conflict. Arbitrations are typically administered by arbitration institutions, which have their own sets of rules. Some of the best-known institutions include the American Arbitration Association, the International Chamber of Commerce, the London Court of International Arbitration, the Arbitration Institute of the Stockholm Chamber of Commerce, the Hong Kong International Arbitration Centre, the Singapore International Arbitration Centre and, in the case of investor-state arbitrations under intergovernmental investment agreements, the International Centre for the Settlement of Investment Disputes. It is also possible, although not generally recommended, to structure arbitration without the support of an administering body. This is known as an ad hoc arbitration. In such a case, the arbitration clause would generally specify the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, which, unlike most other rules, do not provide for or require administration by an institution, although most of the institutions will administer arbitrations under the UNCITRAL Rules as well if the arbitration agreement so provides. A number of factors, including the seat of arbitration; the locations of the parties, witnesses and evidence; the language in which the arbitration will be conducted; and the place of performance, governing law and subject matter of the contract should be considered in choosing an arbitral institution and institutional rules.

(D). Deciding on the number of arbitrators

Nearly all arbitrations have either one or three arbitrators. Having three arbitrators increases the costs significantly because, unlike judges, an arbitrator is paid by the parties, and arbitrators experienced in international commercial arbitration charge at rates comparable to experience lawyers which, indeed, they generally are. Depending on the rules, their fees are usually paid from funds deposited in advance by the parties in equal shares. However, this sharing of costs is normally provisional only, as arbitrators normally have jurisdiction to allocate costs between the parties as they consider appropriate in light of the manner in which the parties have conducted the arbitration and the results thereof, frequently requiring the losing party to reimburse some or all of the funds deposited by the prevailing party. Whilst having three arbitrators increases the costs, it can be very worthwhile for complex disputes because the workload is spread and leads to an award that has been considered by three minds, which is more likely to result in a well-considered, reasoned and better drafted award. In addition, choosing three arbitrators allows each party to nominate an arbitrator of its own choice. Although even the party-appointed arbitrators are expected to maintain neutrality as between the parties, they can help the tribunal arrive at a well- considered result by ensuring that the arguments of both parties are considered and understood by the other arbitrators.

Arbitral process - the steps involved

The arbitral process typically involves the steps set out below. Documents required to be filed are normally sent to the administering institution, if any, until such time as an arbitral tribunal has been constituted, after which all documents are submitted to the tribunal.

(A). Claimant files request for or notice of arbitration
This document is essentially used to put the respondent on notice of the existence and nature of the dispute and initiate the arbitration proceedings. Most institutional rules require the request or notice to include the following information:

the names and contact details of the claimant(s) and of their counsel;
an identification of and, where possible, a copy of the arbitration agreement under which the dispute is to be settled;
identification of any contract, other legal instrument or relationship out of or in relation to which the dispute arises;
a brief description of the nature, and circumstances giving rise to, the claims;
a preliminary statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims; and
the claimants observations or proposals as to the number of arbitrators, the language, the seat of arbitration and the law or rules of law applicable to the substance of the dispute.

(B). Respondent files response to the request or notice
The respondent must, within a specified time, file its response to the request for or notice of arbitration. Depending on the requirements of the particular rules involved, the response will generally set out the names and contact details of the respondent(s) and of their counsel and responses to the contents of the request or notice and may also include

any plea that the tribunal to be constituted will lack jurisdiction over the claims asserted in the notice or request and/or
a brief description of the nature, and circumstances giving rise to, any counterclaims or claims by way of set-off against the claimant.

(C). Appointment of the arbitral tribunal

This is one of the most important steps in the arbitration process as it establishes the ultimate referee of the dispute. Depending on the number of arbitrators and the relevant institutional rules, as well as the terms of the arbitration agreement, the parties are generally given considerable latitude in the constitution of the arbitral tribunal. In the case of a sole arbitrator, they are generally given the opportunity to reach an agreement on the candidates’ nomination. Failing agreement, the sole arbitrator will be appointed by an independent appointing authority in accordance with the applicable rules or statutory provisions. In the case of a three-member arbitral tribunal, each party will generally designate a party-appointed arbitrator. Each of them must be independent, impartial and free of conflicts of interest. Typically, the co-arbitrators then jointly appoint a third arbitrator, who acts as chair or president of the arbitral tribunal. If the party-appointed arbitrators are unable to agree on a third arbitrator, the third arbitrator will be appointed by an appointing authority in the same manner as a sole arbitrator.

The selection of arbitrators who are willing and able to undertake the effort to understand the facts and claims of the case is obviously critical to a successful arbitration. One of the singular advantages of arbitration over judicial resolution of international commercial disputes is the availability of arbitrators who are highly experienced in dealing with the nuances of cross-border contracts and relationships, which are inherently subject to or affected by the laws of multiple jurisdictions as well as international treaties and legal principles. The fact that they have such experience and are paid to devote the time necessary to understand cases that are frequently complex, both factually and legally, tends to ensure a careful attention to the details of a dispute that courts are frequently unable to devote to individual cases.

Relevant factors to consider in selecting an appropriate arbitrator include the language and place of the arbitration, the candidates’ relevant experience as an arbitrator and knowledge of the relevant industry, familiarity with the legal systems and principles potentially involved, experience with the relevant institutional rules, and general reputation for fairness and objectivity. Selection of an arbitrator in the expectation that he or she will act as a 'super advocate' of a party’s position is not usually a wise strategy, as an overzealous partisan will generally not be persuasive to the other arbitrators.

Although party autonomy is central to the selection of the arbitrators, there are limits to the parties freedom. Restrictions contained in the arbitration agreement, institutional rules and the applicable national law can restrict the arbitrators’ nationality and qualifications. In addition, most arbitration statutes and institutional rules impose strict requirements that arbitrators be and remain independent and impartial and permit a party to challenge the appointment of an arbitrator, or disqualify a sitting arbitrator, where there are justifiable doubts as to his or her impartiality or independence due to conflicts of interest, prior relationships with a party or its counsel, or otherwise.

In 2014, the International Bar Association ('IBA') adopted Guidelines on Conflicts of Interest in International Arbitration. These Guidelines have gained wide acceptance within the international arbitration community. Arbitrators commonly use the guidelines when making decisions about prospective appointments and disclosures. Although the IBA Guidelines have not been formally adopted by arbitral institutions, either as binding rules or advisory guidelines, parties and their counsel frequently consider the Guidelines in assessing the impartiality and independence of arbitrators, and arbitral institutions and courts also often consult the Guidelines in considering challenges to arbitrators.

(D). Establishment of a procedural timetable

One of the first things that the arbitral tribunal will do after being appointed is to prepare a procedural timetable, often settled at a procedural conference. The timetable will set out the due dates for the pleadings, requests for discovery, exchange of witness statements and expert reports, submissions and the hearing. As the arbitration progresses, additional steps and procedures may be required such as applications for further discovery or security for costs.

(E). Jurisdictional objections

If a party raises a jurisdictional objection such as a dispute as to the validity or scope of the arbitration agreement, then it is usually addressed by the arbitral tribunal itself rather than by the courts, at least in the first instance. Most national laws and institutional rules leave the timing of a jurisdictional award to the arbitral tribunals discretion. Accordingly, an arbitral tribunal may bifurcate the proceedings, hear the issue of jurisdiction separately and before the merits of the case, and issue a partial award solely on the issue of jurisdiction. This saves wasted time and costs in the event the arbitral tribunal decides it has no jurisdiction to hear the matter. In some cases, however, an arbitral tribunal may not bifurcate but rather may deal with the jurisdictional issue in a final award, particularly where it is intertwined with the merits. In any event, lack of jurisdiction of an arbitral tribunal is one of the few grounds that may be invoked to set aside an arbitral award, since the powers of the arbitral tribunal rests entirely on the agreement of the parties.

(F). Advance on costs

After the arbitral tribunal has been constituted, the parties are generally required to make advance payments towards the fees and expenses of the arbitrator(s). The amount of those advances is generally based on the expected total amount of fees and expenses of the arbitrators. Most institutional rules also contain provisions for the payment of advances against administration costs, which in some cases are based on the amounts in dispute. The actual costs are typically fixed at the end of the proceedings, and the advances on costs are subject to increase depending on the evolution of the proceedings. If the parties do not pay the advances on costs, the arbitration will not proceed, although if one party fails to do so, the other may pay on its behalf so that the arbitration can continue.

(G). Pleadings

The pleadings are crucial documents setting out the foundation of a partys case. They should set out the critical facts and define with clarity and precision the issues in controversy between the parties. Pleadings typically comprise the following documents:

Claimants statement of claim;
Respondents defence and any counterclaims; and
Claimants reply and defence to any counterclaims.

It is also common for the parties to amend their pleadings as the case develops and as they become aware of new facts, through discovery or otherwise, of which they were not previously aware. The arbitrators have discretion as to whether to allow the parties to amend their pleadings. Generally speaking, arbitrators are more reluctant to permit parties to amend their pleadings when the hearing is imminent, but will usually allow amendments (even during or after a hearing) so long as the other party will not thereby be prejudiced, with the potential consequence of an adverse costs order in the absence of a justifiable excuse.

(H). Disclosure/discovery

Disclosure is the process of handing over documents and evidence relevant to the issues in dispute. Virtually all decisions about disclosure in international arbitration are made in the arbitration itself, by the parties or the arbitral tribunal. Rules of disclosure are governed in the first instance by the procedural law of the arbitration and the arbitration agreement (including any institutional rules). These sources define the extent and scope of the arbitral tribunals’ power to order disclosure. The parties are free to supplement the rules by inclusion in their agreement of specific provisions on the subject, such as the adoption of the very useful IBA Rules on the Taking of Evidence in International Arbitration.

(I). Exchange of witness statement / expert reports

Once important difference between arbitration and judicial proceedings, at least in common law jurisdictions, is that evidence supporting a party’s case in chief is generally submitted in the form of written witness statements, which are then tested by live cross examination and, if necessary, re-examination at hearing. Witness statements, which generally include both initial statements and then responses to the statements submitted by the other party, can be particularly helpful in large and complex arbitrations as they give participants in the process sufficient time to study and understand the factual allegations and responsive allegations in advance of the hearing. As noted above, the evidentiary rules and discovery requirements in arbitration are considerably less rigorous than in a courtroom. Arbitrators generally will err on the side of hearing evidence and giving it such weight as they believe it deserves rather than excluding it based on technical objections, thereby risking the setting aside of the eventual award on the grounds that a party has been prevented from fully presenting its case. This simplifies the process of getting testimony, including expert reports, into evidence, subject to the right of the other party to cross-examine the witness.

(J). Exchange of pre-hearing submissions

Prior to the hearing on the merits of the dispute, the parties will typically exchange pre-hearing written submissions, usually referred to as 'memorials'. The purpose of the memorials is to set out both the facts, based on the written witness statements and documents exchanged in discovery, and the law in support of a party’s case and in opposition to the other parties. Arbitrators frequently direct the each of the parties to submit first a memorial and then a counter-memorial responding to the memorial of the other party.

(K). Hearing

Oral hearings are held in virtually all international arbitrations, save where the parties agree otherwise. The hearing provides an opportunity for the parties to present their cases in person to the arbitrators by presenting their submissions in the form of opening statements, testimonial evidence and closing statements. Hearings are typically conducted in hearing facilities maintained by the arbitral institutions or in law firm offices, hotel conference rooms or specialized centres catering to the arbitration community.

(L). Post hearing submissions

Following the hearing, the arbitrators may request and/or the parties may wish to submit post-hearing submissions to clarify and/or elaborate points not fully dealt with at the hearing. These may again include findings of fact and conclusions of law, supporting evidence and legal arguments. The procedures in this respect, too, are generally quite flexible and are established by the arbitrators in light of the needs of the case.

(M). Close of proceedings

It is important for the arbitral tribunal to make an unequivocal close to the submission of evidence and legal argument. This gives the parties notice of the date beyond which that will not be permitted to further argue their case, ensuring they focus their energies when the opportunity is available, promoting an efficient and expedited process. It also ensures that there will be a definite end to the arbitral process, after which the award will be rendered.

(N). Award

After the close of the proceedings, the arbitral tribunal will deliberate and begin drafting the award. The award is the final step in most arbitrations. The award is a formal instrument of the arbitral tribunal that recites the procedural history, facts, legal argument and conclusions. The formal requirements of awards are generally governed by the national law of the seat and applicable procedural rules. In most jurisdictions, the award need only be written, reasoned, and signed and dated, and indicating the place of the arbitration.

(O). Enforcement

With an award in hand, a successful party can seek enforcement through summary proceedings in the courts of a Contracting State to the New York Convention (or an applicable regional counterpart). Almost all Contracting States adopt a 'pro-enforcement' approach to the recognition of arbitral awards, and the New York Convention and its counterparts severely limit the grounds on which enforcement may be denied. In particular, an award will generally survive challenge on grounds of public policies of the enforcing jurisdiction unless it violates those jurisdictions' most basic notions of morality and justice'.

Discharge of Agreement and its Effect on Arbitration Clause

Discharge of Agreement

The term discharge of contract means ending of the contractual relationship between the parties. A contract is said to have been discharged when it ceases to operate i.e. when the rights and obligations created by the parties came to an end.A contract can be discharged if the parties mutually agree to terminate the contract. A contract can be discharged by the same process which created it, that is, by mutual agreement. The discharge of a contract is characterized as the end of an agreement or an arrangement made by a couple of parties, which results in the failure in performing or playing out the obligations referenced at the hour of making a contract with the acknowledgment of all the parties with free consent. Subsequently, the commitments might be legal or contractual or performance, or even operational. Also there are different methods through which contracts can be discharged.

The Doctrine of Accord and Satisfaction (“Doctrine”) means discharge of one’s contractual obligations by way of performing substituted obligations. It is a mode of one’s discharge from its contractual obligations wherein parties to a contract perform a new set of obligations in substitution of older contractual terms. Supreme Court has further explained that as the discharge of contract is also done by mutual consent, such discharge can happen either by performing modified obligations or by entering into a whole new contract in substitution of the original contract. Essentially, the discharge of one’s contractual obligations by way of performing the original terms of the contract is substituted by either a whole new contract or a new set of obligations within the same contract.

Difference between the Doctrine of ‘Waiver’ and ‘Accord and Satisfaction’

Section 63 in The Indian Contract Act, 1872 - Promisee may dispense with or remit performance of promise.

Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.

Section 63 of the Contract Act envisages remittance as well as substitution of obligations of the original contractual terms entered between the parties. The section provides for mode of discharging one’s obligations, either by way of performing substituted obligations or by dispensing with certain terms of the contract. In the context of contractual obligations, Section 63 of the Contract Act may be construed in a manner to suggest that both, ‘waiver’ of contractual obligations and discharge by ‘accord and satisfaction’ are covered thereunder.
However, there are some differences between the two doctrines which can be pointed out as under:

Waiver includes complete abandonment of contractual rights or obligations by mutual consent, whereas ‘accord and satisfaction’ involves replacement of an old set of obligations with new contractual obligations.
Waiver of contractual obligations does not require any consideration, whereas discharge by way of ‘accord and satisfaction’ requires new set of obligations to be performed and such substituted obligations have to adhere to the basic principles of contract i.e. offer, acceptance and consideration.
The doctrine of Accord and Satisfaction is a mode of discharge of contractual obligations as opposed to Waiver of Contractual Rights which only covers the liberty of a person to let go of certain obligations irrespective of the fact whether the remaining obligations have been fulfilled or not.

Essentially, both the doctrines involve a mutual change in the original contractual arrangement between the parties, but the doctrine of Accord and Satisfaction also covers subsequent conduct vis a vis the change in such arrangement. One can also say that the doctrine of Accord and Satisfaction goes a step ahead and encapsulates sanctioning of change in contractual obligations with subsequent mandate for performance of such new set of obligations, as opposed to the Doctrine of Waiver which only provides for a person to let go of its part of obligations in a contract.

Plea of Accord and Satisfaction

As the Doctrine seems to have an application on every contractual arrangement, there might be instances wherein one party may try to wriggle out of its contractual obligations on the basis of the plea of the Doctrine, in situations where actual facts might differ from the plea taken. One of the most common practices is the execution of a discharge voucher/ discharge certificate, which are, generally, obtained by the one party from the other in a works contract, for the purpose of putting a defense of discharge of the contract by way of applying the Doctrine.

For the purpose of defending oneself against such a plea, the other party to the contract may raise a plea of obtaining such discharge voucher/ discharge certificate by way of ‘fraud’, ‘coercion’, ‘financial duress’ etc.

Supreme Court has held that even if someone has signed a ‘no-dues certificate’ or a discharge voucher, such person is still entitled to the claim amount if he/she can prove such entitlement with adequate supporting material in the nature of oral and documentary evidence, both.Where the Claimant contends that a discharge voucher or ‘no-claim certificate’ has been obtained by way of fraud or coercion and challenges the genuineness of the discharge voucher, the Court will have to ascertain whether any prima facie case is being met out or not by the contending party. The Court had further held that if the contention lacks credibility at a prima facie level, it will not be necessary to refer the dispute for arbitration.

Discharge of Contract Method

Discharge of Contract Method

A contract is said to be discharged using the following methods:

Discharge by Performance
Discharge by Agreement or Consent
Discharge by Impossibility of Performance
Discharge by Lapse of Time
Discharge by Operation of Law
Discharge by Breach of Contract

Let us understand the discharge of contract methods in brief;

(i). Discharge by Performance-

Performing means doing all those things which are required by a contract. Discharge of performance occurs when the parties to the contract fulfill their obligations set out under the contract within the specified time and in the manner prescribed. In such a case, parties are discharged and contracts come to an end. But if only one of the party performs, he alone is discharged. Such a party gets the right of action against the other party who is guilty. Discharge of Performance may be:
(a). Actual Performance
(b). Attempted Performance

Actual Performance - When both the parties perform their performance, then the contract is said to be discharged. Performance should be complete and precise according to the terms of the agreement. Majority of the contracts are discharged by performance in this manner.
Attempted Performance - Attempted performance is only an offer to perform the obligation under the contract. When the promisor agrees to perform the contract but the promise refuses to accept the performance, then in such case, it is termed as discharge of contract by attempted performance or tender.

(ii). Discharge by Agreement or Consent

Novation- The term novation means the substitution of the new contract by the original one. The new agreement may be with the same parties or with the new parties. For a contract to be valid and effective, the consent of all the parties including the new one if any is necessary. Moreover, the second party must be capable of enforcement of law, the consideration for which is the exchange of promise not to carry out the original contract.
Alteration- This refers to change in one or more terms of a contract with the consent of all the parties entered in the contract. Alteration leads to formation of new contracts but the parties to it remain the same.
Remission- This means the acceptance by the promisee of a lesser sum than what was mentioned in the contract, or a lesser fulfillment of the promise made. According to the section 63, every promise may:
(i). May remit or give up with it
(ii). Extend the performance time
(iii). Accept any other satisfaction rather than performance
Recession The term recession refers to cancellation of all or some of the material terms of the contract. If the parties entered into the contract, mutually agreed to do so, then in such case the respective contractual agreement of the parties gets terminated.
Waiver The term waiver means abandonment of rights. When one party deliberately abandons his right under the contract, the other party is released of his obligations, else binding upon it.

(iii). Discharge by Impossibility of Performance

If it is impossible for any of the parties entered in the contract to perform their obligations, then the impossibility of performance of contract leads to discharge of contract. If the impossibility of performing the contract exists from the start, then it is termed as impossibility by ab-initio. However, impossibility of performing the contract may also arise later due to:
(i). An unforeseen change in the law
(ii). Destruction of subject-matter of the contract
(iii). Non-existence or Non-occurrence of a particular state of things.
(iv). Outbreak of War
Example: John enters into the contract with this friend Tom to marry his sister within 6 months. Howbere, John met with an accident and became insane. This impossibility of performance leads to discharge of contract.

(iv). Discharge of Contract by a Lapse of a Time

According to The Limitation Act, 1963, there is a specific time period for the performance of a contract. If the promisor failed to perform his duties and the promisee failed to take action within this specified period, then the promisee in such a case cannot be deprived of his remedy through law. Here, the contract is said to be discharged due to the lapse of time. For example: John takes a loan from one of his friends and agrees to pay him installments every month for the next five years. However, he does not pay even a single installment. His friend calls him several times but then gets busy and takes no action. After three years, he approaches the court to help him recover his money. However, the court rejects his complaint because he has crossed the time-limit of three years to recover his debts.

(v). Discharge of Contract

By Operation of Law - A contract can be discharged by the operation of law in the following circumstance:

Unauthorized Material Alteration of Written Document: A party can discharge the contract i.e. from his side if the other party changes the terms such as price or quantity of contract without taking any permission from the former.
By Insolvency
By Death

(vi). Discharge by Breach of Contract

A contract is obliged to perform according to its terms. But when a promisor fails to perform a contract according to the terms of the contract, then he is said to have committed a breach of contract. The breach of contract is of two types
(a). Actual Breach
(b). Anticipated Breach
(a). Actual Breach: Actual breach of contract refers to failure to perform the obligation when the performance is due. For example, if a seller fails to deliver the goods by the appointed time, or the goods are delivered but not up to the mark in terms of quality or quantity specified in the contract.
(b). Anticipatory Breach: Anticipatory Breach, also known as Breach by Contradiction, takes place when one party before the arrival of the fixed date for performance states that it cannot or will not able to perform material part of the contractual obligation on the specified date or it aims to perform the contract in a way that is inconsistent with the deeds specified in the contract at the initiation.

When a contract has been fully performed, there is discharge of contract by performance, and the contract comes to an end. In regard to such discharge contract, nothing remains-neither any right to seek performance nor any obligation to perform. In short, we can say that there cannot be any dispute between the contracting parties on the basis of terms and conditions of the contract.

In a contract/agreement which is discharged there cannot be any reference to arbitration of any dispute arising from breach of any terms and conditions in performance of the contract.

Whether a contract has been discharged by performance or not is a mixed question of fact and law and if there is a dispute in regard to that question, that is arbitral. But there is exception, where both parties to a contract confirm in writing that the contract has been fully and finally discharged by performance of all obligations and there are not outstanding claims or disputes, the courts will not refer subsequent claim or dispute to arbitration.

Similarly where one of the party of a contract issue a full and final discharge voucher (or No Dues Certificate) confirming that he has received the payment in full and final satisfaction of all claims, and he has no outstanding claim, that amount to discharge of the contract by acceptance of performance and the party issuing the Discharge Voucher/Certificate cannot thereafter make any fresh claim or revive any settled claim.

Please note that – when we refer to a discharge of a contract by an agreement signed by the both parties or by execution of full and final discharge voucher/ certificate /receipt by one of the parties, we refer to an agreement or discharge voucher which is validly and voluntarily executed. If a party who has executed the discharge agreement/voucher alleges that the execution of such discharge agreement or voucher was on account of fraud/coercion/undue influence practiced by the other party and is able to establish the same, then obviously the discharge of contract by such agreement/certificate/voucher is rendered void and cannot be acted upon. Consequently any dispute raised by the said party would be arbitral.

The Supreme Court, in the Bharat Coking Coal Ltd. v. Annapurna Construction AIR 2003 SC 3660 has also held that if a person has even accepted a final bill, such a person can still raise his unsatisfied claim under the contract agreement before an arbitrator.

In Payan Reena Saminathan Vs. Pana Lana Palanippa (41 IA 142)- the Apex Court held that “ the receipt given by the appellants and accepted by the respondent, and acted upon it by the both parties proves conclusively that all the parties agreed to a settlement of all their existing disputes by the agreement formulated in the receipt. It is clear example of what used to be well known as common law pleading as “Accord and Satisfaction” by substituted agreement. No matter what were the respective rights of the parties inter se they are abandoned in consideration of the acceptance by all of the new agreement. The consequence is that when such an accord and satisfaction takes place the prior rights of the parties are extinguished. They have in fact been exchanged for the new rights, and the new agreement becomes a new departure, and the rights of all the parties are fully represented by it.”

Arbitration procedures and practice in India: overview

Use of commercial arbitration and recent trends

Commercial arbitration is currently the preferred mode of dispute resolution for complex commercial disputes. The judicial system is, and has been for some time, clogged and burdened with a massive backlog of cases. It is not unusual for matters to be stuck in the judicial system for more than a decade pending resolution, particularly if the matters are of high value or complicated. As a result, it is becoming standard practice for parties to include arbitration clauses in all large transactions and agreements.

Most government entities and public sector undertakings include arbitration clauses in their standard form contracts and are regularly parties to arbitrations. Certain statutes in states also mandate arbitration as a dispute resolution method for contracts with government entities.There have been a number of recent moves to improve the arbitration landscape in India. Significantly, amendments to the Arbitration Act have sought to improve speed and efficiency of arbitration by, among other things:

Imposing time limits.
Encouraging institutional arbitration.
Reducing the scope for court intervention both at the pre-arbitration and post-arbitration stage.
Discouraging filing frivolous applications challenging arbitral awards.
Discouraging delays by introducing a more realistic cost regime.

Courts have also followed the lead, with a number of recent decisions narrowing the scope of judicial interference. The executive has also sought to bring about efficiencies in arbitration involving government entities by encouraging ministries to comply with arbitration awards, pending any proposed challenge, in the interests of ensuring cash flow, particularly in relation to large infrastructure disputes.

Advantages of commercial arbitration in India

Resolution time, which is nearly always substantially less than the time taken in resorting to conventional dispute resolution methods.
Freedom of parties to choose the procedure under which their dispute is to be settled, therefore saving time. This becomes particularly relevant in more complex disputes where the parties are able to set block dates for trial and hearing, which is a big advantage over the court system where trials can go on for up to a decade, with multiple judges hearing the dispute at different stages.
Ability of parties to appoint arbitrators with specialist knowledge, which is particularly useful in disputes involving technical matters. In court proceedings, the parties may find themselves before courts which do not have sufficient experience in handling commercial disputes.

Disadvantages of commercial arbitration in India

Court interference- Historically, this was a significant disadvantage of arbitrating disputes in India but this has been remedied to some extent with recent legislative measures and judicial decisions. However, in the limited circumstances where judicial intervention is permitted, it continues to be a problem primarily due to the severe backlog of cases, and the time taken to dispose of matters, even if on merits the outcome is pro-arbitration.
Lack of a specialist arbitration bar- This means that hearings in some arbitrations are conducted after court hours, or over the weekends for a few hours each day, with hearings spread out over several months. This problem has been partly remedied by the strict timelines now imposed by law to complete arbitration proceedings. There has also been increased specialization among lawyers in arbitration recently.
Reluctance of the parties, counsel and the courts to appoint arbitrators from outside the pool of retired judges which has resulted in arbitrations routinely being conducted like an extension of the court system with arbitrators willing to apply the procedural rules of court as a matter of course. To avoid this, parties are forced to choose from a very limited pool of competent arbitrators who tend to be expensive and busy. These problems are compounded by the fact that a majority of arbitrations in India are ad hoc without an institution exercising some degree of control or oversight over the process and the arbitrators.
Lack of proper transcription facilities in India, resulting in hearings taking significantly longer than they should. This significantly reduces the cost and time efficiencies of arbitration.

Legislative framework Applicable to arbitration

The Arbitration and Conciliation Act, 1996 (Arbitration Act) applies to arbitrations in India. Part I of the Arbitration Act deals with arbitrations seated in India and Part II deals with arbitrations seated outside India. Certain provisions of Part I of the Arbitration Act (such as court assistance in aid of arbitration) also apply to arbitrations seated outside of India.

There have been a series of judicial decisions and legislative amendments in recent years that apply partly prospectively and partly retrospectively. The version of the Act that will apply in any case will depend on the date on which:

The arbitration was commenced.
Court proceedings relating to the arbitration (if any) were commenced.
The arbitration agreement was executed.

For all arbitrations commenced on or after 23 October 2015, the Arbitration Act, as amended in 2015, will apply. The Arbitration Act was also recently amended in 2019. The amendments are silent as to whether they would apply to arbitrations initiated prior to the 2019 amendments coming into force on 30 August 2019; however, for all arbitrations initiated after the commencement of the 2019 amendments, the Arbitration Act, as amended in 2019, will apply.

The Arbitration Act is largely based on the UNCITRAL Model Law (Model Law). There is however some significant departures which make it difficult to apply the Model Law jurisprudence directly to each case. For example, the standard for referring parties to arbitration under the Arbitration Act is significantly lower than that prescribed under the Model Law. The Arbitration Act prescribes time limits for the completion of arbitration, while the Model Law does not. Further, unlike the Model Law, the Arbitration Act contains detailed provisions about the imposition of costs.

Mandatory legislative provisions

The Arbitration Act contains a number of mandatory provisions, including in relation to:

Requirements for the form of the arbitration agreement.
Mandatory reference to arbitration by courts.
Grounds of ineligibility, presumed impartiality and lack of independence of arbitrators.
Time limits for completing arbitration proceedings.
Grounds for setting aside an arbitral award and challenging enforcement of an arbitral award.

A violation of these conditions can either preclude reference to arbitration render proceedings invalid,or result in an award being set aside by courts. However, a breach of the conditions of independence and impartiality can be addressed by the court's powers to substitute one or all members of the tribunal (section 29A (6), Arbitration Act).

Certain statutes and regulations also provide for mandatory arbitration in relation to specific subject matters such as electricity law, stock market disputes and industrial disputes. Certain statutes also provide mandatory, specialist dispute resolution mechanisms which have the effect of precluding a party from arbitrating specific types of disputes. For example, disputes in relation to works contracts in certain states must be submitted to a specialized tribunal, and parties are prevented by legislation from submitting such disputes to private arbitration. Further, consumer disputes and disputes relating to real estate projects between developers and buyers now fall within the purview of specific statutory dispute resolution authorities, which preclude reference of such disputes to arbitration.

Types of disputes that cannot be resolved by arbitration

Under Indian law, the types of disputes that cannot be resolved by arbitration include:

Criminal offences

Matrimonial disputes

Guardianship matters

Insolvency petitions

Testamentary suits

Trust disputes

Labor and industrial disputes.

Tenancy and eviction matters governed by rent control statutes

While there is no authoritative decision on the issue, existing jurisprudence suggests that disputes involving issues of competition law are also not arbitrable. Generally, disputes in rem (regarding a thing/property) cannot be resolved through arbitration, while disputes in personam (regarding a specific person) can be. The law also prohibits reference to arbitration where a specialist forum has been set up to resolve specific types of disputes, such as consumer disputes.

The Supreme Court recently clarified that allegations of fraud alone are not sufficient grounds for courts to refuse to refer parties to arbitration (Vidya Drolia v Durga Trading Corporation, Civil Appeal No. 2402 of 2019). It held that allegations of fraud would only be a ground to refuse reference to arbitration:

Where the arbitration clause or agreement itself cannot be said to exist.
If the allegations are made against the state or state institutions, thereby requiring public enquiry.

The Supreme Court recently held in the same case, in a broad-reaching statement that "intra-company" disputes are not arbitrable. This is likely to include disputes involving oppression and mismanagement claims in shareholder disputes, on which some courts had taken an inconsistent view. However, this area of law is expected to evolve in the coming months since the court’s findings were based on little analysis, the implications are quite vast and the outcome is at variance with previous jurisprudence.

There remains some uncertainty about the arbitrability of intellectual property (IP) law disputes. The prevailing view is that while disputes pertaining to IP rights are in themselves not arbitrable, subordinate rights in personam in the nature of commercial arrangements relating to the use of IP rights are arbitrable.

Limitation to arbitration proceedings

The law of limitation that applies to a civil suit also applies to arbitration. The period of limitation varies from one to three years for civil/commercial disputes, depending on the nature of the dispute and the relief sought. The limitation period is calculated from the date the cause of action arose to the date the arbitral proceedings start which is statutorily defined as the date of receipt by the counterparty of an invocation of the arbitration agreement by the other party (section 21, Arbitration Act).

Jurisdictional issues

India recognizes the principle of kompetenz-kompetenz. The arbitral tribunal is empowered to decide on its own jurisdiction (section 16, Arbitration Act). However, objections to the jurisdiction of the tribunal must be raised within the time prescribed in section 16(2) that is before filing the statement of defence. A party will lose its right to object to the tribunal's jurisdiction if it does not raise objections within the prescribed time. If the arbitral tribunal rules that it does not have jurisdiction, the ruling can be challenged before a court. However, if the arbitral tribunal rules that it has jurisdiction, no immediate appeal or challenge is available and the only option is to challenge the final award passed by the arbitral tribunal on the ground of lack of jurisdiction.

There is however a narrow exception to this rule. Under Indian law, if a court is asked to refer a matter to arbitration and the court decides any issue pertaining to the jurisdiction of the tribunal or the validity of the arbitration agreement, the decision of the court is only a prima facie enquiry, which is subject to a proper consideration by any arbitral tribunal which may eventually be constituted. In recent times, courts have significantly narrowed the scope of their interference. Therefore, the circumstances in which a decision of the court is binding on the arbitral tribunal continues to be narrowed over time.

Arbitration institutions

Large commercial disputes continue to be referred to well-known international institutions such as the:

International Chamber of Commerce (www.iccwbo.org).
Singapore International Arbitration Centre (www.siac.org.sg).
London Centre of International Arbitration (www.lcia.org).
Hong Kong International Arbitration Centre (www.hkiac.org).

Domestic arbitration institutions include the:

Mumbai Centre for International Arbitration (www.mcia.org.in). This is the most popular arbitration institution based in India for large commercial disputes. It was set up in 2016 and is led by a very competent and internationally renowned board of arbitration practitioners from across the globe, has received significant traction, but does not yet have a notable list of administered matters.
Nani Palkhivala Arbitration Centre (www.nparbitration.com). This is another institution which has seen significant growth in recent years. It has been formally recognized by the Madras High Court to render assistance in arbitration matters by its Order dated 21 September 2005. The Centre has a panel of arbitrators comprising retired judges, lawyers, chartered accountants and civil servants among others.

Some High Courts in India have also set up arbitration centres affiliated with such High Courts, such as the:

Delhi International Arbitration Centre (www.dacdelhi.org).
Arbitration & Conciliation Centre – Bengaluru (Domestic & International) (www.arbitrationcentreblr.org), an initiative of the High Court of Karnataka.
Jammu and Kashmir International Arbitration Centre (http://164.100.248.49/), an initiative of the Jammu and Kashmir High Court.

Despite these developments, most arbitrations in India are still conducted on an ad hoc basis. Recent legislative amendments to the Arbitration Act, including in particular the amendments in 2019, have encouraged institutional arbitration with the aim of changing this position.

Requirements for an arbitration agreement to be enforceable

Substantive/formal requirements

The substantive and formal requirements of an arbitration agreement are contained in section 7 of the Arbitration Act. An arbitration agreement must be in writing, and must be contained in one of the following:

A document signed by the parties.
An exchange of correspondence which provides a record of the agreement.
An exchange of statements of claim and defence containing an undisputed acknowledgment of the agreement.

The law also recognizes an arbitration agreement entered into after a dispute has arisen between the parties.

Separate arbitration agreement

The law does not mandate a separate arbitration agreement. An arbitration agreement can either be by way of a separate agreement, in the form of a clause in a larger agreement or can be incorporated by way of reference to a document containing a compatible arbitration clause or agreement. To incorporate an arbitration clause by reference, the reference to the other document must clearly indicate an intention to incorporate the arbitration clause into the contract; a general reference to a different document will not have the effect of incorporating an arbitration clause.

Unilateral or optional clauses

In unilateral or optional clauses, one party has the right to choose arbitration. In recent decisions, High Courts have adopted a more permissive approach to the enforceability of unilateral option clauses than previously. Further, in a recent decision, the Supreme Court upheld the validity of a clause giving one party the right to refuse to categorize a matter as a "dispute", in effect empowering that party to refuse a reference to arbitration unilaterally (Oriental Insurance Co Ltd v Narbheram Power and Steel Pvt Ltd Civil Appeal No. 2268 of 2018). The Supreme Court refused to interpret the clause as vesting both parties with a right to refer disputes to arbitration and held that the party who is not vested with the right is entitled to seek recourse before the jurisdictional court.

Third parties

A third party is not normally permitted to be joined to the arbitration proceedings, except where the third party is a "person claiming through or under" a party to the arbitration agreement. Therefore, an arbitration clause does not bind shareholders of a company, except where there are justifiable grounds to pierce the corporate veil on grounds of fraud and misuse of statute, among other things.The courts have not provided an exhaustive definition of who qualifies as a "person claiming through or under" a party to the arbitration agreement. However, while interpreting this phrase, the courts have permitted third parties to be joined to arbitration where a single commercial transaction is executed through a number of agreements involving multiple parties. If a dispute arises out of such a transaction, all parties across the multiple agreements can be referred to arbitration under the agreement that lies at the heart of the transaction, irrespective of whether a party was a party to the said agreement and whether the agreement to which it is a party contains an arbitration agreement.A third party to an arbitration agreement (whether domestic or foreign seated) can compel a party to the arbitration agreement to arbitrate disputes under the arbitration agreement if the third party is a "person claiming through or under" a party to the arbitration agreement (sections 8 and 45, Arbitration Act). This would typically be where a third party is a party to an ancillary agreement which forms part of a network of agreements entered into to implement a single commercial transaction.

Separability

Indian law recognizes the separability of an arbitration agreement. An arbitration clause survives even if the underlying agreement of which it is a part is held to be void. A finding by an arbitral tribunal that the underlying agreement containing the arbitration clause is void does not render the finding of the tribunal without jurisdiction.

Court proceedings in Breach of an arbitration agreement

If court proceedings are initiated in breach of an arbitration agreement, the aggrieved party can make an application under section 8 (domestic) or section 45 (foreign) of the Arbitration Act, requesting that the court refer the parties to arbitration and decline to entertain the proceedings. The aggrieved party however must make his/her objection no later than filing his/her first statement on the substance of the dispute in the court proceedings. Failure to do so would be construed as a waiver of the arbitration agreement, especially in domestic arbitrations.

During the pendency of these proceedings, a court does not normally injunct the initiation or continuance of domestic arbitration proceedings, as section 8 of the Arbitration Act specifically states that arbitration proceedings can continue pending a determination of these matters by the court.

However, the courts in India have jurisdiction to issue an anti-arbitration injunction to restrain arbitration proceedings seated outside India. The courts have indicated that this remedy will only be granted in extreme circumstances such as where no valid arbitration agreement exists or the arbitration agreement is void, inoperative or incapable of being performed.

Recently, the courts have also pointed out that they retain the inherent jurisdiction to grant such an injunction if in their view the foreign arbitral proceedings are oppressive, vexatious, inequitable or constitute an abuse of process. However, the courts have emphasized that they will not readily make such a finding, particularly where the parties have consciously chosen a foreign forum to resolve their disputes.

Although a separate application is not required for a reference to arbitration under section 45, and a submission to this effect in the first substantive pleading in a suit should suffice, some High Courts have taken a different view under section 8 and require a separate application to be filed by parties seeking a reference to arbitration. The Delhi High Court also recently held that the application under section 8 must be in writing and a verbal submission to the court will not meet the requirements of the section.

Arbitration in breach of a valid jurisdiction clause

Where arbitration is in breach of a valid jurisdiction clause, the aggrieved party can raise a preliminary objection before the arbitral tribunal which is empowered to rule on its own jurisdiction. If the party does not succeed in his/her challenge before the arbitral tribunal, he/she can apply to the court to set aside the arbitral award (whether partial or final) on the basis of an arbitration in breach of a valid jurisdiction clause.

Indian courts are courts of both law and equity and so have the power to issue an anti-suit/anti-arbitration injunction to a party, over whom they have personal jurisdiction. The Supreme Court has confirmed that Indian courts have the power to grant an injunction to restrain proceedings started overseas in breach of an arbitration agreement where the proceedings are found to be oppressive and vexatious. In granting such an injunction, the court will be guided by factors such as comity of courts, mandatory language of the arbitration clause and so on.

Qualifications and characteristics of arbitrators

The parties are free to agree on the number of arbitrators, although there must be an odd number. However, arbitration agreements that provide for an even number of arbitrators are not automatically invalid. In that case, the appointed arbitrators can choose a presiding arbitrator bringing the tribunal up to an uneven number of arbitrators, either at the start of proceedings or when there is a difference of opinion between them. If the even number of arbitrators agrees and gives a common award, there is no frustration of proceedings and their common opinion will prevail. If the parties do not specify the number of arbitrators, the arbitral tribunal will consist of a sole arbitrator.

Qualification and characteristics of arbitrators

An arbitrator does not need to be licensed to practice in India, and the law recognizes that foreign qualified lawyers and technical professionals, among others, can serve as arbitrators. Arbitrators are appointed as agreed by the parties and the parties are free to determine their qualifications and nationality.

Pursuant to the passing of the Arbitration and Conciliation (Amendment) Act, 2021 (2021 Amendment), no qualifications and characteristics of arbitrators are prescribed by statute. The 2021 Amendment deletes Schedule VIII of the Arbitration Act, which appeared to, among other things, limit the ability of foreign qualified lawyers from acting as arbitrators in India. For example, Schedule VIII appeared to prescribe requirements such as minimum experience, knowledge of Indian laws and so on, as preconditions for persons to be appointed as arbitrators. The 2021 Amendment Act however states that qualifications, experience and standards for the accreditation of arbitrators will be specified by regulations passed by the Arbitration Council of India (section 43J, Arbitration Act).

Requirements relating to arbitrators' independence and/or impartiality

Arbitrators are required by law to disclose at the time of their appointment, and throughout the arbitral proceedings, any circumstances that affect their impartiality and/or independence. Schedule V to the Arbitration Act identifies the circumstances that give rise to justifiable doubts about the independence and/or impartiality of arbitrators. Arbitrators must disclose any:

Personal and/or professional relationship with parties or their counsel.
Relationship with the dispute.
Interest in the dispute.

Schedule VII to the Arbitration Act sets out a list of circumstances that render a person ineligible to be appointed as an arbitrator. However, the parties can, subsequent to disputes having arisen between them, waive the applicability of this schedule by an express agreement in writing.

Appointment of arbitrators

The parties are free to agree the procedure for the appointment of arbitrators. If the parties fail to agree on the appointment of arbitrators where the agreement provides for arbitration with three arbitrators, each party must appoint one arbitrator and the two appointed arbitrators must jointly appoint the third arbitrator, who will act as a presiding arbitrator.

Where the parties fail to agree on the nomination of a sole arbitrator or fail to act in accordance with the procedure in the arbitration agreement, or the two appointed arbitrators fail to appoint a third presiding arbitrator, either party can approach the High Court (domestic arbitration) or the Supreme Court (international arbitration) to have the arbitrator(s) appointed by court.The High Court or the Supreme Court, while considering an application for the appointment of arbitrators, must confine itself to the examination of the existence of an arbitration agreement.

Recent legislative amendments to the Arbitration Act have sought to divest the power of appointment of arbitrators from the Supreme Court (in the context of international arbitration) and the High Court (in the context of domestic arbitration) and vest them instead with arbitral institutions accredited by the Arbitration Council of India (an independent body comprising largely of central government appointees, which will grade arbitral institutions, accredit arbitrators, and evolve policy and guidelines for the establishment, operation and maintenance of uniform professional standards in arbitration). However, these provisions have not yet come into force.

Removal of arbitrators

Parties can challenge the appointment of an arbitrator and seek his/her removal on the following grounds:

Existence of circumstances and facts that gives raise to doubts as to the arbitrators' impartiality and independence.
Lack of the qualifications agreed between the parties.

The challenge to the appointment of an arbitrator must be made in accordance with the procedure agreed between the parties. If no procedure has been agreed, the party who wishes to challenge an arbitrator must submit a written statement of the reasons for the challenge to the arbitral tribunal within 15 days from the date when the party learns the facts and circumstances on which the challenge is based. Unless the challenged arbitrator withdraws from his/her office, the arbitral tribunal will decide on the challenge.

If the challenge is unsuccessful, the arbitral tribunal will continue the proceedings and pass an award. The aggrieved party can challenge the award on the ground of challenge of the arbitrator.The mandate of an arbitrator will also terminate and he/she will be substituted by another arbitrator if:

He/she is unable to act as an arbitrator.
He/she withdraws from office.
The parties agree to terminate his/her mandate.

Commencement of arbitral proceedings

Unless the parties agree otherwise, an arbitral proceeding of a dispute commences on the date on which a request for that dispute to be referred to arbitration is received by the respondent (section 21, Arbitration Act).

Applicable rules and powers

Section 19 of the Arbitration Act recognizes the right of the parties to agree on the procedural rules applicable to the arbitral proceedings.Parties can adopt procedural rules or agree to have their arbitration administered by an institution with its own rules in exercise of this choice. If the parties fail to decide on a procedure, the arbitral tribunal can conduct the proceedings in the manner it considers appropriate. The arbitral tribunal is not bound to follow the procedural rules that apply to domestic court proceedings. However, the procedure devised by the parties or the tribunal must meet the basic tenets of an adjudicatory process (such as the parties must be treated with equality and each party must be given a full opportunity of presenting his/her case).

Default rules

The Arbitration Act does not prescribe detailed default rules regulating procedure. However, it does provide some useful guidance to the parties and the arbitrators on the manner in which arbitrations should be conducted. Parties can deviate from these default rules by specific agreement, subject to the limitation that any procedure devised by the parties or the tribunal must meet the basic tenets of an adjudicatory process. The Arbitration Act provides, among other things, that:

The claimant must usually state the facts supporting his/her claim, the points at issue and the relief or remedy sought, and the respondent must state his/her defence in respect of these particulars,and any counterclaim or set-off he/she seeks to claim, while filing his/her statement of claim and defence, respectively.

Parties can submit with their statements all documents they consider to be relevant or add a reference to the documents or other evidence they will submit.

Either party can amend or supplement his/her claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

The arbitral tribunal must, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on a day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and can impose costs including exemplary costs on the party seeking adjournment without any sufficient cause.

The parties must be given sufficient notice in advance of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property.

All statements, documents or other information supplied to, or applications made to, the arbitral tribunal by one party must be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal relies on in making its decision must be communicated to the parties.

If, without showing sufficient cause, the claimant fails to communicate his/her statement of claim, the arbitral tribunal must terminate the proceedings.

If, without showing sufficient cause, the respondent fails to communicate his/her statement of defence, the arbitral tribunal must continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant and must have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited.

If, without showing sufficient cause, a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal can continue the proceedings and make the arbitral award on the evidence before it.

Evidence and disclosure

Under section 19(3) of the Arbitration Act, in the absence of an express agreement by the parties, the arbitral tribunal can, subject to Part I of the Arbitration Act, conduct the proceedings in the manner it considers appropriate. There is nothing in Part I of the Arbitration Act prohibiting or limiting the arbitral tribunal's power to order disclosure of documents and attendance of witnesses. On the other hand, the courts have recognized that the arbitral tribunal has the same powers as the courts with respect to discovery, inspection, and production of documents and summoning of witnesses.

If a direction issued by the arbitral tribunal directing production of documents by a party is not complied with, the tribunal can draw an adverse inference from the conduct of the parties, or it can apply to the court under section 27 of the Arbitration Act for assistance in taking evidence. The arbitrator can appoint one or more experts to report to it on specific issues and require a party to give the expert(s) any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for their inspection (section 26, Arbitration Act). The tribunal can also order the expert(s) to participate in the oral hearings where the parties have been given the opportunity to cross examine the expert(s) on their testimony.

Scope of disclosure

There is no mandatory requirement for disclosure of documents in an arbitration. Under section 23 of the Arbitration Act it is open for the parties to agree upon the required elements of the statements of claim and defence. There is no mandatory requirement to submit documents at this stage, and it is open to the parties to either submit all documents that they consider to be relevant along with their statements of claim and defence, or to add a reference to the documents or other evidence that they will later submit, subject to any contrary procedure that may be prescribed by the arbitral tribunal.

Validity of parties' agreement as to rules of disclosure

Under section 19 of the Arbitration Act, parties can agree upon or the tribunal can decide a procedure to be followed in conducting the arbitration proceedings. This includes the right to agree on a procedure of discovery, inspection and production of documents. The tribunal or a party (with the permission of the tribunal) can also seek the assistance of the court for the examination of witnesses and the production of documents.

Confidentiality

As a result of the legislative changes introduced in 2019 to the Arbitration Act, the arbitrator, the arbitral institution and the parties to the arbitration agreement are under a legal obligation to maintain confidentiality of all arbitral proceedings. The award is exempt from the obligation of confidentiality where its disclosure is necessary for its implementation and enforcement.

Courts and arbitration

The local courts have the power to intervene to assist arbitration proceedings seated in its jurisdiction. The assistance can be in one of the following ways:

Reference of disputes to arbitration (section 8, Arbitration Act).
Granting interim measures in aid of arbitration (section 9, Arbitration Act).
Appointing arbitrators (section 11, Arbitration Act).
Deciding any controversy regarding an arbitrator's mandate (section 14, Arbitration Act).
Enforcing interim orders of the arbitral tribunal (section 17, Arbitration Act).
Assistance in taking evidence including for summoning witnesses and producing documents (section 27 Arbitration Act).
Penalizing and punishing parties for non-compliance with orders of the arbitral tribunal (section 27, Arbitration Act).
Extending an arbitral tribunal's mandate, substituting one or more arbitrators on an arbitral tribunal or penalizing the tribunal or the parties for a delay in pursuing arbitration proceedings (section 29(A), Arbitration Act).
Hearing challenges to an arbitral award in a setting-aside application (section 34, Arbitration Act).
Hearing appeals from certain decisions of the arbitral tribunal (section 37, Arbitration Act) such as when a plea of lack of jurisdiction is accepted (section 16) or an interim measure sought of the arbitral tribunal is denied (section 17, Arbitration Act).
Payment of costs to the tribunal before the rendering of an award (section 39, Arbitration Act).
Extension of time periods fixed by the parties for the initiation of arbitration (section 43(3), Arbitration Act).

Risk of court intervention

In the context of India-seated arbitration, section 5 of the Arbitration Act limits judicial intervention to the purposes mentioned in the Arbitration Act. Significantly, this includes reference of dispute to arbitration (section 8, Arbitration Act) and appointment of arbitrator(s) (section 11, Arbitration Act).Section 23 of the Arbitration Act prescribes a period of six months from the date on which all arbitrators receive notice of their appointment for the filing of the statement of claim and statement of defence. An arbitration proceeding must be completed within 12 months (and an additional six months if mutually agreed by the parties) from the date on which the statement of claim and the statement of defence are filed in an arbitration.

The 2019 amendments remove this restriction for international commercial arbitrations and provide that the tribunals "must endeavor" to complete international arbitration matters within 12 months. In domestic arbitrations, if necessary, the court can grant an extension to the time limit, with or without penalties to the parties/arbitrators. This has increased the scope of court interference, particularly in the context of complex disputes, which cannot always be concluded within these prescribed time limits.The courts can also set aside arbitral awards (section 34, Arbitration Act). In these proceedings, the courts can evaluate the:

Capacity of the parties
Validity of the arbitration agreement.
Appointment and jurisdiction of the tribunal.
Procedure for conduct of proceedings.
Arbitrability of disputes.
Conflict with the public policy of India.

Delaying proceedings

In the past years, there have been significant delays at each stage where a court has intervened in the context of arbitration. This was attributable both to the willingness of the courts to engage in the merits of arbitration, and to the severe backlog of cases that burden the judicial system. However, some progress has been made in relation to the former.

Previously, courts engaged in lengthy enquiries into the validity and effect of the arbitration agreement before referring parties to arbitration and/or before appointing an arbitrator, thereby severely delaying matters. However, with recent amendments to the Arbitration Act, the scope of interference has been substantially reduced. A court is now required to confine itself to only examining the existence of a valid arbitration agreement, leaving all other matters to be determined by the arbitrator.Similarly, in proceedings initiated to set aside arbitration awards, courts previously engaged in a re-assessment of the merits of the arbitration, or an arbitrator's erroneous application of law, or appreciation of evidence. These proceedings were extremely lengthy and often much longer than the underlying arbitration itself.

Recent amendments to the Arbitration Act have narrowed the scope of enquiry, including by specifically clarifying that a court cannot undertake a re-assessment of the merits of the case, or involve itself with re-assessing evidence, in setting aside proceedings.The Arbitration Act also recommends that setting aside proceedings be completed within one year. In practice, while the courts have embraced to some extent the limitation on their scope of enquiry, they have generally not been able to complete proceedings within the prescribed time limit.While some legislative and judicial developments have sought to limit the extent of court intervention, in practice, it is possible for parties to file multiple applications and delay proceedings, both before and

In this context there is a vast difference among the various jurisdictions within India, both in terms of expertise and practice in relation to arbitration. To remedy this, recent amendments to the Arbitration Act require all matters arising out of international commercial arbitration proceedings to be filed before the concerned High Court. Even the High Courts are known to adopt differing approaches; for example, the courts in New Delhi and Mumbai, which regularly handle complex commercial disputes, have a reputation of being less interventionist and more arbitration-friendly than the other courts in the country.

Effect on the arbitration of pending insolvency of one or more of the parties to the arbitration

Pendency of an insolvency proceeding of one party to the arbitration will, in itself, not have any effect on the arbitration itself. However, under the Insolvency and Bankruptcy Code 2016, when a proceeding for insolvency is admitted, a moratorium is imposed on the party subject to the insolvency proceeding for a period of 180 to 270 days. During this period of moratorium, there is a statutory stay on all suits and proceedings, including arbitral proceedings, against the party subject to the insolvency proceeding. As a general principle, the moratorium would be applicable only to proceedings against the party subject to the insolvency proceeding, and no moratorium would be applicable to proceedings by such party. However, where counterclaims are made against an insolvent company, they can continue to the extent they are intrinsically intertwined with the claims made by the insolvent company.The period of moratorium can end either in a resolution of the party's insolvency as mutually agreed on by its creditors or in a final order of insolvency against the party. In the former, the moratorium is lifted and the arbitral proceedings continue.

If the insolvency proceedings culminate in an order of insolvency or winding up passed against a party, then he/she will not be entitled to continue the arbitral proceedings himself/herself. Once an order of insolvency is passed, if the insolvent party is the claimant in an arbitration proceeding, the liquidator of the insolvent party can choose to continue the arbitral proceedings for the benefit of the creditors of the insolvent party. If the insolvent party is the defendant, the arbitral proceedings cannot continue in respect of an insolvent party, and the claimant is left with the recourse of presenting his/her claim to the liquidator to consider.

Remedies
Interim remedies

The arbitral tribunal is empowered to grant interim reliefs during the arbitral proceedings until the making of an award. A party can apply to the arbitral tribunal for the appointment of a guardian for a minor person or a person of unsound mind for the purposes of arbitral proceedings or for an interim measure of protection in respect of any of the following matters:

The preservation, interim custody or sale of goods which are the subject matter of the proceedings.
Securing the amount in dispute in the arbitration.
The detention, preservation or inspection of any property which is the subject matter of the dispute in arbitration.
Interim injunction.
The appointment of receivers.

Ex parte

If a party fails to appear before the arbitral tribunal despite having notice of the constitution of the arbitral tribunal, the arbitral tribunal can grant ex parte interim relief.

Security

The arbitral tribunal can grant orders to provide security for any amount, goods or property in dispute in the arbitration.

Final remedies available from the tribunal

The arbitral tribunal has the power to grant:

Declarations.
Injunctions.
Payment of money.
Specific performance.

Damages can only be compensatory in nature and punitive damages are not permitted. Where an arbitral award is for the payment of money, the arbitral tribunal can also include interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. An arbitral tribunal can also make a suitable award on costs.

Appeals on arbitration proceedings and awards

Rights of appeal/challenge

Awards rendered by arbitral tribunals are considered to be final and binding in terms of the decision on merits, and no appeal is allowed from an arbitral tribunal to the courts.The Arbitration Act allows for challenges to the award (section 34, Arbitration Act). This right is available to all parties to the arbitration where the arbitration is seated in India.

Grounds and procedure

There are very limited grounds available for challenging an arbitral award. The award can be challenged only if:

A party was under some form of incapacity.
The arbitration agreement was not valid under the law to which the parties had subjected it.
The party was not given proper notice of the appointment of an arbitrator or the arbitral proceedings.
The award dealt with a dispute or contained a decision that was beyond the scope of the arbitration agreement.
The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the arbitration agreement or, failing such agreement, was not in accordance with the provisions of the Arbitration Act.
The subject matter of dispute was not capable of settlement by arbitration.
The arbitral award was in conflict with the public policy of India, which means that:
(i). the making of the award was induced or affected by fraud or corruption in violation of principles of confidentiality applicable to conciliation proceedings;
(ii). the award was in contravention of the fundamental policy of Indian law; or
(iii). the award was in conflict with the most basic notions of justice.

Further, an award can be challenged in a domestic arbitration (that is, between two Indian parties seated in India) if the award is vitiated by patent illegality appearing on the face of the award.

The law expressly prohibits courts from looking into the merits of the dispute while examining a challenge to an arbitral award and provides that an arbitral award cannot be set aside merely on the ground of an erroneous application of law or evidence. The recent amendments also clarify that a challenge on grounds of incapacity, insufficient notice, exceeding the mandate for arbitration, or improper constitution of the arbitral tribunal can only be made on the basis of the material already available on the record of the arbitral tribunal, in an attempt to curtail the scope of the challenge and time required to consider such challenge.

Waiving rights of appeal

Indian law does not authorize the parties to waive their rights of challenge to an award by an agreement. Section 28 of the Indian Contract Act 1872 provides that any agreement by which a party is restrained from enforcing its rights through legal proceedings is void.

Limitation period applicable to actions to vacate or challenge an international arbitration award rendered inside your jurisdiction

A challenge to an arbitral award (whether relating to an international commercial arbitration or a domestic arbitration) rendered in India can be made within three months from the date of receipt of the award by the challenging party. If a party can show sufficient cause that prevented it from making the challenge within the limitation period, a further 30 days can be granted, but no longer.

Legal fee structures

Fees of counsel

No legal fees are fixed by law or prescribed for counsel. Lawyers usually charge hourly fees, and sometimes on the basis of the number of sittings attended along with hours of chamber work.Lawyers are both ethically and statutorily barred from charging fees contingent on the outcome of any litigation. There is some recent case law which suggests that contingent fees are permissible in the context of arbitration (see Jayaswal Ashoka Infrastructure (P) Ltd. v. Pansare Lawad Sallagar, 2019 SCC OnLine Bom 578) but this decision of the Bombay High Court has not been followed by other courts and has been the subject of much criticism. In a different decision, it has also been held that foreign law firms are not prohibited from entering into contingency fee arrangements to represent Indian clients in arbitration proceedings under the Advocates Act 1961 (see Spentex Industries Ltd. v. Quinn Emanuel Urquhart Sullivan LLP, MANU/DE/1032/2020). There is no express bar on third party funding of arbitration, but the legal permissibility remains unclear as it has not yet been tested before the courts.

Fees of arbitrators

At present, the law does not prescribe a fee structure for arbitrators. Therefore, traditionally used structures such as hourly rates and lump sum rates based on the size and/or complexity of the matter are acceptable.The fees of the arbitrator cannot be fixed by reference to the result of the dispute.For domestic arbitrations, the law provides a model fee structure in Schedule IV to the Arbitration Act,based on the sum in dispute. At present, this is merely a guideline and not mandatory, but certain amendments to the Arbitration Act which have been proposed, but have not yet come into force; intend to make this schedule mandatory. Certain High Courts in India have adopted this fee schedule and made it mandatory in their respective jurisdictions. The fees proposed in Schedule IV are not applicable to international commercial arbitrations, or arbitrations agreed by parties to be conducted through arbitral institutions. Most arbitral institutions prescribe a fee structure of their own.

Fees of institutions

If arbitrations are conducted through arbitral institutions, the institutions prescribe an institutional fee for administration and use of the institution supervising the arbitration.In ad hoc arbitrations conducted outside arbitral institutions, a small fee is usually also payable for the use of secretarial assistance and transport of arbitrators.

Cost allocation

The arbitral tribunal is empowered to determine the costs to be paid by one party to the other, the amount of these costs and when they are to be paid.

Cost calculation

The Arbitration Act specifies what constitutes "costs", which includes:

Legal fees and expenses of arbitrators, the court and witnesses.
Administrative fees of the institution supervising the arbitration.
Other expenses incurred in relation to the arbitration.

Parties are usually invited by the arbitral tribunal to make submissions on costs after the final hearing, but before the award are rendered.

Factors considered

In determining the costs, the tribunal is expected to have regarded to:

The conduct of the parties.
The success of the claims of the parties.
Any reasonable offers of settlement and refusals of these made by the parties.

Enforcement of an award

Domestic awards

An arbitral award is enforceable after the time for making an application to set aside such an award has expired (three months). The party intending to enforce the award can file an execution petition before the civil court. The award is enforced in the same manner as a decree of the court under the Indian Code of Civil Procedure, which provides the framework for the execution of arbitral awards.If a party wishes to seek a stay on the enforcement of the award, it must make a separate application to the court for that purpose. Recent amendments to the Arbitration Act require the court to ensure that the party applying for a stay on the enforcement of an award has provided sufficient security to satisfy the award, as a precondition to granting a stay. The 2021 Amendment Act now requires courts to unconditionally stay awards if a prima facie case is made out that either the arbitration agreement or the contract, or the making of the award itself was induced or affected by fraud.

An arbitral award rendered in India which is unstamped or is insufficiently stamped is inadmissible. This deficiency can be fixed by payment of deficit stamp duty and penalty. An arbitral award must also be registered if it concerns immovable property.

Foreign awards

India is a party to both the New York Convention and the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention). However, an award is only enforceable if it was made in the territory of another state that is identified by the Government of India in the Official Gazette as being bound by either convention. Most of the popular arbitration destinations such as the UK, US, Singapore, Hong Kong and Switzerland, are gazetted convention countries, and so the awards made in these countries are enforceable under the Arbitration Act. Certain countries such as the UAE are not convention countries.

Further, in India, the conventions only apply to disputes arising out of legal relationships which are considered commercial under Indian law. In recent times, this has been interpreted as meaning that the conventions (and the Arbitration Act) do not apply to Investment Treaty Arbitrations.

To what extent is a foreign arbitration award enforceable?

An award rendered in a commercial arbitration in a gazetted convention country is enforceable in India, provided:

The procedural requirements to enforce an award are satisfied (section 47, Arbitration Act).
The award does not fall under any of the categories where enforcement can be refused (section 48, Arbitration Act).

The grounds for refusing enforcement of a foreign arbitral award are largely the same as the grounds set out in the New York Convention. However, Indian courts have held that a narrower construction than that adopted in a challenge to an award rendered in India must be adopted in relation to interpreting grounds for refusing enforcement of a foreign award. Using this principles, the public policy ground for refusing enforcement of a foreign award has been held to be significantly narrower than the public policy ground that would vitiate an award rendered in India. Further, unlike a domestic award, enforcement for a foreign arbitral award cannot be refused on grounds that it is patently illegal.

Once the court is satisfied that the foreign award is enforceable, it would be deemed to be a decree of the court under section 49 of the Arbitration Act. The process for enforcement of a foreign award is similar to that of a domestic award.

Limitation period for actions to enforce international arbitration awards rendered outside India

There is some uncertainty about the applicable limitation period for actions to enforce international arbitration awards rendered outside India.

Some courts have held that since a foreign award will need to be recognized in India before it is deemed to be a decree of an Indian court, the first step of the proceeding to enforce a foreign award cannot be considered "execution". Therefore, the limitation period to file enforcement proceedings in India is the same as that of filing a new suit (that is, three years from the date of the award).Other courts in India have held that recognition and enforcement are part of the same process and so the limitation period is the same as that which applies to execution proceedings (that is, 12 years from the date of the award).

The Supreme Court has not yet provided an authoritative ruling on the issue but has confirmed that recognition and enforcement are part of the same process and cannot be split into two proceedings. This view would appear to support the argument that the limitation period to enforce a foreign arbitral award is 12 years. However, this currently remains untested.

Length of enforcement proceedings

Enforcement takes about six months to one year in courts which deal with complex commercial matters on a regular basis. However, the process can be significantly longer if the courts are saddled with high volumes of work and/or if they do not regularly deal with commercial disputes. Also, parties can adopt dilatory tactics, and consequently prevent the enforcement for several years. If the courts use their powers to exercise control over such parties and conduct, the impact of these dilatory tactics can be mitigated.

There is no procedure to expedite the enforcement of an award. However, if a party wishes to challenge an arbitral award, and seeks to stay enforcement pending such a challenge, the law requires the party to provide security in respect of the full value of the arbitral award as a precondition to granting stay. If the security provided is in the form of a deposit of the arbitral award amount in court, an application can be made by the successful party to withdraw such sums pending a challenge to the award, against providing sufficient security.

Reform

A number of amendments have recently been passed by the Parliament of India. A significant portion of these amendments have already come into force and have been discussed above. However, some amendments which have been enacted have not yet come into force, including those relating to:

Expediting the appointment of arbitrators through designated arbitral institutions.
Creating an independent body, the Arbitration Council of India, which will:

grade arbitral institutions;
accredit arbitrators;
evolve policy and guidelines for the establishment, operation and maintenance of uniform professional standards in arbitration;
set standards for the qualifications of arbitrators; and
maintain an electronic depository of all arbitral awards.

International Court of Arbitration- Written Notifications or Communications; Time Limits

All pleadings and other written communications submitted by any party, as well as all documents annexed thereto, shall be sent to each party, each arbitrator, and the Secretariat. Any notification or communication from the arbitral tribunal to the parties shall also be sent in copy to the Secretariat.

All notifications or communications from the Secretariat and the arbitral tribunal shall be made to the last address of the party or its representative for whom the same are intended, as notified either by the party in question or by any other party. Such notification or communication may be made by delivery against receipt, registered post, courier, email, or any other means of telecommunication that provides a record of the sending thereof.A notification or communication shall be deemed to have been made on the day it was received by the party itself or by its representative, or would have been received if made in accordance with Article 3(2).

Periods of time specified in or fixed under the Rules shall start to run on the day following the date a notification or communication is deemed to have been made in accordance with Article 3(3). When the day next following such date is an official holiday or a non-business day in the country where the notification or communication is deemed to have been made, the period of time shall commence on the first following business day. Official holidays and non-business days are included in the calculation of the period of time. If the last day of the relevant period of time granted is an official holiday or a non-business day in the country where the notification or communication is deemed to have been made, the period of time shall expire at the end of the first following business day.

Request for Arbitration

A party wishing to have recourse to arbitration under the Rules shall submit its Request for Arbitration (the “Request”) to the Secretariat at any of the offices specified in the Internal Rules. The Secretariat shall notify the claimant and respondent of the receipt of the Request and the date of such receipt.The date on which the Request is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of the arbitration.
The Request shall contain the following information:

the name in full, description, address and other contact details of each of the parties;
the name in full, address and other contact details of any person(s) representing the claimant in the arbitration;
a description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made;
a statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
any relevant agreements and, in particular, the arbitration agreement(s);
where claims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each claim is made;
all relevant particulars and any observations or proposals concerning the number of arbitrators and their choice in accordance with the provisions of Articles 12 and 13, and any nomination of an arbitrator required thereby; and
all relevant particulars and any observations or proposals as to the place of the arbitration, the applicable rules of law and the language of the arbitration.

The claimant may submit such other documents or information with the Request as it considers appropriate or as may contribute to the efficient resolution of the dispute.
Together with the Request, the claimant shall:

make payment of the filing fee required by Appendix III (“Arbitration Costs and Fees”) in force on the date the Request is submitted; and
submit a sufficient number of copies of the Request for each other party, each arbitrator and the Secretariat where the claimant requests transmission of the Request by delivery against receipt, registered post or courier.

In the event that the claimant fails to comply with either of these requirements, the Secretariat may fix a time limit within which the claimant must comply, failing which the file shall be closed without prejudice with the claimant’s right to submit the same claims at a later date in another Request.The Secretariat shall transmit a copy of the Request and the documents annexed thereto to the respondent for its Answer to the Request once the Secretariat has sufficient copies of the Request and the required filing fee.

Answer to the Request; Counterclaims

Within 30 days from receipt of the Request from the Secretariat, the respondent shall submit an Answer (the “Answer”) which shall contain the following information:

its name in full, description, address and other contact details;
the name in full, address and other contact details of any person(s) representing the respondent in the arbitration;
its comments as to the nature and circumstances of the dispute giving rise to the claims and the basis upon which the claims are made;
its response to the relief sought;
any observations or proposals concerning the number of arbitrators and their choice in light of the claimant’s proposals and in accordance with the provisions of Articles 12 and 13, and any nomination of an arbitrator required thereby; and
any observations or proposals as to the place of the arbitration, the applicable rules of law and the language of the arbitration

The respondent may submit such other documents or information with the Answer as it considers appropriate or as may contribute to the efficient resolution of the dispute.The Secretariat may grant the respondent an extension of the time for submitting the Answer, provided the application for such an extension contains the respondent’s observations or proposals concerning the number of arbitrators and their choice and, where required by Articles 12 and 13, the nomination of an arbitrator. If the respondent fails to do so, the Court shall proceed in accordance with the Rules.The Answer shall be submitted in a sufficient number of copies for each other party, each arbitrator and the Secretariat where the respondent requests transmission thereof by delivery against receipt, registered post or courier.The Secretariat shall communicate the Answer and the documents annexed thereto to all other parties.
Any counterclaims made by the respondent shall be submitted with the Answer and shall provide:

a description of the nature and circumstances of the dispute giving rise to the counterclaims and of the basis upon which the counterclaims are made;
a statement of the relief sought together with the amounts of any quantified counterclaims and, to the extent possible, an estimate of the monetary value of any other counterclaims;
any relevant agreements and, in particular, the arbitration agreement(s); and
where counterclaims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each counterclaim is made.

The respondent may submit such other documents or information with the counterclaims as it considers appropriate or as may contribute to the efficient resolution of the dispute.

The claimant shall submit a reply to any counterclaim within 30 days from receipt of the counterclaims communicated by the Secretariat. Prior to the transmission of the file to the arbitral tribunal, the Secretariat may grant the claimant an extension of time for submitting the reply.

International Court of Arbitration- Effect of the Arbitration

Where the parties have agreed to submit to arbitration under the Rules, they shall be deemed to have submitted ipso facto to the Rules in effect on the date of commencement of the arbitration, unless they have agreed to submit to the Rules in effect on the date of their arbitration agreement.By agreeing to arbitration under the Rules, the parties have accepted that the arbitration shall be administered by the Court.

If any party against which a claim has been made does not submit an Answer, or if any party raises one or more pleas concerning the existence, validity or scope of the arbitration agreement or concerning whether all of the claims made in the arbitration may be determined together in a single arbitration, the arbitration shall proceed and any question of jurisdiction or of whether the claims may be determined together in that arbitration shall be decided directly by the arbitral tribunal, unless the Secretary General refers the matter to the Court for its decision pursuant to Article 6(4).

In all cases referred to the Court under Article 6(3), the Court shall decide whether and to what extent the arbitration shall proceed. The arbitration shall proceed if and to the extent that the Court is prima facie satisfied that an arbitration agreement under the Rules may exist. In particular:

where there are more than two parties to the arbitration, the arbitration shall proceed between those of the parties, including any additional parties joined pursuant to Article 7(1), with respect to which the Court is prima facie satisfied that an arbitration agreement under the Rules that binds them all may exist; and
where claims pursuant to Article 9 are made under more than one arbitration agreement, the arbitration shall proceed as to those claims with respect to which the Court is prima facie satisfied (a) that the arbitration agreements under which those claims are made may be compatible, and (b) that all parties to the arbitration may have agreed that those claims can be determined together in a single arbitration.

The Court’s decision pursuant to Article 6(4) is without prejudice to the admissibility or merits of any party’s plea or pleas.

In all matters decided by the Court under Article 6(4), any decision as to the jurisdiction of the arbitral tribunal, except as to parties or claims with respect to which the Court decides that the arbitration cannot proceed, shall then be taken by the arbitral tribunal itself.

Where the parties are notified of the Court’s decision pursuant to Article 6(4) that the arbitration cannot proceed in respect of some or all of them, any party retains the right to ask any court having jurisdiction whether or not, and in respect of which of them, there is a binding arbitration agreement.

Where the Court has decided pursuant to Article 6(4) that the arbitration cannot proceed in respect of any of the claims, such decision shall not prevent a party from reintroducing the same claim at a later date in other proceedings.

If any of the parties refuses or fails to take part in the arbitration or any stage thereof, the arbitration shall proceed notwithstanding such refusal or failure.

Unless otherwise agreed, the arbitral tribunal shall not cease to have jurisdiction by reason of any allegation that the contract is non-existent or null and void, provided that the arbitral tribunal upholds the validity of the arbitration agreement. The arbitral tribunal shall continue to have jurisdiction to determine the parties’ respective rights and to decide their claims and pleas even though the contract itself may be non-existent or null and void.

International Court of Arbitration- Multiple Parties, Multiple Contracts and Consolidation

Joinder of Additional Parties

A party wishing to join an additional party to the arbitration shall submit its request for arbitration against the additional party (the “Request for Joinder”) to the Secretariat. The date on which the Request for Joinder is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of arbitration against the additional party. Any such joinder shall be subject to the provisions of Articles 6(3)–6(7) and 9. Unless all parties, including the additional party, otherwise agree, or as provided for in Article 7(5), no additional party may be joined after the confirmation or appointment of any arbitrator. The Secretariat may fix a time limit for the submission of a Request for Joinder.
The Request for Joinder shall contain the following information:

the case reference of the existing arbitration;
the name in full, description, address and other contact details of each of the parties, including the additional party; and
the information specified in Article 4(3), subparagraphs c), d), e) and f).

The party filing the Request for Joinder may submit therewith such other documents or information as it considers appropriate or as may contribute to the efficient resolution of the dispute.The provisions of Articles 4(4) and 4(5) shall apply, mutatis mutandis, to the Request for Joinder.The additional party shall submit an Answer in accordance, mutatis mutandis, with the provisions of Articles 5(1)–5(4). The additional party may make claims against any other party in accordance with the provisions of Article 8.

Any Request for Joinder made after the confirmation or appointment of any arbitrator shall be decided by the arbitral tribunal once constituted and shall be subject to the additional party accepting the constitution of the arbitral tribunal and agreeing to the Terms of Reference, where applicable. In deciding on such a Request for Joinder, the arbitral tribunal shall take into account all relevant circumstances, which may include whether the arbitral tribunal has prima facie jurisdiction over the additional party, the timing of the Request for Joinder, possible conflicts of interests and the impact of the joinder on the arbitral procedure. Any decision to join an additional party is without prejudice to the arbitral tribunal’s decision as to its jurisdiction with respect to that party.

Claims between Multiple Parties

In an arbitration with multiple parties, claims may be made by any party against any other party, subject to the provisions of Articles 6(3)-6(7) and 9 and provided that no new claims may be made after the Terms of Reference are signed or approved by the Court without the authorization of the arbitral tribunal pursuant to Article 23(4).Any party making a claim pursuant to Article 8(1) shall provide the information specified in Article 4(3) subparagraphs c), d), e) and f).

Before the Secretariat transmits the file to the arbitral tribunal in accordance with Article 16, the following provisions shall apply, mutatis mutandis, to any claim made: Article 4(4) subparagraph b); Article 4(5); Article 5(1) except for subparagraphs a), b), e) and f); Article 5(2); Article 5(3) and Article 5(4). Thereafter, the arbitral tribunal shall determine the procedure for making a claim.

Multiple Contracts

Subject to the provisions of Articles 6(3)-6(7) and 23(4), claims arising out of or in connection with more than one contract may be made in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement under the Rules.

International Court of Arbitration- Consolidation of Arbitrations

The Court may, at the request of a party, consolidate two or more arbitrations pending under the Rules into a single arbitration, where:

the parties have agreed to consolidation; or
all of the claims in the arbitrations are made under the same arbitration agreement or agreements; or
the claims in the arbitrations are not made under the same arbitration agreement or agreements, but the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the Court finds the arbitration agreements to be compatible.

In deciding whether to consolidate, the Court may take into account any circumstances it considers to be relevant, including whether one or more arbitrators have been confirmed or appointed in more than one of the arbitrations and, if so, whether the same or different persons have been confirmed or appointed.When arbitrations are consolidated, they shall be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties.

The Arbitral Tribunal

Every arbitrator must be and remain impartial and independent of the parties involved in the arbitration.Before appointment or confirmation, a prospective arbitrator shall sign a statement of acceptance, availability, impartiality and independence. The prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality. The Secretariat shall provide such information to the parties in writing and fix a time limit for any comments from them.

An arbitrator shall immediately disclose in writing to the Secretariat and to the parties any facts or circumstances of a similar nature to those referred to in Article 11(2) concerning the arbitrator’s impartiality or independence which may arise during the arbitration.The decisions of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final.By accepting to serve, arbitrators undertake to carry out their responsibilities in accordance with the Rules.Insofar as the parties have not provided otherwise, the arbitral tribunal shall be constituted in accordance with the provisions of Articles 12 and 13.In order to assist prospective arbitrators and arbitrators in complying with their duties under Articles 11(2) and 11(3), each party must promptly inform the Secretariat, the arbitral tribunal and the other parties, of the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defences and under which it has an economic interest in the outcome of the arbitration.

Constitution of the Arbitral Tribunal

Number of Arbitrators

The disputes shall be decided by a sole arbitrator or by three arbitrators.Where the parties have not agreed upon the number of arbitrators, the Court shall appoint a sole arbitrator, save where it appears to the Court that the dispute is such as to warrant the appointment of three arbitrators. In such case, the claimant shall nominate an arbitrator within 15 days from receipt of the notification of the decision of the Court, and the respondent shall nominate an arbitrator within 15 days from receipt of the notification of the nomination made by the claimant. If a party fails to nominate an arbitrator, the appointment shall be made by the Court.

Sole Arbitrator

Where the parties have agreed that the dispute shall be resolved by a sole arbitrator, they may, by agreement, nominate the sole arbitrator for confirmation. If the parties fail to nominate a sole arbitrator within 30 days from the date when the claimant’s Request for Arbitration has been received by the other party or parties, or within such additional time as may be allowed by the Secretariat, the sole arbitrator shall be appointed by the Court.

Three Arbitrators

Where the parties have agreed that the dispute shall be resolved by three arbitrators, each party shall nominate in the Request and the Answer, respectively, one arbitrator for confirmation. If a party fails to nominate an arbitrator, the appointment shall be made by the Court.Where the dispute is to be referred to three arbitrators, the third arbitrator, who will act as president of the arbitral tribunal, shall be appointed by the Court, unless the parties have agreed upon another procedure for such appointment, in which case the nomination will be subject to confirmation pursuant to Article 13. Should such procedure not result in a nomination within 30 days from the confirmation or appointment of the co-arbitrators or any other time limit agreed by the parties or fixed by the Court, the third arbitrator shall be appointed by the Court.Where there are multiple claimants or multiple respondents, and where the dispute is to be referred to three arbitrators, the multiple claimants, jointly, and the multiple respondents, jointly, shall nominate an arbitrator for confirmation pursuant to Article 13.

Where an additional party has been joined, (Article 7(1)), and where the dispute is to be referred to three arbitrators, the additional party may, jointly with the claimant(s) or with the respondent(s), nominate an arbitrator for confirmation pursuant to Article 13 and subject to Article 7(5).In the absence of a joint nomination pursuant to Articles 12(6) or 12(7) and where all parties are unable to agree to a method for the constitution of the arbitral tribunal, the Court may appoint each member of the arbitral tribunal and shall designate one of them to act as president. In such cases, the Court shall be at liberty to choose any person it regards as suitable to act as arbitrator, applying Article 13 when it considers this appropriate.Notwithstanding any agreement by the parties on the method of constitution of the arbitral tribunal, in exceptional circumstances the Court may appoint each member of the arbitral tribunal to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award.

Appointment and Confirmation of the Arbitrators

In confirming or appointing arbitrators, the Court shall consider the prospective arbitrator’s nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals and the prospective arbitrator’s availability and ability to conduct the arbitration in accordance with the Rules. The same shall apply where the Secretary General confirms arbitrators pursuant to Article 13(2).

The Secretary General may confirm as co-arbitrators, sole arbitrators and presidents of arbitral tribunals persons nominated by the parties or pursuant to their particular agreements, provided that the statement they have submitted contains no qualification regarding impartiality or independence or that a qualified statement regarding impartiality or independence has not given rise to objections. Such confirmation shall be reported to the Court at one of its next sessions. If the Secretary General considers that a co-arbitrator, sole arbitrator or president of an arbitral tribunal should not be confirmed, the matter shall be submitted to the Court.Where the Court is to appoint an arbitrator, it shall make the appointment upon proposal of an ICC National Committee or Group that it considers to be appropriate. If the Court does not accept the proposal made, or if the National Committee or Group fails to make the proposal requested within the time limit fixed by the Court, the Court may repeat its request, request a proposal from another National Committee or Group that it considers to be appropriate, or appoint directly any person whom it regards as suitable.
The Court may also appoint directly to act as arbitrator any person whom it regards as suitable where:

one or more of the parties is a state or may be considered to be a state entity;
the Court considers that it would be appropriate to appoint an arbitrator from a country or territory where there is no National Committee or Group; or
the President certifies to the Court that circumstances exist which, in the President’s opinion, make a direct appointment necessary and appropriate.

Where the Court is to appoint the sole arbitrator or the president of the arbitral tribunal, such sole arbitrator or president of the arbitral tribunal shall be of a nationality other than those of the parties.However, in suitable circumstances and provided that none of the parties objects within the time limit fixed by the Secretariat, the sole arbitrator or the president of the arbitral tribunal may be chosen from a country of which any of the parties is a national.Whenever the arbitration agreement upon which the arbitration is based arises from a treaty, and unless the parties agree otherwise, no arbitrator shall have the same nationality of any party to the arbitration.

Challenge of Arbitrators

A challenge of an arbitrator, whether for an alleged lack of impartiality or independence, or otherwise, shall be made by the submission to the Secretariat of a written statement specifying the facts and circumstances on which the challenge is based.For a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification.The Court shall decide on the admissibility and, at the same time, if necessary, on the merits of a challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators.

Replacement of Arbitrators

An arbitrator shall be replaced upon death, upon acceptance by the Court of the arbitrator’s resignation, upon acceptance by the Court of a challenge, or upon acceptance by the Court of a request of all the parties.An arbitrator shall also be replaced on the Court’s own initiative when it decides that the arbitrator is prevented de jure or de facto from fulfilling the arbitrator’s functions, or that the arbitrator is not fulfilling those functions in accordance with the Rules or within the prescribed time limits.When, on the basis of information that has come to its attention, the Court considers applying Article 15(2), it shall decide on the matter after the arbitrator concerned, the parties and any other members of the arbitral tribunal have had an opportunity to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators.When an arbitrator is to be replaced, the Court has discretion to decide whether or not to follow the original nominating process. Once reconstituted, and after having invited the parties to comment, the arbitral tribunal shall determine if and to what extent prior proceedings shall be repeated before the reconstituted arbitral tribunal.

Subsequent to the closing of the proceedings, instead of replacing an arbitrator who has died or been removed by the Court pursuant to Articles 15(1) or 15(2), the Court may decide, when it considers it appropriate, that the remaining arbitrators shall continue the arbitration. In making such determination, the Court shall take into account the views of the remaining arbitrators and of the parties and such other matters that it considers appropriate in the circumstances.

The Arbitral Proceedings- International Court of Arbitration

Transmission of the File to the Arbitral Tribunal

The Secretariat shall transmit the file to the arbitral tribunal as soon as it has been constituted, provided the advance on costs requested by the Secretariat at this stage has been paid.

Party Representation

Each party must promptly inform the Secretariat, the arbitral tribunal and the other parties of any changes in its representation.The arbitral tribunal may, once constituted and after it has afforded an opportunity to the parties to comment in writing within a suitable period of time, take any measure necessary to avoid a conflict of interest of an arbitrator arising from a change in party representation, including the exclusion of new party representatives from participating in whole or in part in the arbitral proceedings.At any time after the commencement of the arbitration, the arbitral tribunal or the Secretariat may require proof of the authority of any party representatives.

Place of the Arbitration

The place of the arbitration shall be fixed by the Court, unless agreed upon by the parties.The arbitral tribunal may, after consulting the parties, conduct hearings and meetings at any location it considers appropriate, unless otherwise agreed by the parties.The arbitral tribunal may deliberate at any location it considers appropriate.

Rules Governing the Proceedings

The proceedings before the arbitral tribunal shall be governed by the Rules and, where the Rules are silent, by any rules which the parties or, failing them, the arbitral tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration.

Language of the Arbitration

In the absence of an agreement by the parties, the arbitral tribunal shall determine the language or languages of the arbitration, due regard being given to all relevant circumstances, including the language of the contract.

Applicable Rules of Law

The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex aequo et bono only if the parties have agreed to give it such powers.

Conduct of the Arbitration

The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute.In order to ensure effective case management, after consulting the parties, the arbitral tribunal shall adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties. Such measures may include one or more of the case management techniques described in Appendix IV.Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information.In all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case.The parties undertake to comply with any order made by the arbitral tribunal.

Terms of Reference

As soon as it has received the file from the Secretariat, the arbitral tribunal shall draw up, on the basis of documents or in the presence of the parties and in the light of their most recent submissions, a document defining its Terms of Reference. This document shall include the following particulars:

the names in full, description, address and other contact details of each of the parties and of any person(s) representing a party in the arbitration;
the addresses to which notifications and communications arising in the course of the arbitration may be made;
a summary of the parties’ respective claims and of the relief sought by each party, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
unless the arbitral tribunal considers it inappropriate, a list of issues to be determined;
the names in full, address and other contact details of each of the arbitrators;
the place of the arbitration; and
particulars of the applicable procedural rules and, if such is the case, reference to the power conferred upon the arbitral tribunal to act as amiable compositeur or to decide ex aequo et bono.

The Terms of Reference shall be signed by the parties and the arbitral tribunal. Within 30 days from the date on which the file has been transmitted to it, the arbitral tribunal shall transmit to the Court the Terms of Reference signed by it and by the parties. The Court may extend this time limit pursuant to a reasoned request from the arbitral tribunal or on its own initiative if it decides it is necessary to do so.If any of the parties refuses to take part in the drawing up of the Terms of Reference or to sign the same, they shall be submitted to the Court for approval. When the Terms of Reference have been signed in accordance with Article 23(2) or approved by the Court, the arbitration shall proceed.After the Terms of Reference have been signed or approved by the Court, no party shall make new claims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the arbitral tribunal, which shall consider the nature of such new claims, the stage of the arbitration and other relevant circumstances.

Case Management Conference and Procedural Timetable

When drawing up the Terms of Reference or as soon as possible thereafter, the arbitral tribunal shall hold a case management conference to consult the parties on procedural measures that may be adopted pursuant to Article 22(2).During such conference, or as soon as possible thereafter, the arbitral tribunal shall establish the procedural timetable that it intends to follow for the efficient conduct of the arbitration. The procedural timetable and any modifications thereto shall be communicated to the Court and the parties.To ensure continued effective case management, the arbitral tribunal, after consulting the parties by means of a further case management conference or otherwise, may adopt further procedural measures or modify the procedural timetable.

Case management conferences may be conducted through a meeting in person, by video conference, telephone or similar means of communication. In the absence of an agreement of the parties, the arbitral tribunal shall determine the means by which the conference will be conducted. The arbitral tribunal may request the parties to submit case management proposals in advance of a case management conference and may request the attendance at any case management conference of the parties in person or through an internal representative.

Modified Time Limits

The parties may agree to shorten the various time limits set out in the Rules. Any such agreement entered into subsequent to the constitution of an arbitral tribunal shall become effective only upon the approval of the arbitral tribunal.The Court, on its own initiative, may extend any time limit which has been modified pursuant to Article 39(1) if it decides that it is necessary to do so in order that the arbitral tribunal and the Court may fulfill their responsibilities in accordance with the Rules.

Establishing the Facts of the Case

The arbitral tribunal shall proceed within as short a time as possible to establish the facts of the case by all appropriate means.The arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned.The arbitral tribunal, after consulting the parties, may appoint one or more experts, define their terms of reference and receive their reports. At the request of a party, the parties shall be given the opportunity to question at a hearing any such expert.At any time during the proceedings, the arbitral tribunal may summon any party to provide additional evidence.The arbitral tribunal may decide the case solely on the documents submitted by the parties unless any of the parties requests a hearing.

Hearings

A hearing shall be held if any of the parties so requests or, failing such a request, if the arbitral tribunal on its own motion decides to hear the parties. When a hearing is to be held, the arbitral tribunal, giving reasonable notice, shall summon the parties to appear before it on the day and at the place fixed by it. The arbitral tribunal may decide, after consulting the parties, and on the basis of the relevant facts and circumstances of the case, that any hearing will be conducted by physical attendance or remotely by videoconference, telephone or other appropriate means of communication.If any of the parties, although duly summoned, fails to appear without valid excuse, the arbitral tribunal shall have the power to proceed with the hearing.The arbitral tribunal shall be in full charge of the hearings, at which all the parties shall be entitled to be present. Save with the approval of the arbitral tribunal and the parties, persons not involved in the proceedings shall not be admitted.The parties may appear in person or through duly authorized representatives. In addition, they may be assisted by advisers.

Closing of the Proceedings and Date for Submission of Draft Awards

As soon as possible after the last hearing concerning matters to be decided in an award or the filing of the last authorized submissions concerning such matters, whichever is later, the arbitral tribunal shall:

declare the proceedings closed with respect to the matters to be decided in the award; and
inform the Secretariat and the parties of the date by which it expects to submit its draft award to the Court for approval pursuant to Article 34.

After the proceedings are closed, no further submission or argument may be made, or evidence produced, with respect to the matters to be decided in the award, unless requested or authorized by the arbitral tribunal.

Conservatory and Interim Measures

Unless the parties have otherwise agreed, as soon as the file has been transmitted to it, the arbitral tribunal may, at the request of a party, order any interim or conservatory measure it deems appropriate. The arbitral tribunal may make the granting of any such measure subject to appropriate security being furnished by the requesting party. Any such measure shall take the form of an order, giving reasons, or of an award, as the arbitral tribunal considers appropriate.

Before the file is transmitted to the arbitral tribunal and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof.

Emergency Arbitrator

A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall be accepted only if it is received by the Secretariat prior to the transmission of the file to the arbitral tribunal pursuant to Article 16 and irrespective of whether the party making the application has already submitted its Request for Arbitration.The emergency arbitrator’s decision shall take the form of an order. The parties undertake to comply with any order made by the emergency arbitrator.

The emergency arbitrator’s order shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. The arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator.The arbitral tribunal shall decide upon any party’s requests or claims related to the emergency arbitrator proceedings, including the reallocation of the costs of such proceedings and any claims arising out of or in connection with the compliance or non-compliance with the order.Articles 29(1)-29(4) and the Emergency Arbitrator Rules set forth in Appendix V (collectively the “Emergency Arbitrator Provisions”) shall apply only to parties that are either signatories of the arbitration agreement under the Rules that is relied upon for the application or successors to such signatories.

The Emergency Arbitrator Provisions shall not apply if:

the arbitration agreement under the Rules was concluded before 1 January 2012;
the parties have agreed to opt out of the Emergency Arbitrator Provisions; or
the arbitration agreement upon which the application is based arises from a treaty.

The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the Rules. Any application for such measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat.

Expedited Procedure

By agreeing to arbitration under the Rules, the parties agree that this Article 30 and the Expedited Procedure Rules set forth in Appendix VI (collectively the “Expedited Procedure Provisions”) shall take precedence over any contrary terms of the arbitration agreement.
The Expedited Procedure Rules set forth in Appendix VI shall apply if:

the amount in dispute does not exceed the limit set out in Article 1(2) of Appendix VI at the time
the parties so agree.

The Expedited Procedure Provisions shall not apply if:

the arbitration agreement under the Rules was concluded before the date on which the Expedited Procedure Provisions came into force;
the parties have agreed to opt out of the Expedited Procedure Provisions; or
the Court, upon the request of a party before the constitution of the arbitral tribunal or on its own motion, determines that it is inappropriate in the circumstances to apply the Expedited Procedure Provisions.

Time Limit for the Final Award

The time limit within which the arbitral tribunal must render its final award is six months. Such time limit shall start to run from the date of the last signature by the arbitral tribunal or by the parties of the Terms of Reference or, in the case of application of Article 23(3), the date of the notification to the arbitral tribunal by the Secretariat of the approval of the Terms of Reference by the Court. The Court may fix a different time limit based upon the procedural timetable established pursuant to Article 24(2).The Court may extend the time limit pursuant to a reasoned request from the arbitral tribunal or on its own initiative if it decides it is necessary to do so.

Making of the Award

When the arbitral tribunal is composed of more than one arbitrator, an award is made by a majority decision. If there is no majority, the award shall be made by the president of the arbitral tribunal alone.

Award by Consent

If the parties reach a settlement after the file has been transmitted to the arbitral tribunal in accordance with Article 16, the settlement shall be recorded in the form of an award made by consent of the parties, if so requested by the parties and if the arbitral tribunal agrees to do so.

Scrutiny of the Award by the Court

Before signing any award, the arbitral tribunal shall submit it in draft form to the Court. The Court may lay down modifications as to the form of the award and, without affecting the arbitral tribunal’s liberty of decision, may also draw its attention to points of substance. No award shall be rendered by the arbitral tribunal until it has been approved by the Court as to its form.

Notification, Deposit and Enforceability of the Award

Once an award has been made, the Secretariat shall notify to the parties the text signed by the arbitral tribunal, provided always that the costs of the arbitration have been fully paid to ICC by the parties or by one of them.Additional copies certified true by the Secretary General shall be made available on request and at any time to the parties, but to no one else.By virtue of the notification made in accordance with Article 35(1), the parties waive any other form of notification or deposit on the part of the arbitral tribunal.An original of each award made in accordance with the Rules shall be deposited with the Secretariat.The arbitral tribunal and the Secretariat shall assist the parties in complying with whatever further formalities may be necessary.Every award shall be binding on the parties. By submitting the dispute to arbitration under the Rules, the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.

Correction and Interpretation of the Award; Additional Award; Remission of Awards

On its own initiative, the arbitral tribunal may correct a clerical, computational or typographical error, or any errors of similar nature contained in an award, provided such correction is submitted for approval to the Court within 30 days from notification of the award by the Secretariat pursuant to Article 35(1).

Any application of a party for the correction of an error of the kind referred to in Article 36(1), or for the interpretation of an award, must be made to the Secretariat within 30 days from receipt of the award by such party.

Any application of a party for an additional award as to claims made in the arbitral proceedings which the arbitral tribunal has omitted to decide must be made to the Secretariat within 30 days from receipt of the award by such party.

After transmission of an application pursuant to Articles 36(2) or 36(3) to the arbitral tribunal, the latter shall grant the other party or parties a short time limit, normally not exceeding 30 days, from receipt of the application by that party or parties, to submit any comments thereon. The arbitral tribunal shall submit its decision on the application in draft form to the Court not later than 30 days from expiry of the time limit for the receipt of any comments from the other party or parties or within such other period as the Court may decide. A decision to correct or to interpret the award shall take the form of an addendum and shall constitute part of the award. A decision to grant the application under paragraph 3 shall take the form of an additional award. The provisions of Articles 32, 34 and 35 shall apply mutatis mutandis.

Where a court remits an award to the arbitral tribunal, the provisions of Articles 32, 34, 35 and this Article 36 shall apply mutatis mutandis to any addendum or award made pursuant to the terms of such remission. The Court may take any steps as may be necessary to enable the arbitral tribunal to comply with the terms of such remission and may fix an advance to cover any additional fees and expenses of the arbitral tribunal and any additional ICC administrative expenses.

Advance to Cover the Costs of the Arbitration

After receipt of the Request, the Secretary General may request the claimant to pay a provisional advance in an amount intended to cover the costs of the arbitration

until the Terms of Reference have been drawn up; or
when the Expedited Procedure Provisions apply, until the case management conference.

Any provisional advance paid will be considered as a partial payment by the claimant of any advance on costs fixed by the Court pursuant to this Article 37.

As soon as practicable, the Court shall fix the advance on costs in an amount likely to cover the fees and expenses of the arbitrators, the ICC administrative expenses and any other expenses incurred by ICC related to the arbitration for the claims which have been referred to it by the parties, unless any claims are made under Article 7 or 8 in which case Article 37(4) shall apply. The advance on costs fixed by the Court pursuant to this Article 37(2) shall be payable in equal shares by the claimant and the respondent.

Where counterclaims are submitted by the respondent under Article 5 or otherwise, the Court may fix separate advances on costs for the claims and the counterclaims. When the Court has fixed separate advances on costs, each of the parties shall pay the advance on costs corresponding to its claims.

Where claims are made under Article 7 or 8, the Court shall fix one or more advances on costs that shall be payable by the parties as decided by the Court. Where the Court has previously fixed any advance on costs pursuant to this Article 37, any such advance shall be replaced by the advance(s) fixed pursuant to this Article 37(4), and the amount of any advance previously paid by any party will be considered as a partial payment by such party of its share of the advance(s) on costs as fixed by the Court pursuant to this Article 37(4).

The amount of any advance on costs fixed by the Court pursuant to this Article 37 may be subject to readjustment at any time during the arbitration. In all cases, any party shall be free to pay any other party’s share of any advance on costs should such other party fail to pay its share.When a request for an advance on costs has not been complied with, and after consultation with the arbitral tribunal, the Secretary General may direct the arbitral tribunal to suspend its work and set a time limit, which must be not less than 15 days, on the expiry of which the relevant claims shall be considered as withdrawn. Should the party in question wish to object to this measure, it must make a request within the aforementioned period for the matter to be decided by the Court. Such party shall not be prevented, on the ground of such withdrawal, from reintroducing the same claims at a later date in another proceeding.

If one of the parties claims a right to a set-off with regard to any claim, such set-off shall be taken into account in determining the advance to cover the costs of the arbitration in the same way as a separate claim insofar as it may require the arbitral tribunal to consider additional matters.

Decision as to the Costs of the Arbitration

The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court, in accordance with the scale in force at the time of the commencement of the arbitration, as well as the fees and expenses of any experts appointed by the arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration.

The Court may fix the fees of the arbitrators at a figure higher or lower than that which would result from the application of the relevant scale should this be deemed necessary due to the exceptional circumstances of the case.At any time during the arbitral proceedings, the arbitral tribunal may make decisions on costs, other than those to be fixed by the Court, and order payment.

The final award shall fix the costs of the arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties.In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.

In the event of the withdrawal of all claims or the termination of the arbitration before the rendering of a final award, the Court shall fix the fees and expenses of the arbitrators and the ICC administrative expenses. If the parties have not agreed upon the allocation of the costs of the arbitration or other relevant issues with respect to costs, such matters shall be decided by the arbitral tribunal. If the arbitral tribunal has not been constituted at the time of such withdrawal or termination, any party may request the Court to proceed with the constitution of the arbitral tribunal in accordance with the Rules so that the arbitral tribunal may make decisions as to costs.

Waiver

A party which proceeds with the arbitration without raising its objection to a failure to comply with any provision of the Rules, or of any other rules applicable to the proceedings, any direction given by the arbitral tribunal, or any requirement under the arbitration agreement relating to the constitution of the arbitral tribunal or the conduct of the proceedings, shall be deemed to have waived its right to object.

Limitation of Liability

The arbitrators, any person appointed by the arbitral tribunal, the emergency arbitrator, the Court and its members, ICC and its employees, and the ICC National Committees and Groups and their employees and representatives shall not be liable to any person for any act or omission in connection with the arbitration, except to the extent such limitation of liability is prohibited by applicable law.

General Rule

In all matters not expressly provided for in the Rules, the Court and the arbitral tribunal shall act in the spirit of the Rules and shall make every effort to make sure that the award is enforceable at law.

Role of Commercial Arbitration in Profitable and Smooth Conduct of Business

When different traders undertake business transactions, they certainly have good Intentions to carry out their trade deals faithfully and smoothly to earn a well- deserved profit. However, it is matter of common experience that inspite of best efforts, disputes do arise during performance of business contracts and they arise for various reasons. Unresolved disputes tend to upset the smooth performance and successful completion of business contracts and may, therefore, render an otherwise profitable transaction into a probable loss. Therefore It Is necessary for carrying on business transactions smoothly and profitably that the area of disputes during performance of contracts is narrowed down and provision is made for amicable and quick settlement of disputes that may still arise.

Drafting of Commercial Contracts

To achieve the above purpose businessmen must devote proper attention at the time of drafting their business contracts, by including comprehensive and precise terms and conditions on all important aspects of the trade deal in the contract. Firstly, the contract should be drawn up in writing. In the absence of a written contract the nature and extent of the rights and duties of the parties to the trade deal will have to be gathered from circumstantial evidence or legal Implications, which may give rise to a number of uncertainties and differences of opinion or disputes between the parties, during the performance of the contract. Secondly, the contract should be comprehensive and precise, i.e. it should cover all important points and contingencies in clear and unambiguous terms. And last but not least, it must contain an arbitration clause.

Standard Contract Form

In drafting of business contracts, the parties can also get useful guidance from model or standard contract forms drawn up by experienced commercial/ arbitration organizations. Standard contract forms generally contain all important points relating to a particular line of trade or important conditions required in all commercial contracts generally as the case may be. Standard contract forms can provide useful help in drawing up of business contracts and make the job quite easy and simple.

Some traders do not execute any formal contract but carry on their business dealings by using order and acceptance forms. In such cases either the contract conditions including the arbitration clause may be printed on the order or acceptance form itself or they may be drawn up in a separate sheet and incorporated in the order or acceptance form. However, the contract conditions should be prominently printed, as far as possible, before the signatures of the other party on the order or acceptance form, to remove any doubt about their Incorporation In the contract.

The ICA (Indian Council of Arbitration) provides information and assistance towards formulation of standard forms with necessary terms and conditions which would reduce the chances for occurrence of disputes during performance of the contracts to the minimum.

Arbitration Agreement

As explained above, it is very necessary and useful to make use of arbitration in commercial dealings. It is very simple and can be arranged in the following ways:

An arbitration clause may be Inserted in the contract itself, clearly providing for settlement of any disputes arising under the contract In future, by arbitration, or
If no arbitration clause could be included in the contract for any reason, an arbitration agreement may be entered into later at any stage before or after a dispute has arisen under the contract.

The former method of including an arbitration clause in the contract itself is more expedient than entering into an arbitration agreement after a dispute arises.

Advantages of Arbitration

Court proceedings do not offer a satisfactory method for settlement of commercial disputes as it involves inevitable delays, costs and technicalities. On the other hand arbitration provides an economic, expeditious and informal remedy for settlement of commercial disputes. Proceedings in Courts also involve notoriety and expose the Internal and private affairs of the parties to public. Arbitration proceedings are conducted in privacy and the awards are kept confidential. The arbitrator is usually an expert in the subject matters of the dispute. The dates for arbitration meetings are fixed with the convenience of all concerned. Therefore, arbitration is the most suitable way for settlement of commercial disputes and it must invariably be used by businessmen in their commercial dealings.

Institutional Arbitration

Arbitration may be arranged by the parties themselves on ad-hoc basis or it may be conducted according to the rules of an arbitral institution. Arbitration under the Rules of procedure of an arbitral Institution provides several advantages and helps in quicker disposal of cases. The professional experience and expertise available with an arbitral institution facilitates economic and expeditious conduct of arbitrations and adds to the certainly and finality of the proceedings. The Indian Council of Arbitration (ICA) being a specialized arbitration Institution provides arbitration facilities for all types of domestic and International commercial disputes. The parties are, therefore, advised to use the Institutional arbitration facilities under the auspices of ICA or some other organization, chamber of commerce. Export Promotion Council, trade association, etc. providing arbitration facilities in the sphere of their commercial activity.

Action to be taken by the Trade

As explained above, it is highly desirable and necessary for profitable and smooth conduct of business transactions that precise and comprehensive contract conditions including an arbitration clause are incorporated in commercial contracts. Indian traders are advised in their own interest to persuade their Indian and foreign counter-parts to agree for arbitration as far as possible, under the auspices of the ICA, being a specialized arbitration body In India, or otherwise In appropriate cases.

Important chambers of commerce, trade associations, export promotion councils, etc. has recommended the use of the ICA arbitration clause in all commercial contracts. The Expert Committee on Indian Council of Arbitration appointed by the Ministry of Commerce, Government of India has also recommended in their report (January 1983) that Increasing use of the Council's arbitration services should be made by the trade, particularly the Public Sector undertakings and exporters for profitable and smooth conduct of their business dealings. Similarly the Abid Hussain Committee on Trade Policies appointed by the Government of India has recommended In Its Report (December 1984) for compulsory inclusion of an arbitration clause in all export contracts.

The Online Dispute Resolution (ODR) Policy Plan for India

What is ODR?

ODR is the resolution of disputes, particularly small- and medium-value cases, using digital technology and techniques of ADR, such as arbitration, conciliation and mediation.It refers to the process of using technology for dispute avoidance, containment and resolution outside the traditional court system.As a dispute resolution avenue it can be provided both as an extension of the public court system and outside of it.World over, the potential of dispute resolution mechanisms, especially through technology, is being recognized. Increasingly, ODR has received impetus across Government, businesses and even the judicial processes to tide over the constraints due to Covid-19.

Is it necessary to have a law around ODR in India?

Online Dispute Resolution (ODR) is legal in India. The consent of both parties to resort to ODR is required. It can be done for all cases except where the law specifically prescribes physical appearance or where Rules governing physical arbitration applies.

Online Dispute Resolution in India

NITI Aayog released a handbook on Online Dispute Resolution mechanism. ODR has the potential to decentralize, diversify, democratize, and disentangle the justice delivery mechanism in India’s courts.

Present Scenario in India’s Courts & Associated Issues

The pendency of over 40 million cases in our judicial system remains a focal point for reform and reduction.
This pendency makes a strong case for online dispute resolution (ODR).
Nearly a third of these cases have been pending for 3 to 30 years.
They are pending due to resource-dwindling litigation, case adjudication and difficulty in consensus resolution.
There are barriers to conflict resolution for the common man, because of,
(1). Lack of access to courts and representation, or
(2). Entry-level barriers such as linguistic or technology challenges.
All of this is routinely brought up by those who are impacted by it.
With the pandemic disrupting basic services delivery, the discussion is only going to expand in scope and volume.

Online Dispute Resolution during COVID

Around 40 million cases are pending cases at the Supreme Court, High Courts and the district courts.
This seems more than significant, except that the courts are performing in an exemplary fashion to dispose of cases.
Around 25 lakh cases were heard virtually by courts across the country in the wake of the Covid-19 pandemic.
However, the key statistic is that the number of cases filed surpassed the disposal capacity.
The pandemic has, of course, accelerated this trend.
Given the escalating pendency, it is important that alternative methods for avoiding, containing and resolving disputes are adopted.
The access to justice isn’t just about having the means to resolve disputes but also ensuring that the means are efficacious and expeditious.
Keeping this context in mind, the growing focus on ODR in India is not without reason.

Essence of ODR

Current Framework in India

Owing to the changing circumstances, any debut institution in the societal framework demands a governance framework for regulation purposes. The report of the high level committee on Deeping of Digital Payments was the first formal step for the development of ODR in India. There are several ranges of contributing legislations that deal with the ADR and technology angle of ODR. The Arbitration and Conciliation Act, 1996, governs the domains of ADR. However, the parent legislation is the Code of Civil Procedure, 1908. Section 89 of the Code provides for the power of the court to expose the parties to all forms of ADR and not just within the limits of arbitration, i.e., the conciliation and judicial settlement, including the settlement through mediation or Lok Adalat. These Lok Adalats are governed by the Legal Services Authorities Act, 1987.

Further, Section 12A of the Commercial Courts Act, 2015, introduced pre litigation mediation in India. The parties should consider the option of initiating mediation before directly filing a suit unless the case requires urgent interim relief. Section 442 of the Companies Act, 2013, states that a panel of experts called the ‘Mediation and Conciliation Panel’ must be maintained by the Central Government. The enactment allows parties to proceedings before the National Company Law Tribunal (NCLT) or National Company Law Appellate Tribunal (NCLAT), sometimes even the central government, to request for the dispute to be referred to mediation. In section 74 of the Consumer Protection Act, 2019, consumers are facilitated with broad base mediation through establishment of ‘Consumer Mediation Cells’ in every district. Further, the Consumer Protection Act (E-Commerce) Rules, 2020, have set the mechanisms.

Further, the Information and Technology Act, 2000, comes into play for the technical aspect of ODR. Electronic records and signatures are recognized by section 4 and 5 of the enactment. The digitization of justice delivery system is in crucial need of legal recognition, for which this Act can be used as a support system. The Supreme Court in the case of Shakti Bhog Foods Ltd v. Kola Shipping Ltd., held that:

“Online arbitration agreements are lawful as fulfilling the essentials of a complaint under sections 4 and 5 of the Information Technology Act.”Another notable legal framework is the Indian Evidence Act, 1872, where section 65-A and 65-B of the Act recognizes electronic evidence, sharing of virtual documents and conducting virtual hearings can be regulated through such provisions.For the purpose of appointing an arbitrator, the Supreme Court, in the case Grid Corporation of Orissa Ltd. v. AES Corporation allowed remote conferencing for the purpose of appointing an arbitrator. Similarly, in the case of State of Maharashtra v. Praful Desai, the Supreme Court upheld video conferencing as a valid mode for recording evidence and testimony of witnesses.The apex court in the Meters and Instruments Private Limited & Anr. v. Kanchan Mehta observed that:

“Use of modern technology needs to be considered not only for paperless courts but also to reduce overcrowding of courts. There appears to be a need to consider categories of cases which can be partly or entirely concluded ‘online’ without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated.”

The United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the UNCITRAL Conciliation Rules in 1980. In the context of international commercial relations, this Model Law has been recommended by the United Nations General Assembly (UNGA).India incorporated these uniform principles of ADR in the Arbitration and Conciliation Act, 1996.In the context of India, given below is the timeline for ODR development in India:

2006	National Internet Exchange of India adopted .IN domain name Dispute Resolution Policy (INDRP) which provided the ODR
2011	Chennai hosted the 10th Annual International Forum on ODR
2017	Ministry of Law and Justice issued a statement to urge the Government agencies to resolve disputes through online arbitration
2018	Ministry of MSME launched SAMADHAAN Portal to address delay of payment disputes involving Micro and Small enterprises
2019	E-ADR Challenge was launched to identity and support ODR start-ups
2020	The government of India launched the Vivaad se Vishwas Scheme for efficient resolution of tax disputes through ODR Vidhi Centre for Legal Policy published a report on mainstreaming ODR in India NITI Aayog established a committee under the Chairmanship of Justice (Retd.) A.K.Sikri to broad-base the use of ODR in India Chhatisgarh conducted the first virtual Lok Adalat and provided conciliation services Department related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, in their report called for the introduction of technology in the arbitration and conciliation process

Online Dispute Resolution (ODR) – Origin & Background

The origins of ODR can be traced to the evolution of the Internet in the 1990s, which increased online transactions, and thereby disputes related to such transactions.Broadly, ODR’s development across the world can be divided into three phases, with each phase benefiting from the subsequent innovations in Information Communication and Technology (ICT). Discussed below are the three phases:

Senior judges of the Supreme Court, secretaries from key government ministries, leaders of the industry, legal experts and general counsels of leading enterprises participated in it.The common theme of the meeting was a multi-stakeholder agreement to work collaboratively to ensure efforts are taken to scale ODR in India.

It is the resolution of disputes, particularly small and medium-value cases, using digital technology and techniques of Alternate Dispute Resolution (ADR), such as negotiation, mediation and arbitration.It utilizes information technology to carry out ADR.

The information management and communication tools in ODR may apply to all or part of the proceedings and also have an impact on the methods by which the disputes are being solved.The Arbitration Act provides for ADR mechanisms like arbitration, conciliations, etc. for national and international stakeholders.

Roadmap on ODR in India

NITI Aayog pushes for Online Dispute Resolution for Speedy Access to Justice. NITI Aayog released the report ‘Designing the Future of Dispute Resolution: The ODR Policy Plan for India’, to scale dispute avoidance, containment and resolution online. The roll out of the stated recommendations in the report can help make India a world leader in using technology and innovation through Online Dispute Resolution (ODR) for effective access to justice for every individual.

The report recommends measures at three levels to tackle challenges in adopting ODR framework in India. At the structural level, it suggests actions to increase digital literacy, improve access to digital infrastructure and train professionals as neutrals to deliver ODR services. At the behavioral level, the report recommends adoption of ODR to address disputes involving Government departments and ministries. At the regulatory level, the report recommends a soft-touch approach to regulate ODR platforms and services. This involves laying down design and ethical principles to guide ODR service providers to self-regulate while fostering growth and innovations in the ecosystem. The report also stresses on strengthening the existing legislative framework for ODR by introducing necessary amendments to statutes. The report offers a phased implementation framework for ODR in India.

Constituent members of the Committee included CEO, NITI Aayog; Secretary, Department of Legal Affairs; Secretary, Department of Justice; Secretary, Ministry of Micro, Small and Medium Enterprises; Secretary, Department of Consumer Affairs, Secretary, Department for Promotion of Industry and Internal Trade and, Secretary, Department of Corporate Affairs. The report is the outcome of a collaborative and inclusive exercise, and it should serve as the starting point for a long-term plan of making India the global leader in implementing ODR on a large scale. It sets out the roadmap for how ODR can be scaled up as a point of first contact for dispute avoidance, containment, and when applicable, resolution.

The report is a culmination of the action plan made by a committee constituted at the peak of the Covid crisis by NITI Aayog on ODR in 2020. The Handbook highlights the need for the businesses to adopt Online Dispute Resolution mechanism. According to the handbook, the Online Dispute Resolution (ODR) is the resolution of disputes outside courts. This is mainly used to solve small and medium cases using digital technology. The Online Dispute Resolution adopts techniques of Alternate Dispute Resolution (ADR) such as mediation, negotiation, and arbitration.

United Nations

The United Nations Commission on International Law adopted the UNCITRAL Conciliation Rules in 1980 and Model Law on International Commercial Arbitration in 1985. The UN has recommended the use to the Model Law and the rules to solve disputes that arise in international commercial relations.India enacted the Arbitration and Conciliation Act in 1996. The act incorporates several uniform principles of Alternate Dispute Resolution of UNCITRAL.

Adoption of ODR by Government Departments and Ministries

National Internet Exchange of India’s (NIXI) Domain Dispute Settlement Mechanism.
Integrated Consumer Grievance Redressal Mechanism (INGRAM) initiative by Department of Consumer Affairs.
Department of Justice initiated the discourse on the use of ODR to address disputes involving Government bodies by releasing a list of ODR Platforms and urging Government Departments to resolve their disputes online.
Ministry of Micro, Small and Medium Enterprises launched the SAMADHAAN portal, with facilities for e-filing and online settlement of Micro and Small Enterprises’ (MSE) dues against Public Sector Enterprises.
Department for Promotion of Industry and Internal Trade (DPIIT) released the Draft National e-commerce Policy.
In 2019, the Nandan Nilekani led High Level Committee on Deepening Digital Payments, established by the RBI recommended the setting up of a two-tiered ODR system to handle complaints arising out of digital payments.

ODR Policy Plan Recommendations for India:

The report recommends measures at three levels to tackle challenges in adopting ODR framework in India.

At the structural level, it suggests actions to increase digital literacy, improve access to digital infrastructure and train professionals as neutrals to deliver ODR services.

At the behavioural level, the report recommends adoption of ODR to address disputes involving Government departments and ministries.

At the regulatory level, the report recommends a soft-touch approach to regulate ODR platforms and services.

This involves laying down design and ethical principles to guide ODR service providers to self-regulate while fostering growth and innovations in the ecosystem.The report also stresses on strengthening the existing legislative framework for ODR by introducing necessary amendments to statutes.Keeping in mind that the capacity of the ecosystem, which is still largely untested, and technological innovations are still developing, it is recommended that ODR be progressively implemented in a phased manner.

Why Do We Need ODR?

The Covid-19 pandemic resulted in a large section of society unable to receive timely access to justice.
The pandemic also led to a deluge of disputes further burdening the already lengthy court processes.
ODR has the potential to help reduce the burden on the court and efficiently resolve several categories of cases.
It may also be integrated to support the judiciary through technology integration in court-annexed Alternate Dispute Resolution (ADR) centres, via e-lok adalats and also be introduced within Government departments for internal disputes.
It will set into motion the use of technology towards efficient and affordable access to justice, especially in post-pandemic times.

Benefits of ODR

Cost-Effective

ODR has the potential to reduce legal costs. First, by way of reduced time for resolution and second, by doing away with the need for legal advice in the select category of cases

Convenient and quick dispute resolution

ODR eliminates the need for travel and synchronization of schedules

Increased access to justice

As part of India’s commitment and leadership to attain Sustainable Development Goals adopted by the UN General Assembly in 2015, India is committed to ensuring equal access to justice for all.

Less adversarial and complicated

Since ODR tools such as online negotiation and mediation are premised on mutually arriving at an agreement, they make the dispute resolution process less adversarial and complicated for the parties

Removes unconscious bias

ODR processes lessen the unconscious bias of the neutral while resolving disputes

Ease of Doing Business

Exploring the massive potential of Online Dispute Resolution (ODR) can enhance the Ease of Doing Business in India

ODR aligns with the current socio-economic setting.It has a global precedent of being extremely successful, and above all, has principles of natural justice in its essence.The foundational pillars of any successful ODR regime are trust, convenience and expertise.India now has a long legacy of citizens trusting technology, whether in e-payments or in education and healthcare.To augment dispute resolution mechanisms, Lok Adalats and Gram Nyalayas have been created as alternative options for affordable justice.ODR has significantly large-scale potential for innovation.

ODR Process

Techniques of Online Dispute Resolution

Applicability of ODR

ODR is recommended in the following cases

When goal is resolving a straight forward dispute in a cost effective manner

Disputes can be easily documented

Parties have geographical limitations

Time is of the essence

No existing relationship

Features of ODR

What is the difference between ODR and ADR?

ODR is a process that settles disputes outside courts using digital technology. It combines the technologies of Alternative Dispute Resolution Mechanisms. However, both ODR and ADR work towards achieving the same goal.The Alternate Dispute Resolution was brought as an alternative to going to court. However, it has become expensive lately. On the other hand, Online Dispute Resolution is inexpensive.There are shortages in availability of arbitrator in Alternate Dispute Resolution. This is issue is also addressed by Online Dispute Resolution as searching an arbitrator online is simple and quick.

Pre-requisites of ODR

Before starting the Online Dispute Resolution process, think about possible compromises or solutions to the problems.
Decide what you want from the other person and what you would be willing to give in return (mutual concessions).
Begin the process fully prepared to resolve the conflict. ODR works when both parties participate in good faith to resolve the dispute.
Decide to be calm and polite with the other party. It helps to be courteous when you want to reach an agreement with the other party.
Examine your own thoughts and emotions about the dispute. For example:
(a). What specifically concerns me about this conflict?
(b). How does this affect me?
(c). Why is this important to me?
(d). What values of mine are involved?
(e). Do I carry suspicions or assumptions about the other person? What are they?
(f). What would make the situation better for me?

Common types of Small Claims

Contract
Auto Accident
Damage to Personal Property
Security Deposit
Personal Injury

ODR process

Create an account. You can create a free, secure account from any online device to get started. You will need to provide email addresses for both parties and enter the details of your case. If you do not know the email address of the party, go to Small Claims Resources.

Invite the other party to negotiate.

Negotiate online. If the other party accepts the invitation and creates an account, you can use your account to send messages and upload evidence.

Ask for an ODR Facilitator. You can ask for a neutral ODR Facilitator (limited number available) to help you reach an agreement. The facilitator guides the discussion and can help both parties clearly describe the issues, explore options, and reach a solution that both parties are willing to accept.

E-file your form. Once the parties reach an agreement, you can prepare your legal settlement or dismissal form to be e-filed with the court. A court rule requires that the settlement form be printed and signed by both parties before you submit your e-filing. You must submit your e-filing at least
10 days before your hearing to have time to e-file. If your e-filing is not accepted before your hearing, you must attend your hearing. Bring your settlement or dismissal form and your evidence with you.

Models of Online Settlements

Advantages of Mediation

Where the goal is to maintain or keep relationship with the client or customer mediation is used as –

mediator does not impose a solution
heard by a neutral person
Opportunity for parties to discuss problem or issues
parties are more likely to abide by an agreement they mutually draft

Virtual Magistrate and Dispute Resolution

Virtualmagistrate.org is an ODR service provider for the dispute that arises from online activity.

Party files its complaint with Virtualmagistrate.org

Virtualmagistrate.org contacts the other parties

Other party agrees to online arbitration

The party answers to the complaint electronically

Virtualmagistrate.org assigns an arbitrator

Arbitrator contacts both parties online requesting more information

Resolution of the dispute within 72 hrs of filing

Smart settle Process

The smart settle process goes through six phases-

Phase I

Two or more parties wish to negotiate an agreement about certain matters.
Parties may engage a single Smartsettle facilitator to serve both of them or each have their own private facilitator

Phase II

A Smartsettle facilitator sets up the case online and give access codes to each party.
Facilitator helps parties work together to discuss their interests- framework agreement made with unresolved issues

Phase III

Bargaining ranges are created with optimistic values from each party
Facilitator works independently with each party to elicit their confidential preferences

Phase IV

Parties exchange information (may include telephone/ face to face meetings) and offer visible or invisible concessions.
Smartsettle generates suggestions based on party preferences and concessions.
Equity is achieved when parties reach a tentative solution by agreeing on the same package.

Phase V

Preference representations are refined with the help from the facilitator
Optimization is used to generate improvements to the current tentative solution.

Phase VI

When any party wishes to end the negotiation, the framework for agreement is filed out with the current solution and signrd by all parties

Challenges in ensuring Online Dispute Resolution

Step 1: Log in to the GST portal.

Digital literacy - ODR requires a basic level of digital literacy as a prerequisite. In India, digital literacy often varies across age, ethnicity and geography. This digital divide needs to be addressed to ensure that ODR is adopted by society at large and not remain limited to urban areas

Digital infrastructure - A broad base adoption of ODR will require essential technology infrastructure across the country

Lack of trust in ODR services - A lot of people in the country do not trust the emerging technology which is a major challenge for the people of India

Privacy and confidentiality concerns- Greater integration of technology and reduced face to face interactions create new challenges for privacy and confidentiality, especially in dispute resolution

Cumbersome and often expensive - While arbitration was intended as an alternative to going to court for certain kinds of disputes, that mechanism itself has become cumbersome and often expensive.

Lack of enough arbitrators - Lack of enough arbitrators and building trust among consumers.

Requirement of consent of both parties

Legal recognition to ODR Clause- B2B Contracts- EU View

Maintaining standards and quality

Accountability and impartiality of neutrals and arbitrators

Confidentiality of information gathered during the arbitration process

Lack of homogeneous cyber laws-core principles same- UNCITRAL Model law of e-commerce

Will national courts recognize awards rendered online

For the purpose of statutes and treaties such as the New York convention where an online arbitration takes place and where will the award have been made

How does one ensure the authenticity and integrety of the documents, electronically

For the purpose of statutes and treaties such as the New York convention where an online arbitration takes place and where will the award have been made

Lack of personal interaction may reduce chances of settlement

Differences in language and culture

Solutions to ODR hurdles

Need for an analogous ODR law

There needs to be a fundamental change in the mindset to separate the idea of justice from the place called, court.

Multi-stakeholder exercises need to be undertaken to help achieve this in a sustainable, efficient and collaborative manner for the transformation of justice delivery across various facets.

The future will be a hybrid model that combines the best of the real and the virtual world. People need to re-imagine the whole process of justice delivery to work in the hybrid system.

Private ODR and ADR providers need to be added in the system to ensure that online resolution can reach different industries, locations and parts of the country and also support the public institutions.

Making ODR or ADR voluntary will defeat the purpose so it should be made mandatory (for specified categories) and it should cover about three sessions so that parties don’t feel that it’s a mere formality.

More recognition should be given to the online redressal processes so that its idea reaches people and they can use these online processes.

In European Union, the e-commerce Directive, provides in article 17 that in case if an e- dispute , the member states are required to ensure that the parties are not hindered from using the ADR Process for dispute resolution 'including appropriate electronic means. Some harmonization is in place - UNCITRAL Model law of e-commerce and e-signatures

Use of encryption and other security tools- The ellectronic court houses uses multiple security layers including sophisticated server, complex password and software which backs up complete data of its servers and stores information submitted by the parties in a protected environment. Such technical infrastructure is required to alleviate any concerns- a breach of privacy, confidentiality in the ODR process.

Many para legal rights such as money back guarantee and buyer protection clauses and authentication seals are becoming popular on most e-commerce websites to generate trust.

ODR reduces acrimony- If personal interactions are not there there will be no disadvantage

Differences in language and culture can be overcomed by the use of translators.

Overcoming Enforcement challenges

The adoption of ODR comes with its own set of challenges. Keeping in mind a vast population, there is a gap in the digital literacy in the country. In order to achieve the full implementation of ODR, the gap needs to be reduced. Similarly, there are concerns regarding the lack of digital infrastructure, which includes access to computers, smart phones and medium to high bandwidth internet connection for at least the length of time it takes to conduct hearings. Moreover, there is a lack of awareness regarding the ODR.

The Committee, hence, has provided recommendations in order to curb down the challenges which pose a threat in implementation of ODR. It has become necessary that the regulatory model adopted by India protect the rights of the end users while ensuring that such regulation does not curtail innovation. The report suggests adoption of light touch regulatory model that uses both, legislative and non-legislative tools. The existing legislation is required to be amended to encompass the needs of ODR.

The recent times have seen the rise in the trend of the pre-litigation mediation. One of the keys to implement pre-litigation mediation can be adoption of opt-out model of compulsory or mandatory pre-litigation mediation, as followed in Italy and other jurisdictions. What needs to be taken care of is that adoption of such models has also resulted in barrier in access to courts as happened in Romania. Hence, a carefully woven model needs to be adopted to cater to the needs of India's judicial system.Additionally, an ideal set of standards can be introduced that can be adopted by the stakeholders as voluntary principles. These principles can govern the technology as well as the design of ODR platforms and ethical obligations for ODR Centres and Neutrals.

ODR has been catalyst in improving the ease of doing businesses in other countries. For example, in European Union, the merchants are mandated to inform the customers regarding the availability of ODR. This helps in more stringent enforcement of contracts thereby improving the ease of doing business in the country as it brings in more investment in the country.

ODR has the potential to raise equity, fairness, access in the dispute resolution ecosystem in India.
The convenience brought by ODR has been exhibited by e-Lok Adalats conducted in several states, where disputes were resolved simply over Whats App audio/video calls.
Supply-side capabilities could also be enhanced through a relatively large and competent services pool for adjudication and representation.
ODR has the potential to be an effective alternative that utilizes technology to bridge barriers and access in resolution.
Through facilitating low cost, technology-augmented, linguistically- friendly and incentivized dispute avoidance, containment and resolution; ODR could enhance justice delivery to all.
Parties to mediation conditionally agree that mediation will convert to arbitration. Where an agreement is reached, the mediator can render an arbitral award consistent with the agreement.
Parties put into escrow each party’s consideration involved in dispute. The escrow agent can distribute the assets in accordance with the outcome of the ODR process.
Parties to a settlement agreement provide in the agreement that in case of non-compliance, the parties agree to have an arbitrator appointed to draft an arbitral award according to the terms of the settlement agreement.

Conclusion

Arbitration has emerged as an appropriate forum for effectively resolving misunderstandings between the parties and amicably giving an outcome in a way that benefits both parties. The Act has been subject to a number of reforms and amendments. It has developed multifold and is still continuing to adapt to the changing needs of the public at large.There is a serious need for citizens to be aware of alternate ways of resolving disputes and their benefits. Many people are financially exploited and do not receive adequate relief via litigation. It can be seen as a respite from the pendency of cases and is free from any sort of bias or advantage given to one party.

Discharge of an agreement means fulfillment of all obligations and terms /conditions of the same contract through performance. In case of discharge of contract one party to the contract tender discharge voucher/ agreement or no dues certificate to the other party and confirm that all due or full and final amount has been received by him from other party on performance of the agreement. There is no dispute in case of proper discharge of a contract, but in some cases a party may proof that discharge agreement /voucher has been received from him on the basis of fraud /misrepresentation / undue influence or by coercion, then he /she can raise dispute and same will be arbitral dispute. A Contract may also be performed on the basis of “ Doctrine of Accord and Satisfaction” in which a contract is substituted with another new contract with the consent of both parties under original contract or terms and conditions of Original Contract may be modified with the consent of parties and performed.

The Online Dispute Resolution is in its infancy stage in India. With the E-Commerce industry growing in India rapidly, the numbers of disputes related to online transactions are increasing at faster rate. The Department of Consumer Affairs has rolled out Online Consumer Dispute Resolution Platform to address this issue.

Frequently Asked Questions

1. When can a contract be discharged or terminated?
According to the Indian Contract act 1872, a contract can be discharged or terminated by the parties involved by giving lawful reasons like frustration, recession, ending the contract by giving prior notice, or on completion. Such termination may take place by the mutual consent of the parties or law.
2. How is a contract discharged by frustration?
Sometimes after the contract has been made by both the parties, something occurs beyond the control of the parties and that makes the performance of the contract either impossible or considerably different from what parties agree upon. This is known as discharge of contract by frustration.
3. How are contracts discharged by subsequent agreements?
After the construct has been made by the parties, they may agree to discharge the contract or change their contractual obligation by negotiating another agreement. The parties can discharge their original contract in following ways:
- Novation- The term novation means the substitution of the new contract by the original one. The new agreement may be with the same parties or with the new parties. For a contract to be valid and effective, the consent of all the parties including the new one if any is necessary. Moreover, the second party must be capable of enforcement of law, the consideration for which is the exchange of promise not to carry out the original contract.
- Alteration- This refers to change in one or more terms of a contract with the consent of all the parties entered in the contract. Alteration leads to formation of new contracts but the parties to it remain the same.
- Remission- This means the acceptance by the promisee of a lesser sum than what was mentioned in the contract, or a lesser fulfillment of the promise made. According to the section 63, every promise may:
  (i). May remit or give up with it
  (ii). Extend the performance time
  (iii). Accept any other satisfaction rather than performance
- Recession The term recession refers to cancellation of all or some of the material terms of the contract. If the parties entered into the contract, mutually agreed to do so, then in such case the respective contractual agreement of the parties gets terminated.
- Waiver The term waiver means abandonment of rights. When one party deliberately abandons his right under the contract, the other party is released of his obligations, else binding upon it.
4. What is the type of Breach of contracts?
- Anticipatory breach the phenomenon of anticipatory breach involves the violating obligation done at a time of contact from one person to another. If a person agreed to deliver certain tangible goods to another person at a specific time of period then he refused to perform his duty and supplied to another part without considering the contract. This is called anticipatory.
- Actual Breach: - actual breach of contract is a case that refers to the failure of the seller to perform his contractual obligations at the specified time. If the seller was unable to deliver goods at the given time then it is called the actual breach of contract.
5. Explain the Discharge of Contract by the Operation of Law?
If a contract is to be issued by operation of law, it means a change in daily activities leads to the breach of contract. It is majorly observed in corporations. We have three different reasons to discharge the contract by the operation of law.
They are by alteration of a written document which fails to perform the obligations in the specific time, by merging the company happens when a big company equals or take over the existing company and due to insolvency means the lack of financial Capital leads to the bankruptcy which results in a discharge of a contract.
6. Describe the Breach of Contract by Condition and by Warranty?
When the discharge of a contract occurs due to an actual breach, it has two subsidiary cases, namely breach by condition, breach by warranty. Then one of the parties is in injured condition; he fails to follow the contractual obligations, then it is referred to as a breach of contract by the condition.
Compared to the bridge by condition, breach by warranty is a minor thing used to terminate the contract in terms of non-material things and their damages if anyone fails to continue the contract perfectly.
7. What is arbitration?
In arbitration, a neutral third party serves as a judge who is responsible for resolving the dispute.The arbitrator listens as each side argues its case and presents relevant evidence, then renders a binding decision.The disputants can negotiate virtually any aspect of the arbitration process, including whether lawyers will be present at the time and which standards of evidence will be used.Arbitrators hand down decisions that are usually confidential and that cannot be appealed.Like mediation, arbitration tends to be much less expensive than litigation.
Alternative Dispute Resolution which is also referred to as appropriate or amicable dispute resolution is another way of resolving disputes between parties without taking them to the courts. While courts decide the outcome in a case, ADR resolves the dispute effectively, efficiently, and amicably. Arbitration is one of the prominent forms of ADR.It is commonly used in disputes that are commercial in nature. Parties who have inserted an arbitration clause in the contract can refer the dispute to arbitration. A significant difference of arbitration as compared to mediation is that one of the parties cannot withdraw from arbitration one-sidedly. The parties can select the venue, the language in which the proceedings take place as well as the applicable law so as to make certain that no party gets an undue advantage.
8. Who goes first in arbitration?
The order of proceeding is determined by the arbitrator. Usually the party with the burden of proof will proceed first to call witnesses and give closing argument. In discipline and discharge cases, the employer will proceed first and present the reasons to justify the discipline.
9. Is arbitration better than going to court?
Arbitration typically provides a speedier resolution than proceeding in court. The limited right to appeal arbitration awards typically eliminates an appeal process that can delay finality of the adjudication.
10. What is the next step after arbitration?
Sometime after arbitration, the arbitrator will decide who won. This decision must be in writing. The decision is final and binding so the parties are expected to obey the arbitrator's decision. If they don't, they can be sued.

11. Are witnesses allowed in arbitration?
If the case proceeds to an in-person hearing, the arbitrator may allow the parties to present witnesses. If the parties will have witnesses, they will need to exchange a list of the witnesses who will appear prior to the hearing.
12. What happens if you lose in arbitration?
If the party that lost the arbitration either chooses to accept the award or is also unsuccessful in the challenge, the award will need to be enforced. In many cases, the parties that agreed to arbitration will just follow the award and pay the money that was required.
13. What are disadvantages of arbitration?
There are also some disadvantages of arbitration to consider: No Appeals: The arbitration decision is final. There is no formal appeals process available. Even if one party feels that the outcome was unfair, unjust, or biased, they cannot appeal it.
14. Do I need a lawyer for arbitration?
No, you do not technically need a lawyer for arbitration. It is, however, advisable to take legal advice as, depending on the complexity of the case, you might not be aware of all the issues at play. Resolving disputes can be quite adversarial in nature, and the outcome of arbitration is binding.
15. Who enforces arbitration?
The proper method for seeking to enforce an arbitration award under the Federal Act is to file a motion for confirmation in the appropriate court.That court must grant the motion and enter judgment on the confirmation order unless the opposing party files a timely motion to vacate, modify, or correct the award.
16. Is arbitration considered a lawsuit?
The main difference between arbitration and litigation law is that court is involved in the case of litigation, as it is a lawsuit, whereas, in arbitration, a settlement between the parties is done outside of court.Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
17. Is an arbitrator a judicial officer?
Arbitrators respect the important role of judges in our legal system and most arbitrators do not consider themselves to be private judges. Rather than working for the government, arbitrators work to serve the parties by providing specialized, business practical legal expertise and private decision-making.
18. Can you object in arbitration?
An objection based on relevance may be stated simply as “that matter is not before the Arbitrator today.” Stating objections in such terms may also help you when you know that what is being said is objectionable, but you cannot recall the legal prohibition or specific rule that is applicable.
19. What evidence is allowed in arbitration?
The arbitrator may receive any oral or documentary evidence, except that irrelevant, immaterial, unduly repetitious, or privileged evidence may be excluded by the arbitrator. The arbitrator shall interpret and apply relevant statutory and regulatory requirements, legal precedents, and policy directives.
20. Who decides the cost of arbitration?
Under Section 31, unless otherwise agreed by the parties, the cost of an Arbitrator shall be fixed by the Arbitral Tribunal.

21. Why would you choose arbitration?
Arbitration is generally considered a more efficient process than litigation because it is quicker, less expensive, and provides greater flexibility of process and procedure. The parties often select the arbitrator and exercise control over certain aspects of the arbitration procedure.
22. Can you go to court after arbitration?
If your contract contains an arbitration clause, it might be compulsory to resolve your dispute through arbitration rather than going to court. If the clause makes arbitration compulsory and you attempt to take the case to court, the other party can apply to the court to have the proceedings stayed.
23. Is arbitration mandatory?
Arbitration can be voluntary or mandatory. Voluntary arbitration is preferred as it preserves your legal rights. Mandatory arbitration, on the other hand, compels you to first submit to the arbitration process as a condition of buying or using a product or service before you take your case to court.
24. Is there cross examination in arbitration?
While arbitrators will typically permit a short (e.g., 10-15 minutes), direct examination of a witness who is called for cross, the main focus of hearings in international arbitration is on cross- and redirect examination.
25. Are arbitration decisions public?
Generally speaking arbitration decisions are for the most part private and confidential and they are published only if the parties and the arbitrator agree on making the decision available. There are a variety of commercially available services which publish those decisions.
26. Is arbitration better than mediation?
In other situations—particularly those with higher stakes or more complex disagreements—arbitration is preferred over mediation. Arbitration is a more formal dispute resolution process than mediation. Therefore, this practice is used when a legal matter has escalated to a more serious issue.
27. What is the difference between an arbitrator and a mediator?
Arbitrator listens to facts and evidence and renders an award. Mediator helps the parties define and understand the issues and each side's interests. Parties present case, testify under oath.
28. What is the difference between arbiter and arbitrator?
More specifically, the difference between an arbiter and an arbitrator is subtle– An arbiter can determine the outcome for any type or kind of dispute, while arbitrators can only decide disputes arising in the arbitration format, which has its own specific rules and procedures.
29. Can we bring lawyers to represent our case in mediation?
Yes, you can. In fact, mediation would become more successful and credible when the parties’ advocates or advisers are knowledgeable and skilled in the mediation process. Trained mediation advocates can bring value addition to the process and outcome. In fact, the changing role of a lawyer as a dispute resolution specialist, bringing in specialist representation in mediation has raised the standard, credibility and acceptance of mediation world over.
30. How reliable and professional are the mediators?
Mediation is said to be as good as the Mediator! IIAM Mediators are certified under IIAM Mediator Accreditation System (MAS) and through the Qualifying Assessment Programs (QAP) of APCAM norms. They are bound by the Code of Conduct and Ethical Standards prescribed by APCAM. IIAM was the first institution in India approved by the IMI to certify mediators at global standards. Since IIAM commenced APCAM Certification, QAP for IMI certification was discontinued. The Mediator training program of IIAM follows one of the best curriculums available globally, certified by APCAM and equips a person to become an efficient professional mediator.
31. How can I believe a mediator and if I have any complaint, can I change the mediator?
Trust underpins the mediation process. If the parties do not trust a mediator’s integrity in terms of competence diligence, neutrality, independence, impartiality, fairness and the ability to respect confidences, mediation is unlikely to succeed. The IIAM Mediators’ Code of Professional Conduct provides users of mediation services with a concise statement of the ethical standards they can expect from Mediators who choose to adopt its terms and sets standards that they can be expected to meet. Users who believe the standards established in this Code have not been met may prefer a complaint to IIAM on the Mediators’ conduct Assessment or can request for a change of mediator. The Rules have been made as per the guidelines of APCAM. Details can be seen in the IIAM Mediation Rules.
32. Can the mediator be taken as a witness in any other proceedings?
No, the mediator cannot be cited as a witness in any other proceedings. The Arbitration and Conciliation Act, specifically debars such actions. Section 80 – Role of conciliator in other proceedings. Unless otherwise agreed by the parties:
- The conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings;
- The conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

33. What if after I initiate mediation, the other party does not turn up?
Mediation is a voluntary and non-binding process and the parties are free not to attend or leave the process at any stage, if that party is not happy with the process or outcome. But as per our experience, every invitation to attend a mediation process is normally accepted by the other party.

But even of the other party does not turn up, it is an advantage to initiate mediation first, as after the completion of mediation and on receipt of the Mediator’s Completion Report, IIAM will prepare the Mediation Status Report or Non-starter Certificate and this is given to the Parties. This is given even if the dispute is not resolved or the mediation could not be held due to the absence of the opposite Party. This is a valuable document when the initiating party approaches the court.
34. In mediation, if the other party does no turn up, will my fee be refunded?
While registering a dispute for mediation, the Initiating Party at the time of filing of Request has to pay the registration fee as per the relevant fee schedule, which is non-refundable. Once the mediator is appointed, the initiating party has to make a deposit for 2 sessions of mediator fee and administrative fee, as per the relevant fee schedule. If the other side refuses mediation prior to the first sitting date, the entire fee will be refunded. If the mediation is abandoned due the absence of the opposite party on the first date or due to non-agreement in the first session itself, the balance amount will be refunded to the initiating party.
35. How can I initiate mediation if there is no mediation centre near me?
You can initiate mediation through a Centre near you or online by using the “Peacegate” Application, the digital platform of IIAM, which can be downloaded from www.peacegate. in. Through the App you can not only initiate mediation, but also search for the nearby mediation centres and also search for mediators or mediation advisers/ consultants.
36. What is Deal Mediation? And how is it different from regular Negotiation?
Deal-mediation, which is also known as Transactional-mediation or Assisted deal-making, is a process, whereby parties attempt to make or conclude deals with the assistance of a mediator, who is trained in effective negotiation. Unlike a regular negotiation where parties would have inhibitions to reveal many confidential information, in deal-mediation, the parties can comfortably discuss with the mediator, as the mediator is bound by confidentiality and can help the parties to navigate discussions in a better manner to conclude the best business deals.
37. What is Project Mediation? What are the benefits?
Project-Mediation is a method of Dispute Management, by which the parties to a contract can appoint a Project Mediator and an exclusive hotline hub is created in the Peacegate App, whereby the parties can get the service of a mediator throughout the period of the contract, whenever the parties' own discussions cannot resolve a particular dispute or difference or when the parties need to find a different perspective to an issue requiring a joint solution. This will afford the opportunity to work together, in a more collaborative and mutually beneficial environment and oversee that the contract proceeds smoothly. When the parties invoke Project Mediation under the IIAM Rules, it is agreed by the parties that they shall not disrupt the services or contractual obligations under the contract and shall continue with the terms of the contract.
38. What is IIAM Community Mediation?
IIAM Community Mediation Service with the motto; “Resolving conflicts; promoting harmony” is intended to contribute to the happiness and harmony of the community. The mission is to bring justice to the doorsteps of the people. People would get a platform near home to settle their cases without the trappings of a court. In Community mediation, mediation is provided by trained community mediators who represent the community. Community mediation mechanisms are viewed as an opportunity for citizens to participate in the prevention and early intervention of conflicts as an alternative to institutional mechanisms.
IIAM Community Mediation Service is provided through People’s Mediation Centres, which is a concept of people’s movement. The mediation done in PMC’s is governed by the IIAM Mediation Rules and the fee schedule is as per the IIAM CMS Fee Schedule.
39. What is the IIAM Pledge to Mediate? What are its benefits?
The “Pledge to Mediate” is a simple commitment; whereby you would consider mediation as the first option should a dispute arise in your life, recognizing that resolving disputes amicably and voluntarily is an expression of civil maturity. It helps a positive social transition by making the society just, equal and fair. We need to understand that if we can create disputes, we can also resolve them! We invite you to be part of the revolution, because we want to do this together and make this world a better and more honest place. The joy of creating strong families and healthy communities can come from joining hearts, souls and hands. Take the Pledge and join the exclusive community.
Recognizing that the empowerment to resolve disputes amicably and voluntarily is an expression of civil maturity, the India International ADR Association (IIADRA) in association with IIAM has formulated “Pledge to Mediate” among companies and organizations as part of promoting best governance and speedy justice. By signing the Pledge, which is cost-free and not legally binding, the signatory makes a public, policy statement indicating its commitment to the promotion of amicable settlement of disputes. This portrays a signal to potential business partners and customers that the signatory is a mature business entity which do not drag them to unnecessary litigation and resolve disputes amicably and care for strengthened relationships and continued business opportunities.
40. What is PEACEGATE App?
PEACEGATE is a first of its kind App launched by IIAM. It is a tool meant to give empowerment, self-sufficiency and independence in the way you handle disputes. It is a single point platform where you can negotiate or mediate a dispute. You can also sign the Pledge to Mediate, open Time Bank Account, specify the type of services you can offer, request services that you need, manage the Time account, redeem your time etc. Peacegate App will also guide the mediators to conduct mediation as per the approved process and helps the mediator to issue reports and certificates.
41. What is PEACEGATE Time Bank Service?
The Peacegate Time Banking is a reciprocity-based service system in which hours are credited in the Time Account of the holder. Once you sign the Pledge to Mediate, you can open your Time Bank Account and mention the services you would like to offer under this concept. For eg., if you are a Teacher, Musician, Yoga Instructor, Health professional, or Mediator or for that matter any person, you can offer your services free and the time that you spend for giving those services will be credited in your Time Account. This will carry interest too @12% per annum. Anytime you can redeem your time credit for availing any of these services in return free – for you, your friends, relatives or others for whom you would like to get such service. And the services will be kept on adding! And in case you don’t redeem your points. You can transfer your Peacegate Time Bank Account to your nominee. It is much more worth than the money that you transfer to your children. You have honourably earned this by the services that you have offered! Peacegate will keep track of the time credits and debits using its Time Bank software.
42. What are the training programs imparted by IIAM?
The training programs at IIAM offer the opportunity to learn what is necessary to become an effective negotiator, a skilful mediator, a talented mediation adviser/advocate, an efficient arbitrator or an effective arbitration lawyer. To cater the requirements of various segments of people, IIAM conducts various training programs, to suite their convenience and need.

Professional Mediator Training Program is a 50 hours, 6-days program, which helps you to become a professional mediator. Certificate in Mediation Advocacy is a 3-days program which makes you a skilled mediation advocate. Professional Certificate in Commercial Arbitration is a 3-days program which provides a solid foundation to represent in Commercial Arbitration as an Arbitrator or Arbitration Lawyer. Certificate in Business Negotiation is a 3-Days program which provides a thorough understanding of negotiation process and power.

The training programs provide participants with the opportunity to practice this structured dispute resolution process through a series of interactive presentations, role play simulations, real life case studies and discussion groups.IIAM also provide Distance-Ed programs, which offer the facility to study ADR in a flexible way and fit it around your lifestyle. You can enroll at any time of year and you study entirely at your own pace, submitting your assignments when you are ready.
43. Are the training programs of IIAM affiliated with any University?
No. IIAM does not offer any course as such, the training programs on arbitration, mediation and negotiation imparted by IIAM is meant for giving hands-on training and experience to make you a competitive ADR professional.IIAM conducts its mediation and arbitration training programs, which are certified by APCAM and enable the participants to get certified under APCAM Accreditation norms, entitling them to be enlisted in all the APCAM centres available in more than 10 countries across the Asia Pacific region.We have had an amazing experience since we began our various training programs on ADR. Being one of the pioneer institutions in India training professionals on mediation, arbitration and negotiation, we have received loads of testimonials, feedback and suggestions.
44. What is ODR?
Online Dispute Resolution is a voluntary confidential process through which people with a dispute communicate online to resolve a conflict. They may request a trained, impartial third person called a neutral ODR Facilitator. The facilitator can help the parties to define issues, explore options, and reach a solution that both parties are willing to accept.
- ODR is not a court hearing.
- ODR is not a process to determine guilt or innocence.
With ODR, individuals have the power to develop solutions that meet the expectations and needs of both parties.

45. Is ODR confidential?
Yes. When each party creates an account, they agree that all communication through the site is confidential. Also, communication during dispute resolution such as ODR is protected as confidential by the law.
46. What does the neutral ODR Facilitator do?
The neutral ODR Facilitator is a highly skilled person who assists both disputing parties to resolve their differences. The facilitator will consider both sides of the story and ask questions about what happened in order to get the facts. The facilitator’s goal is to help all parties with finding a solution to their problem. Neutral ODR Facilitators do not take sides and will not give legal advice. The facilitator does not make decisions for the disputing parties. The facilitator may offer suggestions, options, choices and alternatives but facilitator may offer suggestions, options, choices and alternatives but will not give his or her personal opinions. The facilitator acts as a catalyst, enabling agreement between the parties and assisting in developing a mutually acceptable written agreement specifically outlining the terms of the resolution. Because all decisions are made by the participants, the parties retain ultimate control of the outcome.
47. When are ODR Facilitators available?
ODR Facilitators are available Monday-Friday, 8:00am- 5:00pm. However, you can use your case negotiation page to communicate with your ODR Facilitator at any time.
48. Does ODR work?
ODR is a type of alternative dispute resolution. Alternative dispute resolution is uniquely designed to handle most civil disputes. It recognizes people as individuals and that every dispute brings unique characteristics and concerns. The flexibility of the process allows both parties to explore all of the issues, including underlying sources of conflict, complex issues, or issues where there is a high level of emotion attached. Alternative dispute resolution allows parties to consider a wider range of possible outcomes than is often available through other legal processes. Any solution is possible with alternative dispute resolution. Performance under alternative dispute resolution agreements is generally high because no agreement is written unless the parties agree that the solutions are viable for everyone.
49. May I have witnesses, attorneys or other third parties participate?
The parties agree when they create an account that all communication through the site is confidential. Only the parties may participate.
50. If we don’t reach an agreement, do I need to bring my evidence to the hearing?
Yes. When you upload evidence to this site it is only for communication with the other party. There is no way to submit your evidence to the court through this site. You must bring your evidence with you to the hearing
51. What if the other party doesn’t follow through with the settlement agreement?
If the other party doesn’t pay you, you can file the Declaration of Default (L-1152) to enter a judgment so that you can collect. You can type into the form and print it or print it and fill it out by hand. Be sure to sign and date the form. To file it, you can mail it to the court (if you have time) or bring it to the court. If you mail it, include the original plus two copies and a self-addressed and stamped envelope for the clerk to mail you back your filed copy.
52. Does UNCITRAL offer legal advice in specific disputes, administer arbitrations or recommend legal practitioners?
No. UNCITRAL's mandate does not extend to participation in either public or private disputes. Consequently, UNCITRAL does not offer legal advice in specific disputes, and, in particular, does not nominate arbitrators, administer arbitrations, certify arbitral authorities, or recommend any legal practitioner for legal assistance.
53. What does "arbitration under the UNCITRAL rules" mean?
A reference in a dispute settlement clause to the UNCITRAL Arbitration Rules or (in a frequent, but inaccurate formulation) to "UNCITRAL arbitration" or any other provision to the same effect means that the parties agree that an existing or a future dispute should be settled in arbitral proceedings conducted in accordance with the UNCITRAL Arbitration Rules.
Although UNCITRAL and its Secretariat have prepared legislative and contractual provisions and rules relating to international commercial arbitration and conciliation, it is not within UNCITRAL's mandate, as set out by the General Assembly, to become involved in individual cases. UNCITRAL and its Secretariat do not act as an arbitral tribunal, administer arbitration proceedings, or otherwise perform any function related to individual arbitration proceedings, or any other system of public or private dispute settlement.
54. I am involved in a dispute with a company and our contract provides for arbitration pursuant to the UNCITRAL Arbitration Rules. Does UNCITRAL provide assistance in the dispute?
Although UNCITRAL prepared the UNCITRAL Arbitration Rules as well as other texts on the subject of arbitration, it is beyond its mandate, and is indeed inappropriate for UNCITRAL, the Secretariat, or individual legal officers to offer advice regarding the interpretation of provisions of UNCITRAL texts or to otherwise offer legal advice. In particular, UNCITRAL does not administer arbitration or conciliation proceedings, nor does it provide services to public entities or private parties in connection with dispute settlement proceedings. Furthermore, UNCITRAL does not keep any list of potential arbitrators or conciliators, nor act as appointing authority under the UNCITRAL arbitration and conciliation rules.
55. Who may use the UNCITRAL Arbitration Rules?
Parties to a contract may agree to use the UNCITRAL Arbitration Rules to guide the resolution of disputes arising between them.Nothing in the Rules limits their use to nationals of States which are Member States of the Commission.
56. Can UNCITRAL provide an authoritative interpretation of domestic law?
No. Neither UNCITRAL nor its Secretariat can assist individuals or entities in the interpretation of provisions of national law, nor can it provide legal advice to individuals or entities in connection with particular cases or disputes.
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57. What is the difference between the UNCITRAL Model Law on International Commercial Arbitration (1985) and the UNCITRAL Arbitration Rules?
The UNCITRAL Model Law provides a pattern that law-makers in national governments can adopt as part of their domestic legislation on arbitration. The UNCITRAL Arbitration Rules, on the other hand, are selected by parties either as part of their contract or after a dispute arises; to govern the conduct of arbitration intended to resolve a dispute or disputes between themselves. Put simply, the Model Law is directed at States, while the Arbitration Rules are directed at potential (or actual) parties to a dispute.
58. How do I know if I have to go to court or invoke arbitration for a dispute?
If the parties have agreed that if there is any dispute the same shall be resolved by arbitration, kindly check the contract for an arbitration clause therein. If there is no such clause you may have to initiate legal action in court at appropriate jurisdiction. You may still request the opponent to enter into a separate arbitration agreement.
59. Is the arbitration agreement valid even through the main contract is void?
An arbitration agreement shall exist totally independently of the contract. Any modification, extension or rescission of the contract, or invalidity or unenforceability of the contract shall not result in the invalidity of the arbitration agreement. - The consideration of whether the arbitration agreement is valid will be conducted by the arbitral tribunal and the competent court.
60. What can be done if one party ignores the arbitration agreement and commences court proceedings?
If the court proceedings are commenced, the court will refuse to accept jurisdiction, unless the arbitration agreement is determined by the court as invalid or incapable of being performed.
61. What is a tribunal?
Tribunal is another way of referring to the arbitrator (or arbitrators) appointed to decide a dispute. Where three or more arbitrators are appointed, the arbitrator in charge of the panel of arbitrators, and often the day-to-day running of the arbitration, is called the chair or presiding arbitrator.
62. Can the tribunals decision (an 'award') be appealed?
Generally, it is quite hard to appeal (or 'challenge') a tribunals award. Usually, a challenge can only be made where the proper legal processes for the arbitration were not followed - for example, if one party was not given an opportunity to present their arguments. As a result, in arbitration an award is almost always the final word in a matter.
63. What makes arbitration different from mediation and other forms of alternative dispute resolution?
Alternative dispute resolution, or ADR, is what lawyers call a variety of different methods for resolving disputes that are non-binding - meaning that the parties are not required to comply with the outcomes (unlike arbitration or litigation). Mediation is perhaps the most common form of ADR. It involves a 'mediator' sitting with the parties to help them to work together and resolve the dispute themselves. A mediator does not impose an outcome like an arbitrator or a judge does. Instead, the mediator helps the parties to agree an outcome. Often, parties will try to use ADR to avoid needing to go to arbitration or litigation. If ADR doesn’t work because the parties can’t agree on a solution to the dispute, they will then go to arbitration or to court, and have an arbitrator or judge resolve the dispute for them.
64. What makes arbitration different from going to court?
Arbitration and going to court (which is sometimes called litigation) are quite similar. They allow parties to resolve their disputes, and result in a binding decision that the parties are required by law to obey. There are, however, important differences between arbitration and litigation, which often make arbitration a better choice for resolving a dispute: Arbitration is more flexible: A court will generally have very rigid processes which need to be followed in every case. By contrast, the process in arbitration can be adapted to suit the case, as explained above. Arbitration makes it easier to obtain money kept overseas: An award (the written decision in arbitration) or a judgment (the written decision in litigation) will often require one party to pay the other party a sum of money. However, the losing party will sometimes still refuse to pay, so the winning party will need to go to court to enforce the award or judgment and force them to pay. If a winning party needs to enforce in a foreign country to obtain assets that the losing party is keeping in that country, it is usually easier to do so with an award than with a judgment. Enforcing a judgment in a foreign country depends on the particular arrangements agreed between the countries involved, such as the comprehensive arrangements within the European Union. By contrast, almost every country in the world has agreed to recognize awards made by arbitrators and help to enforce them. Because it is so easy to enforce an award all over the world, arbitration is overwhelmingly popular with anyone doing business with someone based in a different country. Awards are almost always final: A judgment can usually be appealed to a higher court (and sometimes again and again to even higher courts) for a variety of reasons. As set out below, an award can only be challenged in limited circumstances. This leads to much more certainty for parties, and a more straightforward and faster process.
65. What is international commercial arbitration?
Arbitration is a form of dispute resolution that is widely-used alternative to traditional court litigation. For reasons that will be explained, it is particularly useful for the management of disputes arising in connection with commercial agreements and transactions involving parties from more than one country. Arbitration is based entirely on the consent of the parties, meaning that before a party can initiate arbitral proceedings, the disputing parties must have agreed to take their dispute to arbitration. Such agreement is usually found in the form of a dispute resolution clause in a commercial contract between the parties, but it may take the form of an agreement to arbitrate a dispute that has already arisen.

By entering into an arbitration clause or agreement, the parties agree that any disputes within the scope of that agreement that arise will not be heard by state courts, but rather will by an arbitral tribunal of private individuals, usually one or three in number, who act as arbitrators. The arbitration process leads to an award being issued by the arbitral tribunal. The award, which is similar to a court judgment, is final and binding on the parties and can only be set aside on certain exceptional grounds. The arbitral award typically includes findings of fact and conclusions of law and, under the arbitration laws of most jurisdictions, may order any form of remedy or relief that could have been ordered by a court. The arbitral process itself is governed by the law of the place chosen as the situs or seat of arbitration, which need not be the law governing the contract in dispute, and by arbitral rules chosen by the parties. It is usually administered by an arbitral institution. Arbitrators appointed in accordance with the arbitral rules chosen by the parties will hear the dispute in much the same way a judge would in court proceedings but in a more informal and private setting.
66. What is the duty of the arbitrators?
Arbitrators must respect the agreement of the parties if it does not breach prohibitions and is not contrary to social morals. Arbitrators must be independent, objective and impartial and must comply with the provisions of law. Parties in dispute shall have equal rights and obligations.
67. Is arbitration clause important in an agreement or should I accept as is when entering into a contract?
Arbitration clause is a very important clause and you should not overlook. When dispute arises, arbitration cost will play a very important role cost also depends upon the seat of arbitration, the tribunal forum, the applicable law for the arbitration and several other factors therefore conceiving and drafting arbitration clause or agreement is really important.

68. Can I seek interim relief from court pending or commencement of arbitration?
Section 9 of the Arbitration and Conciliation Act, 1996 permits interim measures and any party to an arbitration agreement can seek relief by way of an interim application from the Arbitration and Conciliation Act before the court under Section 9 of the commencement of the arbitral proceedings or after the pronouncement of award but before its enforcement.
69. What is the cost of arbitration?
This will depend on several factors such as the institution; tribunal fees; seat of arbitration and solicitors/ lawyers’ fees and expenses.
70. What is the time frame to complete arbitration?
Section 5 of the 2019 Amendment Act inserted sub-section (4) in Section 23 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). By virtue of this insertion, the statement of claim and defense is now required to be completed within a period of six months from the date when the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment. Section 6(a) of the 2019 Amendment Act substituted Section 29A (1) of the Arbitration Act, which, inter alia, now mandates that the award in matters other than international commercial arbitration shall be made by the Arbitral Tribunal within a period of twelve months from the date of completion of pleadings under the newly inserted sub-section (4) of Section 23 of the Arbitration Act. The erstwhile section 29A(1) mandated that an ar the date of entering into reference of the Arbitral Tribunal.bitral award shall be made within 12 months from
71. Who are the arbitrators in arbitration proceedings?
Arbitrators are independent third-party individuals who hear the evidence, apply the law, and decide the outcomes of arbitration disputes.
72. What types of disputes can be resolved in arbitration?
Almost any type of legal dispute can be settled in arbitration, including those arising under commercial contracts. When entering into a contract, the parties can include an arbitration agreement clause providing that some or all of the disputes that arise between the parties will be resolved in arbitration.
73. How to enter into an Arbitration agreement?
An Arbitration agreement may be in the form of Arbitration clause in a contract or in the form of a separate agreement. An Arbitration agreement has to be in writing.agreement has to be in writing.The requirement as to Arbitration agreement being in writing is fulfilled;-
- If the document is signed by the parties
- If the Arbitration is entered into by exchange of letters, telex, telegrams or other means of communication which provide as a record of the agreement; or
- An exchange of statements of claim and defense in which the existence of the agreement is alleged by one party and not denied by the other.
74. How and what number of Arbitrators are to be appointed?
The parties are free to determine the number of arbitrators, provided that such numbers shall not be an even number. Feeling the determination referred to by the parties, the Arbitral Tribunal shall consist of a sole Arbitrator. If the procedure for appointment of Arbitrator or Arbitrators is not agreed, in Arbitration with three arbitrators each party shall appoint an arbitrator and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding Arbitrator. In case a party fails to appoint his Arbitrator within 30 days from the receipt of the request to do so from the other party or the two appointed Arbitrators fail to agree on the third Arbitrator within 30 days from the date of their appointment, the appointment shall be made upon request of a party, by the Chief Justice or any person or institution designated by him. In Arbitration with a sole Arbitrator if the parties fail to agree on the Arbitrator within 30 days from receipt of request by one party from the other party to so agree, the appointment shall be made upon request of the party by the Chief Justice or any person or institution designated by him. This applies in cases where the agreement on the appointment procedure does not provide other means for securing their appointments. The appointment made by the Chief Justice is final.
75. When does the Arbitration commence?
Unless otherwise agreed by the parties, the Arbitration proceedings commence on the date on which a request for the dispute to be referred to Arbitration is received by the respondent.
76. What is the Law applicable in case of Arbitrations within India and in case on International Commercial Arbitration?
In an Arbitration other than an International Commercial Arbitration, the Arbitral Tribunal (Arbitrator/Arbitrators) shall decide the disputes in accordance with the substantive Law for the time being in force in India; In International Commercial Arbitration :-
- the dispute is to be decided in accordance with the Law as agreed by the parties to be applicable to the dispute.
- Such agreed Law or legal system as agreed to be applicable shall be construed unless otherwise expressed, as directly referring to the substantive Law of that country and not to its conflict of Laws rules;
- Failing any agreement as to the Law applicable by the parties, the Arbitrator shall apply the rules of Law it considers to be appropriate, given all the circumstances sur rounding the dispute. In all cases the Arbitrator shall decide in accordance with the terms of the contract and shall take in to accordance with the terms of the contract and shall take in to account the usages of the trade applicable to the transaction.