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Legal Advisory & Representation - Arbitration - National & International |
| Arbitration and Conciliation |
| Arbitration and Conciliation are very popular, age-old, methods of resolving disputes between parties. In India, Arbitration and Conciliation are subject to the provisions of the Arbitration and Conciliation Act, 1996 [ACA]. |
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| Arbitration |
In a commercial agreement if there is any provision for resolution of disputes arising between the parties to the agreement, any party who is aggrieved of any breach of terms of the agreement or omission or commission or infringement of right or failure to perform an obligation may invoke arbitration process.
Unless parties to a dispute choose arbitration as the mode for resolving disputes between them, courts cannot force the parties to go through the arbitration process. Arbitral Award has the force of a decree of a civil court.
No formal qualification is necessary for acting as an arbitrator. However it goes without saying that the arbitrator should have reasonable knowledge of commercial and business matters, contractual obligations, issues involved in breach of contract, remedies against breach of contract.
Before commencing or during or even after completing the arbitration process, it is possible for a claimant to approach a Civil Court for interim relief. [Section 9]
If the Arbitration Agreement fails to state how many Arbitrators should be appointed, parties can constitute an Arbitral Tribunal with a Sole Arbitrator. [Section 10]
If Parties do not concur on the choice of arbitrator and they have not chosen any institutional procedure for appointment of Arbitral Tribunal, the Chief Justices of the high courts or his designate enjoys the power to appoint an arbitrator or arbitrators in relation to domestic arbitrations and the Chief Justice of Supreme Court has powers to appoint Arbitrators when there is no consensus with regard to appointment of Arbitrators in an International Commercial Arbitration. [Section 11]
Where the mandate of arbitrator is terminated, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. Upon termination of the mandate of an arbitrator, a substitute arbitrator shall be appointed in accordance with the same rules as were applicable to the appointment of the original arbitrator. [Section 15]
An Arbitral Tribunal has power to rule its own jurisdiction. [Section 16]
If parties to a dispute have an Arbitration Agreement, Court will be liable to direct them to arbitration. If there is any controversy whether the Arbitrator has resigned or not, a party who is aggrieved of the controversy may approach a Civil Court of appropriate jurisdiction.
The Parties request the Tribunal to record the settlement arrived at between them in the form of an Arbitral Award on agreed terms. In arbitration proceeding, the arbitraltribunal’s award is binding and enforceable and it does not require consent of parties at all. There is no provision for making an appeal against an Arbitral Award which has become final, binding and enforceable. Only on limited grounds, it is possible to apply to Court for setting aside an Arbitral Award.
In Venture Global Engineering, USA v Satyam Computer Services Limited, India, SC held that an international arbitral award made in London under the LCIA Rules and enforced by the District Court, Michigan, USA, could be challenged in India under the Indian Arbitration & Conciliation Act, 1996 (the Act). |
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| Arbitration Agreement |
| An Arbitration Agreement can be in the form of letter correspondence or fax or telegram or e-mail communication [Section 7]. However a typical Arbitration Agreement would contain the following minimum aspects. |
- Nature or sweep of Disputes that are supposed to be resolved only through Arbitration
- Name of the Arbitrator or the institution, if Parties desire to incorporate a clause which names the Arbitrator in advance or wants to introduce a institution procedure. In International Arbitrations, adopting rules of International Chamber of Commerce [ICC] or the London Court of International Arbitration [LCIA] is not uncommon
- The Number of Arbitrators
- The specific or desirable qualifications / status / experience of Arbitrators
- The Place of Arbitration. [Place is a broader term than ‘venue’]
- Language
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| Request for Arbitration |
| Before commencing the Arbitration Process, the Party who intends to raise a dispute for being resolved through Arbitration as per the Arbitration Agreement, shall send a Request for Arbitration [RFA]. A typical RFA will contain the following: |
- Description of the parties
- Description of the agreements and arbitration agreement contained therein
- A brief summary of the disputes and claims
- RFA would invite the other parties to accept the appointment of a named arbitrator
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| Conciliation |
If parties to a dispute appoint a conciliator and due to the efforts of the conciliator they arrive at a settlement but if they fail to get the settlement agreement authenticated by the conciliator, it will not have the force of an enforceable award. Conciliation as such has not taken off to that extent even though Conciliation is a formal procedure whereas Arbitration is a superior procedure next only to adjudication of disputes by ordinary civil courts. In conciliation, Parties and Conciliators have more liberties. Conciliators may discuss with parties and assist them to reach a settlement. The procedure for appointment of conciliators is very simple. If parties agree initially for resolving their disputes through conciliation and if one of the parties later on turn around and refuse to co-operate in the appointment of a conciliator, there is no remedy. The law is blank.
There is a lot of difference between the statutory prohibition contained in Section 5 read with Section 8 of the Arbitration and Conciliation Act, 1996 and the prohibition contained in Section 77 of the Act. It is clear from the most important law contained in Section 73 of the Act that a settlement agreement cannot be thrust upon parties in the nature of an arbitral award within the meaning of Section 31 to 36 of the Arbitration and Conciliation Act, 1996. The conciliation proceeding may be rendered meaningless and may be terminated in accordance with Section 76 of the Arbitration and Conciliation Act, 1996, if it does not end with a settlement agreement. Conciliation cannot commence without the consent of parties nor can it continue or end without consent of parties! |
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| What we do? |
| We at Liza Sahni & Co., assist parties in |
A. Drafting commercial agreements
B. Render advisory and representation services relating to arbitration and conciliation matters
C. Assist parties in securing appropriate injunctions and orders for preserving and protecting rights of aggrieved parties
D. We also assist in identifying and appointing independent persons of repute as arbitrators, be it domestic or international arbitration. |
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