TOPIC XII

CONDUCT OF ARBITRAL PROCEEDINGS

Sections 18 to 27 of the Act deal with the proceedings

of Arbitral Tribunal. The
following are the main principles regarding the conduct of arbitral proceedings

1 The parties are free to agree on the place of arbitration (s.20 (1))

on the place of arbitration the place of arbitration shall

2 If the parties fail to agree
be determined by the Arbitral Tribunal, having regard
to the circumstances of the case
the convenience of the parties.
(s.20 (2))
Including 67
 Procedure, 1908 o
3
he Arbitral Tribunal shall not be bound by the Code of Civil
the Indian Evidence Act,1872 ( s.19 (1).
followed by the Arbitral
4 ne parties are free to agree on the procedure to be
Tribunal in conducting its proceedings. (s. 19 (2))

Arbitral Tribunal may

It the parties have failed to agree on the procedure, the
5. 19 (2))
in the it considers apporpriate. (s.
conduct the proceedings manner

the admissibility, relevance,

Tribunal shall have power to determine
6 The Arbitral
materiality and weight of any evidence.

shall be given a
An arbitrator shall treat the
parties with equality and each party
7
full opportunity to present his case. (s. 18)

rules of
but he cannot ignore
by technical procedure
The arbitrator is not bound
run through the
entire arbitration pro-
natural justice. Threads of naturaljustice should
of the choice of the parties. He is not bound by
ceedings. An arbitrator is a judge
in the Evidence Act. He can decide
the dispute en-
the rules of evidence as provided
best he thinks fit. The limitation on his power is that he should not
trusted to him as as
should give the parties a fair hearing and
principles of natural justice. He
violate the
substantiate their respective claims. Failure on his
reasonable time and opportunity to
witnesses would amount to misconduct on his part.
part to hear the parties and their

In Impex Corporation and Others v. Elenjikal Aquamari ( 2007 (4) KHC 998,
it was held that the proceedings of the arbitrator cannot be equivalent to the proceed-

ings in a Civil Court. The Code of Civil Procedure as such is not applicable before the
arbitrator. Where no procedure is Contemplated in the arbitration agreement, the Arbi-
tral Tribunal can adopt the proceedings in the manner it considers appropriate. But the
proceedings adopted shall be fair and in accordance with the principles of natural jus-
tice Arbitrator cannot violate the provisions of the Act. Thread of natural justice should
and the principles of natural justice re-
run through the entire arbitration proceedings
quire that sufficient notice of posting shall be given to both sides and equal opportuni-
ties shall be given to both sides to prosecute the case and that the Arbitral Tribunal is
not bound by technical rules of Code of Civil Procedure, 1908.

8 The parties are free to agree on the language or languages to be used in the
arbitral proceedings.

9 f the parties fail to the language to be used in the arbitral

agree on prOceedings,
the Arbitral Tribunal shall determine the language to be used in the arbitral proceed

ings.

10 n e language agreed or determined shall apply to any written statement Dya

party, any nearing and any Arbitral Award, decision or other determination by the Arbi-
tral Tribunal

11 IheArbitral Tribunal may order that any documentary evidence shall be accom
panied by a translation into the language or languages agreed upon by tne partes
o
determined by the Arbitral Tribunal.

12 The Claimant shall state the facts supporting his claim, the points at issue and
the relief or remedy sought within the period of time agreed upon by the parties or
determined by the Arbitral Tribunal
13 If the claimant fails to communicate his statement of claim within the
time, the
Arbitral Tribunal shall terminate the proceedings.

14 The respondent shall state his defence. If the

respondent fails to communicate
his statement of defence, the Arbitral Tribunal shall continue the
proceedings without
treating that failure in itself as an admission of the allegations by the claimant

15. The parties may submit with their statement all documents they consider to be
relevant or may add a reference to the documents or other evidence
they will submit.
16. The respondent, in support of his case, may also
submit a counter -claim or
plead a set-off, which shall be adjudicated upon by the arbitral
claim or set-off fals within the scope of the
tribunal, if such counter-
arbitration agreement.
17. Unless otherwise agreed by the
parties, either party may amend or
his claim or defence
during the course of the arbitral supplement
tribunal considers it
inappropriate fo allow the amendment proceedings, unless the arbitral
to the delay in making it.
or
supplement having regard
18 The Arbitral Tribunal shall give suftiCient
advance notice of any
hearing and of
 of inspection of documenis, good
any meeting of the Arbitral Tribunal for the purposes

or other property.

19 All statments, documents or other information upplied to

the Arbitral Trib ribunal by
one party shall be communicated to the other party.

on
to report to t specific
Tribunal may appoint one or more experts
20 ne ArDitral
issues to be determined by the arbitral tribunal.

Arbitral Tribunal may rely in

which the
21. Any expert or evidentiary document on

communicated to the parties.

making its decision shall be

to produce
documentary evidence
oral hearing or
22 a party tais to appear at an
and make the
arbitral award on the
the arbitral tribunal may continue the proceedings

evidence before it.

of the arbitral tribunal, may apply

23. The arbitral tribunal or a party with the approval
taking evidence.
to the court for assistance in

domestic arbitration,
situate in India, in the c a s e of
24 If the place of arbitration is
arbitration in accordance with
arbitral tribunal shall decide the dispute submitted to
the
time being in force in India.
the substantive law of the

the Arbitral Tribunal shall

25. In the case of International Commercial Arbitration,
accordance with the rules of law designated (selected) by the
decide the dispute in
parties.

In the case of International Commercial Arbitration any designation by the parties

26
shall be construed as
directly referring to
of the law or legal system of a given country
the substantive law of the country and not to its conflict of law rules.

In the case of International Commercial Arbitration if the parties have not se|
27
lected a law, the arbitral tribunal shall apply the rules of law it considers to be appropr
ate.

28 The arbitral tribunal does not have the authority to decide the matters on com
passionate grounds or in an arbitrary or capricious manner. But by virtue of section 2
(2) of the Act, if the parties have expresslv authorised the arhitrr i chal
 or in
decide matters
according to what it reaards as just and good (
ex aequo etbono)
a sympathetic and flexible manner ( as amiable composieu
d s e s the Arbitral Tribunal shall decide in accordance with the terms o
a
tra a
COndcl dna shall take into account the usages of the trade applicable to tiE a

tion

30. narbitral proceedings with more than one arbitrator, any deCision or tne ArDlld

Tribu nal shall be made by a majority of all its members.

from the date the

31 The award shall be made within period of twelve months
a
nave
arbitral tribunal enters upon the reference. An arbitral tribunal
shall be deemed to
arbitrators
or all the
enterea upon the reference on the date on which the arbitrator

have received notice in writing of their appointment.

arbitral tribu-
32 IT the award is made within a priod of six months from the date the
receive such
nal enters upon the reference, the arbitral tribunal shall be entitled to
amount of additional fee as the parties may agree.

months for making award

33 The parties may, by consent, extend the period of twelve
for a further period not exceeding six months

the extended
If the award is not made within the period of twelve months
or
34
to
period, the mandate of the arbitrator shall terminate unless the court has, either prior
or after the expiry of the period so specified, extended the period. The exention of

period granted only for suftiCient cause and on such terms and contitions as
may be
While exending the period, it shall be open to the court to
may be imposed by the court.
substitute one or all of the arbitrators. in such a case, the arbitral proceedings shall
continue from the stage already reached and on the basis of the evidence and material
already on record. The substituted arbitrator shall be deemed to have received the said

evidence and material.

35 ast Track Procedure By section 29 -B (inserted by Amendment Act,2015)

the parties to an arbitration agreement may at any stage either before or at the time of
appointment of the arbitral tribunal agree in writing to have their dispute resolved by
fast track procedure. The parties to the agreement while agreeing for resolution of
dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a
sole arbitrator who shall be chosen by the parties.
 The arbitral tibunal shall follow the following procedure while Conducting fast

track arbitration proccedngs

of written plead
dispute on the basis
(a) h e arbitral tribunal shall decide the
without any ora nearing
hgs, documents and submissions filed by the parties
further intormation or
The arbitral tribunal shall have power to
call for any
(b)
t i e d dy them
and documents
claritication from the parties in addition to the pleadings
make a request or the
held only, if, all the parties
(c) An oral hearing may be
certain issues
aroittal tribunal considers it necessary to have oral
hearing for claritying
formalities if an oral
h e arbitral tribunal may dispense with any technical
(a)
for expeditious dis-
as deemed appropriate
neaing IS held, and adopt such proced ure
posal of the case
of six months from
The award under this section shall be made within a period
the date of the arbitral tribunal enters upon the reference

encourage settlement
of the dispute and
36 Settlement An Arbitral Tribunal can

mediation, conciliation
With the agreement of the parties, the arbitral tribunal may use

or other procedures at any time during the arbitral proceedings to encourage settle-

ment

If during arbitral proceedings, the parties settle the dispute, the arbitral tribunal
shall terminate the proceedings and, if required by the parties and not objected to by
the Arbitral Tribunal, record the settlement in the form of an arbitral award on agreed
terms

An arbitral award on agreedterms shall have the same status and

effect as any
other arbitral award on the substance of the dispute.