An Introduction to Alternative Dispute Resolution

Table of Contents
 Introduction
 What is alternative dispute resolution?
 How did the concept of ADR arise?
 Pros and cons of ADR
o Pros of ADR
o Cons of ADR
 Types of ADR methods
o Arbitration
 Main Types of arbitral proceedings
 Ad Hoc Arbitration
 Institutional Arbitration
o Mediation
o Negotiation
o Conciliation
 Difference between mediation and conciliation
o Lok Adalats
 Conclusion
 References

Introduction
Today’s world has become globalised and commercial with the advent of
technology. People can now contact each other and settle business deals and
disputes when they are sitting at the opposite ends of the world. Most people
no longer have the time to go and file papers at the courts and then wait
long periods for a hearing. We are rapidly approaching a stage where
litigation is being replaced with alternative dispute resolution (ADR), due to
the inefficiencies and drawbacks of litigation. India hasn’t quite reached a
stage where litigation has been completely displaced by ADR methods, but
the legal system is beginning to see the benefits of ADR. This article shall be
helpful to give you an overview of the ADR methods and how it is beneficial.

What is alternative dispute resolution?

Alternative dispute resolution (ADR) refers to a range of dispute settlement
methods which help the parties in the dispute to come to a settlement
without going to court, or without litigating on the said matter. These
methods usually involve a third party, who helps them in settling the
disputes. In many cases, ADR methods are used alongside the litigation
process as well through court authorisation.
How did the concept of ADR arise?
As stated in the 222nd Report of the Law Commission of India, the
Constitution has guaranteed access to justice for all, primarily through Article
39A, which states that everyone must have an equal opportunity of getting
justice and this must not be denied to any citizen by reason of economic or
other sort of disabilities.

The report further states that ‘access to justice’ for the common masses in
India means access to the courts of law. But even that has been hindered,
due to factors like poverty, illiteracy, ignorance, social and political
backwardness etc.

In a developing country like India, many people still live in poverty. When
their rights get violated, they often do not have the money to fight long
battles in the Court. They do not have the money to afford a lawyer. They do
not know the legal system and procedures. Therefore, they often think that
the court system is an inconvenience.

These kinds of inefficiencies are shared reasons among many countries,

which is why ADR is being explored. The courts also have too many pending
cases and these cases keep going on for many years which is a tremendous
burden to the courts.

These reasons prompted the Indian Government to enact Section 89 of the

Code of Civil Procedure, 1908 and replace the earlier Arbitration
Act,1940 with The Arbitration and Conciliation Act 1996, in accordance with
the mandates of the United Nations Commission on International Trade Law
(UNCITRAL).

Pros and cons of ADR

Pros of ADR
 It is less expensive.
 It is less time consuming.
 It is free from the technicalities that are present in the court system.
 The parties are free to differ in their opinion and can discuss their
opinions with each other, without any fear of disclosure of this fact
before the courts.
 There is no feeling of enmity between the parties as there is no winning
and losing side. They also get their grievances redressed and their
 relationship remains as it was before, therefore, they can conduct
future business deals with each other.
 ADR is more suitable for multi party disputes, as all the parties can put
forward their opinions at the same place and in one go, rather than
going to court again and again. Also, it provides for a wider perspective
of the dispute.
 The parties often have the choice of the ADR method to be used. They
sometimes also have the choice to select the individuals or bodies who
will settle the dispute.
 The process is also very flexible, according to what suits the parties.
 The parties also have the option of being confidential. The ADR system
also enables the parties to put focus on practical solutions.
 A wider range of issues are considered and shared future interests of
the parties are protected.
 ADR system also allows for risk management.

Cons of ADR
 ADR is not helpful where a dispute is to be decided on the basis of a
precedent.
 When there is a need for court and interim orders, ADR would not be
useful.
 ADR is less suitable when there is a need for enforcement.
 When there is a need for live and expert evidence and analysis in a
case, then ADR would not be useful.
 When there is an imbalance of power, between the parties in the
dispute, then ADR would not work.
 If the case is of a complex nature, then the adjudicating body must
look into minor details and may need expert advice and suggestions.
Here, ADR would probably not work.

Types of ADR methods

There are various ADR methods, but they differ from country to country. This
article shall look at the main ADR methods used, with special focus on India.

 Arbitration
Arbitration in India is governed by The Arbitration and Conciliation Act, 1996.
It is a form of dispute resolution where one or more parties are appointed to
adjudicate the dispute. They act as third parties. This third party should be
neutral and this party is referred to as an ’arbitrator’ while the decision of the
arbitrator, which is essentially a determination of merits in the case, is
known as ‘arbitration award’.

The arbitration process is informal and this process allows the dispute to be
resolved amicably and efficiently as it takes less time and involves lesser
costs for the parties. Therefore, parties frequently choose to arbitrate when
disputes arise, especially in the business world. Big corporations would rather
settle disputes quickly, rather than fighting long cases in the courts.

Before the arbitration process begins, an arbitration agreement is required to

be formed. This agreement lays down the terms and conditions on which the
arbitration process is carried out. It is determined through this agreement as
to how the process will be made cheaper, efficient and and how the rules of
evidence would be applied etc. This agreement should be valid as per The
Indian Contract Act 1972 and the parties must have the capacity to contract
under Sections 11 and 12 of the same Act.

Arbitral decisions are final and binding on the parties, who have limited scope
of objecting to the decisions. Non binding arbitrations also exist wherein the
party can request a trial if it is not satisfied with the arbitrator’s decision.

Main Types of arbitral proceedings

Ad Hoc Arbitration
Under ad hoc arbitration , the parties involved in the dispute determine the
conduct of the arbitration proceedings themselves, without going to an
arbitral institution. In case if the parties are not able to settle on one
arbitrator, or one of the parties is reluctant to appoint that particular
arbitrator, then Section 11 of The Arbitration and Conciliation Act 1996 will
be invoked by the other party. Under Section 11 of the Act, the arbitrator for
that dispute will be appointed by either the Chief Justice of the Supreme
Court or his designate or the Chief Justice of the High Court or his
designate.

 If it is a domestic arbitration, then the Chief Justice of the High Court

or his designate will appoint the arbitrator.
 If it is international commercial arbitration, then the Chief Justice of
India or his designate will appoint the arbitrator. In ad hoc arbitration,
the fee of the arbitrator is decided mutually by the parties and the
arbitrator.
Institutional Arbitration
In this kind of arbitration, the parties decide in the agreement itself, that an
arbitration institution will administer the arbitration. The Indian institutions
are International Centre for Alternative Dispute Resolution and the Indian
Council of Arbitration. These institutions formulate the rules for arbitration
owing to their experience in observing arbitral procedures and situations,
therefore they are prepared for all possible situations that may arise in future
arbitration cases.

 Mediation
In mediation, a third neutral party aims to assist two or more disputants in
reaching a settlement. This third party is referred to as the mediator. The
mediator needs to properly communicate with both the parties and use
proper negotiation techniques, in order to make one party fully aware of the
other party’s perspective, through empathy and dialogue. This process is
controlled by the parties.

One of the characteristics of this type of dispute resolution is that the

mediator is not allowed to give an outcome of the dispute. The solution is
given mutually, and the agreements are generally non binding. Parties are in
significant control of the mediation process and it is strictly confidential. The
parties can even go for litigation if they are not satisfied with the mediation
process.

It must be observed that the main aim of the mediation process is to build
relationships, and not to make a decision. It is more of an amicable
resolution of differences with potential form future business between the
parties.

 Negotiation
Negotiation is also a form of dispute resolution, but there is no third party to
adjudicate the matter, therefore the parties work together to find a mutually
acceptable solution or a compromise. The parties may choose to be
represented by their attorneys during their negotiations. Negotiation is not
statutorily recognized in India. There are no set rules for conducting a
negotiation.

Essentials of negotiation-

 It is a process of communication which helps to resolve conflicts.

 It can be entered into voluntarily and its outcome is non-binding.
  The parties are benefitted here as they have control over the outcome
and procedure and the process is carried out keeping their interests in
mind.

 Conciliation
In conciliation, the third party, who is called the conciliator, talks to the
parties involved separately so that the parties can arrive at a mutually
acceptable solution through facilitating talks between the parties. Conciliation
is also governed in India under The Arbitration and Conciliation Act, 1996.
Under Section 61, conciliation is provided for disputes arising out of legal
relationships, whether they are contractual or not.

Difference between mediation and conciliation

In mediation, the mediator plays a more active role in the the process by
proposing compromise solutions after hearing all parties while in the case of
conciliation, the conciliator has to bring the parties into such a state of mind
as to facilitate the parties to come to an acceptable compromise.

 Lok Adalats
In a country like India where there are many illiterate people, the concept of
Lok Adalats is a necessity. This was first introduced in 1982 in Gujarat. This
concept mainly focused on reducing the burden of pending cases on the
Courts and has incorporated the concept keeping in mind various factors like
social justice.

Lok Adalats are governed under The Legal Services Authorities

Act,1987. Sections 19, 20, 21 and 22 specifically deal with Lok Adalats. They
have been organised by the State Legal Aid and Advice Boards with the aid of
District Legal Aid and Advice Committees. These have helped poor people to
avoid the inefficiencies of litigation. The aim of The Legal Services Authorities
Act was to provide access to justice for all, whether he be poor or rich. Since
the poor masses of the society were not being delivered on this promise, this
Act was formed. This access has been further strengthened by judgements of
various courts, such as the Delhi High Court, in the case of Abul Hasan and
National Legal Service Authority v. Delhi Vidyut Board & Ors. AIR 1999 Del
88, where it gave an order for setting up permanent Lok Adalats. Further,
the decision given by the Lok Adalat is binding and shall be treated akin to
the order of a civil court., thereby increasing poor people’s access to justice.
 Conclusion
There are many other dispute resolution methods, like med-arb, mini trial,
summary jury trial etc. But arbitration, mediation and Lok Adalats etc are the
most commonly used techniques of ADR in India. Throughout the world, ADR
has been slowly becoming the favored choice for parties, but India still relies
a lot on litigation. However, with the development of these ADR methods,
and in an effort to improve access to justice, ADR is being seen as a
necessity. Legal recognition should be given to all ADR methods including
negotiation as they are viable and convenient., and it would help to ease the
burden of the courts.

Negotiation models which every legal professional needs to know

Table of Contents
 Introduction
 Essentials of negotiation
 Types of negotiation
o Distributive negotiation
o Integrative negotiation
 Negotiation pie
 Phases of negotiation
o Preparation
o Discussion
o Clarifying goals
o Negotiating towards a win-win outcome
o Agreement
o Implementing a course of action
 Models of negotiation
o Win-lose or lose-win
o Lose-lose model
o Win-win model
o No outcome
 RADPAC model of negotiation
o Rapport
o Analysis
o Debate
o Propose
o Agreement
o Close
 Conclusion
 References

Introduction
Negotiation is a method by which people resolve differences. It is said to be a
process by which a compromise is reached, avoiding arguments and
controversies. However, the principle of fairness and seeking mutual benefit
and maintaining relationships is the key to success. Negotiation is said to be
a non-binding process in which the discussions between the parties are
intimated without any intervention of the third party with the object of
arriving at a certain negotiated settlement of the said dispute. So,
negotiation is a process of managing relationships. It is a basic human
activity that exists between social animals. As social animals, we negotiate
and hence it is an important part of our day to day lives.

Essentials of negotiation
Negotiation is defined as a discussion between individuals to reach an
acceptable conclusion for one and all. It is a process where people, instead of
fighting amongst themselves, sit together, try to formulate a settlement by
evaluating its pros and cons, then figuring out a choice that will be a win-win
situation for all.

There are certain essentials of negotiation as follows:

1. It is a communication process;
2. It resolves conflicts;
3. It is a voluntary exercise;
4. Parties retain control over the outcome and the procedure;
5. It is said to be a non-binding process;
6. There is a possibility of achieving the wide-ranging solutions, and of
maximising joint gains beneficial to the parties.

Types of negotiation

Distributive negotiation
Distribution negotiations, sometimes called situational or hard bargaining,
attempts to distribute the “fixed pie” of some benefits. Distributive
negotiations are the negotiations that are going on under zero-sum terms
and this means that any profit made by one party is at expense of the other
and vice versa. Due to this reason, distributive interactions are sometimes
called win-lose because it is believed that one person’s gain is the other
person’s loss.

In the distributive approach, it is said that each negotiator fights for the
largest possible piece of the pie, so the parties push each other to take a
greater and harder line than the ally. Yet the Prospect Theory indicates that
people do more harm than gain and are more disinclined or reluctant to take
risks about losses, concession-convergence bargaining is likely to be more
strident and less productive of an agreement.
Integrative negotiation
Integrated negotiation is also called interest-based, or princely negotiation. It
is called a set of techniques that attempt to improve the quality and the
probability of interaction by taking the advantage of fact that different parties
often value different outcomes differently.

While the sharing negotiation assumes that there is a certain amount of

value (a “fixed pie”) between the parties, integrated negotiation efforts
(“expand the pie”) to create value during the negotiation would either
“compensate for the loss”. With the benefit of one item over another (“trade-
offs” or logrolling), or by creating or redefining conflict issues in such a way
that both sides benefit (“win-win” negotiations)

Negotiation pie
Total advantages and disadvantages that can be delivered in a conversation
is interpreted with the term conversation pie. These values can either
increase, shrink or stagnate during the conversation. If the negotiating
parties are able to expand the total pie, then the win-win situation is possible
assuming that both sides benefit from the expansion of the pie.

In practice, however, this maximization approach is imposed by the so-called

small pie bias, namely by a psychological minimization of the size of the
interaction pie. Similarly, the possibility of increasing the pie can be
underestimated due to the so-called inconsistency bias. Unlike raising the
pie, the pie can also shrink during a conversation. Due to (excessive)
negotiation costs

Phases of negotiation

Preparation
Before any interaction can take place, it should be decided where and when
the meeting will be held to discuss the problem and who will participate in it
as well. Setting a finite time scale can also be helpful to prevent
disagreements from continuing.

This phase involves ensuring all relevant facts of the situation to clarify its
position. This would include knowing the rules of your organization that are
offered when the help does not seem appropriate and the basis for such
refinancing. Your organization may have good policies for which you can
prepare to negotiate. Undertaking preparations before discussing
disagreements will help to avoid further conflict and unnecessarily wasting
time during the meeting.

Discussion
 During the phase of discussion, the person or members of each party
present the case as they see it, i.e. their understanding of the
situation.
 The key skills during the phase of discussion include questioning,
listening and clarifying.
 Sometimes it is quite helpful to take notes during the phase of
discussion, to record all the points needed for further clarification.
 It is very important to listen because when there is disagreement it is
easy to make too many of the mistakes and say too much than to
listen. Each party should have an equal opportunity to present its case.

Clarifying goals
By discussion, the goals, interests and attitudes of both sides of the
disagreement should be clarified. It is helpful to list these factors in the order
of priority. Through this explanation, it is often possible to establish or
identify some of the common grounds. Clarification is an essential part of the
negotiation process. without clarification there could be misunderstandings
that could, in turn, cause problems and obstaclesi n reaching a profitable
outcome.

Negotiating towards a win-win outcome

This phase focuses on what is called the ‘win-win’ outcome, where both
parties feel that their respective points have been taken into consideration,
and have achieved something positive out of the negotiation process. A win-
win result is usually said to be the best result. Although this may
not alwayst be possible, through interaction, it should be the ultimate goal.

Agreement
Once the views and interests of both parties are considered, the agreement
can be achieved. It is essential for everyone involved to have an open mind
to achieve an acceptable solution to a discussion. Any agreement needs to be
fully clarified so that both parties are aware of what has been decided.
Implementing a course of action
By agreement, a course of action is to be implemented to carry through the
decision.

Models of negotiation
A good negotiator will always be knowing the best and worst alternatives for
the process of negotiation or the settlement he is striving to achieve. The
Best Alternative to Negotiated Arrangement (BATNA) and the Worst
Alternative to Negotiated Arrangement (WATNA) are two significant points
that a negotiator is supposed to find out and discuss at every level of the
discussion. Even in cases where he does not discuss, he must at least be
aware of it. Such an understanding will guide him properly to steer through
the difficulties. BATNA and WATNA are the best methods for evaluating the
same outcome.

Win-lose or lose-win
The win-lose or lose-win situation is also called a zero-sum game. An
example of a zero-sum situation could be a game of chess. In chess, there is
one loser and one winner. Adding one positive to one negative result in zero.
The feeling of the loss is not good because the person who loses has to walk
away without having met his wants and needs. Usually, a win-lose situation
results in the loser not willing to negotiate with the winner in the future.

Lose-lose model
In a lose-lose situation, it is said that neither party achieves their wants or
needs. Stark gave a common example of a lose-lose negotiation situation
which is a labour strike in which management and labour unions cannot
come to any satisfactory agreement. Almost always in a labour strike,
everybody loses. The employees lose, the company loses and most tragically,
the customer loses.

Win-win model
What the negotiator wanted after a talk does not mean that he won and the
other participant lost. There is likely to be a win-win situation where both
sides win, which is the ideal outcome for almost all negotiations. Good
negotiators find a balance between the objectives of each party to create a
win-win outcome.
No outcome
The fourth possible outcome of an interaction is a ‘no result’ meaning that no
party can win or lose. In this situation negotiators cannot come to terms that
are suitable for both parties and the best thing to do is to just walk away and
try to find someone else to agree with. Some people see the outcome of no
result as a win-win or defeat. A winning result in such situations occurs when
both parties find another person to deal with while in the losing situation
both parties waste their precious time in negotiations and still try to find
another dealer. In any conversation, there is a limit to how much sacrifice
must be made. In some cases, it may make sense to walk away. Before
entering the negotiating table, the negotiator must state the point of him or
her walking away. This will help the person not to miss out on a bad deal.

RADPAC model of negotiation

This RADPAC model of negotiation is said to be a widely used model of
negotiation.

Each alphabet of this model represents something like:

R – Rapport

A – Analysis

D – Debate

P – Propose

A – Agreement

C – Close

Rapport
As the name suggests, it refers to the relationship between the parties which
are involved in the conversation. The parties involved in the conversation
should ideally be comfortable with each other and share a good rapport
within themselves.
Analysis
One side should understand the other side very well. It is important that
individuals understand each other’s needs and interests. The shopkeeper
must understand the needs and pockets of the customer, and in the same
way, the customer should not ignore the profits of the shopkeeper. People
should listen to each other carefully.

Debate
Anything can be achieved with discussion. This round involves discussing
issues between the parties involved. The advantages and disadvantages of
an idea are evaluated in this round. People argue among themselves and try
to explain each other. One should not lose his temper in this period but
should remain calm and composed.

Propose
Everyone proposes their best idea in this round and tries their best to come
up with the best possible idea for reaching a point of acceptable conclusion
by all.

Agreement
Individuals come to the conclusion at this stage and agree to the best
possible option.

Close
The conversation is over and the people return satisfied.

Conclusion
Negotiation is an interaction between two or more people or parties that aim
to reach a beneficial outcome in one or more issues involving a conflict.
Negotiation is called an entity that compromises to agree on matters of
mutual interest, customizing their individual utilities. This beneficial outcome
can be for all parties involved, or only for one or a few of them. Negotiators
are required to understand the process of negotiation and other negotiators
 as well in order to close the deal, avoid conflict, establish relationships with
other parties and reap the benefits.

Its purpose is to obtain points for an individual or collective, or to formulate

results to meet different interests, solving points of difference. It is often
conducted by making concessions to advance a position and obtain an
agreement. Negotiating parties rely on each other to implement a negotiation
solution: a major factor for determining whether negotiation is successful or
not.

Arbitration – types and significance

Table of Contents
 Introduction
 Historical background of arbitration
 What is arbitration
 Kinds of arbitration
o Domestic arbitration
o International arbitration
o International commercial arbitration
o Ad-hoc Arbitration
o Fast track Arbitration
o Institutional Arbitration
 Advantages of arbitration in India
 Conclusion
 References

Introduction
We often hear a plethora of complaints by the petitioners or the plaintiff of a
particular case. The legal fees charged were exorbitantly high, the dispute
was resolved after a number of hearings, or that the verdict did not provide
them with the appropriate remedy. But with the advent of alternative dispute
resolution, we can observe a significant decrease in such complaints.
Arbitration can especially be seen as a recent trend in commercial contracts
and disputes.

An increase in foreign trade has resulted in a subsequent increase in cross-

border disputes giving rise to a need for an effective form of dispute
resolution. Arbitration has emerged as a way to preserve the relationships
between two companies and resolve a dispute amicably. A recent judgment
given by the Supreme Court in the case of Amazon v Future Retail Limited,
2021 garnered attention to the parties opting for arbitration to resolve the
dispute. But what is arbitration? Is it more time-efficient and cost-saving as
compared to the traditional courts? What are the different types of
arbitration prevalent and what is their significance? The questions will be
answered in the course of the article.

Historical background of arbitration

A number of authors have argued that the first arbitrator, King Solomon, had
used a procedure similar to the modern-day procedure while resolving a
dispute that emerged when two women protested that they were the mother
of a baby boy.

Another influential figure, Philip the Second, had used arbitration to amicably
resolve a territorial dispute that took place way back in 337 BC. In Roman
law, ‘compromissum’ was used to indicate a process of dispute resolution
which would draw out a compromise between the parties. Therefore, we can
see that there have been a number of examples of arbitration that actually
took place in the ancient era and can be seen as a trailblazer for the laws we
have today.

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 were 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
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.

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
In domestic arbitration, both the parties must be Indians and the
proceedings take place in India itself. In the Arbitration and Conciliation Act,
1996 there is no specific definition given to domestic arbitration. A mere
reading of Section 2(2) can lead us to infer that domestic arbitration is when
the parties had agreed to resolve any disputes that arise in India. The
proceedings must be held in the domestic territory and must be in lieu of the
procedural and substantive law in India.

International arbitration
As the name suggests, international arbitration occurs outside the domestic
territory 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 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 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
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. A few prominent arbitration centres are
the Chartered Institute of Arbitrators UK, the London Court of International
Arbitration, the National Arbitration Forum USA, Singapore International
Arbitration Centre, and the International Court of Paris.

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.

Advantages of arbitration in India

1. 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.
2. 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.
3. Confidential procedure – Any disclosure made by the parties in the
proceedings and when the arbitration award is given is to be kept
confidential.
4. 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.
5. 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.
6. 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.
7. 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.
8. Binding decision – The arbitration awards given are enforceable
making the decision binding on the parties.
 9. 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.

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.

What is arbitration
Table of Contents
 Introduction
 Alternative Dispute Resolution mechanism
o Arbitration
o Mediation
o Negotiation
o Conciliation
o Comparison table of various ADR methods
 Types of arbitration
o Ad Hoc Arbitration
o Institutional Arbitration
o Domestic Arbitration
o International Arbitration
o Emergency Arbitration
 Stages of arbitration in India
o
 Arbitration agreement (Section 7, Arbitration and Conciliation Act, 1996)
 Number of arbitrators (Section 10, Arbitration and Conciliation Act, 1996)
 Commencement of arbitral proceedings (Section 21, Arbitration and Conciliation Act,
1996)
 Appointment of arbitrators (Section 11, Arbitration and Conciliation Act, 1996)
 Statements of claim and defence (Section 23, Arbitration and Conciliation Act, 1996)
 Hearing and written proceedings (Section 24, Arbitration and Conciliation Act, 1996)
 Arbitral award
 Challenging of arbitral award (Section 34, Arbitration and Conciliation Act, 1996)
 Enforcement of arbitral awards
 Important concepts related to arbitration
 o Arbitration Agreement and its essentials
 Conditions to be fulfilled to enforce an arbitration clause
o Seat of arbitration
o Venue of arbitration
o Arbitrability of subject matter
o Arbitral Award
 Foreign Arbitral Award
 Recognition and enforcement of foreign arbitral awards
o UNCITRAL Arbitration Rules
o UNCITRAL Model Law on International Commercial Arbitration
 Laws dealing with Arbitration in India
o Arbitration and Conciliation Act, 1996
o New Delhi International Arbitration Centre Act of 2019 (NDIAC Act, 2019)
o Arbitration Council of India (ACI)
 Advantages of arbitration
 Disadvantages of arbitration
 Why is arbitration preferred more in modern days
o The way forward for arbitration in India
 Permanent Court of Arbitration (PCA)
o The Enrica Lexie case (Italy v. India)
 Conclusion
 Frequently Asked Questions (FAQs) related to arbitration
o What is the difference between UNCITRAL arbitration rules and UNCITRAL model law
on arbitration?
o What is the importance of arbitration rules?
o What to do if originally there was no arbitration clause or agreement and the parties
are willing to resort to arbitration later?
o The dispute is already in court and the parties want to resort to arbitration. Is this
possible? If yes, how?
o What are some of the examples of disputes that can be resolved by arbitration?
o Can criminal matters be referred to arbitration?
o Are arbitration proceedings confidential?
o How much does arbitration cost?
o Can two Indian parties have a foreign seat of arbitration?
o Can the Supreme Court of India refuse to enforce a foreign arbitral award?
 References

Introduction
Disputes happen frequently between parties in the world of business and in
today’s fast-paced commercial world, time is nothing less valuable than
money. Both parties suffer losses if the dispute becomes the victim of a long-
drawn, complex court battle. The solution to this comes in the form of
Alternative Dispute Resolution (ADR) mechanisms that have eased and
simplified the resolution of disputes between parties. Arbitration is a key ADR
method that can be historically traced to the village panchayat days, when
the elders used to resolve disputes between persons based on principles of
natural justice. In simple words, arbitration is a method of resolving disputes
between parties without going to court.
Alternative Dispute Resolution mechanism
The term ADR or Alternative Dispute Resolution signifies any out of court
processes adopted to solve disputes. Arbitration, mediation, conciliation, and
negotiation are usually the most common methods of ADR. When the courts
are understaffed and overburdened with cases, ADR serves the purpose of
providing faster and simpler means of dispute resolution. All ADR methods
are mostly private in nature. The typical methods of ADR are briefly
discussed as follows:

Arbitration
Arbitration is outside the court settlement of a dispute by one or more (odd
number) persons who are appointed as arbitrators by both the parties.
According to Section 2(1)(a) of the Arbitration and Conciliation Act,
1996 “Arbitration means any arbitration whether or not administered by
permanent arbitral institution”. In other words, any form of arbitration
irrespective of its nature has been recognised statutorily in India by bringing
such arbitration under the ambit of the Arbitration and Conciliation Act,
1996. It consists of a simplified trial, with simplified rules of evidence and
with no discovery. Arbitration hearings are usually not a matter of public
record. The arbitral award is binding on the parties just like a court decree or
order.

Mediation
Mediation usually involves a neutral third party who tries to facilitate the
issues between the parties and guides them through dialogue to a win-win
situation. Mediation settlements are non-binding in nature.

Negotiation
Negotiation is a type of ADR where usually no third parties like lawyers,
arbitrators, or mediators are involved. The two parties in dispute sit down
and discuss terms that best serve their mutual interests. When both parties
are willing to come to a compromise, usually the negotiation becomes
successful. In case, the parties fail to reach an acceptable, common middle
ground, the end result is a stand-off with either a promise of future
negotiation or to resort to other methods of ADR like mediation. There are no
hard and fast rules or technicalities in a negotiation.
Conciliation
Conciliation is a flexible and informal process of ADR where the disputing
parties resolve their disputes with the aid of one or more conciliators who act
in an impartial manner and aid the parties in reaching an amicable
settlement. Compared to a mediator, a conciliator is more proactive in
persuading the parties to reach a settlement by making proposals for
settlement at any stage of the conciliation proceedings. It may be noted in
this regard that neither the mediator nor the conciliator is bound by the Civil
Procedure Code (CPC) or the Indian Evidence Act. They are bound by the
principles of natural justice and can in no way impose their wills upon the
parties.

Comparison table of various ADR methods

Issues Arbitration Mediation Conciliation Negotiation

Conciliation is a Negotiation is a
Mediation flexible and informal type of ADR where
involves usually a process of ADR usually no third
neutral third party where the disputing parties like lawyers,
Arbitration is outside the court who tries to parties resolve their arbitrators or
settlement of a dispute by one facilitate the disputes by the aid mediators are
Definition or more (odd number) persons issues between of one or more involved and the
who are appointed as the parties and conciliators who act two parties at
arbitrators by both the parties. guides them in an impartial dispute sit down
through dialogues manner and aid the and discuss terms
to a win-win parties in reaching that best serve
situation. an amicable their mutual
settlement. interests.

Mediation Bill, Part III of the

Governing
Part I and II of the Arbitration 2021 after it is Arbitration and Principles of
law in
and Conciliation Act, 1996. passed and comes Conciliation Act, natural justice.
India
into force. 1996.

Mutually decided by the Mutually decided Subject to Part III of Mutually decided
Procedural parties; in case of institutional by the parties; the Arbitration and by the parties
rules arbitration the institutional usually CEDR Conciliation Act, based on the
followed rules are usually adopted; in Model Mediation 1996, the principles of
case of ad hoc arbitration the Procedure or their procedural rules are natural justice.
parties mutually decide the equivalents are mutually decided by
 arbitral rules to be followed i.e. followed. the parties.
the seat of arbitration is
decided by the parties. E.g: the
parties may agree to follow
the UNCITRAL Arbitration Rules.

Becomes binding
Usually non- Usually non-binding, only after the
Nature of Binding and thus binding, unless a unless a court order negotiated deal is
outcome mostly enforceable. court order directs directs to the ratified by a
to the contrary. contrary. competent court of
law.

The third party, i.e.,

The third party,
the conciliator, is
i.e., the mediator,
more proactive
Roughly speaking, the third engages in talks
Role of compared to a
party, i.e., the arbitrator(s) who with both parties No third party is
third mediator. The
constitute the arbitral tribunal and helps both involved.
parties conciliator proposes
act like a civil judge. parties come to a
solutions that are
win-win solution
acceptable to both
to the dispute.
parties.

Types of arbitration
There are various types of arbitration depending upon the nationality of the
parties, the arbitral award or the arbitrators involved. They are discussed as
follows:

Ad Hoc Arbitration
Ad hoc arbitration is the type of arbitration where the parties mutually agree
to resolve their disputes by arbitration proceedings conducted by mutually
appointed arbitrators but not by an institution. This is one of the most
common forms of arbitration in India where the parties themselves agree to
and arrange for arbitration. Here, in this method of arbitration, both the
parties and the arbitrators mutually and independently decide the procedures
of arbitration, without the involvement of an arbitral institution. Example:
When the parties decide to keep the arbitration seat in India, the dispute
would be resolved as per the provisions of the Arbitration and Conciliation
Act, 1996.
Institutional Arbitration
Institutional Arbitration is the form of arbitration where an institute, which
has been set up for the purpose of settling disputes by arbitration or other
ADR methods, is employed to conduct arbitration. Such institutes may be
national or international in character and they usually lay down their own
rules of arbitration. But such rules cannot override the provisions of the
Arbitration and Conciliation Act, 1996. These institutes maintain a panel of
arbitrators from which arbitrators are recommended to the parties. Besides
that, these institutes also offer administrative and consultancy services. So,
with the proper infrastructure and experience that these institutes bring to
an arbitral proceedings, some parties really find institutional arbitration
beneficial. Some of the prominent institutes that offer institutional arbitration
are as follows:

Domestic Arbitration
When the arbitration takes place in one jurisdiction and both the parties
come under that jurisdiction, then such an arbitration is called domestic
arbitration. In other words, both the parties must be nationals of the same
jurisdiction as that of the seat of arbitration or in case of body corporates,
they must be incorporated under the same jurisdiction as that of the seat of
arbitration. Eaxmple: when the seat of arbitration is in India to resolve a
dispute between two Indian companies, then it is a domestic arbitration.

International Arbitration
International arbitration is the type of arbitration where at least one of the
parties at dispute is a foreign national or in the case of a body corporate, has
been incorporated in a foreign country. In other words, at least one of the
parties must be a foreign national or habitually resident in a foreign country.
And in case of a body corporate or an association or body of individuals, the
core control and central management must be operated from outside India.
Also, one of the parties may be a foreign government too. Then such an
arbitration is construed as international arbitration. Section 2(1)(f) of the
Arbitration and Conciliation Act, 1996 has defined international commercial
arbitration in the light of international arbitration for commercial disputes.

Emergency Arbitration
Emergency arbitration is a form of arbitration where interim relief is given by
the arbitral tribunal to a party who wants to protect their assets and/or
evidence from being otherwise lost or altered. It can be roughly compared to
the concept of interim injunctions granted by civil courts. In India, there is
no mention of the term ‘emergency arbitration’ in the Arbitration and
Conciliation Act, 1996 till date, and regarding the enforceability of the same,
the picture is still unclear. But the concept of emergency arbitration has been
adopted in India by various arbitral institutions like Delhi International
Arbitration Centre, Court of Arbitration of the International Chambers of
Commerce-India, International Commercial Arbitration (ICA), Madras High
Court Arbitration Centre (MHCAC), Mumbai Centre for International
Arbitration etc. within their rules.

Stages of arbitration in India

The stages of an arbitral process as per the provisions of the Arbitration and
Conciliation Act, 1996 are described as follows:

Arbitration agreement (Section 7, Arbitration and Conciliation

Act, 1996)
The arbitration agreement is the first step towards arbitration and it has
been discussed in detail here.

Number of arbitrators (Section 10, Arbitration and Conciliation

Act, 1996)
Section 10 of the Arbitration and Conciliation Act, 1996 lays down the
number of arbitrators that will be adjudgung the arbitral proceedings.
According to this Section-

 The parties are empowered to themselves determine the number of

arbitrators they want provided that such number of arbitrators are
odd in number.
 In cases where the parties are unable to come to a decision as to
what shall be the number of arbitrators, the arbitral tribunal will be
graced by a sole arbitrator.

Commencement of arbitral proceedings (Section 21,

Arbitration and Conciliation Act, 1996)
Section 21 of the Arbitration and Conciliation Act, 1996 lays down the
provision as to when shall an arbitral proceeding begin. According to this
Section, in the event of no agreement to the contrary, the arbitration
proceedings shall be deemed to commence from the date the respondents
have received a request i.e., notice of referring the dispute to arbitration
from the other party i.e., the petitioners / claimants.

Appointment of arbitrators (Section 11, Arbitration and

Conciliation Act, 1996)
Section 11 of the Arbitration and Conciliation Act, 1996 deals with the
provision of appointment of arbitrators. Just like the parties can mutually
decide upon the number of arbitrators vide Section 10 of the Act, similarly
they can also mutually decide upon the procedure of appointment of
arbitrators and can appoint any person(s) of any nationality as arbitrator(s)
based on mutual agreements. Also, in case of disputes regarding
appointment of arbitrators, the parties can approach the Supreme Court or
High Court (as the case may be depending on arbitration agreement) to
appoint arbitrator(s) for them.

Statements of claim and defence (Section 23, Arbitration and

Conciliation Act, 1996)
Section 23 of the Arbitration and Conciliation Act, 1996 envisages the
provision of statements of claim and defence made by both the parties
before the arbitral tribunal. According to the section, subject to the mutual
agreements between the parties or as per the order of the arbitral tribunal,
the claimant shall submit his claims in details corroborated with facts, issues
and relief or remedy sought. In response, the respondent is to submit
defence i.e., counter-statements within the stipulated time. According to the
recently added sub-section (4) of Section 23, the statements of claim and
defence of both the parties should be finished within a maximum period of
six months from the date of appointment of arbitrator(s).

Hearing and written proceedings (Section 24, Arbitration and

Conciliation Act, 1996)
Section 24 of the Arbitration and Conciliation Act, 1996 deals with the
provisions of hearing and written proceedings before an arbitral tribunal.
According to the Section, subject to an agreement to the contrary between
the parties, it is upto the arbitral tribunal to decide whether the arbitral
proceedings will be held orally or on the basis of documents and other
materials. Moreover, as far as practicable the Act encourages the arbitral
tribunal in the holding of oral hearings on a regular basis and strongly
discourages unnecessary adjournments without sufficient cause. The arbitral
tribunal is also empowered to impose cost on the party seeking adjournment
without sufficient cause. It may be noted in this regard that, although speedy
disposal is of the essence in arbitration, it is only just that the parties be
given sufficient notices at every stage of hearings and evidence submission,
inspection etc.

Arbitral award
The judgement or order of the arbitral tribunal is called the arbitral award
and it has been discussed in detail here.

Challenging of arbitral award (Section 34, Arbitration and

Conciliation Act, 1996)
Section 34 of the Arbitration and Conciliation Act, 1996 deals with the
provision of applications for setting aside of arbitral awards and was pari
materia to the Section 34 of the UNCITRAL Model Law on Arbitration. Just
like the UNCITRAL Model Law on Arbitration is territorial in nature, India’s
Arbitration and Conciliation Act, 1996 also follows the territoriality principle.
In other words, just like the seat of arbitration governs the law related to the
arbitral proceedings, similarly the challenge to the arbitral award will also
depend upon the seat of arbitration. Thus, if the seat of arbitration is in
India, any aggrieved party can seek redressal under the provision of Section
34 of the Act.

Section 34(2) and Section 34(2-A) of the Act lays down the ground for
setting aside of the arbitral award and Section 34(3) lays down the time i.e.
limitation period within which the aggrieved party needs to approach the
Court for challenging an arbitral award. According to Section 34(3), the
aggrieved party has 90 days or three months from the date of receipt of the
arbitral award or from the date an application under Section 33 of the Act
seeking correction and interpretation of arbitral award or additional award
has been duly disposed off by the arbitral tribunal.

The grounds for setting aside of an arbitral award under Section 34 of the Act
can be briefly stated as follows:

 A party was under some incapacity.

 The arbitration agreement between the parties is invalid under the
applicable law or violates the law for the time being in force.
 Insufficient notice or lack of proper notice to a party regarding
appointment of arbitrators or arbitral proceedings or where one
party was otherwise unable to present his case.
 The arbitral award pertains to a subject beyond the scope of the
terms of the arbitration agreement or the arbitral award is on a
subject that is non arbitrable in nature as per the law of the land. In
situations where, the arbitral tribunal has transgressed the subject
 submitted to arbitration and such transgression can be shredded off
from the remaining award pertaining to the valid arbitrable subject
as per the arbitration agreement, then the invalid portion is only set
aside and the valid portion of the award becomes enforceable.
 The composition of the arbitral tribunal was in violation of
agreement between the parties subject to the provisions of Part I of
the Act. In other words, if the agreement does not violate the
mandatory provisions of Part I of the Act and still the composition of
the arbitral tribunal violated the agreement between the parties or
in the absence of such an agreement, the composition of the
tribunal violated the provisions of Part I of the Act, it is a ground for
setting aside the arbitral award.
 The arbitral award cannot be in violation of public policy of India.
 Other than an arbitral award of an international commercial
arbitration, any other arbitral award may be set aside in the event
of prima facie vitiation of the award because of its patent illegality.
Initially, there has been a lot of dispute about the power of the Courts under
Section 34 of the Act. The main unresolved question of law was whether the
Courts are only empowered to set aside the arbitral award in case of
violations of procedural safeguards and fairness or can modify or vary them
for the ends of justice. It is now a settled position in law after the
recent National Highways Authority of India v. M. Hakeem (2021) case that
the Courts can only set aside the arbitral award if deemed fit but cannot vary
or modify the arbitral award. This is a welcome interpretation of Section 34
because as stated before Section 34 of the Act is pari materia with Article 34
of the UNCITRAL Model Law on Arbitration. Article 34 of the UNCITRAL Model
Law does not envisage any scope of varying or modifying the arbitral award.
So, with this line of interpretation adopted by the Hon’ble Supreme Court,
the international obligation of India with respect to arbitration has also been
upheld. It is interesting and pertinent to note in this regard that the Courts
under Section 34 of the Act can partially set aside an award subject to the
doctrine of severability. In other words, the bad portion of the award, if
separable from the just portion of the award, can be partially set aside by the
Courts even if that amounts to modification or varying of the arbitral award.

Enforcement of arbitral awards

Section 36 of the Arbitration and Conciliation Act, 1996 deals with the
enforcement of domestic arbitral awards. According to the section, when the
limitation period for approaching the Court under Section 34 of the Act is
over, the arbitral award can be enforced just like a decree of court can be
enforced as per the provisions of the Code of Civil Procedure, 1908.

Part II of the Act deals with enforcement of foreign arbitral awards and the
same has been discussed in detail here.
Important concepts related to arbitration

Arbitration Agreement and its essentials

Arbitration agreement is a written agreement between the parties whereby
both the parties resolve to submit themselves to arbitration in the event of a
dispute. It has been defined in Section 2(1)(b) of the Arbitration and
Conciliation Act, 1996. According to this provision, “Arbitration Agreement”
means an agreement referred to in Section 7. And according to Section
7(1), “arbitration agreement” means an agreement by the parties to submit
to arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether contractual
or not.

It may be noted in this regard that the form of arbitration agreement is not
important. In other words, an arbitration agreement may be a separate
written agreement or it may be inserted in the clauses of the contract
between the parties or it may be present in any form of electronic
communication between the parties.

Conditions to be fulfilled to enforce an arbitration clause

In the event there is a contract between the parties and that contract refers
to another document which contains the arbitration clause, then for such
arbitration clause to be construed as an arbitration agreement, certain
essential conditions need to be fulfilled, which are as follows:

 The contract must be in writing.

 The reference to the arbitration clause in the separate document is
made in a manner so as to signify that the arbitration clause is a
part of the contract.
 The reference to the arbitration clause must be in clear and
unambiguous terms.
 The arbitration clause should be well framed, clearly portraying the
intention of the parties to resort to arbitration, so that in cases of
disputes under the contract, such clause can be made applicable.
 The arbitration clause should not be repugnant to any other terms
of the contract.
 Whether the arbitration agreement is an independent agreement or
a composite agreement, it is important that the arbitration clause
should be severable from the rest of the agreement or contract. This
 ensures that the arbitration agreement survives if the main
agreement gets terminated or invalidated.
 In case the arbitration agreement is an independent agreement, it
must fulfil the criteria of a valid contract.

Seat of arbitration
The place of arbitration is referred to as the seat of arbitration. Usually, both
parties agree to a seat of arbitration within the terms of the arbitration
clause or arbitration agreement itself. The importance of the seat of
arbitration is paramount because it is the seat of arbitration that governs the
arbitration rules and procedures to be followed in resolving the dispute in
case the parties have not predetermined any procedure. In other words, the
seat of arbitration determines the situs of arbitration. But in case the parties
fail to agree on the place of arbitration as per Section 20(1) of the Arbitration
and Conciliation Act, 2015, then the arbitral tribunal can fix the seat of
arbitration for the parties depending on the circumstances of the case and as
per the convenience of the parties vide Section 20(2) of the Act.

In the case of Bharat Aluminium Company Ltd v. Kaiser Aluminium Technical

Service Inc (BALCO case) (2012), the Hon’ble Supreme Court held that if the
disputing parties have agreed to a seat of arbitration in a different country,
then it necessarily implies that the parties have accepted the law of that
country governing the rules and procedures of arbitration. However, after the
enactment of the Arbitration and Conciliation (Amendment) Act, 2015, Part I
of the Act, such as Section 9 (interim relief), Section 27 (court assistance for
evidence), Section 37(1)(a) (appealable orders) of the Act will apply even to
an international commercial arbitration where the seat of arbitration is
outside India subject to an agreement to the contrary vide Proviso to Section
2(2) of the Act.

In the recent case of PASL Wind Solutions (P) Ltd. v. GE Power Conversion
(India)(P) Ltd. (2021) the Hon’ble Supreme Court, stressing on party
autonomy, held that two Indian parties have the liberty to choose a foreign
seat of arbitration.

Venue of arbitration
Sometimes confusion arises when the words ‘venue’, ‘seat’, ‘place’ of
arbitration get used interchangeably in the arbitration agreement or
arbitration clause. Although the seat of arbitration and the place of
arbitration mean the same thing, the venue of arbitration usually means the
convenient geographical place where the arbitration proceedings are being
conducted. So, the seat of arbitration refers to the place whose rules and
procedures are to be applied to the arbitration proceedings and it also
determines which courts will have supervisory jurisdiction over the
arbitration proceedings. Thus, the venue of arbitration may not be the same
as the seat of arbitration. When the seat of arbitration has been fixed, i.e.,
the governing rules and procedures have been fixed, the proceedings can go
on at any geographical place or venue, even across countries. Hence, it can
be said that the term ‘venue of arbitration’ carries less weightage than the
term ‘seat of arbitration’.

Arbitrability of subject matter

All matters cannot be resolved outside the court by arbitration since
arbitration is a private forum of resolution. This brings us to the crucial word
‘arbitrability’ which determines if a subject matter can be submitted to the
process of arbitration or not. The legislature and judicial authority decide
which matters cannot be subjected to arbitration.

The legislature has barred certain types of disputes from being subjected to
arbitration by stating in Section 2(3) of the Arbitration and Conciliation Act,
1996 that if by any law in force some matters are barred from arbitration
then such law will override any provisions of Part I of this Act. In other
words, the non-obstante provision mentioned in Section 5 of the Act will not
override any law in force that bars a subject matter from being submitted to
arbitration. Also, Section 34(2)(b)(i) of the Act enables the courts to set
aside an arbitral award if the subject matter of the arbitration was non-
arbitrable in nature. Basically, no list has been provided by the legislature
which dictates which subject is arbitrable and which is not arbitrable. Section
2(3) read with Section 34(2)(b)(i) of the Act empowers the judiciary to
decide the principles for non-arbitrability of a subject matter within the
parameters of law and this was held in the recent case of Vidya Drolia v.
Durga Trading Corporation (2020).

To make the principles of arbitrability of a subject matter comprehensible,

the Hon’ble Supreme Court, for the first time, in Booz Allen & Hamilton Inc.
v. SBI Home Finance Ltd. (2011) laid down the following three conditions
that need to be met for a subject matter to become arbitrable, viz:

1. The disputes between the parties must be capable of being settled

and adjudicated by the private forum of arbitration.
2. The disputes must come under the ambit of the arbitration
agreement or arbitration clause.
3. The parties to the dispute must refer the same to arbitration.
Arbitral Award
In simple words, the judgement or order of the arbitral tribunal (consisting of
the appointed or chosen arbitrators) is called the arbitral award. Section
2(1)(c) of the Arbitration and Conciliation Act, 1996 defines arbitral award.
According to this provision, “arbitral award includes an interim award.” It is
clear from this definition that the statutory definition is not exhaustive in
nature and basically includes any order of the arbitral tribunal.

The arbitral award must be duly written, signed by the arbitrator(s) and
dated with proper mention of the place of arbitration. The arbitral award
must contain due reasons for the granting of such an order unless the parties
have waived the necessity of a reasoned decision or speaking order. It may
be noted in this regard, that an arbitral award is binding on the parties just
like a judgement of the court. Also, any party within thirty days of the receipt
of the award may request the tribunal to correct any errors in the award and
if all the parties so wish, can even ask for interpretation of a specific part or
portion of the arbitral award.

After the time has expired to make an application for setting aside of the
arbitral award under Section 34 of the Act and no such dismissal or stay
order has been granted by the court, then the arbitral award in a domestic
arbitration shall become enforceable just like a decree of a Civil Court under
the Code of Civil Procedure, 1908.

In general, when the seat of arbitration is in India, whether it is a domestic

arbitration or an international commercial arbitration, the award granted is a
domestic arbitral award. In other words, a domestic award is granted under
Part I of the Act.

Foreign Arbitral Award

Foreign arbitral award or foreign award is the award granted by an
arbitration tribunal recognised by the New York Convention (1958) (as
defined in Section 44 of the Act) and under the Geneva Protocol and Geneva
Convention (as defined in Section 53 of the Act). In a way, because of a lot
of dissatisfaction, the New York Convention (1958) replaced the Geneva
Protocol (1923) and Geneva Convention (1927).

Recognition and enforcement of foreign arbitral awards

A foreign arbitral award is enforceable under Part II of the Arbitration and
Conciliation Act, 1996. But in order to be enforceable, certain conditions laid
down under Section 48 of the Arbitration and Conciliation Act, 1996 (for
awards granted under the New York Convention, 1958) and Section 57 of
the Act (for awards granted under the Geneva Convention, 1927) need to
be fulfilled. Some of these conditions are mentioned below:

 The arbitral award is granted in matters considered to be

commercial matters by laws in force in India because India has
adopted the commercial reservation under the New York Convention
and the Geneva Convention.
 The arbitral award must be granted in pursuance of an arbitral
agreement that comes under the ambit of the New York Convention
and the Geneva Convention.
 The arbitral award should be granted in relation to parties where at
least one person is subject to the jurisdiction of a territory duly
notified in the Official Gazette by the Indian government and passed
in one such notified territory.
 The award must be final in nature to become enforceable in India,
and such award will be deemed to be final when no proceedings
challenging the award are pending or ongoing in that foreign
country.
 The foreign arbitral award must not be against the public policy in
India.
 The foreign award must be an arbitrable subject matter in India.
 The foreign award must not have been set aside or suspended by
competent authorities in the foreign country.
 The executing court for a foreign award may be a High Court which
has jurisdiction over the territory in which the award debtor’s assets
are situated or where a suit for the recovery of money can be filed.
 In order to enforce a foreign award, the enforcing party must duly
submit before the executing court the following:

 The original or authenticated copy of the arbitral award.

 The original or certified copy of the arbitration agreement.
 Evidence demonstrating that the arbitral award is a foreign award.

UNCITRAL Arbitration Rules

UNCITRAL Arbitration Rules are a set of rule based procedural framework of
arbitration rules that parties, either as a part of their contract or after a
dispute occurs, can use to govern their arbitration proceedings. UNCITRAL
Arbitration Rules are pretty flexible in nature as they allow the parties to
mutually modify the rules to specifically suit their needs vide Art.
1(1), UNCITRAL Arbitration Rules (2013 Revision). The UNCITRAL Arbitration
Rules were originally adopted way back in 1976 by the United Nations
General Assembly but were last modified in 2013 and the latest Expedited
Arbitration Rules were adopted recently on 21.07.2021 by the UNCITRAL
w.e.f. 19.09.2021 by this press release. The UNCITRAL Arbitration Rules can
be broken down into four parts, viz:

 Section 1: Introductory Rules (Articles 1-6)

 Section 2: Composition of the Arbitral Tribunal (Articles 7-16)
 Section 3: Arbitral proceedings (Articles 17-32)
 Section 4: Arbitral award (Articles 33-43).

UNCITRAL Model Law on International

Commercial Arbitration
The UNCITRAL Model Law on International Commercial Arbitration acts as a
set of guidelines so that the national governments can make proper
arbitration laws in their countries. In other words, it is designed to act as a
lighthouse while guiding states to frame their own domestic legislation on
arbitration in a proper way. It was first adopted in 1985 and was modified
later by amendments in 2006. In cases where countries already have
legislation on arbitration, the UNCITRAL Model Law is meant to assist the
States in the modernisation and reformation of their domestic legislation on
arbitration at par with international standards. It covers all stages of
arbitration, starting from the arbitration agreement to enforcement of the
arbitral award.

Laws dealing with Arbitration in India

Arbitration and Conciliation Act, 1996

In India, the main law which governs arbitration is the Arbitration and
Conciliation Act, 1996 which came into force on 22nd August, 1996 and
extends to the whole of India. In the 246th Report of the Law Commission, it
was noted that “The 1996 Act is based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985 and the UNCITRAL Conciliation
Rules, 1980.” After the enactment of the Arbitration and Conciliation
(Amendment) Act, 2015 and 2019, recently the Arbitration and Conciliation
(Amendment) Act, 2021 was passed into law on 10th March, 2021 and
retrospectively came into force on and from 4th November, 2020 except as
otherwise stated.

The Act can be structured into four parts and seven schedules, viz:

 Part I- Arbitration (Sections 2 to 43)

 Part II- Enforcement of certain foreign awards (Sections 44 to 60)
 Part III- Conciliation (Sections 61 to 81)
 Part IV- Supplementary Provisions (Sections 82 to 86)
 First Schedule– “CONVENTION ON THE RECOGNITION AND
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS” read with Section
44.
 Second Schedule– “PROTOCOL ON ARBITRATION CLAUSES” read
with Section 53.
 Third Schedule– “CONVENTION ON THE EXECUTION OF FOREIGN
ARBITRAL AWARDS” read with Section 53.
 Fourth Schedule– “FEES OF ARBITRAL TRIBUNAL” read with Section
11(14).
 Fifth Schedule– “GROUNDS THAT GIVE RISE TO JUSTIFIABLE
DOUBTS AS TO THE INDEPENDENCE OR IMPARTIALITY OF
ARBITRATORS” read with Section 12(1)(b).
 Sixth Schedule– “ARBITRATOR DISCLOSURE FORM” read
with Section 12(1)(b).
 Seventh Schedule– “CATEGORIES SPECIFYING AS TO WHAT WILL
MAKE A PERSON INELIGIBLE FOR APPOINTMENT AS ARBITRATOR”
read with Section 12(1)(5).

New Delhi International Arbitration Centre Act of

2019 (NDIAC Act, 2019)
The New Delhi International Arbitration Centre Act, 2019 was enacted to
establish the New Delhi International Arbitration Centre. This centre is meant
to act as an independent and autonomous institutionalised arbitration centre
and for acquisition and transfer of the undertakings of the International
Centre for Alternative Dispute Resolution for the more efficient and better
management of arbitration. The New Delhi International Arbitration Centre
has also been declared as an institute of national importance and the Indian
government is actively working to make it a major arbitration hub which can
provide quick and efficient dispute resolution. This centre was necessary to
overcome the failures of the International Centre for Alternative Dispute
Resolution which was established in 1995.
Arbitration Council of India (ACI)
The Arbitration and Conciliation (Amendment) Act, 2019 under its Clause
(10) introduced Part IA in the Arbitration and Conciliation Act, 1996. This
part consists of Sections 43A to 43M and inter alia, speaks about the setting
up of the Arbitration Council of India as a body corporate with headquarters
in Delhi. The Council will be entrusted to perform functions and discharge
duties as per the provisions of this Act. Part 1A is yet to come into force as
the same has not yet been notified by the central government in the Official
Gazette. One of the major functions of the Arbitration Council will be to boost
institutionalised arbitration by grading institutes of arbitration and accrediting
arbitrators as per the provisions of the Eighth Schedule, which has yet to
come into force.

Advantages of arbitration
The advantages of arbitration are discussed as follows:

1. Fair process: In arbitration, both parties usually decide or appoint

the arbitrators. This ensures dispute resolution by a fair and
impartial third party, unlike in litigation where the parties do not
have much control over the judge or jury selection.
2. Timely procedure: Arbitration proceedings mainly work on
arbitration rules that have been framed based on the principles of
natural justice. They are not complex like procedural laws necessary
in traditional court battles where the legal dispute gets dragged on
for years. The more flexible and less formal arbitration rules ensure
a quick dispute resolution between the parties.
3. Cost effective process: In most cases, both the parties bear the
cost of arbitrators equally as per the pre set terms of the arbitration
agreement. Since, arbitration is a smoother and faster process, the
disputes end quickly with less legal representation and saves tons of
money for both parties.
4. Private proceedings: Mostly, the parties at dispute are unwilling
to air their dirty laundry in front of the whole world if the dispute
reaches trial stage in front of a jury or judge. This problem is solved
by outside the court resolution by arbitration in private meetings
where confidentiality is ensured.
5. Final and binding nature: The arbitral awards granted by the
arbitral tribunal are binding on both parties and they are
enforceable in nature, just like a decree of a civil court. Only in very
limited circumstances, as prescribed in the domestic legislation, can
arbitral awards be challenged in court.
 6. Ease of proceedings: The simple procedural nature of arbitration
encourages the disputing parties to come to an agreeable solution
easily.
7. Reduces burden of courts: Most courts in most countries are
overburdened with cases. Arbitration is one of the key solutions to
reducing the burden of the courts and leaving the courts free for
more pressing issues that absolutely warrant court proceedings.

Disadvantages of arbitration
The disadvantages of arbitration are discussed as follows:

1. No appeals: Arbitral award is binding on both the parties. So, even

if one party feels that the award was unjustified or biased, they
mostly cannot appeal against it. Only in very limited circumstances,
the arbitral awards are set aside.
2. Evidence Rules: In a traditional court, usually there are rules that
strictly govern as to what evidence is admissible and what is not.
But in case of arbitration, the arbitrators admit whatever is brought
in front of them most of the time. Illegally obtained evidence
admission is a major problem in most arbitrations in the absence of
proper arbitration rules for evidence.
3. Lack of cross-examination: Most arbitrations lack the necessary
rules for cross-examination of documents and witnesses that are
possible in courts. This jeopardises the credibility of the documents
and witnesses presented.
4. Lack of consistency: Arbitration rules governing arbitrations vary
from country to country and convention to convection. This creates
the problem of lack of consistency and sometimes leads to unjust or
biased arbitral awards.
5. Lack of Transparency: Public perception of public bodies at
disputes is very important and when these public entities get to
work behind closed doors by arbitration, there are chances of
sweeping the dust beneath the carpets privately and the public miss
the chance of holding these public bodies accountable for their faults
committed.

Why is arbitration preferred more in modern days

Indian laws related to arbitration and other alternative dispute resolution
(ADR) mechanisms have been amended many times to adapt the country’s
legal scenery to the evolving international commercial law jurisdictions in the
interest of integrating India with the world’s business community. Concerted
efforts are being made by both the government and various private players
to promote ADR mechanisms like arbitration, conciliation, mediation and
negotiation because of the many advantages of arbitration as stated before.
Because of the many advantages that arbitration brings to the table, it is
preferred in modern times and the journey ahead for India in this regard can
be stated as follows:

The way forward for arbitration in India

The way forward for arbitration in India can be envisaged under the following
points as mentioned below:

1. Necessity of a virtual or platform inbuilt Online Dispute Resolution

(ODR) System in India:
If a dedicated platform based Online Dispute Resolution (ODR) mechanism is
introduced in India, then the whole Indian consumer complaint redressal
scenario stands to be revolutionised. Such ODR platforms are available for
various European Union (EU) countries like Norway, Liechtenstein, Iceland,
etc. and even countries like Mexico have adopted similar procedures. In this
process, consumers may file their complaints against goods and services
online and the consumer protection agencies or other responsible authorities
of the concerned countries resolve these complaints quickly and efficiently
via telephone or over the internet.

2. Necessity to address and accept emergency arbitration in India:

In the famous Amazon, Future Group and Reliance case, Amazon obtained an
emergency injunction from a Singapore International Arbitration Centre
(SIAC) tribunal and blocked the Future Group from Rs 24,700 crores retail
business monetization agreement. But since there is considerable
controversy regarding emergency arbitration in India, the enforceability of
this emergency award became doubtful. Singapore, Hong Kong, London
Court of International Arbitration (LCIA), the American Arbitration
Association (AAA), and the International Chamber of Commerce (ICC) have
officially accepted emergency arbitrator’s temporary orders but India is still
lagging behind. This novel concept of emergency arbitration saves time and
money and expedites the process. It is high time that India introduces proper
legislative provisions for the enforceability of emergency awards.

3. Need for proper laws to address novel technologies like blockchain,

NFTs, smart contracts in arbitration and ADR:
The newly introduced Digital Dispute Resolution Rules in the UK (UK
Rules) have pioneered the way digital disputes are resolved, especially using
novel technologies like blockchain. A novel concept called ‘on-chain’ dispute
resolution or ‘automatic dispute resolution’ has been introduced where the
arbitrator is directly empowered to enforce the arbitral award on a blockchain
using a private key. E.g: it can be decided by the arbitral tribunal that the
losing party deposit compensation amount immediately in the victorious
party’s blockchain based digital wallet. Moreover, by the use of ‘digital
signature, cryptographic key, password, or other digital access grant’ the
arbitral tribunal is enabled to operate, modify, sign or cancel any relevant
digital asset. It is highly recommended that India adopts new laws and
amends existing laws to embrace this new future where smart contracts,
NFTs, blockchain technologies etc are becoming an integral part of arbitration
and other ADR methods.

Permanent Court of Arbitration (PCA)

The Permanent Court of Arbitration (PCA) was established way back in 1899.
It serves as an intergovernmental organisation with over 122 contracting
parties. It is situated at the Peace Palace, Hague. Its main aim is to adopt
arbitration and other alternate dispute resolution mechanisms to settle
disputes between the governments of countries. Today, even after more than
a century, the Permanent Court of Arbitration acts as a modern, multi-
faceted arbitral institution to meet the ever evolving needs of the
international community. The organisational structure of the PCA can be said
to be made of three bodies viz-

 The Administrative Council– looks after the policies and budgets of

the PCA.
 The Members of the Court– that consists of a panel of independent
potential arbitrators.
 The International Bureau– this is the Secretariat which is headed by
the Secretary General.
One of the famous cases of the Permanent Court of Arbitration (PCA) where
India had been a party is discussed as follows:

The Enrica Lexie case (Italy v. India)

This was the famous ‘Italian Marines case’ where inter-state arbitration took
place between the Republic of India and the Italian Republic following ad hoc
rules of procedure under Annex VII, Article 1 of the United Nations
Convention on the Law of the Sea (UNCLOS). It all started on 15th February
2012, when two Italian marines aboard the Italian oil tanker Enrica Lexie,
approximately 20.5 nautical miles off the coast of India, shot two Indian
fishermen aboard the Indian vessel St. Antony. The five member arbitral
tribunal of the PCA granted the arbitral award wherein it was found inter alia
that the Italian marines would enjoy immunity from criminal proceedings in
India just like state officials, and Italy was to give compensation to India for
the “connection with the loss of life, physical harm, material damage to
property (including to the “St. Antony”) and moral harm suffered by the
captain and other crew members of the “St. Antony.” The compensation
amount was to be mutually decided between India and Italy, and the agreed
upon sum received as due compensation was INR 100 million (10 crores).

Conclusion
Today, it is indeed true that India has come a long way in the journey of
accepting, promoting and implementing arbitration and other alternative
dispute resolution (ADR) mechanisms. Multiple amendments to the
Arbitration and Conciliation Act, 1996 to cater to the needs of the ever
evolving global business community, show the commitment of the Indian
government in making India a global hub for arbitration and other ADR
mechanisms. But India still has miles to go in becoming the first choice of the
international commercial bodies in the ease of resolving disputes in business
by arbitration and other ADR methods. Constant adaptations based on the
learnings of the relevant commercial jurisdictions of the world and proper
implementations of the same with regard to arbitration can only leverage
India as the world leader in quick and efficient dispute resolution.

What is the difference between UNCITRAL

arbitration rules and UNCITRAL model law on
arbitration?
Simply put, the UNCITRAL arbitration rules are a set of arbitration rules that
disputing parties may apply to govern their ad hoc arbitration proceedings,
whereas UNCITRAL model laws on arbitration are meant for States so that
the countries can be guided to make proper domestic legislation pertaining to
arbitration.

What is the importance of arbitration rules?

Arbitration rules are the procedural rules that govern the proceedings and all
stages of arbitration. The parties are usually free to accept the rules in full or
accept them in part or modify them mutually to suit their specific needs.
What to do if originally there was no arbitration
clause or agreement and the parties are willing to
resort to arbitration later?
In that case, the parties should form a new arbitration agreement in clear
terms and resort to arbitration thereafter. It is pertinent to mention in this
regard that the subject matter of the dispute must be arbitrable in nature for
this recourse.

The dispute is already in court and the parties

want to resort to arbitration. Is this possible? If
yes, how?
Yes, this is possible if the subject matter of the dispute is arbitrable in
nature. If there was no arbitration clause or agreement before, a new
arbitration agreement must be entered into first. But most importantly, leave
of the court where the dispute is ongoing, is mandatory and domestic laws, if
any, must be upheld.

What are some of the examples of disputes that

can be resolved by arbitration?
Generally, any civil, commercial, contractual or business disputes between
parties can be resolved by arbitration depending on the domestic legislation
on arbitration and other laws in force for the time being. Some examples of
disputes that can be resolved by arbitration are: matrimonial matters like
divorce, maintenance; insolvency matters like winding up of a company,
declaring a person insolvent; damages for breach of contract, employer-
employee disputes, neighbour disputes, IPR disputes etc. It must be
mentioned here that most matrimonial disputes and insolvency disputes are
not arbitrable in India.

Can criminal matters be referred to arbitration?

Arbitrations are mostly for private disputes and since criminal matters are
committed against State, criminal matters are generally not arbitrable in
nature. Only in very exceptional cases where the criminal matter prima facie
appears to be false in the bigger picture of a private dispute, with the leave
of the court, such criminal matters may be referred to arbitration, subject to
domestic legislations.

Are arbitration proceedings confidential?

Yes, the arbitration proceedings are completely private and confidential in
nature and if one party leaks such confidential information related to
proceedings, damages can be sought from the accused party.

How much does arbitration cost?

Arbitration proceedings are very cost effective in nature compared to
litigation. Mostly, both the parties bear the cost equally. If the seat of
arbitration is India, Section 11(14) of the Arbitration and Conciliation Act,
1996 read with the Fourth Schedule of the Act, determines the fees of the
arbitral tribunal mostly depending on the sum in dispute.

Can two Indian parties have a foreign seat of

arbitration?
Yes, in the recent case of PASL Wind Solutions (P) Ltd. v. GE Power
Conversion (India)(P) Ltd. (2021) the Hon’ble Supreme Court, stressing on
party autonomy, held that two Indian parties have the liberty to choose a
foreign seat of arbitration.

Can the Supreme Court of India refuse to enforce

a foreign arbitral award?
Yes, the Supreme Court can refuse to enforce a foreign arbitral award if the
subject matter of the award is not arbitrable in India or if the award is
against the public policy of India or the conditions mentioned in Section 48 of
the Arbitration and Conciliation Act, 1996 for the enforcement of foreign
awards are not met.
 Arbitration and Conciliation
Act, 1996
Table of Contents
 Introduction
 Applicability of the Arbitration and Conciliation Act, 1996
o Objectives of the Arbitration and Conciliation Act, 1996
 Scheme of the Arbitration and Conciliation Act, 1996
o Definitions under the Arbitration and Conciliation Act, 1996
 Legal analysis of the Arbitration and Conciliation Act, 1996
o Arbitration (Part I)
 Types of Arbitration
 Advantages of arbitration
 Disadvantages of arbitration
 Cases not referred to arbitration
o Arbitral tribunals
 Composition of tribunals
 Procedure for appointment of arbitrators
 Termination of arbitrator
 Jurisdiction
o Arbitral award
 Types of arbitral awards
 Recourse against arbitral awards
o Foreign awards (Part II)
o Conciliation (Part III)
 Features of conciliation
 Proceedings of Conciliation under the Act
 Role of conciliator
o Supplementary provisions (Part IV)
 Landmark case laws
o Haryana Space Application Centre (HARSAC) v. Pan India Consultants Pvt. Ltd.
(2021)
 Facts of the case
 Issue involved in the case
 Judgement of the Court
o Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund (2021)
 Facts of the case
 Issue involved in the case
 Judgement of the Court
o Oriental Structural Engineers Pvt. Ltd. v. State of Kerala (2021)
 Facts of the case
 Issue involved in the case
 Judgement of the Court
 Conclusion
 Frequently asked questions
 References
Introduction
ADR means Alternative Dispute Resolution which includes various methods of
settling a dispute without getting into the intricacies of the court. It is a
method where parties try to resolve their disputes privately in front of a
third-person expert. The decision is binding on the parties like the decision of
the court. It includes methods like arbitration, mediation, conciliation and
negotiation. These work on the principles of justice, legal aid and speedy trial
as given under Article 39A of the Indian Constitution. Even Section 89 of
the Code of Civil Procedure, 1908 provides settling disputes by way of ADR.
The proceedings are flexible and creative. It provides satisfying solutions
with reduced cost and time and thus, is an emerging field in Law. The
Parliament felt the need and passed an act regarding this matter. The article
deals with an act on arbitration and conciliation known as Arbitration and
Conciliation Act, 1996. It lays out the object, extent and applicability and
discusses the important provisions under the Act.

Applicability of the Arbitration and

Conciliation Act, 1996
The Act applies to the whole of India but Part I, Part II, Part III and Part
IV will extend to Jammu and Kashmir only if they relate to international
commercial arbitration or conciliation. The Act was enforced on 22nd August
1996 but the ordinance was promulgated by the President on 16th January
1996. The other two ordinances i.e., Arbitration and Conciliation ordinances
were passed on 26th March and 21st June 1996 respectively.

Objectives of the Arbitration and Conciliation Act,

1996
Earlier, the law on arbitration was dealt with under 3 acts which eventually
became outdated. As a result of which the bodies of trade and industry and
experts of arbitration demanded and proposed amendments to make the Act
responsive and at par with the needs of the society. It was felt that the
economic reforms in the country can only be dealt with if domestic and
international commercial disputes and their settlement are not outside the
purview of such reforms. The United Nations in 1985 adopted the Model Law
on International Arbitration and Conciliation and asked all the countries to
give due importance to it. This resulted in the enforcement of the said Act.
The various objectives of the Act are:

 Cover international and domestic commercial arbitration and

conciliation comprehensively.
  Make a procedure which is fair, efficient and capable of meeting the
needs of the society for arbitration and conciliation.
 Provides reasons by the tribunal for granting any arbitral award.
 Ensure that the tribunal does not exercise its jurisdiction beyond the
limits.
 Minimise the role of courts and reduce the burden on the judiciary.
 It permits the tribunal to opt for arbitration and conciliation as a
method of dispute settlement.
 It makes sure that every award is enforced in the same manner as
the decree of the court.
 It provides that the conciliation agreement reached by the parties
has the same effect as the award granted by an arbitral tribunal.
 It also works on the enforcement of foreign awards.

Scheme of the Arbitration and Conciliation

Act, 1996
The Act is divided into four parts:

 Part I (Sections 2-43) – Applies to the place of arbitration in India.

The award granted is treated as a domestic award.
 Part II (Sections 44-60) – Enforcement of foreign awards.
 Part III (Sections 61-81) – Conciliation
 Part IV (Sections 82-86) – Supplementary provisions
It contains three schedules:

 Schedule I – Convention on the recognition of foreign awards of

arbitration.
 Schedule II – Protocol to be followed on arbitration clauses.
 Schedule III – Convention for the execution of foreign arbitral
awards.

Definitions under the Arbitration and Conciliation

Act, 1996
Section 2 of the Act gives various definitions of some important terms given
in the Act. These are:
 1. Arbitration – Section 2 (1)(a) of the Act defines arbitration as to any
arbitration which is either administered or not by a permanent
arbitral institution.
2. Arbitration agreement – Section 2(1)(b) of the Act says that for
arbitration agreement Section 7 of the Act must be referred.
3. Arbitral award – this has not been defined clearly in Section
2(1)(c) but mentions that it includes interim award.
4. Arbitral tribunal – it means a sole arbitrator or panel of arbitrators
who help in arbitration. (Section 2(1)(d))
5. Courts – Section 2(1)(e) defines courts. It includes civil courts
having original jurisdiction in a district and the High Court having
jurisdiction to decide issues related to the subject matter of the
arbitration.
6. International commercial arbitration – defined under Section
2(1)(f). It means arbitration in disputes arising out of a legal
relationship, whether contractual or not and where one party is a
national of another country, a body corporate in another country,
company under the control of any other country or government of a
foreign country.

Legal analysis of the Arbitration and

Conciliation Act, 1996

Arbitration (Part I)
It is defined under Section 2 (1)(a) of the Act. It is an alternative to litigation
in courts and is advantageous as it provides flexibility and confidentiality.
According to Black Law Dictionary, it means a method of resolving disputes
which includes two parties and a neutral third party whose decision is binding
on both parties.

Section 8 of the Act talks about the powers of any judicial authority to refer a
case to arbitration. It must be followed by an arbitration agreement. The
Hon’ble Supreme Court in the case of P. Anand Gajapati Raju v. P.V.G Raju
(2000) gave certain requirements necessary for referring parties to
arbitration:

 An arbitration agreement must be there.

 A party must bring an action in court against others.
 The subject matter must be the same as in arbitration.
 One party demands arbitration in court.
In another case of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd.
(2011), it was held that there is no time limit to file an application but it
should be filed before submission of the first statement related to the
dispute. Further, Section 9 provides that the parties to arbitration may at any
time refer to the court for interim measures.

Types of Arbitration
1. Domestic arbitration – It means that the proceedings of
arbitration will take place as per Indian laws and be subject to
Indian jurisdiction.
2. International and commercial arbitration – This is done in
cases involving disputes out of a legal relationship where one of the
parties is a foreign national, body corporated in some other country,
a company or group which is under the control of some other
country and government of a foreign country.
3. Institutional arbitration – It is administered by arbitration
institutions like the Indian Council of Arbitration, the International
Centre for Alternative Dispute Resolution (ICADR) etc.
4. Statutory arbitration – some acts provide for the resolution of
disputes by arbitration. In case there is any inconsistency between
any Act and Part I of the Arbitration Act then the provisions given in
that Act will prevail.
5. Ad hoc arbitration – It means an arbitration where parties agree
without any assistance from the Arbitral tribunal.
6. Fast track arbitration – It is also called documentary arbitration.
The arbitration proceedings are very fast and time-saving. It is
solely based on the claim statement by one party and its written
reply by another.
7. Look–sniff arbitration – It is a combination of an arbitral process
and the opinion of an expert. There are no formal submissions and
hearings under this.
8. Flip–flop arbitration – It is also called pendulum arbitration. The
parties in this type of arbitration create the cases before and then
invite the arbitrator to decide any one of the two options.

Advantages of arbitration
 A person appointed as arbitrator is based on the whims of the
parties.
 If parties agree only then an arbitral tribunal is taken into matter.
 It is inexpensive and saves time.
  It ensures a fair trial.
 Gives freedom to the parties from judicial intervention.
 Parties choose the place of arbitration themselves (Section 20).
 The proceedings are kept private and confidentiality is maintained.
 The arbitral award is enforced in the same way a decree of the court
is enforced.

Disadvantages of arbitration
 It does not always guarantee an expeditious resolution.
 The procedure is at times uncertain.
 It cannot give remedies like punishment, imprisonment, injunction,
etc. which are given in courts.
 Due to flexibility, it is ineffective.
 The method cannot be easily used in disputes involving multiple
parties.

Cases not referred to arbitration

Generally, cases of civil rights where the remedy is the damages are referred
to arbitration but Section 2(3) of the Act gives the list of such cases which
cannot be submitted to arbitration. These are:

 Winding up proceedings of any company. (Haryana Telecom

Ltd. v. Sterlite Industries (1999);
 Disputes that have to be determined by any particular tribunal as
the law may provide;
 Proceedings related to insolvency;
 Probate proceedings;
 Question of will and genuineness;
 Guardianship matters;
 Succession disputes;
 Disputes related to immovable property;
 Illegal transaction cases;
 Proceeding under Section 145 of the Code of Criminal Procedure;
and
 A criminal case cannot be referred to arbitration;
Arbitral tribunals

Composition of tribunals
It is the creation of an agreement which conforms with the law. Section 10 of
the Act enables the parties to determine freely the number of arbitrators to
settle their dispute. The only restriction is that the number of such
arbitrators must not be even. If the parties are not able to decide then there
will be only 1 arbitrator. But if there are even number of arbitrators then the
agreement cannot be held invalid merely on this ground. (Narayan Prasad
Lohia v. Nikunj Kumar Lohia, 2002)

Procedure for appointment of arbitrators

Further, Section 11 of the Act provides the procedure for the appointment of
arbitrators. The valid requirements for any such appointment are:

 Party must give proper notice of appointment to the other party. If

it does not do so, the appointment is held invalid.
 A person appointed as an arbitrator must be duly informed and his
consent must be taken.
 The consent must be obtained before finalising his appointment.
It also says that if the parties fail to appoint an arbitrator within 30 days of
the request or if two arbitrators are appointed and not the third one, then
the appointment will be made by Chief Justice or any person on his behalf
designated by him but with the prior request of the parties.

Termination of arbitrator
The grounds for termination are given under Section 14 and Section 15 of
the Act. These are:

 If he is not able to perform his functions without undue delay

(whether de jure or de facto),
 If he withdraws or is terminated by the parties,
 He shall be terminated where he withdraws himself or by agreement
of the parties.
 On his termination, a substitute arbitrator will be appointed as per
Section 15.
Jurisdiction
Section 16 of the Act provides that the tribunal will act in its jurisdiction. If
the arbitral tribunal has no jurisdiction then a plea will be raised but not later
than when the statement of defence is submitted. It also provides that in
case a party is not satisfied with the arbitral award, it can make an
application to set it aside according to Section 34 of the Act. The Supreme
Court in the case of Centrotrade Minerals and Metals v. Hindustan Copper
Ltd. (2006), held that any issue related to the jurisdiction can be raised by
people in the proceedings or anyone from outside. But if it is made by the
party then it must be done during the proceedings or at the initial stage.

Arbitral award
It is a final determination of a claim or a part of it or a counter-claim
awarded by the arbitral tribunal. It must be written and duly signed by the
members of the arbitral tribunal as given under Section 31 of the Act. The
Section further gives the power to the tribunal to make interim awards for
any matter. In case of payment of money, it can award the interest which
seems reasonable, just and fair to the tribunal.

Section 32 of the Act empowers the arbitral tribunal to terminate the

proceedings by making a final arbitral award. The procedure for any
correction in the award or its interpretation is given under Section 33 of the
Act. It also gives the power to the tribunal or the arbitrator to amend, correct
or remove any errors of any kind within 30 days but is silent on judicial
review. The tribunals cannot exercise their jurisdiction beyond whatever has
been mentioned in this section.

Types of arbitral awards

1. Interim award – It is the determination of any issue arising out of
the main dispute. It is a temporary arrangement to satisfy a party
and is subject to the final award.
2. Additional award – According to Section 33 of the Act, if the
parties find that certain claims have been missed out by the arbitral
tribunal and they were present in the proceedings then it can after
notifying other parties, make a request to the arbitral tribunal to
make an additional award and cover the claims which have been
left.
3. Settlement awards – It is made if the parties agree on certain
terms of the settlement. As per Section 30 of the Act, the arbitral
tribunal may use any method of dispute resolution like mediation,
conciliation or negotiation to bring a settlement between the
parties.
 4. Final award – It is an award which finally determines all the issues
in a dispute. It is conclusive unless set aside by courts and binding
on the parties.

Recourse against arbitral awards

Under Section 34 of the Act, a party if not satisfied can make an application
to set aside the award granted by an arbitral tribunal. The time limit to make
such an application is not more than 3 months from the date the arbitral
award was made. The grounds are:

 Incapacity of parties.
 Non-existence of the agreement of arbitration.
 Did not follow the due process.
 Error on the part of the arbitral tribunal to exercise its jurisdiction.
 Improper composition of the arbitral tribunal.
 The subject matter is not capable of being referred to arbitration.
 It is against public policy.
 Fraud or corruption.
Section 37 of the Act provides that if a person is not satisfied with the order
passed by the tribunal, he/she can appeal to the court. However, there are
no provisions for a second appeal once an appeal has been made. In the case
of Pandey and Co. Builders Pvt. Ltd. v. State of Bihar (2007), it was held that
the appellate authority in any case which is referred to arbitration must be
decided from the definition of court given under Section 2 of the Act.

Foreign awards (Part II)

Foreign awards are given in the disputes arising out of some legal relations
which can either be contractual or not and are considered under any
commercial law of the country. In simple terms, it means the awards given in
International commercial arbitration. Foreign awards are granted in foreign
countries and are enforceable in India under the Act. It is divided into two
chapters:

 The New York Convention (1958)

 The Geneva Convention (1927)
The foreign award related to the New York Convention is given under Section
44 of the Act and that related to the Geneva Convention under Section 53 of
the Act. The conditions to enforce these awards in the country are given
under Section 48 and Section 57 of the Act respectively.
Conciliation (Part III)
It is a process in which a third party helps the parties in dispute to resolve it
by way of agreement. The person authorised to do so is called a Conciliator.
He may do it by giving his opinion regarding the dispute to help parties reach
a settlement. In other words, it is a compromise settlement between the
parties.

Features of conciliation
 The person assisting the parties to come to a compromise is called a
conciliator.
 Conciliators give their opinion regarding the dispute.
 The process of conciliation is voluntary.
 It is a non-binding process.
 The main difference between arbitration and conciliation is that,
unlike arbitration, the parties in this process control the whole
procedure and the outcome.
 It is a consensual party and the desired outcome is the final
settlement between the parties based on their wishes, terms and
conditions.
 A conciliator can become an arbitrator on the wish of the parties if
no compromise could be reached by the process of conciliation. This
is known as Hybrid Conciliation.
 The settlement agreement will have the same importance and
status as the arbitration award. (Section 74)

Proceedings of Conciliation under the Act

 Section 62 of the Act provides that in order to initiate the
conciliation proceedings one party to the dispute has to invite the
other party in writing for conciliation. However, there will be no
proceedings if the other to whom notice/invitation is sent, reject it
or does not reply.
 The general rule states that there must be one conciliator but in the
case of more than one conciliator they have to function together
with each other as per Section 63 of the Act.
 The appointment of the conciliator like an arbitrator will be done by
the parties themselves under Section 64 of the Act.
  A party according to Section 65 of the Act is under an obligation to
submit in writing the nature of the dispute and all the necessary
information related to it to the conciliator.
 The proceeding can be terminated following any of the procedures
given under Section 78 of the Act.

Role of conciliator
It is mentioned under Section 67 of the Act:

 He must be independent and impartial.

 He must assist the parties to come to a settlement.
 He is not bound by the procedure given under the Code of Civil
Procedure, 1908.
 He must adhere to the principles of fairness and justice.

Supplementary provisions (Part IV)

 Section 82 empowers the High Court to make rules relating to any
provision of the Act.
 The Central Government has the power to remove any kind of
difficulties and make rules in the Act as per Section 83 and Section
84 respectively.
 There were 3 Acts dealing with the arbitration in India which have
now been repealed by the Act of 1996. These were:
o The Indian Arbitration Act, 1940

o The Arbitration (Protocol and Convention) Act, 1937

o Foreign Awards (Recognition and Enforcement) Act, 1961

Landmark case laws

Haryana Space Application Centre (HARSAC) v. Pan India Consultants

Pvt. Ltd. (2021)

Facts of the case
In this case, an application was filed under Section 29 A(4) of the Act
wherein it was stated that the decision of the arbitral tribunal was ready to
be pronounced by the authorities. Also, the required cost was paid to the
tribunal. On this, the other party argued that the application must be denied
on the ground that it lacks reasons for extension under the Section.
However, the argument was rejected and an extension of 3-months was
granted. HARSAC in a response filed a revision in the High Court. But it again
granted a four-month extension. To this, a special writ application was filed
to the Supreme Court.

Issue involved in the case

Whether the extension be given to the party or not?

Judgement of the Court

It was ruled by the court that the clause given in Section 12 is obligatory
when it is dealt together with the Schedule of the Act. It was also held that
the Principal Secretary is not qualified to be an arbitrator. If been the one, he
would probably influence HARSAC. The court also directed to appoint another
arbitrator who will continue the proceedings and help them come to an
agreement within 6 months.

Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund (2021)

Facts of the case

Indus Biotech issued some preference shares which are convertible at the
option to funds of Kotak India. A clause was added in the agreement of
shareholders but they could not agree on how to convert these shares into
paid-up equity shares. As a result, Kotak India filed an application when the
other party failed to redeem those shares.

Issue involved in the case

Whether the subject matter of the dispute falls in those that could be
referred to arbitration if the case is pending in NCLT?
Judgement of the Court
The Supreme Court opined that the case cannot be referred to arbitration if
the process is in rem. It further stated that if any proceedings are pending
before NCLT under Section 7 of IBC, then any application under the
Arbitration and Conciliation Act, 1996 will not be entertained. In the instant
case, the Supreme Court held that the decision of NCLT was reasonable and
the case (Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund, 2021) was
successfully referred to an arbitral tribunal.

Oriental Structural Engineers Pvt. Ltd. v. State of Kerala (2021)

Facts of the case

In this case, there was a contract to upgrade the segments of roads. The
contractor demanded extra interest for any late payment. But in the letter,
there was no such provision of any interest on late payments.

Issue involved in the case

Whether the contractor must get such interest even when it is not mentioned
in the letter?

Judgement of the Court

The Supreme Court held that if the tribunal wishes, it can grant interest as a
compensatory award to the contractor. It also referred to the case
of G.C. Roy v. Secretary Irrigation Department (1991). The fact that the
payment of interest in such cases was not excluded particularly in the
agreement was taken into consideration. But the rate on such payment was
missing and not agreed upon by the parties. The High Court in this same
asked the parties to fill up the blank details that they left in the appendix.
The Supreme Court held that this decision was incorrect and impermissible.
It ruled that the tribunal was right in providing compensation as there was
no clause in the contract which mentioned exclusion of payment of interest if
the payment was delayed.

Conclusion
The Act deals with alternate dispute resolution methods which are effective,
cost-friendly, and time-saving. Due to the pendency of cases and rigid
procedural laws of the courts and to prevent litigation, people nowadays
generally prefer settling a dispute outside the courts with the help of ADRs
like arbitration, conciliation, mediation etc. The Act provides the procedure to
be followed in arbitration proceedings, arbitral tribunal, the conduct of the
tribunal along with the arbitral awards to be made in a dispute. The decision
is binding on the parties and given in the form of an arbitral award in an
arbitration agreement. It also prescribes the procedure of appeal to courts in
case of discrepancies.

Frequently asked questions

What is arbitration?

According to Black Law Dictionary, it means a method of resolving disputes

which includes two parties and a neutral third party whose decision is binding
on both parties.

What were the previous acts related to arbitration in the country?

There were 3 acts dealing with the arbitration in India:

 The Indian Arbitration Act, 1940

 The Arbitration (Protocol and Convention) Act, 1937
 Foreign Awards (Recognition and Enforcement) Act, 1961
However, these Acts have been consolidated into one and repealed by The
Arbitration and Conciliation Act of 1996.

Which law is the basis of the Act of 1996?

It is based on Model Law on International Commercial Arbitration adopted in

1985 UNCITRAL.

What is the difference between conciliation and mediation?

Unlike in conciliation, the mediator in mediation does not give his opinion
regarding the dispute. Neither he is given the power to impose a settlement
but a conciliator has this power. His only function is to resolve the deadlock
and encourage parties to reach a reasonable settlement.

In how many parts and schedules has the Act been divided?

The Act is divided into four parts:

 Part I (Section 2-43) – Applies to the place of arbitration in India.

The award granted is treated as a domestic award.
  Part II (Section 44-60) – Enforcement of foreign awards.
 Part III (Section 61-81) – Conciliation
 Part IV (Section 82-86) – Supplementary provisions
It contains three schedules:

 Schedule I – Convention on the recognition of foreign awards of

arbitration.
 Schedule II – Protocol to be followed on arbitration clauses.
 Schedule III – Convention for the execution of foreign arbitral
awards.
What do you mean by foreign award?

Foreign awards are granted in foreign countries for any dispute referred to
arbitration in international cases and are enforceable in India under the Act.
It is divided into two chapters under the Act:

 The New York Convention

 The Geneva Convention

Role Of A Mediator In The Process Of Mediation

Introduction
Abraham Lincoln once said, “Discourage litigation. Persuade your clients to
compromise, whenever you can. Point out to them the nominal winner is
often a real loser- in fees, expenses and waste of time. As a peacemaker, the
lawyer has a superior opportunity of being a good person”.
The justice delivery system prevailing in India is of an adversary nature. It
puts the conflicting parties against each other, which ultimately causes a lot
of animosity amongst them. One of them has to win, and the other is bound
to lose. This tedious process not only harms the social standing of a person
but also puts him/her through an economic setback as the process of
litigation is usually a very expensive and cumbersome affair. It is a well-
known fact that litigation involves a large number of technicalities, which
leads to a lot of delay and unnecessary expenditure which leaves a stain and
stigma of enmity between both the parties. Moreover, in the wake of
globalization and liberalization, we need to develop a friendly, speedy and
less costly justice delivery system.
This is where an alternative to the usual judicial system becomes into play.
Hence, we have alternative dispute resolutions.

What is an alternative dispute resolution?

As the term clearly suggests, alternative dispute resolutions are dispute
resolution techniques other than the process of litigation. In India, Arbitration
and Conciliation Act, 1996 provides the guidelines for the Alternative Dispute
Resolution in India. The model laws set by the United Nations Commission on
International Trade Law is the main guiding force behind it. Section 89(1) of
the Code of Civil Procedure, 1908 also provides for settlement of disputes
outside the courts.This type of dispute resolution can be broadly classified
into four separate categories: 1) Arbitration 2) Mediation 3) Conciliation 4)
Negotiation. But in this article, we will be talking about the process of
mediation only.

What is Mediation?
Mediation is a process of negotiation where a neutral and unbiased third
party assists the disputing parties in peacefully resolving their disputes.
Mediation is known to be a party-centered process. It means that the whole
process revolves around the concerned parties. They get the right to decide
the outcome of the whole process.

Mediation has found quite a bit of popularity in India, especially in the cases
of marital disputes. Nowadays the courts themselves ask the disputing
parties to try resolving the concerned matter through mediation so that they
can reach a more amicable solution. It has been found many times that
couples go to court to file for a divorce on grounds which are not
maintainable under law. The court has only to consider the facts that have
been given to them, and if the law supports the facts at that time, then the
divorce can be granted. More often than not, these type of situations can be
easily resolved without necessarily breaking off the sacred bonds of
marriage. Sometimes the parties only need an experienced person who can
hear their problems out. This is why Courts suggest these troubled married
couples to go into mediation and try to resolve the matter before getting a
divorce.

Mediation is not only limited to matrimonial disputes. Even in the case of a

property dispute, mediation tries to resolve the matter in a manner, which
appeases to both the parties. Clearly, there are many advantages of pursuing
mediation rather than litigation.Regarding cost effectiveness, time
consumption and flexibility, mediation has the upper hand. In mediation, the
parties can even waive off their legal entitlements if it ultimately leads to an
amicable settlement.

It must be kept in mind that mediation does not and is not meant to solve
problems or disputes which on the face of it are illegal in nature. In such a
case mediation will be more beneficial to the law breakers, who intentionally
break laws for their benefit and seek mediation as an alternative to solve
their problems, which do not enjoy any form of solemnity in law or on facts.
Mediation thus attempts to resolve legitimate matters in a very peaceful
manner. In the whole process of mediation, a mediator has a very important
role to play as well.

Who is a mediator? What are his/her functions?

The mediator is a neutral and unbiased third party who assists the feuding
parties in their quest for a settlement. Even though the last decision has to
be taken by the disputing parties, it is the mediator who first initiates a
meeting, discusses the problem and then assists the conflicting parties in
finding possible solutions.

The main points that are kept in mind by a mediator are impartiality and
neutrality. He has to be completely unbiased all the time while he is resolving
a case. He doesn’t have to take any party’s side. His most important task is
to act as a catalyst between the conflicting parties. He must take necessary
steps to organize the talks between the disputing parties and act as a guiding
force while assisting them to reach a solution. He is not allowed to give his
personal opinions on the case. But he can assess the case; give the disputing
parties a fair idea of what the consequences might be if the said case is
taken to court. He can give the parties a few ideas or possible solutions that
could help in resolving the dispute.

In the case of litigation, there are a large number of scenarios where the
disputing parties choose to withhold some information, which if revealed, can
change the judgment in a very drastic manner. But in the case of mediation,
this can be avoided as the parties get a chance to sit in isolation with the
mediator and discuss their end of the concerned problem. Here, it is the
mediator’s job is to draw out the disputing parties from their defensive shell
and make them reveal the truth. While doing so, it is the mediator’s job to
keep the party reassured that the secrets revealed in his presence shall be
kept completely off the records.

A mediator hence facilitates communication between the disputing parties

and encourages interaction between them so as to arrive at an amicable
settlement. He also assists the concerned parties in evaluating the situation
and finding out the possible outcomes. Thus, we can see that the process of
mediation is a party-centered process; the mediator is a very important
block in the structure that is mediation.

Conclusion
So we can see that mediation is a very efficient and reliable system through
which disputes can be resolved. Through this process, the disputing parties
can reach an amicable end. The most important element is the mediator in
this process. He makes sure that no party suffers any undue loss. It is his
responsibility to ensure that the case reaches its end and does not have to
be transferred back to the traditional form of litigation. So we can see that
there is a huge responsibility on the shoulders of a mediator.

Mediation in India
What is Mediation?
In 2002, Section 89 of the Indian Code of Civil Procedures was amended and
has given way to alternative dispute resolution methods such as arbitration,
mediation, conciliation and pre-trial settlement methodologies.

Mediation is usually defined as “A voluntary process by which parties

involved in a conflict, in the presence of a neutral third-party, negotiate to
arrive at a settlement satisfactory to both parties.”
The above definition very clearly states that the process of mediation is
voluntary. This means that no party can be threatened into participating in
the process. Remembering this, if we inspect the idea of alluding cases for
necessary intervention, it appears to be repetitive and damages the very
premise of the intercession procedure.

Indian Courts on the Process of Mediation

In certain types of cases, the courts can make it mandatory for the parties to
be given an option of mediation. The judge, thus, has a great responsibility
of referring only the appropriate cases for the process of mediation. The case
should be deemed as appropriate for the process of mediation if and when
the judge can ascertain that elements of settlement exist in the case. A case
can be referred to the process of mediation, whenever the judge believes
that there is a possibility of the settlement if the case is referred to the
process of mediation, or if the parties voluntarily choose the mediation. Both
the parties should be aware of the rights available to them and should be
informed and prepared for entering into negotiations to reach a settlement or
agreement that will satisfy the needs of both the parties.

Mediation in India Currently

At present, in India, mediation applies to divorce cases and other
matrimonial disputes.

On 22 February 2013, the Supreme Court of India passed a judgment that

laid down the following guidelines for courts while dealing with matrimonial
matters:

1. “Regarding Section 9 of the Family Courts Act, the Family Courts

shall make all efforts to settle the matrimonial disputes through
mediation. Even if the Counsellors submit a failure report, the
Family Courts shall, with the consent of the parties, refer the matter
to the mediation centre. In such a case, however, the Family Courts
shall set a reasonable time limit for mediation centres to complete
the process of mediation because otherwise the resolution of the
disputes by the Family Court may get delayed. In a given case, if
there is good chance of settlement, the Family Court in its
discretion, can always extend the time limit.The criminal courts
dealing with the complaint under Section 498-A of the IPC should,
at any stage and particularly, before they take up the complaint
about hearing, refer the parties to mediation centre if they feel that
there exist elements of settlement and both the parties are willing.
However, they should take care to see that in this exercise, rigor,
purport and efficacy of Section 498-A of the IPC are not diluted.
Needless to say that the discretion to grant or not to grant bail is
not in any way curtailed by this direction. It will be for the
concerned court to work out the modalities taking into consideration
the facts of each case.
2. All mediation centres shall set up pre-litigation desks/clinics; give
them wide publicity and make efforts to settle matrimonial disputes
at pre-litigation stage.”[1]
In India, mediation is slowly gaining recognition as a dispute settlement
mechanism. Now before the court gives a divorce case a decree, the parties
are given a chance for reconciliation. Studies show that 10-15% marital
disputes get solved in mediation centres.[2] Divorce issues like settlement,
maintenance and custody of the child are deemed perfect for the process of
mediation.
Section 9 of the Family Court Act states that the court can take the
assistance of counsellors to resolve marriage related disputes, as it is the
duty of courts to make the best effort to resolve the disputes under this
section. In case the counsellors are unable to help resolve the dispute then
the courts should refer such cases to mediation centres, as a complete effort
to resolve the dispute.

Many mediation centres are setting up ‘Help Desks’ at places within the court
complex, this is helping bring forward the concept of pre-litigation mediation
in India. The recent statistics gives an insight that the Delhi High Court
Mediation Centre and Delhi Government Mediation and Conciliation Centres
have been successful in resolving many marital disputes. Such centres are
gaining success and popularity, very fast, in the sector of pre-litigation
mediation. Pre-litigation mediation in India can be made as a standard way
of resolution of marriage related disputes with sufficient publicity and effort;
the parties will also be saved from the various problems that arise after a
divorce.

In the case of Ramgopal & Anr. v. State of Madhya Pradesh & Anr.[3], the
court asked the Law Commission and the Government of India to do
research, to determine if the punishments for the offenses mentioned under
Section 498-A of the Indian Penal Code that is currently none compoundable
can be made compoundable. If these offenses are made compoundable, then
the courts can order the parties involved in such disputes to consult the
mediation centres.

Mediation is gaining popularity as a method of dispute resolution, very fast.

This is also increasing the number of people who rely on the process of
mediation for resolution of disputes. Based on this Indian courts may
consider venturing out into other alternate dispute resolution mechanisms.

Mediation as a process can be used to resolve various areas of disputes,

most of the civil cases can be referred to mediation for resolution. Matters
related to rent, partition, recovery of money, labour, damages, specific
performance, recovery of money, injunction, declaration, dispute between a
landlord and a tenant, case of dishonoured cheques, claims related to motor
accidents, etc., are some examples of types of cases that are suitable for the
process of mediation. There are also criminal offenses like those mentioned
under Section 320 of the Code of Criminal Procedure that can be resolved
through the process of mediation.

Areas Where Mediation Can be Made Mandatory in India

Estate: This is a matter which is very closely connected to family matters.
Mediation is a great option for such matters as this process can easily resolve
family matters and will also help the people escape the lengthy process of
litigation. Mediation might also help bridge pre-existing gaps and revive the
familial ties. The process of mediation can address issues like distribution or
poor communication or lack of communications among the heirs.

Landlord and Tenant: The relationship between a landlord and a tenant is a

very complicated one. The relationship complicates itself, further than the
usual delays in payment of rent. The relationship complicates itself when
there are misunderstandings on the interpretation of the lease agreement
between the two parties with regards to the meaning of various provisions
and legal rights of both the parties. Disputes arise out of such
misunderstanding and force the parties to take such disputes to court, and
there is no guarantee that the judgment of the courts is the best solution to
the problem. The judgment will fall for one of the two parties and will
defiantly not guarantee a better rent amount to the landlord or a better
tenant, or improvement in living conditions for the tenant. A court procedure
also consumes a lot of time and money and in this time the tenant finds
another residence and the landlord finds a new tenant. Mediation, on the
other hand, can be used to obtain a mutual understanding of the clause and
improving the relations between the parties.

Mediation can help them to look at issues differently, generate options that
they might not have considered before. Since the settlement arrived at
through the mediation process puts the agreement in writing, all parties
know the nature of the agreement. Also, the entire process is confidential
and unbiased.

Disputes arising between consumers and merchants: In the world,

many businesses don’t know how to resolve disputes, in case things don’t go
as expected. Many times the two parties get annoyed as both have their
priorities set on various levels, and it feels like they cannot even
communicate in the same language. These disputes lead to the parties going
to court, which usually does not resolve the real dispute but increases it.

Tort issues between neighbours: Mediation helps to resolve disputes

among neighbours voluntarily and economically. A trained and unbiased
conflict Manager helps to resolve disputes safely and confidentially for a
mutual benefiting result.

The traditional methods of dispute resolution through litigation and

complaints in the police, usually ignore the underlying problem. Many
complaints are of no avail, as neighbours get caught up in proving the other
party wrong, causing their personalities to hinder in the process.
Mediation helps to get to the actual dispute in less time and with less money
spent. It helps them realize and talk about what they feel about the
situation. Sometimes disputes like noise, vandalism, parking space, pet
control and other conflicts over money and property can be solved just by
directly talking to the neighbour.

Conclusion
Mediation is a safe, informal and confidential method to resolve issues
involving simple and complex contract disputes, payment disputes, cases
based on miscommunication, matter pertaining to product satisfaction as well
as safety issues, matters relating to service satisfaction issues, employment
disputes, insurance disputes, debt disputes, disputes relating to Personal
injury, civil rights and small claim matters.

MEANING, OBJECTS, AND ESSENTIALS OF ARBITRATION

AGREEMENT
Arbitration Agreement – Meaning, Objects, Essentials and more.

We all know that plenty of cases are pending in a court, and the judges are
overburdened. Hence, we require a way to solve some of the matters
through alternative means. This will reduce the burden of the court and
ensure a speedy trial. There are four methods of alternative dispute
resolution (ADR)-

1. Negotiation.
2. Conciliation.
3. Mediation.
4. Arbitration.

In this law note, let us understand what arbitration is and under what
circumstances a party can go for arbitration.
 Meaning of Arbitration
Arbitration means the settlement of a dispute by a third party’s judgment
called arbitrator without recourse to the court of law. The conflicts which
can be settled without going to a court come under the ambit of arbitration.
Arbitration is governed under the Arbitration and Conciliation Act, 1996,
and it extends to the whole of India.

Need for Arbitration

Indian courts are overburdened with the multiplicity of cases of various
grounds amongst various parties, and they can’t bear the whole burden.
Thus, there is an urgent need to shift gradually to some other mode of
dispute resolution. The purpose of the Arbitration Act is to provide speedy
redressal to dispute by private arbitration.

Object of Arbitration
The object of arbitration is to settle the disputes in-

 Expeditious.
 Convenient,
 Inexpensive, and
 Private manner.

All this is to ensure the case does not become the subject of future litigation
between the parties.
 Arbitration Agreement
Arbitration agreement is an agreement signed by the parties that, if in case
any future dispute arises, then the disputed matter will go before the
arbitration.

Essentials of Arbitration Agreement

The essentials of the Arbitration Agreement are listed below:-

1. Form of arbitration.

An arbitration agreement can be either in the form of an arbitration clause

in a contract itself, or a separate agreement can be made for it.

2. Arbitration agreement must be in writing.

The arbitration agreement must be in writing. An agreement is considered

to be in writing, if:

 Both parties have signed the document.

 Letters, telexes, telegrams, and other forms of communication are used
to agree.
 If there is an exchange of defendants and claimants statements.

3. Valid contract.

The agreement must fulfil all the essentials of a valid contract as provided
under section 10 of the Indian Contract Act, 1872. The parties must be
 major, of sound mind, not disqualified by law, with free consent, and for
lawful object and consideration.

4. Separate agreement.

The arbitration agreement must be in the form of a separate agreement or

clause in the contract.

5. Intention.

There must be an intention of the parties to refer a dispute to arbitration.

6. Dispute.

It must refer to a dispute, present or future, between the parties to the

arbitration.

Matters Which May Be Referred to

Arbitration
 Calculating damages in the event of a breach of contract.
 Question of validity of a marriage.
 Maintenance payable to the wife.
 Time barred claims.
 Matters of commercial nature.

Matters Which Cannot be Referred to as

Arbitration
 Matrimonial matters such as divorce or restitution of conjugal rights.
 Industrial disputes.
 Insolvent matters.
  Rent disputes.
 Criminal matters.
 Matters relating to guardianship of minors.
 Winding-up petition.

Arbitral Tribunal
According to section 2(1)(d) of the Arbitration and Conciliation Act, 1996,
an arbitral tribunal means a sole arbitrator or a panel of arbitrators. There
should be an odd number of arbitrators present in the tribunal so that they
can reach a fair decision.

MMTC Ltd. vs Sterlite Industries (India) Ltd.

Section 10 of the Act provides that the parties can freely determine the
number of arbitrators, but such arbitrators shall be odd in number. This is
an important element for the working of the arbitration agreement to ensure
that there would be no chances of a tie in the decision making. But still, if
there are even number of arbitrators, the arbitration agreement cannot be
termed invalid.

Significance of the Arbitration agreement

Arbitration Agreement and describes the importance of certain provisions in
the Arbitration Act.

Table of Contents
 Introduction
 Arbitration agreements
o Essentials of an Arbitration Agreement
o Some common elements included in the Agreement other than the essential agreements
 Important provisions in the arbitration agreement
 Significance
 Conclusion
 Reference

Introduction
The term arbitration in very lucid terms means the disputes of the parties
with one another, gets referred to a neutral party where this neutral party
solves the disputes. Arbitration is a form of alternative dispute resolution,
where the settlement of the dispute takes place outside the Courtrooms. This
third party who solves the dispute is known as an arbitrator. His decisions
regarding the dispute are always binding upon the parties. It is an adequate
way to save time and resources. This method of settlement outside the court
is governed by an Act called, “The Arbitration and Conciliation Act, 1966”.
This Act saves the parties from the hassle of spending years in the Courts
and saves them a lot of time and money, which otherwise would have been a
lot to invest. Arbitration is a quasi-judicial process and the parties are
referred to a domestic tribunal.

Arbitration agreements
The formation of an arbitration agreement takes place when two parties,
enter into a contract and in which, the contract states that any dispute
arising between the parties have to be solved without going to the courts
with the assistance of a person, who would be a neutral person, a third
party, appointed by both of the parties, known as the Arbitrator, who would
act as a judge. The arbitrator so appointed should have been previously
mentioned in the contract that they made. They should also state who should
select the arbitrator, regarding the kind of dispute the arbitrator should give
decisions on, the place where the arbitration would take place. Furthermore,
they should also state the other kinds of procedures mentioned or that has to
be required during an arbitration agreement.

The parties are generally required to sign an Arbitration Agreement. The

decision taken by the arbitrator regarding any issue, is binding on both the
parties, as stated by the agreement. In any event, where one party decides
that an agreement must be made prior to entering the contract, it can be
stated that the agreement was made to deviate from the hassles of the
court. These agreements are like contingent contracts, which means that
these agreements shall only come into force or become enforceable if any
dispute happens, and on the basis of the same dispute between two parties
mentioned in the contract. It also takes place or is enforceable in the light of
any dispute that arises between the parties to the contract.

Essentials of an Arbitration Agreement

  There must be a dispute that should take place, only then the
agreement will be valid. The presence of a dispute amongst the parties
is an essential condition for the contract to take place. When the
parties have already settled the dispute, in no case, they can invoke
the arbitration clause to refute the settlement.
 Another essential is the written agreement. An agreement related to
the arbitration must always be in writing. An arbitration agreement will
be considered as a written agreement when:

1. It has been signed by both parties and it is in the form of a document.

2. It can be the exchange of the telex, the letters, the telegrams, or any
other means of communication which provides the record of the
exchange and the agreement for arbitration.
3. There must be an exchange of statements between the parties that
gives the statement of claim and defence in which the existence of the
agreement of the arbitration is agreed by one of the parties and which
is not defined by the other party.

 The third essential intention. The intention of the parties while forming
the contract is of utmost importance and it forms the basis of the
agreement. There have been no prerequisite citations of terms such as
an “arbitrator” or “arbitration” to be made in the agreement. Therefore,
it is necessary to note that the intention of both parties plays a very
important role in such an agreement. However, one must keep in mind
that even if the words have not been mentioned, the intention must
show that both the parties have agreed to come to the terms with the
Arbitration Agreement.
 The fourth essential element is the signature of the parties. The
signature of the parties is an essential element to constitute an
arbitration agreement. The signature can be in the form of a document
signed by both the parties to the contract which comprises all the
terms and conditions, or it can also be in the form of a document which
is signed by only one party to the contract which contains the terms
and acceptance by the other party to the contract. It will be sufficient if
one party puts up a signature in the agreement and the other party
accepts that.
In the landmark case of K.K. Modi v. K.N. Modi and Ors. (1998) 3 SCC 573, it
was held by the Hon’ble Supreme Court that the following attributes must be
present in an arbitration agreement:

1. The agreement must state that the decision of the tribunal will be
binding upon by both the parties.
2. That the jurisdiction of the tribunal on the rights of the parties should
be decided by both the parties consensually or from an order obtained
by the Court which states that the proceeding shall be made through
arbitration.
 3. The tribunal has the right to determine the rights of the parties by
being fair and just.
4. The agreement that the parties will refer to the tribunal must be
enforceable by law.
5. The agreement must state that any decision made by the tribunal on
the dispute must be formulated prior to the time when the reference is
made.

Some common elements included in the

Agreement other than the essential agreements
The following are some of the common elements included in an arbitration
agreement, which is generally not considered as an essential element, but
shall be included if the parties want it to be mentioned in the contract.

1. Seat of Arbitration- the seat here means the place. Therefore, this
clause states that there will be a place of arbitration in the case of the
dispute. This provision is an important one, especially in the case of an
international commercial arbitration, as this seat helps in determining
the procedural laws that govern the procedure of the arbitration.
However, the seat of the arbitration does not have to be the same
place as the hearing of the proceedings. It is the place where the
arbitration takes place, even though it differs from the place of the
hearings.
2. Procedure for appointing the Arbitrators- the procedure is the same as
mentioned in the Arbitration Act. It states that any person, irrespective
of the nationality, may be appointed as an arbitrator, unless the parties
agree to something otherwise. The parties can themselves agree for
the appointment of an arbitrator.
3. Language- The language plays an important role while making an
agreement. It is necessary that the language which has been chosen in
the contract doesn’t have to be the one that is not understood by both
parties. There must not be any sort of communication gap and that the
agreement made by the parties are of such a manner that each and
every clause mentioned in the contract is actually understood by both
the parties signing the contract. Picking the language which can be
understood by both parties is important because then it would save
both the parties, the cost of a translator.
4. Number and Qualifications of Arbitrators- The Act allows the parties to
determine the number of the arbitrators, with the only condition that
the number shall not be an even number, but an odd number of
arbitrators, so that the decision can be made even if there is a
disagreement amongst the arbitrators.
 5. Type of Arbitration- The parties have the choice to choose between the
institutional and the ad hoc (which means it is created for that specific
purpose) kind of arbitration. Institutional means that agreeing to be
bound by the rules of the arbitration institutions ad hoc means that the
parties themselves agree to arrange an arbitrator.
6. Governing Law- It is important to mention the substantive law that
they want to be governed by as failing to mention this substantive law
might be a huge issue in the future disputes arising between the
parties, if any.

Important provisions in the arbitration

agreement
There are a few important provisions under an arbitration agreement, and
these are mentioned below:

1. Written Agreement- As stated as an essential condition, there must be

a written agreement. Section 7(4) of the Act, states that every
agreement made must be in the form of a written document or even in
the form of any kind of communication whether or not those
communications take place through telegrams, telex or even other
telecommunication devices provided that there must be a record of the
communication.
2. Appointment of the Arbitrators- Section 11 states that the arbitrator
can be appointed at the liberty of the parties to the contract. In case,
where the parties fail to decide the appointment of the arbitrator, the
Chief Justice of the High Court, in case of the domestic arbitration and
the Chief Justice of the Supreme Court, in case of International
Commercial Arbitration is approached.
3. Interim Relief- Section 9 and Section 17 of the Act provide for the
Interim relief orders with respect to the arbitration. The relief petition is
maintainable under section 9 if there is prima facie evidence that there
is an agreement for the arbitration proceeding. The parties, if they
want, can move to the Court before the arbitration proceeding actually
starts or even after making the arbitral award but before its
enforcement as per section 36 of the Act. Section 17 states that, at the
parties’ request, the tribunal may order the party to take interim
measures, the way it deems fit and necessary in respect to the subject
matter of the dispute.
4. Finality of an Award by Arbitration- Section 34 states that the award
given by the arbitrator is final and is binding upon the parties who have
signed the contract. Once the decree is granted by the court, it shall be
enforceable with respect to section 34 of the Act.
5. Appeal- Section 37 states that if the parties are not satisfied with the
decision of the arbitrators, an appeal lies against the order granting or
 refusing to grant any measure under section 9 and also against
refusing to set aside or setting aside an award. An appeal can also lie
against the order of the tribunal accepting the plea referred to
in section 16 or granting or refusing to grant an interim measure under
section 17. However, there is no provision for an appeal against the
appointment of an arbitrator as given under section 11.

Significance
The growth of arbitration signifies that there is a fundamental change that is
present in our way of legislating. Another significance is in deciding the
matters in a significantly lesser amount of time and the different or the
separate clauses mentioned in the commercial contract. These are paving the
way for the most effective and the most suitable remedy without having to
go through the recourse of the courtrooms. Arbitration is generally the most
efficient form of remedy for settlement of disputes amongst the parties,
which actually does not require any long procedures of the Court for the
decisions to be made. It is cost-efficient, it is time-saving, it also permits one
to choose their own arbitrators. Through this, the decisions are given swiftly,
and according to the nature of the case, they are also, most of the time
satisfactory. The severability, separability, and the autonomy principle of the
Arbitral agreement prevent the validity of one agreement from being
overlapped by the other. Nonetheless, the two agreements may co-exist.
Having such a principle does not negate the value of the other principles
mentioned in the contract, but mostly adds on to those principles. Thus it
plays an important role when the contractual clauses arise when dealing with
the disputes.

Conclusion
Therefore, from the above article, we can state that an arbitration agreement
is not only beneficial to the parties whilst saving the resources, but also in
means of the time and efforts put in by each of the parties. Despite a few
people stating that it is not a complete procedural aspect of dealing with the
cases, one state that it does help both the parties who have faced the
dispute. However, most importantly, it is important that there are certain
things that have to be kept in one’s mind before actually drafting or while
drafting a contract for the arbitration agreement. In practice though, almost
all arbitration agreements are concluded with arbitration clauses.
Analysis Of The Lokpal and the Lokayuktas Act, 2013
History

The idea of an ombudsman to investigate the matters of corruption was first

introduced in 1968 in the fourth Lok Sabha. After that efforts were made to
make this abstract idea a reality in 1971, 1977, 1985, 1989, 1996, 1998 and
2001. However, this endeavors remained largely unsuccessful owing to lack
of political will. In 2010-11, these efforts reached its pinnacle when a social
worker Anna Hazare went on a fast until death in order to enact the Act
regarding the establishment of the institution of Lokpal. The public support
that Anna Hazare had made the government succumb and a joint committee
consisting of representatives of government and civil society were formed to
draft the bill. However no consensus could be achieved, and the government
moved its version of the bill in the Lok Sabha. The bill was reviewed by the
Parliamentary Standing Committee on Law and Justice and passed by the Lok
Sabha. The bill was referred to the Select Committee in the upper house and
amended on the basis of its recommendations. As a result of this, the Lokpal
and the Lokayuktas Act, 2013 was enacted. The important provisions of the
Act are discussed here.

Composition
The institution of Lokpal shall consist of eight members along with a
chairperson. The members are further classified into judicial and non-judicial
members. The judicial members should have higher judicial experience and
the non-judicial should have experience in public administration, finance,
insurance and banking laws, anti-corruption and vigilance. Half of the
members should be from among the SC/ST/OBC/ minority and women.

Appointment
The Chairman is to be appointed by a Selection Committee consisting of
Prime Minister, Leader of the Opposition, Speaker of the Lok Sabha, an
eminent jurist nominated by the President on the basis of the
recommendation of the Selection Committee and Chief Justice of India or any
other sitting judge of Supreme Court nominated by the Chief Justice. The
chairperson or member can be removed from his office by President on
grounds of misbehavior after a Presidential reference to Supreme Court on a
petition signed by 100 MPs.
Eligibility
The Chairman has to be either the former Chief Justice of the Supreme Court
or the former judge of the Supreme Court. An eminent person of impeccable
integrity and outstanding ability, having special knowledge and expertise of
minimum 25 years in the matters relating to anti-corruption policy, public
administration, vigilance, finance including insurance and banking, law and
management can also be appointed as a chairperson.

The judicial members should be a former judge of the Supreme Court or a

former Chief Justice of a High Court. As far as the non-judicial members are
concerned, he should be an eminent person with impeccable integrity and
outstanding ability, having special knowledge and expertise of minimum 25
years in the matters relating to anti-corruption policy, public administration,
vigilance, finance including insurance and banking, law and management.
Every member of the Lokpal has to declare its assets before taking up the
office.

Jurisdiction
The jurisdiction of the Lokpal extends to cover the Prime Minister, Union
Ministers, Members of Parliament (except for the matters relating to Article
105), class A,B,C and D officials, any person who is or has been in-charge
(director / manager/ secretary) of anybody / society set up by central act or
any other body financed / controlled by central government, any other
person involved in act of abetting, bribe giving or bribe taking.

The inquiry against Prime Minister can only be initiated if the full bench of the
Lokpal considers the initiation and two-third of the members approve of it.

Working of the Lokpal

The Lokpal has three officials under him- Secretary to Lokpal, Director of
Inquiry and Prosecution. After receiving the complaint, the Lokpal will decide
whether the inquiry is to be conducted or not. The inquiry wing is headed by
the Director of Inquiry, and the function of the inquiry wing is to conduct a
preliminary inquiry into the offenses alleged to have been committed by the
public servants. The inquiry needs to be completed within 90 days. The
Lokpal can also conduct the inquiry through CBI. The report made by the
inquiry wing or CBI would be placed before the Lokpal bench with at least 3
members. Right to be heard will be given to the alleged officer. If he is found
guilty, then the prosecution wing/ CBI would be directed to file the charge
sheet against him. Departmental inquiry can also be initiated. If the officer is
found to be innocent, then a closure report can be filed and proceed against
the complainant for a false complaint. If the complaint is against an A to D
officer, then the complaint is to be referred to the CVC, who will inquire and
submit the report to the Lokpal in the case of group A and B officers. As far
as group C and D officers are concerned, the matter will be further dealt by
the CVC only. The Lokpal has powers of superintendence, ordering search
and seizure, confiscation and attachment of property, recommending transfer
or suspension of the accused public servant. It can also recommend
constitution of Special Courts to try the cases of corruption. The inquiry wing
of the Lokpal will have the powers of a civil court.

The salary of the Lokpal will be charged on the consolidated funds of India.
However, the Lokpal is required to prepare its budget for every financial
year. A Lokpal cannot conduct an inquiry against itself.

Lokayuktas
A Lokayukta is a state counterpart of the Lokpal. Prior to the enactment of
the Act, it was left to the respective states to institute Lokayukta or not. The
Act provided for appointment of Lokayuktas within a year in every state.
Presently only states of Maharashtra, Orissa, Rajasthan, Bihar, Uttar
Pradesh, Karnataka, Madhya Pradesh, Andhra Pradesh, Gujarat have
Lokayuktas. Different states have different acts which impart different
powers to the Lokayukta accordingly.

Loopholes and Lacunae

The institution of Lokpal is yet to see the light of the day. No new state has
implemented the Lokayukta yet. Parliamentary Standing Committee on
personnel, public grievances, law, and justice, in its report tabled in
Parliament in April 2015 has slammed the government for the non-
implementation of the Act. The lack of political will is to be blamed.

Even if the Act is implemented, it will only add to the already complex and
complicated bureaucratic system which only defeats its own purpose.
Further, it is not free from political influence as the appointing committee
itself consist of parliamentarians. There is no criteria to decide who is an
‘eminent jurist’ or ‘a person of integrity.’ Thus, this appointment can easily
be manipulated.

Further, the act provides no immunity to the whistleblowers. The provision

for initiation of inquiry against the complainant if the accused is found
innocent will only discourage people from complaining. Also, there is no
foolproof way to determine whether the person who is appointed as the
Lokpal will remain honest throughout.

The biggest lacuna is the exclusion of judiciary from the ambit of the Lokpal.
The Lokpal is also not given a constitutional backing. There are no adequate
provisions for appeal against the Lokpal. The powers, composition and scope
 of Lokayuktas do not find any mention of the act. There is a long way to go
to ensure transparency and crusade against corruption are still on and yet to
reach its destination.

Lokpal and Lokayuktas under the Lokpal and Lokayukta

Act, 2013

Table of Contents
 Introduction
 What are Lokpal and Lokayuktas?
 Origin and History
o Lokpal and Lokayukta Amendment Act, 2016
 Structure of the Lokpal
o
 Term and appointment to the office of Lokpal
 Lokpal search committee
 Jurisdiction and powers of Lokpal
 Limitations
 Conclusion

Introduction
Maladministration is like a termite that slowly erodes the foundation of a
nation. It hinders administration from completing its task. Corruption is the
root cause of this problem that our country faces. Though there are many
anti-corruption agencies in India, most of these anti-corruption agencies are
hardly independent. Even the CBI has been termed as a “caged parrot” and
“its master’s voice” by the Supreme Court of India.

Many of these agencies are only advisory bodies with no effective powers to
deal with this evil of corruption and their advice is rarely followed. There also
exists the problem of internal transparency and accountability. Moreover,
there is not any effective and separate mechanism to maintain checks on
such agencies.

In this context, an independent institution of Lokpal and Lokayukta has been

a landmark move in the history of Indian polity which offered a solution to
the never-ending menace of corruption. It provides a powerful and effective
measure to counter corruption at all levels of the government.

What are Lokpal and Lokayuktas?

The Lokpal and Lokayukta Act, 2013 mandated for the establishment of
Lokpal at the Union level and Lokayukta at the State level. Lokpal and
Lokayuktas are statutory bodies and these do not have any constitutional
status. These institutions perform the function and role of an “Ombudsman”
(an official appointed to investigate individuals’ complaints against a
company or organization, especially a public authority). They inquire into
allegations of corruption against certain public bodies/organizations and for
other related matters.

Origin and History

The story of the Lokpal and the Lokayukta has a long story. Lokpal and
Lokayukta is not Indian origin concept. The concept of ombudsman
originated in 1809 with the official inauguration of the institution of
Ombudsman in Sweden. Later in the 20th century, after the Second World
War, the institution of ombudsman developed and grew most significantly.
Countries like New Zealand and Norway also adopted the system of
ombudsman in the year 1962. This system proved extremely significant in
spreading the concept of ombudsman to other countries across the globe.

Great Britain adopted the institution of the Ombudsman in the year 1967, on
the recommendations of the Whyatt Report of 1961. Through the adoption of
such a system, Great Britain became the first eminent nation in the
democratic world to have such an anti-corruption institution. After great
Britain, Guyana emerged as the first developing nation to adopt the concept
of the ombudsman in the year 1966. Subsequently, this concept was further
adopted by Mauritius, Singapore, Malaysia, and India as well.

In India, the former law minister Ashok Kumar Sen became the first Indian
to propose the concept of constitutional Ombudsman in Parliament in the
early 1960s. Further, Dr. L. M. Singhvi coined the term Lokpal and
Lokayukta. Later in the year 1966, the First Administrative Reform
Commission passed recommendations regarding the setting up of two
independent authorities at the central and at the state level. According to the
commission’s recommendation, the two independent authorities were
appointed to look into complaints against public functionaries, including
members of Parliament as well.

After the recommendations from the commission, the Lokpal bill was passed
in Lok Sabha in 1968 but lapsed due to the dissolution of Lok Sabha. Since
then, the bill was introduced many times in Lok Sabha but has lapsed. Till
2011 as many as eight attempts were made to pass the Bill, but each of
them failed.

Before 2011, a commission, headed by M.N. Venkatachaliah, was also set up,
in the year 2002 to review the working of the Constitution. This Commission
recommended the appointment of the Lokpal and Lokayuktas. The
commission also recommended that the Prime Minister ought to be kept out
of the ambit of the Lokpal. Later in 2005, the Second Administrative Reforms
Commission chaired by Veerappa Moily came up with the recommendation
that the office of Lokpal needs to be established without delay.

Though all these recommendations were never given the due preference, the
government in 2011 formed a Group of Ministers, chaired by the former
President Pranab Mukherjee. These groups of ministers worked to examine
the proposal of a Lokpal Bill and to suggest measures to tackle corruption.

Not only the administration and the government but even the people of India
felt the need for such a system to be introduced into the Indian governance
system. India rose into a nationwide protest for Lokpal. The “India Against
Corruption” movement was led by Anna Hazare to exert pressure on the
United Progressive Alliance (UPA) government at the Centre.

The protests and the movement resulted in the passing of the Lokpal and
Lokayuktas Bill, 2013, in both the Houses of Parliament. The bill received
assent from President on 1 January 2014 and came into force on 16 January
2014 under the name “The Lokpal and Lokayukta Act 2013”.

Lokpal and Lokayukta Amendment Act, 2016

After the introduction of the Lokpal and Lokayukta Act 2013, a bill was
passed by Parliament in July 2016 which amended the Lokpal and Lokayukta
Act, 2013. This amendment enabled the leader of the single largest
opposition party in the Lok Sabha to become a member of the selection
committee in the absence of a recognized Leader of Opposition.

This bill also amended Section 44 of the Lokpal and Lokayukta Act 2013.
Section 44 of the Act dealt with the provisions of furnishing of details of
assets and liabilities, within 30 days of joining the government service, of
any public servant. This amendment replaced the time limit of 30 days. It
stated that the public servants will make a declaration of their assets and
liabilities in the form and manner as prescribed by the government.

In the case where any non-governmental organization receives funds of more

than Rs. 1 crore from government or receives foreign funding of more than
Rs. 10 lakh then the assets of the trustees and board members were to be
disclosed to the Lokpal. The bill provided an extension to the time limit given
to trustees and board members to declare their assets and those of their
spouses.

Structure of the Lokpal

Let us try to understand the structure of the Lokpal. Lokpal is a multi-
member body consisting of one chairperson and a maximum of 8 members.
The person to be appointed as the chairperson of the Lokpal must be either:

1. The former Chief Justice of India; or

2. The former Judge of the Supreme Court; or
3. An eminent person with impeccable integrity and outstanding
ability, who must possess special knowledge and a minimum
experience of 25 years in matters relating to:
1. Anti-corruption policy;
2. Public administration;
3. Vigilance;
4. Finance including insurance and banking;
5. Law and management.
The maximum number of members must not exceed eight. These eight
members must constitute:

 Half members to be judicial members;

 Minimum 50% of the Members should be from SC/ ST/ OBC/
minorities and women.
The judicial member of the Lokpal must be either:

 A former Judge of the Supreme Court or;

 A former Chief Justice of the High Court.
The non-judicial member of the Lokpal needs to be an eminent person with
flawless integrity and outstanding ability. The person must possess special
knowledge and an experience of a minimum of 25 years in matters relating
to:

 Anti-corruption policy;
 Public administration;
 Vigilance;
 Finance including insurance and banking;
 Law and management.

Term and appointment to the office of Lokpal

Lokpal Chairman and the Members can hold the office for a term of 5 years
or till they attain the age of 70 years, whichever is earlier. The members and
the chairman of Lokpal are appointed by the president on the
recommendation of a selection committee.
The selection committee consists of:

 The Prime Minister of India;

 The Speaker of Lok Sabha;
 The Leader of Opposition in Lok Sabha;
 The Chief Justice of India or any Judge nominated by Chief Justice
of India;
 One eminent jurist.
The Prime Minister is the Chairperson of the selection committee. The
selection of the chairperson and the members is carried out by a search
panel of at least eight persons, constituted by the selection committee.

Lokpal search committee

As per the Lokpal Act of 2013, the Department of Personnel and Training
needs to create a list of candidates who are interested to become the
chairperson or members of the Lokpal. The list was then to be presented to
the proposed eight-member search committee. The committee on receiving
the list shortlists the names and place them before the selection panel,
headed by the Prime Minister.

The selection panel has discretion in selecting the names from the list
presented by the search committee. In September 2018, a search committee
was constituted by the government which was headed by former Supreme
Court judge Justice Ranjana Prakash Desai. The Lokpal and Lokayukta Act of
2013 also mandates that all states must set up the office of the Lokayukta
within one year from the commencement of the Act.

Jurisdiction and powers of Lokpal

The Jurisdiction of Lokpal extends to:

 Prime Minister, Ministers,

 Members of Parliament,
 Groups A, B, C and D officers,
 Officials of Central Government.
The Jurisdiction of the Lokpal extends to the Prime Minister, except in the
cases of allegations of corruption relating to:

 International relations;
 Security;
  The public order;
 Atomic energy and space.
The jurisdiction of the Lokpal does not include ministers and members of
Parliament in the matter relating to:

 Any speeches delivered in the Parliament or;

 For a vote cast in the Parliament.
Lokpal’s jurisdiction also includes:

 Every person who is or has been in charge (director/ manager/

secretary) of a body or a society set up by the act of central
government,
 Any society or body financed or controlled by the central
government,
 Any person involved in act of abetting,
 Bribe giving or bribe-taking.
The Lokpal and Lokayukta Act states that all public officials need to furnish
their assets and liabilities as well as their respective dependents. The Lokpal
also possesses the powers to superintendence over the CBI. It also has the
authority to give direction to CBI. If a case is referred to CBI by the Lokpal,
then the investigating officer in such a case cannot be transferred without
the prior approval of the Lokpal. The powers of a civil court have been vested
with the Inquiry Wing of the Lokpal.

The Lokpal also possesses powers regarding the confiscation of assets,

proceeds, receipts, and benefits arisen or procured by means of corruption in
special circumstances. It also has the power to make recommendations
regarding the transfer or suspension of public servants connected with the
allegations of corruption.

Lokpal is capable of giving directions to prevent the destruction of records

during the preliminary inquiry.

Limitations
The institution of Lokpal came up as a much-needed change in the battle
against corruption. The Lokpal was a weapon to curtail the corruption that
was spreading in the entire administrative structure of India. But at the same
time, there are loopholes and lacunae which need to be corrected. The
appointing committee of Lokpal consists of members from political parties
that put Lokpal under political influence.

There are no criteria to decide who is an ‘eminent jurist’ or ‘a person of

integrity’ which manipulates the method of the appointment of Lokpal. The
Lokpal and Lokayukta Act 2013 failed to provide any kind of concrete
immunity to the whistleblowers. The provision related to the initiation of
inquiry against the complainant, in cases where the accused is found
innocent, leads to discouraging people from making complaints. One of the
biggest lacunae is the exclusion of the judiciary from the ambit of the Lokpal.

The Lokpal does not have any constitutional backing. Also, there are no
adequate provisions for appeal against the actions of Lokpal. The states have
complete discretion with respect to the specific details in relation to the
appointment of Lokayukta. The need for functional independence of the
CBI has been catered to some extent, by the change brought forth in the
selection process of CBI’s Director, by the Lokpal and Lokayukta Act.

The Lokpal and Lokayukta Act also mandates that no complaint against
corruption can be registered after a period of seven years from the date on
which the mentioned offense is alleged to have been committed.

Conclusion
In order to tackle the problem of corruption, the institution of the
ombudsman should be strengthened both in terms of functional autonomy
and the availability of manpower. The appointment of Lokpal in itself is not
enough. The government should address the issues based on which people
are demanding a Lokpal. Merely adding to the strength of investigative
agencies will increase the size of the government but not necessarily improve
governance. The slogan adopted by the government of “less government and
more governance”, should be followed in letter and spirit.

Moreover, Lokpal and Lokayukta must be financially, administratively and

legally independent of those whom they are called upon to investigate and
prosecute. Lokpal and Lokayukta appointments must be done transparently
so as to minimize the chances of the wrong sorts of people getting in. There
is a need for a multiplicity of decentralized institutions with appropriate
accountability mechanisms, to avoid the concentration of too much power in
any one institution or authority.

Introduction
Towards fulfilling the Preambular promise of securing to all the citizens, Justice – social,
economic and political, Article 39 A of the Constitution of India provides for free legal aid
to the poor and weaker sections of the society, to promote justice on the basis of equal
opportunity. Articles 14 and 22(1) of the Constitution also make it obligatory for the
State to ensure equality before law. In 1987, the Legal Services Authorities Act was
enacted by the Parliament, which came into force on 9th November, 1995 to establish a
nationwide uniform network for providing free and competent legal services to the
weaker sections of the society.

The National Legal Services Authority (NALSA) has been constituted under the Legal
Services Authorities Act, 1987 to provide free Legal Services to the weaker sections of the
society. The Chief Justice of India is the Patron-in-Chief and the Senior most Hon'ble
Judge, Supreme Court of India is the Executive Chairman of the Authority. Presently,
NALSA is housed at 12/11, Jam Nagar House, New Delhi-110011.

Public awareness, equal opportunity and deliverable justice are the cornerstones on
which the edifice of NALSA is based. The principal objective of NALSA is to provide free
and competent legal services to the weaker sections of the society and to ensure that
opportunities for securing justice are not denied to any citizen by reason of economic or
other disabilities, and to organize Lok Adalats for amicable settlement of disputes. Apart
from the abovementioned, functions of NALSA include spreading legal literacy and
awareness, undertaking social justice litigations etc.

With the aim of reaching out to the diverse milieu of people belonging to different
socio-economic, cultural and political backgrounds, NALSA identifies specific categories
of the marginalized and excluded groups from the diverse populace of the country and
formulates various schemes for the implementation of preventive and strategic legal
service programmes to be undertaken and implemented by the Legal Services
Authorities at the various levels. In carrying out all these responsibilities, NALSA works in
close coordination with the various State Legal Services Authorities, District Legal
Services Authorities and other agencies for a regular exchange of relevant information,
monitoring and updating on the implementation and progress of the various schemes in
vogue and fostering a strategic and coordinated approach to ensure smooth and
streamlined functioning of the various agencies and stakeholders.

Power to make awards

An arbitral award is similar to a judgement of the court. It is based on the
interpretation of the facts and evidence by the arbitral tribunal. The decision
of the tribunal is what resembles an arbitral award.

The main motive of the arbitral proceeding is the determination of the

arbitral award and the power to declare it lies with the arbitral tribunal.
However, the rules applicable in an arbitration proceeding are to be verified
on the basis of the below-mentioned provisions:
 1. In matters related to international commercial arbitration, the
dispute shall be decided according to the rules of proceedings which
are decided by the parties, but if they fail to decide upon the rules,
then the arbitrator himself decides them and they become
applicable.
2. In other matters, the arbitral tribunal shall have the right to decide
the rules which are in accordance with the substantive law.
Declaring an arbitral award is not only a power conferred on the arbitral
tribunals but also a duty on their part to assess all the information related to
the dispute and then decide upon the same.

Expenses of arbitral tribunals

As the Arbitration and Conciliation (Amendment) Act, 2019 provided that the
appointment of the arbitrators is to be made by the arbitral institutions
assigned by the Supreme Court or the High Court and all the decisions
regarding the matters of expenses is to be made by the assigned institution
as per Section 31A of the Act.

The expenses are to be borne by the unsuccessful party as per the award.
This rule can be changed in certain cases where the court or arbitral tribunal
may make a different order for which they have to record the reasons in
writing.

Expenses for the matter of arbitration proceedings as per the Indian Council
of Arbitration, which is one of the institutions, include the following-

1. The fees and expenses of the arbitrators and witnesses

2. Administrative and secretarial expenses
3. Expenses on the travel of the arbitrator and others concerned
4. Stenographic, translation, and interpretation charges
5. Stamp duty on an award
6. Expenses of witnesses
7. The cost of legal or technical advice
8. Other incidental expenses arising out of or in connection with the
arbitration proceeding or award.

Jurisdiction of arbitral tribunals

Arbitral tribunals don’t exercise statutory jurisdiction. They define their
jurisdiction as per the needs of the parties involved in the dispute.
Section 16 of Chapter-4 of the Arbitration and Conciliation Act, 1986 talks
about the provisions regarding the jurisdiction of the arbitral tribunal. It
basically says that an arbitration clause will be valid even if the contract is
held void. It is to be read as another agreement. It also provides for the
provisions of interim orders and the power of the arbitral tribunal to make
them as per Section 17 of the statute.

Functions of arbitral tribunals

As per Section 2(1)(d) of the Arbitration and Conciliation Act, 2019, an
arbitration tribunal refers to a sole arbitrator or a panel of arbitrators. These
people have quasi-judicial authority because they act as private judges in
civil matters. So, under this capacity, they also have some functions to
perform, which are as follows:

To fix time and place for the arbitration

proceedings
It is the duty of the tribunal so assigned to finalise the place and time for the
proceedings as per the convenience and consent of the parties to the
dispute. But after the finalisation of the time and place, it is the duty of the
parties to produce themselves for the proceedings, otherwise the tribunal can
give an ex parte order.

To decide upon the liability of arbitration-related

expenses
It is the duty of the tribunal to decide upon the liability of the expenses of
the arbitration proceedings and then give the verdict on the issue with valid
reasoning on their part.

To manage the scope of investigation

It is one of the most critical functions of the arbitration tribunal. An
arbitration tribunal should analyse all the evidence and witnesses to be sure
of the circumstances and then take a stand on the basis of which the arbitral
award is given by the tribunal.

To maintain the secrecy of the case

There is an obligation for the arbitrators in the tribunal to maintain the
secrecy of all the facts in order to maintain the trust values defined, intact.

But at the same time, as per Section 12 of the Arbitration and Conciliation
Act, 1996, they have to disclose some facts to the parties so that no sense of
partiality is found in the delivery of the award.

To determine the rule of procedure

According to Section 19 of the Arbitration and Conciliation Act, 1996, the
arbitration procedure is not bound by any code of procedure. The arbitration
organisation assigned the task of setting up the tribunal for a particular
arbitration case defines the rules for conducting the arbitration proceedings.
Most of these rules are pre-defined by the organisation, and some rules are
interpreted during the course of the proceedings. These have to comply with
the other laws of the country.

Duty to interpret or correct the award

According to Section 33 of the Arbitration and Conciliation Act, 1996, it is the
duty of the arbitral tribunal to correct or interpret the award passed by the
tribunal assigned, within 30 days from the date of receipt of the application
for the same. It can be done in the following two cases:

1. A party with the notice to the other party may request arbitration
tribunal to correct any error of the sort of typographical,
computation, clerical, or any other error of similar nature;
2. A party may, with a notice to the other party, request the tribunal to
interpret any specific part or parts of the award again.
As per this section, the tribunal may correct any error of the award on its
own initiative within thirty days from the date of the arbitration award.

Laws governing arbitral tribunals in India

In case of domestic arbitration in India, the Arbitration and Conciliation Act,
1996 is the main law regulating the arbitration proceedings in India. Also,
along with the Act, all the proceedings must be in lieu of the procedural and
substantive law of India.

The arbitral tribunal, while deciding a dispute, has to comply with these
provisions in order to pronounce an arbitral award that is maintainable.
In India, the Code of Civil Procedure, 1908 along with the Arbitration and
Conciliation Act, 1996, which is based on UNCITRAL model text, provide for
the basic rules and regulations to be followed by the arbitration tribunal
during the proceedings to grant an arbitral award.

Laws governing arbitral tribunals in the international sphere

In case of international commercial disputes which are to be settled by way
of arbitration, there are at least five systems of law that are relevant to be
considered during the process and for deciding the outcome of the
arbitration. These systems are as follows:

Governing law of the agreement

The law governing the other provisions of the agreement, which the parties
have agreed upon and subsequent breach of which results in the initiation of
the proceedings.

Governing law of the Arbitration Agreement

The law governing the arbitration clause or arbitration agreement determines
various other provisions for the proceedings of the arbitration.

Governing law for the arbitration proceedings

Any specific law to be considered as per the agreement for the purpose of
proceedings and deciding the dispute is to be taken into account beforehand.

The UN Working Group, which also drafted the UNCITRAL Model Law on
International Commercial Arbitration, started with the assertion that when
the parties have not expressly provided for any law to determine the
substantive validity of the arbitration agreement itself, then the law of the
seat of the Arbitral Tribunal must apply for the same.

Governing law for defining the capacity of parties to sign and

get into an arbitration agreement
Laws defining the capacity of the parties under which they have contracted
with each other are to be considered as these provisions can have a very
important role to play in deciding the dispute.
Governing law for the land of enforcement of arbitral award
The laws of the territorial area in which the arbitral award will be enforced
have to be taken into consideration by the tribunal to primarily decide the
kind of compensation to be provided as per the arbitral award.

Major arbitration centres in the world

There are many centres in the world that assist in the delivery of justice in
arbitration cases. Some of the most prominent arbitration centres are
mentioned below with a brief account of their details. All of these centres
have some predefined rules and are responsible for assigning the tribunal for
arbitration proceedings.

The High Court assigns the institution to the parties to the dispute in cases of
domestic arbitration, whereas in the case of international commercial
arbitration, the institution is assigned by the Supreme Court of India.

International Chamber of Commerce International

Court of Arbitration
The International Chamber of Commerce’s International Court of
Arbitration was established in Paris in 1923. It is generally described as the
world’s leading international commercial arbitration institution.

The ICC’s International Court of Arbitration is not a tribunal or a court and

does not itself decide disputes or act as an arbitrator. It is rather an
administrative body that acts in a supervisory and appointing capacity under
the rules of the International Chamber of Commerce.

ICC India is one of the most active chapters of the ICC, the world’s apex
business organisation. In its fold, it has a large membership of corporations,
chambers of commerce, trade and industry associations, consultancy
organisations, law firms, etc.

London Court of International Arbitration

The London Court of International Arbitration was founded in the year 1892.
It is one of the world’s leading international institutions for commercial
dispute resolution.
It provides efficient, flexible, and impartial administration of arbitration and
other ADR proceedings such as negotiation,mediation etc., regardless of
location, and under any system of law.

This centre levies administrative expenses on an hourly basis for the services
of the arbitrators.

The London Court of International Arbitration, India started its operations in

2009. Its purpose was to promote the use of arbitration and other ways of
dispute resolution through an Indian arbitral institution which would offer
institutionally administered arbitration based on India-specific rules.

Permanent Court of Arbitration

This institution was established by the Hague Conventions of 1899 and
1907 for the Pacific Settlement of International Disputes and is focused
particularly on international arbitration involving states and similar entities.

The Permanent Court of Arbitration has a three-part organisational structure

consisting of an Administrative Council that looks after its policies and
budgets, a panel of independent potential arbitrators known as the Members
of the Court, and its Secretariat, known as the International Bureau, headed
by the Secretary-General.

Singapore International Arbitration Centre

It is one of the most trusted arbitration institutions and was established in
1991. Since its inception, it has provided third party dispute settlement
services to its clients, and now they have a panel of more than 500
arbitrators hailing from over 40 jurisdictions all round the world.

The Singapore International Arbitration Centre Rules provide a state-of-the-

art procedural framework for efficient, expert, and enforceable resolution of
international disputes of all sizes and complexities involving parties from
diverse legal systems and cultures.

The largest number of non-Singaporean clients for the institute hail from
India and China. Its rules are based largely on the UNCITRAL Rules.

Indian Council of Arbitration

This institution was established in 1965 as a specialised arbitral body at the
national level under the initiatives of the Government of India and apex
business organisations like Federation of Indian Chambers of Commerce and
Industry (FICCI), etc.

This institution is based in New Delhi, and the main objective of the Indian
Council of Arbitration is to promote amicable, quick, and inexpensive
settlement of commercial disputes by means of arbitration and conciliation,
regardless of location.

Conclusion
The dispute resolving system of arbitration is proving to be very handy in the
domestic as well as international arenas as the delay caused by the
conventional court procedure for the relief delivery system is a big problem
and the third party justice delivery system is proving to be handy. Most of
the matters of civil nature are now being dealt by the way of arbitration with
the consent and the will of the parties, and this is helping to resolve the
matters in a much more feasible manner.

The provisions regarding the alternative ways of dispute resolution are

evolving with time, especially in India. With the growth of arbitration
proceedings in India, which might help in solving the unwanted condition of
court burden in the coming few years, new institutions are providing their
services to India.

Let’s hope that the problem gets solved, and that the situation gets better
with time and the justice delivery system becomes much more efficient and
effective with these alternative ways of doing the same.

Lok Adalats in India: Apertures to Speedy Justice

Introduction
The concept of Lok Adalats stands as a unique contribution of the Indian
legal system to world legal jurisprudence. It is an informal system of justice
dispensation which has largely succeeded in providing a supplementary
forum to litigants for determination and settlement of disputes[1].
Originating from Gandhian principles by Mahatma Gandhi, it has become a
major helping hand to courts and is prescribed in Section 89 of the Code of
Civil Procedure, 1908 as well[2].

The advent of Legal Services Authority Act, 1987 further gives a statutory
status to these Lok Adalats, promoting the constitutional mandate of Article
39-A of the Constitution of India, which directs the state to organize Lok
Adalats to secure that the operation of the legal system promotes justice on
a basis of equal opportunity[3]. These Lok Adalats provide three-fold benefits
involving speedy resolution of disputes coupled with reduced costs of
litigation and avoiding further appeals, thereby making them the perfect
instrument to resolve the heightened burdened on judiciary for disposing
cases[4]. In 2018 alone, about 47 lakh cases were disposed of in National
Lok Adalats, which included about 21 lakh pending cases and 26 lakh pre-
litigation cases[5]. Therefore, their efficacy has been a linchpin in reducing
excessive litigation[6].

Keeping in mind their contribution to Indian jurisprudence, the author shall

discuss the concept of Lok Adalats in the country, their functioning,
advantages, places for improvement and their role as functionaries towards
access to justice for the poor and downtrodden.

The functioning of Lok Adalats

Level of Organization
Lok Adalats are better known as the people’s courts, therefore they need to
be available to people on every level of governance[7]. The Legal Services
Authority Act, 1987 (Hereafter “the Act”) prescribes for several levels
wherein Lok Adalats can be organized, ranging from the lowest courts to the
apex court which can take cognizance and organize Lok Adalats for effective
and speedy justice[8]. The persons residing over these Adalats include
serving or retired judicial officials as well as other persons as prescribed by
the authority conducting the Lok Adalats in the given area[9].

Jurisdiction
The jurisdiction of these Lok Adalats is parallel to the courts organizing them,
therefore it extends to any case or matter which is being heard by that court
under its original jurisdiction[10]. Matters with respect to offences not
compoundable under law are an exception to this jurisdiction. They cannot be
adjudicated in Lok Adalats[11]. These courts may also take cognizance of
cases as per provisions of the Act for disputes agreed by the parties to be
resolved under them or if one of the parties makes an application to the
courts for referring the case to Lok Adalats for settlement and the court
is prima facie[12] satisfied that there are chances of settlement[13].

Resolution and Award

 After admission of disputes, the Lok Adalats proceed to hear the case and
dispose of the matter by reaching a settlement or compromise in an
expeditious manner[14]. The manner of resolution in Lok Adalats is more
towards compromise and less towards conclusive determination[15]. In any
case, if the parties are unable to reach a compromise and the Lok Adalat
deems that matter needs more determination, it can refer the matter back to
the courts for adjudication[16].

Eventually once the court is satisfied, it passes an award with respect to the
dispute is final and binding on the parties[17]. The award is enforceable as a
decree of the civil court and no appeal lies from this award[18]. Therefore,
this provision ensures that the award is conclusive and the matter is put to
rest once and for all.

Advantages of Lok Adalats

The reason behind the efficiency of Lok Adalats is based on several
advantages which it holds over normal courts of law. These factors are
responsible for its quick disposal of several disputes. They are:

Procedural Flexibility
There exist considerable procedural flexibility as major procedural laws such
as the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1882 are
not strictly enforced[19]. The parties can interact directly through their
counsels which is not possible in a regular court of law. This dynamic nature
of Lok Adalats allows them to conciliate both party interests and pass awards
which are acceptable to both parties[20].

No Court Fees
There is no court fee payable when a matter is filed in a Lok Adalat[21]. If a
matter pending in the court of law is referred to the Lok Adalat and is settled
subsequently, the court fee originally paid in the court on the
complaints/petition is also refunded back to the parties[22].

Final and Binding Award

Under Section 21 of the Act, the award passed by the Lok Adalats stand final
and binding. As no appeal lies to this conclusive determination, the cases are
put to rest on first instance[23].
Maintenance of Cordial Relationships
The main thrust of Lok Adalats is on compromise between parties. While
conducting the proceedings, a Lok Adalat acts as a conciliator and not as an
arbitrator. Its role is to persuade the parties to reach a solution and help in
reconciling their contesting differences[24]. This encourages consensual
arrangements. Therefore, disputes are not only settled but also the cordial
relations between parties can be retained. Hence, it is a very healthy way of
dispute resolution[25].

Areas for Improvement within Lok Adalats

Some areas of improvement whereby the functioning of Lok Adalats can be
improved are as follows:

Enforceability lies with Civil Court

The awards passed by the Lok Adalats are deemed equivalent to decrees of
the civil court[26]. Although, the enforcement of these decrees cannot be
carried out by the Lok Adalats. This function rests with the civil courts,
therefore the parties need to apply for enforcement to execute the award. It
is the author’s recommendation that this power to enforce needs to be
provided to the Lok Adalats itself to ensure that the decisions passed are
executed to their finality.

Lack of Criminal Jurisdiction

The jurisdiction of Lok Adalats with respect to criminal disputes is limited to
offences which are compoundable under law[27]. This removes crimes such
as that of petty theft other small crimes from the purview of Lok Adalats.
Hence, this should be reviewed to bring petty crimes within the purview of
Lok Adalats.

Lok Adalat and Access to Justice: A

Symphonic Interplay

What is “Access to Justice”?

The term “access to justice” can be understood as “the right to ensure that
every person is able to invoke the legal processes for legal redress
irrespective of social or economic capacity” and “that every person should
receive a just and fair treatment within the legal system”[28]. Basically, the
right of every person to access judicial forums for putting forth their case can
be termed as a chance to access justice.

Here, there lies an important point of difference between “access” to justice,

and access to “justice”; wherein the former refers to whether a chance of
redressal was provided to the aggrieved party whereas the latter refers to
whether justice was served. Both these aspects have been analyzed in this
article.

Role of Lok Adalats in providing “access” to justice

Since their inception in 1982, Lok Adalats have been the instrumentalities for
the poor to have “access” to justice in our country, which is troubled with
more than 3.3 crore cases (2018 figures) pending for adjudication till
date[29]. The functioning of these Lok Adalats have been responsible for the
disposal of more than 50 lakh cases in 2017 itself[30], thereby being a major
modality for reduction of judicial workload. The average number of cases
resolved by Lok Adalats stand at 4000 cases a day, therefore their existence
is undoubtedly vital for solving the judicial backlog which exists in recent
times[31].

A major feature of Lok Adalats to determine disputes without charging any

fees has also been a strong incentive for the poor to approach the Lok
Adalats for finality of their disputes. In contrast to filing an application as an
indigent person under Order 33 of the Code of Civil Procedure, 1908, this
alternative dispute resolution mechanism stands as a much friendlier means
for the poor to access legal redressal mechanisms. Hence, Lok Adalats can be
said to have passed the test for providing “access” to justice to the poor.

Role of Lok Adalats in providing access to “justice”

The sheer right to get access to a legal redressal mechanism, cannot in the
author’s view, be deemed sufficient justice. The financial status of parties to
the dispute, their situations, fair procedure during trial and influence on the
legal process also need to be considered to understand whether a proper
chance to access “justice” was provided to them[32].

Many times, parties settle in Lok Adalats as they cannot afford the expenses
of continuing with litigation. There is compromise out of necessity rather
than will. This can be related due to the issues in our legal system and
therefore it is difficult to deem this as a fair chance. Hence, it is rather
difficult to say that the Lok Adalats have passed the test for providing access
to “justice” to the poor.

Conclusion
Lok Adalats have become an integral part of the Indian legal system and
have become the apertures for access to justice for the poor and
downtrodden. The have bridged the gap to legal aid, but still have certain
areas of improvement which could increase their efficiency even more. While
they are acting well to bridge the gap of “access” to justice, there needs to
be a review of their effectivity in providing aggrieved parties true access to
“justice”. With finality, one can conclude that there is more than meets the
eye which can be done to make Lok Adalats a better redressal system
towards rising litigation.

Doctrine of Severability
Basis Of Doctrine
This doctrine of severability is also known as the doctrine of
separability. The word “to the extent of the inconsistency or contravention”
makes it clear that when some of the provision of a statue when some of the
provisions of a statute becomes unconstitutional on account of inconsistency
with fundamental rights, only to the repugnant provision of the law in
question shall be treated by the courts as void, and not the whole statute.

The doctrine of severability means that when some particular provision of a

statute offends or is against a constitutional limitation, but that provision is
severable from the rest of the statute, only that offending provision will be
declared void by the Court and not the entire statute.

The doctrine of severability says that if good and bad provisions are joined
together by using the word ‘and’ or ‘or’ and the enforcement of good
provision is not made dependent on the enforcement of the bad one that is
the good provision can be enforced even if the bad one cannot or had not
existed, the two provisions are severable and the good one will be upheld as
valid and given effect to. On the other hand, if there is one provision which is
capable of being used for a legal purpose as well as for illegal one, it is
invalid and cannot be allowed to be used even for the legal purpose.

In this doctrine it is not the whole act which is held invalid for being
inconsistent with the Part three of the constitution which is given to the
citizens of India. It is only those parts are inconsistent which are violative of
the fundamental rights. But just the part which violates the fundamental
rights is separable from that which does not isolate them. If it there that the
valid portion is combined with the invalid portion that it is impossible to
separate them. Then in such cases the court will leave it and declare the
whole Act as void. This process of doing it is known as the doctrine of
severability.

The honourable Supreme Court of India has used this doctrine in the case
of A.K Gopalan vs State of Madras it was held by the court that the
preventive detention should be removed from section 14 then it would be
valid and by removing this will not affect the act and it will remain valid and
effective. The doctrine was further was also applied in D.S Nakara vs Union
of India where it was that the act remained valid and the portion which was
not consistent was declared as invalid and this was because it was easily
separated from the valid part. Also, State of Bombay vs F.N Balsara and here
it was held that the provision of the Bombay Prohibition Act, 1949 where the
entire act was declared as void and it did not affected the rest of the part and
there was no need to declare the whole statute as void.

The doctrine of severability was even used in the case of Minerva Mills vs
Union of India where section 4 of 55 of the 42nd Amendment Act, 1976 was
struck down for being beyond the amending power of the Parliament and
then it had declared the rest of the Act as valid. Then in another case
of Kihoto Hollohan Vs Zachillhu which is very famously known as the
defection case. In this case the paragraph 7 of the Tenth Schedule which was
first inserted by the 52nd Amendment Act of 1985 was declared as
unconstitutional because it had violated the provisions under Article 368(2).
But, the whole part was not declared unconstitutional. So, the rest of
the Tenth Schedule excluding paragraph 7 was upheld by the Constitution.

The doctrine of severability was considered by the supreme court of India in

the case of R.M.D.C vs Union of India and the rules regarding severability
was laid down in this case-

1. The intention of the legislature behind this is the determine whether

the invalid portion of the statute can be severed from the valid part or
not.
2. And if it happens that the both the valid and invalid parts can’t be
separated from each other then the invalidity of the portion of the
statute will result in invalidity of the whole act.
3. Even if it happens that the invalid portion is separate from the valid
portion.
It is the power and duty of the courts to declare law which is inconsistent
with the constitution of India to be unconstitutional. The foundation of this
power of judicial review as it was explained by a nine-judge bench is the
theory that the constitution which is the fundamental law of the land, is the
will of the people, while the statute is only the creation of the
elected representatives of the people, when therefore the will of the
legislature as declared in a statute, stands in opposition to that of the people
as declared in the Constitution, the will of the people must prevail.

Also, the power to annul the acts of the executive and the judiciary which
violates the constitution is given by the Constitution itself in the judiciary.
But, the same is not part of the legislature which is the creature of the
constitution or one can say a law-making body. It is not correct to say that
view of the legislators must prevail because they are answerable to the
people. In determining the constitutionality of a provision the court will first
question that whether the law is constitutional or not because there will be a
possibility that it might be contravening a lot of articles that is enshrined in
the constitution.

Practice of Doctrine of Severability

The practice of Doctrine of Severability has been in practice for a very long
time and it is not a new thing. It has been adopted in many countries like
United Kingdom, Australia, United States of America, Malaysia and so as well
in our country which is India. In England, United Kingdom the doctrine of
severability goes back when it had originated in the case of Nordenfelt v.
Maxim Nordenfelt Guns and Ammunition Company Ltd. In this case Then in
other countries like the United States of America where the first case of
doctrine of severability was decided in the year 1876. After this a question
evolved which question that if the Congress knew about the invalid portion
had it enacted it the first time. In this particular case the case was centred
around the fifteenth amendment of the american constitution that spoke
about the voting rights not being denied to the American male citizen on the
basis of color or race etc.

Then in the very popular case of Champlin Refining Co. v. Corp. Commission
of Oklahoma where an oil refining company had challenged several
provisions of the Oklahoma statute which further argued the various
provisions that had violated the Commerce Clause and even the fourteenth
amendment that talks about the due process and equal protection clauses.
And in determining whether any of these or any one of them could be struck
down and further separated from the residue of the oil and gas statute at
issue. In the year 2006 the Supreme Court of the United States of America
propounded the three principles as an underlying rationale. Then in the case
of Ayotte vs. Planned Parenthood of N. New Eng., here also the court had laid
down the three principles of severability.

In another case which is Cardegna. Vs Buckeye Check Cashing that was in

the year 2006 where the defendant which was the Buckeye took a loan
amount from a subsidiary that was a business. Later on again he took
another loan amount which was higher than the loan amount which was
previously taken and then he was later unable to pay back. He then filed a
class action suit with the help of a lawyer. The suit was regarding that the
interest rates charged by the plaintiff were higher when compared with
others that was charged by the company that was at least 45 percent higher
than the prescribed normal rates. But, the court in Florida stated that it is
not only one part of the contract that could be challenged but it needs to be
the whole contract. And so this means that the doctrine of severability which
earlier was thought could be applied cannot be applied now. Further the
honourable Supreme Court of gave the decision and declared that the whole
of the contract was void ab initio on the grounds that such void contracts
that are absolutely void and useless from the initial stage itself.

The doctrine of severability has now it just been part of the western world
but also has spread to the eastern countries of the world. Like from India to
Malaysia and in Malaysia this doctrine was evolved in the very popular case
which is Malaysian Bar & Anr. V. Government of Malaysia. When we talk
about India with respect to the doctrine of severability then we need to study
and understand how Article 13 of the Indian Constitution came into being.
This doctrine works when it becomes evident that any part of the law offends
the Constitution . When we talk about incontext of Indian Constitution then it
will be the fundamental rights which is guaranteed by the Constitution. So,
this doctrine will work especially when subjected to this part which is Part III
of the Indian Constitution.

Whether One Could Challenge the

Constitutionality of a Law
One can challenge the constitutionality of law but only if our rights are
directly affected by a law. Then only we can question the constitutionality of
the law. It follows in such ways-

When a person is outside the class that might be injured by the statute then
he has no right to complain. Then where a statute affects bona vacantia,
then there is no person who is competent to challenge the validity of such
statute. Again, where the statute operates as a contract, either party to the
contract is entitled to challenge the validity of the statute.

Presumption Taken By The Courts

It is always on the person who attacks and tries to show that it is
contravening the constitution then it is him on whom the burden is upon to
show that courts that while performing its duties it has the constitutional
principles by and its guidelines while laying down its decisions as it said in
the case of Chiranjit Lal Chowdhury vs The Union Of India And Others. If it
happens that the challenge is not on the provisions of the Constitution then
the courts have to consider and make sure that it is intra vires and try to
interpret the same. So, it is clear that the burden fully lies upon the person
who questions the decision and challenges it in a court of law.

If something happens and the constitutionality of the act is challenged then

the person must show that he has sustained some injury as a result of that
or that he/she is in immediate danger of sustaining some direct injury as a
result of the statute or law coming into force. And if it even abridge the
fundamental rights of the person in any form then the aggrieved person has
all the powers to approach the courts without waiting or delaying for the
State to take some or any type of action. And if it happens that the person
does not possess any of the fundamental rights then he/she cannot challenge
the validity of the law on the grounds that it is inconsistent with a
fundamental right. Even a corporation has a legal entity separate from that
of its shareholders. Hence, in the case of corporations, whether the
corporation itself or the shareholders would be entitled to impeach the
validity of the statute and this will depend upon the question whether the
right of the corporation or of shareholders have been affected by the statute
that has been impugned.

When it happens that the fundamental rights of the company is impugned by

the statute then it also affects the interest of the concerned shareholders
then in such cases the shareholders also impugns the constitutionality of the
statute. In such situations what happens is that the joinder of the company
as co-petitioner would not bar relief to the shareholders even though the
company is not a ‘citizen’ and so would not be entitled to relief. Also, the
possibility of financial relief due to the management of the company being
taken over by the government is sufficient to give locus standi to a
shareholder.

Effects When A Law Is Declared As

Unconstitutional
Article 141 of the Constitution of India says that the honourable Supreme
Court of India is binding on all the courts which is within the territory of
India. For example, once if any law or any statute is declared
unconstitutional by the Supreme Court of India then it shall be from that
date onwards will be binding on all lower courts in India. The effect of this is
that the decision operates as a judgement in rem against all the persons who
may or is going to seek relief in any court in India. So, in further proceedings
then there is no onus on the party to affected to establish its
unconstitutionality again and then the court is bound to reject the law which
is declared as invalid by the honourable Supreme Court.

The same thing is applied when the law has been declared to be
unconstitutional partially. If the law is sought to be enforced in a case then in
such cases no notice is to be taken by the Court of that part which has been
declared by the Supreme Court as unconstitutional. In other words, it means
that the Court will read the Statute in such a manner that the part of the
section which has been declared as invalid as never existed before. If it
happens that the person is prosecuted for the contravention of the section
which has been declared as invalid then no onus is cast upon the accused to
prove that his/her case falls upon and under that part of the section which
has been held invalid. On the other hand, it happens that the prosecution
cannot succeed unless it is proven that the accused has contravened that
part of the section which is enforceable and valid after the honourable
Supreme Court decision.

No distinction is made where a case where the law is declared to be invalid

because of the lack of legislative competence and a case where it is declared
invalid on the ground of contravention of a fundamental right. Even Article
245(1) of the Constitution of India lays down very specifically that the
legislative power whether it is of Union or of a State Legislature is and will
always remain subject to other provisions of the Constitution. The result is
that when a legislature makes any law which is contravening a provision of
the Constitution like say any of the fundamental rights then the position will
remain the same as if they had no power to legislate over the subject-matter
of the legislation at all. Then, accordingly, the declaration of invalidity of the
law by the honourable Supreme Court goes through the legislative power in
either of the cases as held many cases by the court itself.

Effects on Unconstitutional Statute Due to

Constitutional Amendment
Earlier back in the days there were a lot of confusion upon this topic when
there is a constitutional amendment and because of this there is some effects
on the unconstitutional statute. The ‘doctrine of eclipse’ can be invoked in the
case of pre-constitution law which was valid when it had been enacted. But,
there was some inconsistency with the constitution which came into
existence subsequently, if and when the shadow is removed, the pre-
constitution law becomes free from all kinds of infirmity.

But the thing is that the principle cannot be invoked in the case of a post
Constitution law which is void ab initio. In view of Article 13(2), the
fundamental rights constitute express limitations upon the legislative power
of a legislature making a law after the commencement of the Constitution
and no distinction can be drawn between a post-Constitution law which is
ultra-vires that is beyond the legislative competence of the legislature and a
law which contravenes a fundamental right. It is that a post-Constitutional
law which violates a fundamental right is void ab initio and no subsequent
amendment of the Constitution can revive such still-born law, unless such
amendment is retrospective.
Power of a Legislature when a statute is
declared Unconstitutional
When a statute is declared unconstitutional by a Court of law then the
Legislature cannot directly override that decision which is taken and further
pronounce the statute to have been valid on the date of judgement. It is,
however, so that the competence of the Legislature to a new law which is
further free from the unconstitutionality and then provide that anything done
under the offending law shall be deemed to have been under the new law
and subject to its provisions.

Effects of a Proclamation of Emergency

upon the Unconstitutional Statute
A Proclamation of Emergency which is made under Article 352 is prospective
in its operation. Article 358 in the Indian Constitution which frees the
Legislature from the limitation which is laid down in Article 19 during the
proclamation of emergency means during its continuance. But it does not
operate to validate a law which is enacted prior to the Proclamation which
was invalid owing to the contravention of Article 13(2). Then such laws will
be void ab initio and cannot be revived by the proclamation of the
emergency. So, now if any executive action which is taken in the exercise of
any power in the hands by such a void law will also be invalid. Even though
such action takes place after the commencement of the Proclamation or a
continuation of pre-Constitution executive action.

Whether a Right Could be Waived

The important question which has been there over the years was that
whether a fundamental right could be waived which has been answered by
the Constitution Bench of the honourable Supreme Court. Like for example in
the case of Behram vs State of Bombay where the honourable Venkatarama
J.had expressed the view that such of the rights as are for and in the interest
of the individuals and is totally different from the interest of the general
public, could be waived accordingly even the right which is guaranteed by
Article 19(1) which also comes under this category.

But everyone else didn’t have the same viewpoint which is the majority that
included Mahajan, C.J., Mukherjee, Bose and Hasan, JJ. And they expressed
the viewpoint even without deciding the question which was mainly for the
good of the individuals. This has also been laid into our Constitution on
grounds of public policy and in pursuance of the objective declared in the
Preamble itself. So, in the end the conclusion is that none of the fundamental
rights could be waived.
Then again in the case of the Basheshar v. Commr. Of I.T., Justice Bhagwati
and Subba Rao, JJ. have held that a fundamental right being in the nature of
a prohibition addressed to the State, none of the fundamental rights in our
Constitution can be waived by an individual and this declaration was given
with what the majority have viewed in the Behram’s Case.

In the very famous case of Olga Tellis vs Bombay Corpn. where the
Constitution bench has unanimously held that there cannot be any estoppel
against the Constitution which is the supreme law of the land. Also, a person
cannot waive any of the fundamental rights conferred upon him by the
Constitution itself which is stated in Part III. In many of the cases there have
been situations where the courts without even entering into the question of
waiver, the Court has held that a person who has applied for an appointment
to an office by an Act is not prevented from challenging on the ground that it
violates his or her fundamental right which is guaranteed under Article 16.

Effect of Acquiescence
There have been cases over the years where it has been held that if a person
has gained any kind of benefits under statute then he/she cannot challenge
its constitutionality or its validity in any case. Like in the case of Nain Sukh v.
State of U.P. where the Supreme Court has observed that a person who had
been allowed to contest an election which is being conducted on the basis of
separate electorates which is formed on the communal lines then he/she
cannot seek remedy under Article 32 of the Constitution of India after they
are done with the election.