i | | i iy yp ARBITRATION AND CONCLIATION ACTS 1996 ‘The Arbitration and Conciliation Act, 1996 replaced. the ‘Arbitration / Act, 1940, It came into force. on 22" August, 1996. Disputes between the paities in the ‘context of commercial: relations is inevitable. Rather than going to the Court, the parties may seek an. amicable settlement by ‘recourse to conciliation. For achieving this, unified legal framework is sought to be achieved. by this Act. [‘The main_chjective of the Act is to make provisions for anvarbitral procedure. which is fair, efficient and’ capable of meeting the needs..of arbitral proceedings-for the settlement of disputes. 7 7 nm at . What is an arbitration agreement - (What is an arbitration agreement Axbitration agreement means an, agreement entered into between the Parties to submit to arbitration all disputes or certain disputes a) which have already arisen or b) which may arise between them in ful in respect of a legal ot contractual relationship. ; The arbitration agreement may be a clause in the original. agreement of Contract or it can, be entered into by a separate agreement, However, it is important that an arbitration agreement shall be in writing and signed by: the parties. An exchange of letters, telex, ¢-mails ete which prove that the parties intended an arbitration is enough for this purpose. The words “arbitration”, “arbitral tribunal” or “arbitrator” ate not compulsory to conclude that the parties intended arbitration, |The parties should glso agree that the decision of the arbitrator will be binding of them} According to s8, a judicial authority before which an action is brought shall refer a matter for arbitration if a) there is an arbitration clause is the contract or an arbitration agreement and - b) one of the parties applies forarbitration. Number of arbitrators. The parties are given the: freedom to determine the numbér of arbitrators. However, such number shall_not ‘be an even number. Failing in reaching an “agreement on the number of arbitrators will mean that each party can nominate one arbitrator each and the two such arbitrators appointed shall appoint the third arbitrator. ‘The third arbitrator shall act as the presiding. arbitrator.1 : on ot | ¢° Justice oF # pers i sit abitato : i nt SO; Jé the parties fail to appoint — Sy be 7 7 the a pointe institution designated by him shall appoint an itrator and # ; e lyif area NS tment of an arbitrator: may be challenge’ ‘made shall be final. Appoin| ; a) circumstances éxist that give ™ impartiality ofthe arbitrator oF ii des se to doubts about the independent” — greed to by the parties: +) he does not possess the qualifications a : . Jurisdiction and Powers of Arbitrators sittin, ntiing 98 °° any! ital Tril its own Ny : > *. ent. ‘The Arbitral Tribunal may rule on jt jue Oe objections with respect fo the existence or validity of aie os sa etzin petitions During pendency of arbitration, civil courts have no, jurisdiction ; | and decide nature of objections raised therein? i | i i r The Arbitrary Tribunal may order a party to, may consider necessary in the subject matter of the d : ‘a party to provide appropriate security it may déem necessary. it! ake any interim measure aS 1 ispute. The Tribunal can require The party shall be treated equally and gach’ party shall be given full opportunity to present his case. The Tribunal is not bound by the Code of Civil Procedure or the Indian ‘Evidence Act. The parties are free to agree on the procedure; tobe followed. However, if the parties do not agree on the procedure, the Tribunal! may conduct the proceedings in the mariner it consjders appropriate. : Failing any; The parties are free to agreé on the ‘place of arbitration. agreement, the Tribunal shall take into account a) the convenience of the parties r i b) any place appropriate for consultation among the members + ¢) place suitable for hearing witnesses, experts, and the parties 4) place convenient for inspection of documents, goods or other property, The parti et corer agree upon the language or languages to be used’ in the . ing an il lane 'g an agreement, the Tribunal shall determine the language« rbitral Tribunal shall; decide” whether to hold oral hearings or oral The Arbiir shar the proceedings shall be conducted on the basis of documents ema Cee “Ail statements, documents or information supplied by one party a other ed to the olher parly. In case any parly fails to communicate his claim shall be supply ribunal may continue the proceedings and make the orstatement of defence, the arbitral award on the evidence'before it. The Axbitral Tribunal may. appoint one or more experts to report to it on specific issues to be determined by the Arbitral Tribunal. The Arbitral Tribunal or a party with the approval of the Arbitral Tribunal may apply (0 the Court for assistance in taking evidence. Details of persons to be heard or documents to be produces shall be specified. ‘The court may’ofder thiat‘evidence’ * be provided directly to the Tribunal. Persons who fail to obey such orders shall be subject to the same penalties and punishments as would occur for suits tried before the courts. 4 ‘The Arbitral Tribunal shall decide the dispute in accordance With the law for the time being in force in India, the terms of the contract and the usage of the trade applicable to the transaction. In case there are more than one Arbitratot, any decision of the Arbitral Tribunal shall be made by a majority of its members. ‘The Tribunal may use mediation, conciliation or other procedure at any time during the, arbitral proceedings ‘to encourage settlement. . : The Award shall be made in writing and shall be signed. by the members. ‘The award shall state the reasons upon which it is based unless the parties have agreed that no reasons are to be given. The Arbitral Tribunal may make an interim*arbitral award on any matter with respect to which it may make a finial arbitral award. Where: the award is for payment of money, ‘the Tribunal may.mention the payment of money and interest from datq of cause of action till date of award. i Unless otherwise mentioned, the jate of interest from date of award till settlement shall be eighteen percent per annum. An Arbitral Award may be set aside only by a Court on an application made within three months of the award.: If no such application is made, an Arbitral Award shall be final and binding on the parties.‘pitra' ee ions ite for Arbitration * rbitration. The ¢5 sentials features of: an, ari The reference’of a dispu i eS ential featur’ one to submit himself for 2 eet force any agreement are: ve all the essential features A fit must ha iil is (i x [it mnist_be in writing] [hat is y = 7 Fhgesment ay bared atthrough flex, e-mails of |. 3 The subjéet matter of the ag ment should be to refer a dispute : wey ict IK ! ; ‘the dispute! tration ; + a.fpoin partes should have the tight to refer the dispute For ‘Arbitration : 2 Wergclent jn the apreementihat the declsion of the Arbitrat (Award) shall be binding on the parties to ihe dispute. i 6.[he Agreement for Arbitration need not contain the names. of Arbitrators/or a - Presiding Arbitrator] They may be nominated/decided later when the need arises. 7. The agreement for Arbitration may be | i Semin at a) by an Arbitration clause in the original contiact or : 2) inthe form of a separate agreement, | __ pspye : ; Subject matter of Arbitration in Government contracts ‘There may be several areas of ' i : 2) difference of opinion: : : ; b) disputes or ‘¢) compensation‘events. between a contractor‘and the Government, f i Theatsual areas are: i nn Sle The employer did not hanover the Sound conditions were, substantially m more adverse than the information made eeeoundicondition: 7 ,« , available or from the Site Investigation Report of the Government. The Engineer, gave an instruction for dealing with an unforeseen situation, we The Engineer ordered nal work for safety or other reasons. | 19 Other contractors, employer or other public authorities did not!carry out their, _ Work\pn time and caused delay or extra work to the contractor. An. The ademce payments deay. “14. Other events listed as Compensation Events in the contract took place. Other general areas and subject matter of Arbitration Be : in_natiire- and hence disputes of. criminal nature cannot:be a subject matter of Arbitration. 2. The subject matter shall be a matter affecting the personal rights based on a contract, resulting in loss or damages. — contract res 7 The disputes may relate to breach of contract redultiigs ‘in loss.to one party ~ based on a technical, managefial or financial agreement. Arbitrators can discharge their duties efficiently: only “it: they: are vested with sufficient powers. The: following 3 are the powers of the Axbitral Tribunals: "ZA. Administer ott to p pares, - “LE ‘Administer oath to’ ‘witnesses. ae 73. Can get suestions of law clarified by Courts. 4, Can approdchourts for summoning witnesses.and docym nok : ve “5. Pass iter s interiin awards. ea 6. Can correct clerical mistakes in their award suo moto or on am application made by any of the Patties. 7 FI, Examine parties._— 8. Examine witnesses and experts 3is payable. . ich it eriod for whiel : oe “Award rate of interest and A aesel onits own itisction.(y , Arbitsation agreement. i | fh -connte cane cxdetence-or valid validity of an / opriated ioe je abot the ¢ manner it considers appropria'™ : Ih sino ae ma and weight of a1 teriality d weight of determing the sig Ys relogoe, “materiality | bg {9 mi members > 1 i place siachitationf for corisultation amon; = me $ ‘inspection of “for hearing witiesses, experts or other parties or for documents, good or other property. y - 5.o decide the language or languagesto be used.” terain “only 7 16.Whether to cntertain -oral hearing and. arguments on en documents. in case a parly fails to 17.To continue the proceedings and make an award in ease a party fails: tf appear at an oral hearing or fails to produce documentary evidence. : A8TO To appoint one or more experts to to it.on specific issues. 7 v!9.Can request the Court for assistance in taking evidence. i To make-a writteh Arbitral Award stating the reas ons unless the partiés : ie agree that no reasons are to be given: 21.The Tribunal i: is not bound by y the Code of Civil Prdcedure or the Indian Evidence Act. Duties of Arbitrators. aittes of Arbitrators. 1 ae = Glowing are the i important duties of the Arbitrator, \ To give notice to the pacti ic) to appear before the Arbitrator, 7 4 ; the. zac equally) and give due Opportunities to the ¢ parties b ACs Mast: act et stity ctly with ope of the arbitration age eminiy A he award d given mu; a. Pass ; 7. “Must disclose whether he oa | orhas any interest in any party to the ei meee — 8. Must observe | Principles of natural TS. (Must be fair toboth pa tes) ~ 10. Must at amity Yih otter SB ALBBIO 5 apctaatonj Setting aside Arbitral Award . An award passed by an Arbittal Tribunal is final and binding on parties. An award may be set aside by the Court only if the party makings the application. furnishes proof h a y w hat : : 04. hewas under some inca A! the arbitration agt isnot valid or <3. he was not given proper notice of: : a) thé appointment of an arbitrator or ‘b) ofthe artiteal proceedings’ or et the Asbitral Award deals with “a dispute not falling” within the terms of, atbitration or bey beyond the : ope of arbitration or |. Phat oe the composition of the tribunal or the prdeedure-was notin accordance with the agreement of the parties or 6. the Court finds that a) the subject matter of the dispute is not capable of settlement by arbitration of b) the arbitral award is in conflict with the public policy of India. : a ! Setting aside an Arbitral Award | ‘An application for setting aside an avard shall not be made after three months, | Finality of Arbitral Awards , |. CAnArbitral:Award shall be final and binding on the parties to the arbitration) : The Award shiall be enforced under the Code of Civil Procedure as if it were a decree of | the Court. | Tamil Nadu: , @) appointment of third Arbitrator : [the employer and contractor may nominate one arbitrator each. Cathe third third * arbitrator shall be chosen by the two arbitrators so appointed by the parties and he shall Ov act as the Presiding Arbitrat ‘Yo choose the Presiding Arbitrator — O vrithin a period of 30 days, the Presiding Arbitrator shall be appointed by the Chairman, - —p; \Me ston o Engineers Cid), Tamil Nadu Ste Centre, Chena.n date Site possession date ‘shall be »within 15 days from the date of issue of notice % - proceéd with the work, aay Ge» fect lability per: ur3 - The Defect Liability Period is 365% days from the date of cert ification of completion of works. (a) Liquidated dam: ages mages: b The maximum amount of liquidated damages for the whole work is 10% of the ‘final. contract price. Le : eee a (c) Retentions in Binls ? i Income Tax ~2% Education suircharge- = 3% of the above 2% VAT for the total value of the work— AYaeee te Insurance Premium paid Amount with held, ifa any, ACLS us Dose OM ee Eee Cee