SCHOOL OF LAW AND CONSTITUTIONAL STUDIES

A project file submitted in partial fulfillment of the requirements of the degree of

BA., LLB /BBA LLB(H) /LLB

On

ALTERNATE DISPUTE RESOLUTION

(Subject Code: BLW-415/BBW-415 / LLB - 504)

Submitted by: Submitted to: -

Name: - Ravi Pratap Ms. Neha Bharti

Enrollment no. 2021130083 Assistant Professor

School of Law and Constitutional Studies

Shobhit Institute of Engineering and Technology – Deemed to be University,
NH-58, Roorkee Road, Modipuram, Meerut (U.P.) - 250110

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 ACKNOWLEDGMENT

I would like to express my gratitude and appreciation to all those who gave me
the possibility to complete this project. Special thanks to my supervisor Ms.
Neha Bharti for giving me this golden opportunity to work on ADR project and
whose help, stimulating suggestions and encouragement helped me in all time
of fabrication process and in writing this report. I also sincerely thank her for
the time she spent in proofreading and correcting my many mistakes.

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 DECLARATION

I hereby declare that my Project titled ADR is a bona- fide record of the project
work which I have submitted to School of Law and Constitutional Studies,
Shobhit University in partial fulfilment of credit requirements for the degree of
B.A.LL. B is my authentic work. This project has not been copied, duplicated or
plagiarised from any other paper, journal, document or book and has not been
submitted to any educational institute or otherwise for the award of any
certificate, diploma, degree or recognition.

Name of Student – Ravi Pratap

Roll No.- MRT21UGLLB022
Date- 21/12/2023

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 CONTENTS
1. Introduction
2. Need of the Mediation Act
3. Core provisions of the Mediation Bill
a) Scope of the mediation bill
b) Pre-litigation Mediation
c) Subject matter of disputes
d) Interim Reliefs
e) Period of Mediation
f) Enforceability of Mediated Settlement Agreements (MSA)
g) Procedure to challenge the MSA
h) Online Mediation
i) Confidentiality
j) Mediation Council of India
k) Institutional mediation
4. History of mediation act in india
a) Commercial Courts Act, 2015
b) Commercial Courts (Pre-Institution Mediation and Settlement) Rules,
2018
c) The New Delhi International Arbitration Centre Act, 2019
d) The Arbitration and Conciliation (Amendment) Act, 2019
5. Effects of mediation act on “ADR” system
a) Promotion of Mediation
b) Pre-Institution Mediation
c) Reducing Court Backlogs
d) Increased Awareness and Acceptance
e) Enhanced Credibility of Mediation
f) Establishment of Mediation Infrastructure
g) Establishment of Mediation Infrastructure
h) Continuous Development and Improvement

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1. INTRODUCTION
 In December 2021, the Mediation Bill of 2021 was introduced in the Rajya
Sabha, followed by a referral to the Standing Committee on Personnel, Public
Grievances, Law & Justice. On July 13, 2022, the committee issued its 117th
Report, which included specific recommendations for the Bill. Some of these
recommendations gained approval from the Union Cabinet. Consequently,
the Mediation Bill of 2023, commonly referred to as the 'Mediation Bill,'
successfully passed both the Rajya Sabha on August 2, 2023, and the Lok
Sabha on August 7, 2023. Upon receiving Presidential assent, it will formally
become the 'Mediation Act of 2023.'

 The Concept of Mediation is ancient and deeply rooted in our country. It has
been practised in the form of the Panchayat system for centuries, in which
respected elders of the village worked as mediators between the parties and
helped to resolve their disputes.

 Mediation is one of the key components of Alternative Dispute

Resolution (“ADR”) which also includes Arbitration and Conciliation. The
growing adoption of the ADR mechanism has aided in reducing the burden
on the judiciary and thus facilitated prompt and equitable delivery of justice
to the nation's citizens. According to the "Survey of Dispute Resolution in
India, 2023," conducted jointly by the Federation of Indian Corporate
Lawyers (FICL) and the Centre for Trade and Investment Law (CTIL),
participants have ranked Mediation/Conciliation as the second most favored
method of dispute resolution in India.[1]

 In its essence, Mediation constitutes a conflict resolution methodology

wherein two or more disputing parties reach a mutually acceptable resolution,
guided by a neutral third party. It is important to note that a mediator does not
hold the role of a judge but rather functions as a facilitator, aiding the
involved parties in identifying common ground and achieving consensus.

2. NEED OF THE MEDIATION ACT

During a discussion on the draft legislation on The Mediation Bill, Union
Minister for Law and Justice, Arjun Ram Meghwal, said, "Mediation is not a
new concept for an ancient country like India. Several examples of mediation
are available in different texts and scriptures." He added that the Bill aims at
addressing and resolving the problems of the poor. The Law Minister said
that about 70,000 cases are pending in the Supreme Court and another 60
lakh were pending arbitration in high courts. He noted that as many as 4 crore
cases were pending in the district and subordinate courts.[2]
[1] https://newsonair.gov.in/News?title=Parliament-passes-Mediation-Bill-2023&id=465709
[2] https://www.ficl.org.in/law/2023/05/30/release-of-indias-first-survey-on-dispute-resolution-in-india-by-ficl-ctil-by-
justice-navin-chawla-delhi-high-court

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  There has been a significant demand for the introduction of a dedicated
mediation law, aimed at establishing a formal framework for the mediation
process and eliminating discrepancies found in various existing statutes, such
as the Code of Civil Procedure 1908, the Industrial Disputes Act 1947, and
the Commercial Courts Act 2015, among others. Additionally, it became
imperative to enact legislation that could effectively address both domestic
and international mediation matters. Furthermore, India signed the Singapore
Convention on Mediation ("Singapore Convention") on August 7, 2019,
which has standardized and unified rules for mediation in international
commercial disputes; however, the ratification of the Singapore Convention
is still pending.

 Furthermore, there is a lack of consistent procedural rules governing the

mediation process, resulting in proceedings adhering to the guidelines
prescribed by individual High Courts. These inter-alia factors have created
obstacles in fully realizing the advantages of mediation. Additionally, some
statutes such as the Companies Act 2013, MSME Act 2006, and Industrial
Relations Code 2020, among others, include provisions for mediation as a
dispute resolution mechanism. However, in cases falling under these statutes,
post-litigation scenarios are governed by the Code of Civil Procedure (CPC),
and even pre-litigation mediation remains unregulated.

 It is worth highlighting Section 12A of the Commercial Courts Act, which

mandates pre-litigation mediation for all cases brought before commercial
courts, except in cases requiring urgent relief. Regrettably, parties have
sometimes exploited this exception to circumvent mediation, resulting in the
provision's failure to achieve its intended objective.

 Given the identified gaps in the existing legal framework, the proposed
Mediation Bill of 2021 seeks to regulate various aspects of mediation within
the Indian legal system.

3. CORE PROVISIONS OF THE MEDIATION BILL

a) SCOPE OF THE MEDIATION BILL: The Mediation Bill will apply to
mediation/conciliation proceedings carried out within India under the
following circumstances:
i) when all involved parties reside in, are incorporated in, or operate
their businesses within India,
ii) when the mediation agreement explicitly stipulates adherence to this
Bill,
iii) in cases of international mediation, which pertains to commercial
disputes involving at least one party that is a foreign government,
foreign national/resident, or an entity with its business premises
located outside India. The Statement of Objects and Reasons of the
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 Bill states that Mediation will subsume conciliation under Part III of
the Arbitration and Conciliation Act, 1996 and both terms “mediation”
& “conciliation” shall be used interchangeably.
iv) In instances where the central or state government is a party to the
mediation, the Mediation Bill jurisdiction is limited to (a) matters
pertaining to commercial disputes, and (b) other disputes as specified
by the respective government through notification. However, the
Mediation Bill will not override the statutes specified in the Second
Schedule which include The Industrial Disputes Act, 1947; the
Industrial Relations Code, 2020; the Family Courts Act, 1984; the
Finance Act, 2016; the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, amongst others.
v) A broad aperture has been provided under Sections 4 & 5 of the Bill
for parties to commence mediation. This can be done either by
incorporating a dedicated mediation clause within the contract,
entering into a separate agreement, or in cases where no prior
"mediation clause" exists, the parties may opt for mediation by mutual
agreement to resolve any current or impending disputes.
b) Pre-litigation Mediation: In case of civil or commercial disputes, a person
must try to settle the dispute by mediation before approaching any court or
certain tribunals as notified. Even if the parties fail to reach a settlement
through pre-litigation mediation, the court or tribunal may at any stage of the
proceedings refer the parties to mediation if they request for the same.
c) Subject matter of disputes: Section 7 of the Mediation Bill sets forth a
prohibition on specific disputes as outlined in the First Schedule, which are
ineligible for mediation referral. These encompass disputes encompassing
criminal offense prosecution, both direct and indirect tax disputes, and
conflicts entailing the rights of third parties (with the exception of cases
involving a child's welfare in matrimonial matters).
d) Interim Reliefs: Section 8 of the Mediation Bill incorporates a provision
allowing parties to seek recourse to the court or tribunal with appropriate
jurisdiction in the event of extraordinary circumstances, necessitating urgent
interim relief either prior to or during the mediation process. However, the
Bill refrains from providing specific details regarding what constitutes
"exceptional circumstances," leaving this matter open to judicial
interpretation.
e) Period of Mediation: As per the 2023 Bill, mediation is to be completed
within a period of 120 days, with a maximum extension of 60 days. The
Mediation Bill has fixed a time limit of 180 days to complete mediation.
Furthermore, the Bill stipulates that parties have the right to withdraw from
mediation after the initial two mediation sessions. Nevertheless, if a party
fails to attend these first two sessions without valid justification, resulting in
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 the mediation's failure, such behaviour may be considered by the court or
tribunal when determining costs in any subsequent legal proceedings
involving the same subject matter.
f) Enforceability of Mediated Settlement Agreements (MSA): Chapter 6 of
the Bill deals with the enforcement of the settlement arrived through
mediation. The Bill envisions that the settlement would be documented in
writing, bearing the signatures of the parties involved, and officially validated
by the mediator. Following this authentication, the settlement would be
enforceable in accordance with the provisions of the Civil Procedure Code,
1908 treating it as if it were a court-issued judgment or decree. This stands in
contrast to a settlement agreement reached through conciliation under the
Arbitration Act (which is currently proposed for removal), which carries the
status and legal effect of an arbitral award.
g) Procedure to challenge the MSA: The threshold to contest MSA is very
narrow such as fraud, corruption, impersonation, or if the subject matter of
the dispute was unsuitable for mediation. To initiate such a challenge, the
concerned party must file an application before the court or tribunal that
holds the requisite jurisdiction within 90 days from the date they received the
authenticated MSA copy. In cases where the court is convinced that the
applicant had valid reasons preventing them from filing the application within
the initial 90-day period, an extension of up to another 90 days may be
granted.
h) Online Mediation: To keep abreast with the acceptance of conducting online
mediation during COVID times, The Bill embraces the concept of online
mediation as a means to overcome logistical challenges for parties to travel,
etc. It offers parties the option to engage in mediation virtually. Nevertheless,
to uphold the security and effectiveness of such online mediation, it becomes
crucial to establish clear regulations governing the conduct of participants
throughout these virtual proceedings, as well as rigorous procedures to be
adhered to during the mediation process.
i) Confidentiality: Confidentiality is at the heart of a mediation process and is
critical to a successful resolution. The parties must be assured that they can
share sensitive information at the session, where it is necessary to see that
their true needs and interests may be met, without fear of subsequent
disclosure to their detriment. The Bill explicitly specifies that all proposals,
admissions, as well as documents exclusively created for the mediation
process, must be treated with the utmost confidentiality.
j) Mediation Council of India: The Mediation Bill outlines the formation of a
Mediation Council of India consisting of seven members. The Council will
consist of a chairperson, two full-time members (with experience in
mediation or ADR), three ex-officio members (including Secretaries in the
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 Ministries of Law and Justice and Finance), and one part-time member (from
an industry body). This council's primary role is to foster the practice of
mediation, both within the country and on an international scale, register
mediators, recognise mediation service providers and mediation institutes,
etc.
k) Institutional mediation: Chapter 9 of the Bill envisions the establishment of
a 'Mediation Service Provider and Mediation Institutes' whose primary
functions would be to accredit mediators, curate a panel of qualified
mediators, offer necessary facilities and administrative support for the
mediation process, and more. Furthermore, the Bill specifies that the grading
of these Mediation Service Providers would be overseen by the Mediation
Council of India.
Upon the official enactment of the Mediation Bill into law, the specified statutes
will undergo amendments as outlined from Third Schedule 3 to Tenth Schedule
namely:

 The Indian Contract Act, 1872,

 The Code of Civil Procedure, 1908,
 The Legal Service Authorities Act, 1987,
 The Arbitration and Conciliation Act, 1996,
 The Micro, Small and Medium Enterprises Development Act, 2006,
 The Companies Act, 2013,
 The Commercial Courts Act, 2015,
 The Consumer Protection Act, 2019.

4. HISTORY OF MEDIATION ACT IN INDIA

In India, the promotion and development of mediation as an alternative dispute
resolution mechanism have been ongoing for several years. The formal
recognition and regulation of mediation received a significant boost with the
enactment of the Commercial Courts Act in 2015 and the subsequent
introduction of the Commercial Courts (Pre-Institution Mediation and
Settlement) Rules in 2018.
a) Commercial Courts Act, 2015: This legislation was a landmark step in
expediting the resolution of commercial disputes in India. The Act aimed to
create specialized commercial courts and introduced provisions for pre-
institution mediation. Section 12A of the Act mandated pre-institution
mediation as a prerequisite for filing suits in certain commercial matters.

b) Commercial Courts (Pre-Institution Mediation and Settlement) Rules,

2018: These rules laid down the procedure and framework for pre-institution
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 mediation in commercial disputes. They provided guidelines for referral to
mediation before the commencement of formal court proceedings,
emphasizing the role of mediation in resolving disputes.

c) The New Delhi International Arbitration Centre Act, 2019: This Act
emphasized the promotion of arbitration, mediation, and other alternative
dispute resolution mechanisms. It aimed to establish an institution for the
conduct of arbitration, mediation, and conciliation proceedings.

d) The Arbitration and Conciliation (Amendment) Act, 2019: While

primarily focusing on reforms in arbitration, this amendment also encouraged
the use of mediation. It included provisions that made it mandatory for parties
to exhaust the remedy of mediation before initiating arbitration in certain
cases.

These legislative initiatives were significant in fostering the use of mediation as

an effective means of dispute resolution in India, particularly in commercial
matters. The emphasis on pre-institution mediation aimed to encourage parties
to resolve their disputes amicably before resorting to lengthy and often
expensive court proceedings.

Furthermore, various courts across India have been actively promoting and
incorporating mediation into their dispute resolution mechanisms. Mediation
centers have been established in many states to facilitate the mediation process.

It's important to note that the landscape of mediation laws in India continues to
evolve, and there might be further developments or amendments in legislation
to further strengthen and promote the use of mediation as an effective tool for
dispute resolution in the country.

5. EFFECTS OF MEDIATION ACT ON “ADR” SYSTEM

The Mediation Act and other legislative initiatives aimed at promoting
alternative dispute resolution (ADR) in India have had several significant
effects on the ADR system in the country:

a) Promotion of Mediation: The enactment of the Mediation Act and related

legislation has significantly contributed to the promotion and formal
recognition of mediation as a viable alternative to traditional litigation. It has
elevated the status of mediation as a key component of the ADR landscape in
India.

b) Pre-Institution Mediation: Provisions in various acts, such as the

Commercial Courts Act and associated rules, mandate pre-institution
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 mediation in certain commercial disputes. This requirement encourages
parties to explore mediation as an initial step before initiating formal court
proceedings, thereby easing the burden on the courts and promoting faster
resolution of disputes.

c) Reducing Court Backlogs: By encouraging parties to attempt mediation

before pursuing litigation, these legislative measures have aimed to alleviate
the burden on the Indian judicial system. Mediation can often lead to quicker
resolution of disputes, reducing the number of cases entering the already
overburdened court dockets.

d) Increased Awareness and Acceptance: The implementation of mediation-

specific laws and provisions has raised awareness about ADR methods,
particularly mediation, among legal professionals, businesses, and the public.
This has led to greater acceptance and utilization of mediation as a cost-
effective and efficient means of resolving disputes.

e) Enhanced Credibility of Mediation: The legal framework provided by the

Mediation Act and associated regulations has helped enhance the credibility
and enforceability of mediated settlement agreements. This has instilled
confidence in parties participating in mediation, knowing that the agreements
reached through this process can be legally binding and enforceable.

f) Establishment of Mediation Infrastructure: The emphasis on mediation in

legislation has led to the establishment of mediation centers and institutions
across various states in India. These centers provide a conducive environment
for mediation proceedings and facilitate the resolution of disputes outside the
traditional court system.

g) Continuous Development and Improvement: The evolving nature of

mediation laws and regulations indicates an ongoing commitment to refining
the ADR system in India. There is a continuous effort to incorporate
feedback, introduce reforms, and adapt to changing needs to make the ADR
mechanisms, particularly mediation, more effective and accessible.

Overall, the Mediation Act and related legislative measures have significantly
influenced the ADR landscape in India by promoting mediation as an effective,
efficient, and viable alternative to traditional litigation, thereby contributing to
the swift resolution of disputes and reducing the burden on the courts.

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Conclusion
The mediation principles embedded in current Acts barring a few like the
Commercial Courts Act 2015, etc have become somewhat outdated in the
context of our contemporary times. The Mediation Act, serving as a
comprehensive framework, will not only modernize these existing practices but
also establish a unified and harmonized approach, aligning them with the
demands of today. The age-old saying, "the proof of the pudding is in the
eating," underscores that the real evaluation occurs during actual
implementation. Any shortcomings or deficiencies in the Mediation Act will
become apparent only when it is applied in practice.

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 (PROCEEDINGS ON ADR SYSTEM)
[PROCEEDING 1]
Steel Authority Of India Limited V. Indian Council Of Arbitration

ISSUES
1. The primary issue revolved around the appointment of arbitrators. SAIL
contested the legitimacy and fairness of the process conducted by the Indian
Council of Arbitration for appointing arbitrators to resolve a dispute. This
raised questions about the adherence to the agreed-upon arbitration
procedures and the fairness of the appointment process.
2. The case have centered on whether the Indian Council of Arbitration
complied with the terms and conditions outlined in the arbitration agreement
between SAIL and ICA. The dispute might have been about the interpretation
of the agreement and whether the actions of the Indian Council of Arbitration
were in accordance with the agreed-upon arbitration mechanisms.
3. There have been arguments regarding the jurisdictional authority of the
Indian Council of Arbitration to oversee the arbitration process between
SAIL and ICA. This could include discussions about the scope of authority
granted to the arbitration body as per the arbitration agreement and relevant
legal provisions.

FACTS
1. SAIL awarded TPL, along with a Dutch company, a contract for setting up a
blast furnace at one of its steel plants.
2. The contract contained an arbitration clause for resolving any disputes
arising from it.
3. A dispute arose later, and SAIL invoked arbitration under the International
Chamber of Commerce (ICC) Rules.
4. TPL challenged the arbitral tribunal's jurisdiction, arguing that the dispute
was not international commercial arbitration due to the involvement of
SAIL, a public sector undertaking under the Indian government.

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ARGUMENTS
(SAIL's Arguments)

1. Flawed Arbitrator Appointment Process: SAIL have argued that the

process followed by the Indian Council of Arbitration for appointing
arbitrators was flawed or in violation of the arbitration agreement between
the parties.
2. Lack of Fairness or Impartiality: SAIL have contended that the arbitrator
appointment process lacked fairness, impartiality, or compliance with agreed-
upon procedures, leading to a lack of trust in the arbitration mechanism.
3. Jurisdictional Challenge: SAIL have questioned the jurisdiction or authority
of the Indian Council of Arbitration in overseeing the arbitration process,
citing reasons related to contractual agreements or legal grounds.

(Indian Council of Arbitration (ICA) have countered with arguments such

as)

4. Adherence to Agreement: ICA have defended its actions, asserting that it

followed the agreed-upon procedures for arbitrator appointments as per the
terms of the arbitration agreement between the parties.
5. Legitimacy of Appointment Process: ICA have presented arguments
supporting the legitimacy, fairness, and compliance of its arbitrator
appointment process, providing evidence to substantiate their actions.
6. Jurisdictional Authority: ICA have presented legal arguments or precedents
supporting its jurisdictional authority to oversee arbitration matters between
the involved parties, based on the terms of the agreement or applicable laws

JUDGEMENT

(1.)Sub-Section (2) of Section 16 of the Arbitration and Conciliation Act

provides that a plea that the Arbitral Tribunal does not have jurisdiction shall be
raised not later than the submission of the statement of defence. Sub-section (3)
of the aforesaid Section provides that a plea that the Arbitral Tribunal is
exceeding the scope of its authority shall be raised as soon as the matter alleged
to be beyond the scope of its authority is raised during the arbitral proceedings.
Sub-section (5) of the aforesaid section, which is relevant for the purpose of
these petitions, reads as under:-
"(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or
sub-section (3) and, where the arbitral tribunal takes a decision rejecting the
plea, continue with the arbitral proceedings and make an arbitral award."

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Section 37 of the Act, to the extent it is relevant, provides for an appeal from an
order of the Arbitral Tribunal accepting the plea referred to in sub-section (2) of
sub-section (3) of Section 16. No appeal, however, is provided, in case such a
plea is rejected. Section 5 of the Act provides that notwithstanding anything
contained in another law for the time being in force, in matter governed by Part-
I of the Act, no judicial authority shall interfere, except where so provided in the
said Part.
(2.) The following two issues of law arise for consideration in these two
petitions:-
(i) Whether the Arbitral Tribunal is mandatorily required to take a decision on
the plea referred to in sub-section (3) of the Act before it proceeds further in the
matter or it can decide such a plea at a later stage while making the arbitral
award;
(il) If the Arbitral Tribunal decides to go ahead with the arbitral proceedings,
without taking a decision on such a plea or if it rejects the said plea whether
such an order of the Tribunal can be interfered with in exercise of writ
jurisdiction under Article 226/227 of the Constitution.
(3.)In W.P.(C) No. 6328 of 2013, the petitioner before this Court, in response to
the statement of claim and also by filing a separate application under Section 16
of the Act, challenged the very initiation of arbitration proceedings on the
ground that there was no arbitration agreement between it and respondent No. 2-
Seaspray Shipping Co. Ltd. It was also pleaded in the said application that
disputes, if any, could not be classified as maritime dispute attracting
applicability of clause 60 of the agreement between the parties and the
agreement dated 04.12.2007 does not fulfill the ingredients of an arbitration
agreement, as prescribed in Section 7 of the Act. The aforesaid application,
however, was not decided by the Arbitral Tribunal which was of the view that on
the first date of hearing, the claims should be decided and adjudicated. This was
followed by three more applications before the Arbitral Tribunal seeking a
decision of the issue of jurisdiction, competence and validity of the Arbitral
Tribunal. The Arbitral Tribunal, however, decided to proceed with the matter,
without giving decision on the applications filed by the petitioners. Being
aggrieved from the order of the Tribunal dated 05.07.2013, deciding to proceed
with the matter, the petitioner is before this Court seeking quashing of the
aforesaid order, besides a direction terminating the mandate of the
Arbitral Tribunal.

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[PROCEEDING 2]
Lion Engineering Consultants Vs. Respondent: State Of M.P. And
Ors.
ISSUE
Matter arising out of a dispute in the execution of works contract was referred to
Arbitrator by High Court. The arbitrator made his Award in favor of Appellant.
It was challenged under Section 34 of Act by Respondent. The Respondent
sought to amend its objections after three years which was rejected by Trial
Court. High Court had allowed said amendment. Hence, the present appeal was
filed by the Appellant.
FACTS
1. The challenge focused specifically on a delay by the State of M.P. in seeking
amendment of its objections to the arbitration award.
2. The District Court rejected the amended objections due to the delay, but the
High Court later allowed them.
3. Lion Engineering Consultants appealed the High Court's decision to the
Supreme Court, questioning the validity of allowing belated amendments
and raising broader legal issues surrounding arbitration procedures.

ARGUMENT
1. In M/s Lion Engineering Consultants v. State of Madhya Pradesh &
Ors., the respondent had filed a petition under Section 34 of the Arbitration
and Conciliation Act, 1996 (‘Arbitration Act’) against an award passed in
favour of the appellant.
2. The respondent sought to belatedly amend this petition, which was rejected
by the trial court, but was allowed by the High Court of Madhya Pradesh. The
petitioner approached the Supreme Court contending, inter alia, that the
amendment should not have been permitted as it introduced new grounds at
the stage of the petition under Section 34 of the Arbitration Act, which had
not been raised under Section 16 of the Arbitration Act before the tribunal.
3. The appellant relied on MSP Infrastructure Ltd. v. MPRDC Ltd. (‘MSP
Infrastructure’).
4. The Supreme Court overruled the MSP Infrastructure judgement to hold that
there is no bar to the plea of jurisdiction being raised by way of an objection
under Section 34 of the Arbitration Act, even if no such objection was raised
under Section 16, as both stages are independent of one another.

16 | P a g e
5. The MSP Infrastructure judgement had also held that public policy of India
means the policy of the Union i.e., central law and not State law.
6. The Supreme Court overruled the same to hold that ‘public policy of India’
refers to law in force in India, whether State law or central law.

JUDGEMENT
The court finds merit in the contentions raised on behalf of the State. The court
proceeds on the footing that the amendment being beyond limitation is not to be
allowed as the amendment is not pressed. The court does not see any bar to the
plea of jurisdiction being raised by way of an objection under Section 34 of the
Act even if no such objection was raised under Section 16.
It is not possible to accept this submission. Firstly, there is nothing to warrant
the inference that all objections to the jurisdiction of the tribunal can’t be raised
under Section 16 and that the tribunal doesn’t have the power to rule upon its
jurisdiction. Secondly, Parliament has employed a different phraseology in
clause (b) of Section 34. That phraseology being “the subject-matter of the
dispute isn’t capable of settlement by arbitration”. This phrase does not
necessarily refer to an objection to “jurisdiction” as the term is well known. It
refers to the situation where the dispute referred for arbitration, because of its
subject-matter isn’t capable of settlement by arbitration.
The newly added ground that the tribunal under the Arbitration Act, 1996 had
no jurisdiction to decide the dispute in question because the jurisdiction lay with
the tribunal under the M.P. Act of 1983, was a question which can be agitated
under sub-clause (ii) of clause (b) of sub-section (2) of Section 34 of the
Arbitration Act, 1996.
Therefore, it is contended that the amendment had been rightly allowed and it
cannot be said that what was raised was only a question which pertained to
jurisdiction and ought to have been raised under Section 16 of the Act, but in
fact, there was a question which should also be raised under Section 34 before
the Court, has been done by the respondent. Thus, the submission must be
rejected.
Furthermore, it was provided that the contention should have been raised under
the topic that the arbitral award conflicts with the public policy of India. In
other words, it was submitted that it is the public policy of India that arbitrations
should be held under the appropriate law. It was contended that unless the
arbitration was held under the State law i.e. the M.P. Act that it would be a
violation of the public policy of India.

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In our considered view, the public policy of India alludes to law enforcement in
India either State law or Central law. Accordingly, we overrule the observations
to the contrary in the above paras of the judgment in MSP Infrastructure Ltd.
The impugned order is set aside.

 Section 16 of Arbitration and Conciliation Act

 (2018) 16 SCC 758
 Supreme Court Judgement Dated- 22.03.2018

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[PROCEEDING 3 ]
R.V. Solutions Pvt. Ltd. Vs. Ajay Kumar Dixit & Ors. 2019

ISSUE
The central issue in the case of R.V. Solutions Pvt. Ltd. v. Ajay Kumar
Dixit & Ors. 2019 revolved around whether a dispute concerning allegations of
breach of employment contracts, including resignation without notice,
misappropriation of confidential information, and joining a competitor, should
be referred to arbitration as per the clauses within those contracts, or whether it
should be decided by the court directly.
FACTS
1. Three of the ex-employees had arbitration clauses in their employment
contracts mandating arbitration for contract-related disputes.
2. R.V. Solutions argued that the arbitration clause didn't apply to Rishabh
Enterprises and the claims against it.
3. The dispute centered on whether the entire case, including claims against
Rishabh Enterprises, should be referred to arbitration as per the clauses or
decided by the court.

ARGUMENT
1. R.V. Solutions alleged that the ex-employees, including Dixit, breached their
employment contracts by:
a. Resigning without proper notice or justification
b. Taking away confidential information
c. Joining a competitor company (Rishabh Enterprises)
2. R.V. Solutions sought:
a. A permanent injunction restraining the defendants from working
with any R.V. Solutions employee or using confidential
information.
b. Damages of Rs. 1.1 crore.

3. The Arbitration Clause:

a. The employment contracts of the ex-employees contained an
arbitration clause, mandating arbitration for any disputes arising
from the contract.

4. Central Issue:
a. Whether the dispute should be referred to arbitration as per the
clause, or decided by the court.

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5. Arguments for Arbitration:

a. Defendants:
i. The arbitration clause is valid and binding.
ii. The dispute arises directly from the employment contracts.
iii. Referring the case to arbitration would be faster and more
cost-effective.
b. R.V. Solutions:
i. The arbitration clause only applies to the ex-employees, not
Rishabh Enterprises.
ii. The claims against Rishabh Enterprises are independent of
the employment contracts and cannot be arbitrated.
iii. There is no commonality of subject matter between the
claims against the ex-employees and Rishabh Enterprises.

JUDGEMENT
The Delhi High Court held that a non-signatory or third party could be
subjected to Arbitration without its consent, only in exceptional cases. There
needs to be either a direct relationship to the signatory party of the Arbitration
Agreement, or commonality of the subject matter, or composite transactions in
the agreement between the parties.

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[PROCEEDING 4]
Parsoli Motor Works (P) Ltd. v. BMW India P Ltd. 2018

ISSUE
The central issue in the case of Parsoli Motor Works (P) Ltd. v. BMW India P
Ltd. (2018) revolved around the termination of their dealership agreement and
whether it constituted an unfair or illegal practice by BMW India.

FACTS
1. The Competition Commission of India (CCI) initially ruled in favor of
Parsoli Motor Works, finding that BMW India had abused its dominant
position and imposed a fine.
2. BMW India appealed the decision to the National Company Law Appellate
Tribunal (NCLAT), which upheld the CCI's findings and the imposed fine.

ARGUMENT
1. Abuse of Dominant Position:
a. BMW India holds a dominant position in the Gujarat luxury car
market, giving them significant control over dealerships.
b. The abrupt termination of their dealership agreement, with only 21
days' notice, was an unfair exercise of this power.
c. Parsoli Motor Works was a successful and well-performing
dealership, contributing significantly to BMW India's sales in
Gujarat.
d. The non-renewal without any valid reason or opportunity for
improvement was clearly aimed at eliminating competition and
maintaining BMW India's market dominance.

2. Unreasonable Termination:
a. The non-exclusive agreement does not imply unlimited discretion
to terminate without due process.
b. The long-standing and successful partnership established a
legitimate expectation of continued collaboration.
c. The short notice period caused severe financial hardship and
disrupted their business operations, leaving them unprepared for
closure.
d. This constituted a breach of good faith and fair dealing expected in
such long-term business relationships.

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3. Legality of Termination:
a. The lack of any documented performance issues or contractual
violations before the termination raises suspicion about BMW
India's motives.
b. Alleged performance shortcomings, if any, were likely used as a
pretext to mask the anti-competitive intent behind the termination.
c. The burden of proof lies with BMW India to demonstrate
legitimate business reasons for not renewing the agreement.

4. Business Restructuring:
a. The claimed business restructuring plan lacked transparency and
clear criteria for dealership selection.
b. Parsoli Motor Works was not provided with any specific
explanation for their exclusion, suggesting arbitrariness and
potential bias.
c. The timing of the non-renewal coinciding with the restructuring
plan raises further doubts about its genuine nature.

5. Overall, Parsoli Motor Works sought to:

a. Demonstrate the abuse of dominance by BMW India, emphasizing

the unfair and unnecessary termination of their dealership
agreement.
b. Highlight the short notice period, lack of due process, and alleged
pretextual reasoning as evidence of unreasonable and damaging
business practices.
c. Challenge the legality of the termination based on the absence of
valid justifications and potential breach of contractual obligations.
d. Cast doubt on the claimed business restructuring plan as a
convenient mask for anti-competitive motives.

JUDGEMENT
The Delhi High Court held that injunctions that cannot be granted under Section
41 of the Specific Relief Act, cannot be granted under Section 9 of Arbitration
Act, 1996 either.

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