ADRS. UNIT-1.

Alternative Dispute Resolution System.

Brief points. Prepared by Reens Sasidharan ,(
from Usha Jagan ) if any body wants notes of
4th sem do text me.
This term is generally used to refer to informal
dispute resolution process in which parties
meet with a professional third party who helps
them resolve their disputes in a way less formal
and often consensual than what is done in
courts.
Following forms of dispute settlement.
Arbitration.
conciliation.
Mediation.
Judicial settlement conferences.
Fact finding bodies.
Ombudsman.
Lok adalats.
Consumer Redressal Forums.
Industrial conciliation and adjudicative
machineries.
ADRS is common way to resolve difficult
international business disputes.
Mediation and arbitration now used to settle
labor management disputes, marital disputes
and other family disputes.
Courts Vs. ADRS.
page 4.
Courts are overloaded. Delay defeats justice.
Last two decades much importance on ADRS.
This does not mean courts failed.
questions of law, complicated cases and
involving heavy funds are still workable through
courts only.
So ADRS are only supplementary and
complimentary to the existing judicial system.
Only small disputes settled easly via ADRS.

Judicial Impact Assessment is a process

whereby the government can anticipate the
likely cost of implementing a legislation
through the courts and help deliver timely
justice to litigants.
JIA requires statistical data. Structural
imbalance in the judicial system, the supreme
court gave a direction to the government to
make JIA an essential component of the
Financial Memorandum of Legislative
proposals.

Government in turn appointed a task force to

recommend a methodology and infrastructure
for institutionalising JIA in the law making
process.
The committee headed by N J Rao submitted its
report to the government which is likely to
come before the apex court for appropriate
orders in the pending matter before it.
Need for ADRS and advantages: page 7.
1. solution for pending cases.
2. applies divergent techniques for resolution.
3. This techniques lessened the court burden.
4. ADRS provides various modes of settlement.
5. it is also based on article 14 and 21.
6. it provides socio econo political justice.
7. Art.39A free legal aid, ADRS help this way.
8. it is inexpensive and speedy remedy.
9. cpc and evidence rules applied flexibly.
10. Even technical experts can head ADRS.
11. NO publicity hence confidentiality.
12. it is informal with simple procedure.
13. Time saving as no lengthy proceedings.
14. Tech heads can solve tech problems easily.
15. consenses of parties makes it enforceable.
16. Direct participation by disputants so easy.
17. Integrative approach so not adversarial.
Disadvantages:
1. mediator or conductor not legally qualified..
2. simple procedure so injustice may creep in.
3. Critics says: second class justice.
4. compromise not workable with every case.
Section 89 of CPC. Settlement outside court.
1. Court may refer a case for arbitration,
conciliation, judicial settlement or mediation if
there is such possibility.
2. it is based on the principle that the parties
should exhaust remedies available under
contract before going to civil court directly.
Court is not under any compulsion under
section 89 to refer the case to ADRS.
Court can resort it only if there is chance for
compromise.
In all the cases where disputes are referred for
arbitration or conciliation , provisions of the
Arbitration and Conciliation Act, 1996 shall
apply.
In all the cases refered to lokadalat , court shall
refer it as per the provisions of Section 20 of
the Legal Services Authority Act, 1987.
In cases where it is referred for judicial
settlement the court shall refer it to a suitable
institution or person deemed to be a lokadalat
and the provisions of the legal services
authority act shall apply.
In cases referred to mediation court effects a
compromise between the parties.
If the parties do not arrive at a settlement in
the above proceedings outside the court
through adrs then the case is referred back to
the court which shall determine the case by
regular trial of the suit.
ADRS in CRIMINAL CASES.
in recent days, ADRS is made applicable even to
the criminal cases.
ADRS encompasses a number of practices in
reference to criminal cases. These practices are
not part of traditional criminal justice system.
They are:
1. Family group conferencing
2. victim-offender panels.
3. Victim assistance programs.
4. community crime-prevention programs.
5. Sentencing circles.
6. Ex-offender assistance.
7. community service.
8. Plea bargaining.
9. School programs.
Types of ADRS in criminal cases.
Mediation is the most sought after form of
ADR.Mediation is followed in anticipatory bail,
small offences etc.
Plea bargaining.
is a form of adrs provided in crpc for deciding
the punishment. It is an agreement between
the prosecution and the defence. Here the
accused changes his plea from not guilty to
guilty in return for an offer by the prosecution
or when the judge has informally made the
accused aware that his sentence will be
minimised if he pleads guilty.
Victim offender panels.
it is developed as a result of the rise of the
victims rights movement and in particular to
the campaign against drunk driving.
victim assistance programme.
The programme created crime victim fund,
contributed by all fines that are collected from
the convicts of offences against the state.

These programmes point towards a gradual

shift from deterrence to reparation, as a mode
of criminal justice. It is the application of
restorative justice.
Criticism against ADR in Criminal disputes.
Victim -offender mediation considered to be
highly emotionally charged.
In moderate level of conflicts there is scope for
mediation.

INQUISITORIAL method of Dispute Resolution.

page 16.
Inquisitorial legal system where the court or
part of it is actively involved in investigating the
facts of the case. The judge questions the
witnesses, interrogates suspects and orders
searches for other investigations. This is not to
prosecute but for collecting evidence instead of
being a just referee as in adversorial system.
Criticism for and against both systems.
Supporters of adversorial system argue that it is
more fair and less prone to abuse becaue it
allows less room for state to be biased against
the defendant.
It allows private litigants to settle their disputes
in an amicable manner.
Supporters of adversorial system argue that it is
more fair and less prone to abuse becaue it
allows less room for state to be biased against
the defendant.

Supporters of Inquisitorial system.

plea bargaining system causes the participants
within the system to act in perverse ways.
Most legal cases in adversarial system do not
go to trial, this may lead to injustice.
The adversorial system cannot accurately
resolve complex technical issues such as
science, technology, or tax or accounting
regulations.
Adversarial ( formal ) method of dispute
resolution.
in this system parties develop and present their
arguments, gather and submit evidence, call
and question witnesses . The judge remains
neutral and passive througout the proceeding.
In a legal case, the advocates contest the case
and usually the judge determines the truth of
the case. This is called the adversary method of
dispute resolution.
But since the judgement is dependent on the
advocates power to argue his case effectively,
this system is criticised on the ground of
depending upon a lawyers capacity to win the
case and the result may not be the truth.

The indian legal system is based largely upon

the British law. The british system is a
traditional formal dispute resolution. It offers
litigants different categories of courts and
appellate courts depending on the nature of
the remedy sought.

In the formal dispute resolution there are

constant complaints that justice is not fully
served. The wheels of justice is too slow. Indian
courts suffer from serious backlog of cases.

Arbitration - advantages and disadvantages.

Arbitration and conciliation Act,1996.
English Law: arbitration means settlement of
disputes by the decision called ' award ' by one
or more persons called ' arbitrators '.
Russel: artbitration is referring some dispute by
the parties for settlement to a tribunal of their
own choice instead of referring to court.

Collins v collins: Justice Romilly: reference of a

particular matter in dispute to the decision of
one or more persons either with or without an
umpire.

Section 2-1-a of Arbitration and Conciliation

Act,1996 : arbitration means any arbitration
whether or not administered by permanent
arbitral institution.

Arbitration means the submission by two or

more parties of their dispute to the decision of
the third person called the arbitrator who
decides the disputes in a judicial manner.

The arbitration and conciliation act provides

rules so as to conducting the procedures as of a
judicial adjudication but in a summary manner.

The difference left to arbitration must belong

to the present issue not of any future issue.

Institutional arbitrations is actually not

arbitration by any institution but by individual
arbitrators entrusted by those institutions.

Conciliation. Section 61.

Advantages and disadvantages.
Conciliation is another ADRS recognised now
through the Arbitration and conciliation Act,
1996.
Provisions of Sections 61 to 81 provides for the
method of conciliation.
Conciliation means the settlement of disputes
through discussion without litigation.
It is a process by which discussion between
parties are made through the participation of a
conciliator.
The conciliator adopts its own means to settle
the disputes and need not be strict legal
procedure.
Parties are at liberty to evolve their own
procedure of conciliation for negotiating and
arriving at a settlement of disputes.
It can be applied both to national and
international disputes.
Application and scope:
Disputes where by law concilation is made
inapplicable.
Parties must be willing to apply conciliation
provisions.
applied to those disputes out of legal
relationships by contract or not.
disputes arising even from illegal contracts, or
even criminal acts which are compoundable
under section 320 CRPC are settled through
conciliation.
The process of conciliation extends to all
proceedings relating to the disputes from legal
relaionships.
Importance of conciliation.
Applicable in many legal fields:
1. In industrial disputes act,1947.
2. In Hindu Marriage Act,1955.
3. Section 9 of the Family Courts Act,1984.
4. Arbitration and Conciliation Act has given
recognition to conciliation and so all matters
referable to arbitration are also referable for
conciliation.
In all the cases the reports of conciliators are
statutorily valid and binding on the parties.

Negotiation. Page 27.

Latin word negotiatus. Means to carry on
business.
Negotiation is a intended to resolve disputes,
to produce an agreement upon courses of
action, to bargain for individual or their groups
for certain interests.
Essentials of negotiation.
Essentials of negotiation is nothing but the tips
and tools at the hands of negotiators to struck
the desired deal. Reans.
1. master preparation techniques.
2. match the situation with right negotiation
tactic.
3. Realign the negotiation steps when results
not coming.
4. Personal agreements including salaries and
counter offers.
5. Inluence bosses and peers.
6. Explore the major concepts and theories of
the psychology of bargaining and negotiation
and dynamics of interpersonal inter group
conflict and its resolution.
application.
it can be applied in business, non-profit
organisations, government agencies, legal
proceedings, among nations, marriage, divorce,
parenting, and everyday life.
There are specialised negotiators like, union
negotiators, peace , hostage negotiators,
diplomats, legislators, or even brokers.

Negotiation, mediation, arbitration.

Negotiation is usually through a trained
negotiator acting on behalf of a particular
individual, organisation.
Mediation happens where a disinterested third
party listens to each sides arguments and
attempts to help and arrive at an agreement
between the parties.
In arbitration , both sides make an argument as
to the merits of their case and then the
arbitrator decides the outcome for both
parties.
Approaches to negotiations.
Negotiation has three elements:
Process, behaviour and substance.
process refers to the parties, the tactics
applied, the context of negotiation, the
sequence and stages of play.
Behaviour refers to the relationships among
these parties, the communication between
them and the styles they adopt.
substance refers to the mater under
negotiation.
In the second approach negotiation has four
elements:
strategy, processes & tools, tactics and
persuasion and influence.
Strategy refers to top level goals.
Tactics refers to statements and counter
statements.
skilled negotiators may use variety of tactics
ranging from negotiation hypnosis, to straight
forward talks, and more deceptive approaches
to bring about the settlement through
negotiations.
ADRS in international issues.
page 33.
In the domestic artbitration, national courts
provide for acceptable means of resolving
disputes. In settlement of international
disputes, since national courts is not possible ,
it is mostly adrs.
Even before ADR had become a mode of
settlement of international disputes, inter trade
agreements were incorporaing formal dispute
settlement mechanisms.
Main method was through informal
negotiations, that is through the help of frindly
countries.

Association for international arbitration is a

good forum for a negotiation table to sort out
issues.
International commercial arbitration also
provides avenues to sort out issues between
private parties without resorting to national
courts.
Section 2-1-f : " international commercial
arbitration means an arbitration relating to
disputes arising out of legal relationships,
considered as commercial under the law in
force in india and where at least one of the
parties is -
an foreigner or resident abroad,
a body corporate incorporated outside india.
An association or a body of individuals
management and control is from other country.
government of a foreign country.

the formula in international commerce

arbitration is same as in domestic arbitration.

UN economic commission gave india

international commitment to indian arbitration
by applying international arbitration rules to
countries in Europe and Asia.

" UN conference on international commercial

Arbitration , 1958 " has boosted the scope of
international commercial arbitration.
UN commission on international trade Law has
also helped that way.

some treaties and conventions acting as

international commitment to ADRS:
1923 Geneva Protocol on Arbtiration clause.
1927 Geneva convention on the execution of
foreign arbitral awards.
Article II-2 and VII-1 of Newyork convention,
2006.
1966 convention providing a Uniform Law on
Arbitration - Strasbourg Convention.

International and regional arbitration

instruments.
Agreement relating to application of European
convention on international commercial
arbitration .

Arab convention on commercial arbitration-

1987.
Convention for pacific settlement of
international disputes,1907.

Convention on the settlement of Civil Law

Disputes Resulting from Relations of Economic
and scientific technical cooperation - Moscow
convention,1973.

Convention on settlement of disputes between

states and nationals of other states.
Washington convention 1965.

European convention on international

commercial arbtiration. 1961.

European convention for providing a uniform

law for arbitration.1966.
Inter american convention on international
commercial arbitration- panama convention
1975.

UNCITRAL model law on international

commercial arbitration.

Code of ethics for commercial arbitrators-2003

Revised uniform arbitration Act. 2001.

ADR ethics - ethics 2000 commission. 2002.

Uniform mediation Act, 2002.

conclusion:
Globalisation has abridged the world through
business connections. Disputes are often their
byproducts too. Hence a uniform law for
settlement of international commercial
disputes. Since ADRS works on mutual consent
basis, it is resorted to by most of the countries.

Suitability of ADRS to particular type of

disputes.
What it makes more suitable ?
speedy, inexpensive,
ADRS techniques like arbitration, conciliation,
mediation and negotiation have been
successfully used in a variety of disputes.

Types of disputes settled by ADRS:

Business disputes like contract, partnerships
etc.
Family disputes.
Insurance disputes.
consumer disputes.
Landlord tenant disputes.
civil or personal conflicts between persons.
disputes relating to employment contract,
terminaions, nonpayment of wages, hours of
work, holidays.
property transfers, boundaries, easement
disputes etc.

Code of Civil Procedure and ADRS.

Courts overloaded so depends on ADRS.
But cases involving question of law and
involving huge funds are often leave to court
process.
ADRS are only supplementary and
complimentary to the exising judicial system
and can never be a substitute for it.
Only small disputes can be quickly and without
much expenses be settled through ADRS.

Role of CCP in Arbitration proceedings.

page 44.
CCP was originally enacted to codify the civil
court proceedings to decide suits of civil nature
and enforce the judgments in civil suits by
attachment, execution and sale of the suit
property.
However, the rise in cases burdened civil
courts.
To avoid this situation, the parliament enacted
" civil procedure ADR and civil procedure
Mediation Rules, 2005".

These rules encourage settlement of disputes

through compromise.

These provisions are called ADRS , which are

inbuilt in CPC Rules itself.

These rules are :

The court records the admissions and denials at
the time of first hearing of the suit. Court then
examine these admissions and denials and see
if there is any possibilities of settlement for the
disputes and then it gives the parties an
opportunity of settlement.

Court formulates the terms of settlement and

give it to the parties and parties shall submit
their response to the court in 30 days.

The court give directive guidelines and

advantages of ADRS.

If it is not settled under ADRS then the suit is

refered back for continuation of trial.

Courts selects retired law professors, lawyers

and judicial officers for training in ADRS .

High courts and District courts conduct period

awarness seminars to bring the advantages of
the system to the public.
High court prescribes the qualifications of those
who are selected to the ADR panel.
Retired judges of supreme court, high court ,
district courts.
legal practitioners with 15 years standing at the
Bar at the level of supreme court or High court
or district court or courts of equivalent status.

Experts or other professionals with at least 15

years standing or retired senior bureaucrats or
retired senior executives.

Institutions expert in mediation, and

recommended by High Court.

Main difference between the court judgments

and settlement is that the court judgments are
subject to appeal, review and revision whereas
the settlement through ADRS has no such
provisions.

…...END of UNIT-1…....
 UNIT - 2
ARBITRATION.
Arbitration is reference of a dispute (between
parties) to the decision of one or more
arbitrators.
Arbitration agreement is essential for
reference of a dispute to arbitration.

Only matters of civil nature can be referred to

arbitration.
The Arbitration and conciliation Act,1996
makes arbitration absolute, with minimal
interference from court.

The Act provides for the composition of

arbitral tribunal, by prescribing the procedure
of appointment of arbitrators, number of
them, their powers , duties and functions and
also circumstance of their removal.

The Tribunal can have its own procedures,

but must observe the principles of natural
justice, in conducting the proceedings.

There is no direct appeal from any award, but

only from the interim/final orders of the civil
court.
The UN enacted a model arbitration law for
its member nations called UN Commissions
on international trade law ( UNCITRAL ), to
regualte the international commercial
arbitration.
Based on the above law , india repealed The
Arbitration Act, 1940 and enacted Arbitration
and Conciliation Act,1996.
The Act provides rules for enforcement of
foreign awards, New York Convention
Awards, 1958 and Geneva Convention
Awards,1927.

The party applying enforcement of foreign

awards shall submit its copy and arbitration
agreement copy before the court.
The court may reject it on found defective as
per the law.
The system of arbitration existed in ancient
india, but it got legal status only during British
period.
Arbitration in ancient India.
Panchayats--Head of the panchayat--panchas
( arbitrator ). Three grades of panchas : puga,
sreni and kula..an appeal, from the decision
of Puga ,referred to Pradivaca and ,final
revision left to ruler or the King of the
province.

Arbitration during the British period.

Panchayat system existed ,even after British
rule started in india.
To give legal effect to the panchayat system,
provisions were made in the Bengal
Regulations 1772.
Evolution of present arbitration law.
Indian Arbitration Act, 1889 was made
applicable to those matter, not in pending
with court.
Later laws consolidated into Arbitration Act,
1940 , based on British Arbitration act,1934.
The above act was in force till 1996, when it
was substituted by the present Arbitration
and conciliation Act,1996.
New legal techniques like conciliation,
negotiation and mediation, are now
statutorily recognised in the present act.
Further the need for passing it was
necissitated by, the developments in UNO
regarding International Arbitration Laws.
UNO passed a model law called UNCITRAL.
Based on CiTRAL , india was forced to repeal
the old one and passed the 1996 Act.

Scope of Arbitration law.

The present act can decide on commercial
matters. But the term commerce includes
those matters, which promote commercial
transactions. So it is very wide.

Commercial matters include:

shipping, sale, purchase, banking, insurance,
building constructions, engineering, technical
assistance, scientific know-how, patents,
trade marks, management consultancy,
commercial agency, labour etc arising
between the parties in inida, or a party in
india and a party outside, or between two or
more foreign parties who agree for
arbitration under the act,1996.
In a case Supreme court held, that the
consulting services by a trading company, is
for promoting commercial transaction ,of
sales and hence, the relationship between the
two companies are commercial in nature.
( RM Investment & Trading Co, Vs. Boeing co.

The Arbitration and Conciliation Act,1996.

Salient features and objectives:
page 64.
Old panchayat system of arbitration, changed
to legally accepted concepts under arbitraion,
provided by the Act of 1940. To remove the
defects of 1940 act , to bring a uniformity in
arbitration rule globally, and to meet the
requirements of globalisation and
international compelsion, to accept a
UNCITRAL model , india enacted the present
act in 1996.

Objectives of the Act.

To cover both domestic and global
arbitrational standards,in settling commercial
disputes.
To make a fair and efficient arbitrational
procedure of world standard.
That the Arbitrational Tribunal shall gives
reasons, for decisions behind the Award.
To ensure that the Tribunal acts within its
jurisdiction.
To minimise the supervisory role of courts in
arbitrational proceedures.
To permit the Tribunal to effectively use,
other newly added techniques of ADR, that is
conciliation and mediation, apart from
Arbitration.
To give legal status to the enforcement of
awards ,as in the case of court.
To provide that concilation settlement will
have the same status, as Arbitrar Award.

Salient Provisions of the Act.

1. Uniformity in arbitrational proceedings.
..because of following the lines of UNCITRAL.
2. Conciliation as means of settling disputes.
3. Conciliation and arbitration.
..in conciliation the conciliator assists the
parties, reaching a settlement. But in
arbitration, the arbitrator independently
decides the dispute, and passes an Award.
4. Finalty to arbitral awards.
5. Comprehensive.
..the act is comprehensive compared to the
act of 1940. it deals with arbitration in india,
Enforcement of foreign awards, conciliation
and other supplementary provisions.
6. Schedules:
Schedule-1: convention, recognition, and
enforcement of foreign arbitral award.
Schedule-2: Geneva protocol on arbitration.
Schedule-3: convention on the execution of
foreign arbitral awards.
7. curtailment of the powers of the court.
..Section 5: no judicial authority can intervene
in the arbitration proceedings except when it
is so provided.
Section 35: the arbitral award shall be final
and binding on the parties in dispute.
8. Procedure for conduct of Arbitral
proceedings : chapter 5 provides procedures.
Parties can have their own procedures or
they can follow the procedures given in the
CCP.
9. Abolition of umpire system.
..parties can decide on the number of
arbitrators. But their number shall not be
even number. The arbitrators so appointed
can appoint a presiding Arbitrator.
10. Award is equivalent to court Decree.
11. Arbitrator shall state the reasons for his
decision in the award.
12. The Tribunal can pass interim award, if
any one of the parties so requests.
13. The awards shall not be against public
policy of india.
14. Enforcement of foreign awards.
The Act provides for this.
15. Compare to the Act of 1940, this Act gives
more powers to the Arbitrators, under
sections 16 and 17.

Arbitration & conciliation ( amnd ) act,2019.

Arbitral institution:
An arbitral institution, designated by the
supreme court or a high court under the Act.
Appointment of Arbitrators. Section 11.
Arbitrators in the case of international
commercial arbitration , supreme court
designate arbitral institutions, for the
purpose of appointment of arbitrators. And
for domestic matters it is High court.
Such arbitral institutions are graded by
Arbitration council of india. Where graded
institutions is not available then , the chief
justice of the concerned High court, may
maintain a panel of arbitrators, for
discharging the functions of the arbitral
institution.

In the absence of any procedure, for the

appointment of arbitrators they are
appointed by artbitral institutions, designated
by supremen court and high court.

The application for appointment of

arbitrators, is disposed of by the arbitral
institution, within 30 days of service of notice
on the opposite party.
The arbitral institution determines the fees of
arbitral tribunal, and manner of its payment.

Arbitration council.
The Act has introduced the concept of an
Arbitration Council of India. It is established
by Central government.

Its head quarter is in Delhi.

The composition of the council includes a
Chairperson appointed by government.
He must be a judge of the supreme court, or
chief justice of a High court or judge of high
court, or an eminent perons, having special
knowledge and experience , in the conduct of
arbitration.

The ex-officio members of the council,

includes the secretary to the government of
india, in the department of legal affairs,
ministry of law and justice, and secretary to
the government of india, in the department
of expenditure, ministry of finance or
respective representatives not below the rank
of joint secretary. one representative of
industry, and commerce as a part time
member.

The council promotes and encourages

arbitration, mediation, conciliation or other
adrs.
The council formulates uniform policies for
arbitration.
It frames policies for grading of arbitral
institutions, and recognise accreditation of
arbitrators.
The council grade arbitral institutions, on the
basis of criteria relating to infrastructure,
quality and calibre of arbitrators, their
performance in domestic and international
commercial arbitration.

Timeline under the amended Act.:

completion of pleadings:
Section 23 says, statement of claim and
defence must be completed, within six
months from the date of receipt of notice, in
writing of the appointment.
In domestic arbitration award must be
submitted within 12 months of completion of
pleadings.
In international commercial arbitration, the
award is made expeditiously, and within 12
months from the date of completion of
pleadings.
Qualification and experience of Arbitrators.
He must be :
1. An advocate with 10 years experience.
2. A chartered Accountant with 10 years exp.
3. A cost Accountant with 10 year experience.
4. A company secretary with 10 experience.
5. An officer of Indian legal service.
6. An officer with engineering degree, with 10
years experience.
7. An officer having senior level experience of
administration, in the central government or
state government, or having experience of
senior level manager, in any public
undertaking or private company of repute.
8. a person with degree with 10 year
experience, in a scientific or technical stream,
in the field of telcom, information technology,

General norms applicable to arbitrators:

1. Arbitrator must be impartial, neutral .
2. he must be conversant with constitution of
india, principles of natural justice, equity,
common and customary laws, commercial
laws, labour laws, law of torts, making and
enforcing the arbitral awards, domestic and
international legal system on arbitration.

Definitions:
Arbitration.
Section 2-1-a.
arbitration means any arbitration , whether
or not administered by an arbitrator,
appointed specially for the settlement of a
particular dispute, or by some permanent
arbitration institution.
Arbitration agreement.
Section 2-1-b .
..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.
A non contractual relationship, may arise
from tort. Example ; finder of lost goods.
Arbitral award.
Section 2-1-c.
Arbitral award is the final stage of arbitration
proceedings, and it is the judgment of the
arbitral proceedings. It is in fact a final
adjudication, by a tribunal of the parties own
choice. It is binding in the same manner, as
the decision of a court. It includes interim
award.
Essentials of arbitration:
1. Parties.
2. Arbitration agreement.
There must be an arbitration agreement. It is
an agreement by the parties, to submit to
arbitration.
Such agreement must, either contain an
arbitration clause in the general contract, or
may be a separate agreement. It must be in
writing, and signed by the parties, or through
exchange of letters, telex, telegrams etc.
3. Dispute or difference.
The dispute arise from legal transaction only.
Though an arbitration agreement may
provide for, reference of a present or future
dispute to arbitration , it is essential that
there should be existing dispute, for
reference to arbitration.
The provision of reference of future disputes
to arbitration, merely constitutes " arbitration
clause ", but not actual arbitration.

The term dispute means dispute of law and

facts, acts of ommission or commission, but
does not mean contention, or disputation
over matters in disputes.
4. Dispute of civil nature.
Dsipute of criminal nature cannot be referred
to arbitration.
This is because in criminal cases , the power
of criminal courts cannot be deprived.
However, if criminal prosecution is only
incidental , then the reference to Arbitration
is not improper.
In the absence of any contract , for all tort
case, arbitrator cannot decide.
Winding up of the company cannot be
referred to arbitration.

Attributes of arbitration.
page 98.
Main attribute is agreement between parties.
The agreement must clearly state that the
award will be binding on the parties.

The consent of the parties is necessary for the

arbitral tribunal, to exercise its jurisdiction, to
decide the rights of the parties to the dispute.

Must be clear in the agreement, that the

process for the resolution of the dispute, has
to be by arbitration.

The rights of the parties shall be determined

by the arbitral tribunal, so must agreement
state.

The Arbitral Tribunal must determine the

rights of parties in a judicial , fair and
unbiased manner.

The agreement to refer the dispute to arbitral

tribunal must be enforceable at law.
The Arbitral Tribune shall give equal
opportunity to both the parties.

Principles of Arbitration.
page 99.
1. Principle of transparency.
2. Fairness and impartiality.
3. Fair hearing and reasonable opportunity.
4. Fair means of resolution of dispute.

Different kinds / type of arbitration.

1. Domestic arbitration.
2. international arbitration.

Domestic arbitration.
Arbitration takes place in india. The subject
matter of contract is in india. The merits of
the dispute are governed by Indian law.
Procedure is governed by Arbitration and
Conciliation Act, 1996.

International arbitration:
Section 2-1-f : the arbitration relating to
disputes arising out of legal relationships,
whether contractual or not, where at least
one of the parties is :
an individual who is a national of , or
habitually residing other than india.
A corporate body incorporated in other than
india;
A company or an association or a body of
individuals whose control and management is
exercised from outside india.
The government of foreign country.

As per the 1958 New York Convention, each

contracting state shall recognise an
agreement in writing, under which the parties
undertake, to submit to arbitration, all or any
difference which have arisen , or which may
arise between them , in respect of a defined
legal relationship, whether contractual or not,
conerning a subject matter, capable of
settlement by arbitration.
page 101.
Arbitration may divided into four types.
1. Ad hoc or temporary arbitration.
2. Business or contractual arbitration.
3. Institutional arbitration.
4. Statutory or legal arbitration.

In Ad hoc arbitration usually disputes are

solved or settled by an individual, or
sometimes through mediation or conciliation
by a third party.
In business arbitration, an arbitration clause
is incorporated in all such agrements.
In institutional arbitrations , it is usually with
big business house, they will refer their
disputes to established institutions who may
act or arrange for arbitrators.
Usually such arbitral institutions have their
own men, and keep a panel of experts in
various fields of profession.
Statutory or legal arbitration: various statutes
provide for compulsory Arbitration. For
example : Indian trust act, defence of india
act, railway act, they provide for statutory
arbitration.
Decided cases:
Supreme court held that even if the original
agreement is void, and the other party had
taken part in arbitration proceedings, then he
can not subsequently repudiate the award as
void.
Reference made to an expert need not be for
Arbitration. The intention of the parties and
the arbitration clause has to be considered to
judge that.
Just because the word ' arbitration' not found
in the clause, it does not mean there was no
arbitration clause.

Advantages of arbitration:
Arbitration proceedings are held in private. So
confidentiality is maintained.
Since it is informal simple procedure.
No appeal, award is enforceable immediately.
Inexpensive.
Saves time, money. No lengthy proceedings.
In technical matters as arbitrator is
technically qualified, award is better than tht
of a civil court judge.
since there is consent by both parties, award
becomes final and enforceable.

Disadvantages:
Arbitrator may not be Legally not qualified.
High probability of injustice creep in.

Disputes can and not arbitrable.

page 142.
All matters relating to private rights and
obligations cognizable by civil courts under
section 9, of Civil Procedure Code,1908 is
arbitrable, unless they are specifically
forbidden by a statute or is opposed to public
policy.

Matters referable:
Determination of quantum of damages in
case of breach of contracts.

suits relating to properties, movable or

immovable or intangible.

compensation for civil wrongs in tort.

matters of personal or private rights. Example

right to priesthood in a temple.

Disputes regarding temple properties.

Disputes regarding compliment and dignity.

Right to specific relief, like injunction.

Disputes of goods sale, partnership.

Expulsion from club or caste, right of custom.

Disputes in accounts.
Contracts of assignment.

if a single act has both elements of crime and

civil effect, then he may chose to refer to
arbitration.

Matters not referable.

page 144.
Matters of criminal nature.
Matrimonial matters, conjugal rights, divorce.
Testamentory matters like validity of a will.
Insolvancy matters.
Matters relating to charity and charitable
trust.
Guardianship of a minor.
Lunacy proceedings.
Execution proceedings.
Winding up of company.
Excepted matters clause,' in a government
contract.
Matters under the electricity supply Act,1948.
Disputes under Consumer protection Act.

Malika vs. Sardar :

Held, even if matters of criminal nature is
referred to arbitration , it is not illegal, but an
arbitrator cannot be allowed to arrogate
himself, to the power of a Magistrate
deciding criminal matter, so it is invalid.

Persons who can refer:

Minor or lunatic cannot refer.
A person with joint interest can refer even
without the authority from the other, but he
only is bound by the award.

Kartha can refer , provided he act bona fide,

for the benefit of the family.

Advocates and counsels have the implied

authority to submit to arbitration on behalf of
their clients.

An agent duly authority has the power to

refer to arbitration.

An insolvant cannot, but the official Receiver

or assignee can , with the permission of court.

A trustee can submit a dispute relating to

trust property to arbitration.

A partner has no implied authority, but he

can if he is authorised or custom or usage
allow.

Arbitration Agreement.
page 148
Section 7 and 8 deals with agreement.
Section 7: 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
relationship , whether contractual or not "
Act envisages that without an agreement no
dispute can be referred to Arbitration.

Importance of the agreement : arbitral

proceedings and dispute is to be decided in
accordance with the agreement.

Scope of Arbitration Agreement.

Scope is wide so as to include both
contractual and non contractual legal
relationship between the disputing parties.

Agreement need not be in a prescribed form.

So scope is wide to cover even exchange of
letters, telex, telegrams, etc.

It may also be an arbitration clause in a

written contract menntioning " reference to
arbitration"
Instead of having clear cut terms of
agreement, if the parties have reached a
mutual understanding on the material terms
of the contract to refer any dispute to
arbitration, then such material terms is
sufficient to arbitration.

Arbitration clause left blank in material parts

cannot come within the scope of arbitration
agreement.
Even if the agreement is in order, certain
other matters also need clarity like:
Certainity in the existence of a dispute.
specification of place of arbitration.
Mutuality of arbitration.
Lawful subject matter of arbitration.

Mere understanding to refer to arbitration

cannot come under the scope of arbitration
agreement.

Essentials of Arbitration Agreement.

page 151.
1. Forms of Arbitration Agreement.
Section 7-3. must be in writing.
section 7-4. if arbitration agreement is
contained in a simple document signed by the
parties, then it is deemed as an arbitration
agreement in writing.
An arbitration agreement through exchange
of letters, telex, telegrams or other means of
telecommunication also constitutes the form
of written arbitration agreement.

Similarly, one party alleged the existence of

arbitration agreement and other party not
deny that, then also constitutes written
arbitration agreement.
There is no need for any separate arbitration
agreement , but if there is reference to
arbitration, then such reference itself
consitutes arbitration clause.
2. valid contract.
Arbitration agreement should have all the
essentials of a valid contract.
3. Parties to arbitration agreement.
Minimum two parties.
4. Dispute between parties to arbitration.
A dispute in the context of arbitration means
an assertion to a claim by one party and its
repudiation by the other party.
it is a disagreement between the parties
regarding a legal claim or liability.

The arbitration agreement must relate to the

existing disputes or disputes which may arise
in future. Though arbitration agreement
provides for submission of disputes which
may arise in future, for the purpose of
submission to arbitration, only existing
disputes can be referred.
Submission for arbitration may be for all or
some of the disputes.
For a non existing , future dispute, there can
only be a clause in the arbitration agreement
for submission to arbitration, i.e., as and
when the dispute actually arise.

The term 'dispute' includes difference also,

which means having different opinions or
interpretations as to the meaning of a certain
term in a contract or otherwise.
The existence of a dispute is the basic
essential for submission to arbitration.
Nathani steels Vs. Associate construction.
The supreme court held that if a dispute is
already settled , the parties cannot invoke the
arbitration clause.
Sankar Vs. Kumaravelu:
Held, if the original contract itself is illegal,
the arbitration clause would also be illegal
and void.
5. Defined legal relationship.
page 154.
There should be definite legal relationship as
in the cases of principal and agent, seller and
buyer etc. Such defined relationship need not
necessarily come from a contract. It could as
well arise from non contractual case also. For
example : liability arising out of negligence of
one person resulting in the loss or damage or
injury to the other.
6. Artbitration clause in a contract.
An arbitration may be in the form of " an
arbitration clause " in a contract or in the
form of a " separate agreement. "
An arbitration clause in a contract is different
from an arbitration agreement.
Clause comes to an end when contract ends.
whereas agreement is separate agreement.
Arbitration agreement , being a personal
covenant between parties, is not assignable
whereas a contract with a clause therein can
be assigned or transferred.

Doctrine of Mutuality.
page 155
An arbitration agreement relating to
contingent contract is not permissible under
the Arbitration Act, as it is not based on
mutuality.
An arbitration clause which give only one
party the option to arbitrate and binds only
one of the parties is not valid, as there is no
mutuality.
if one party alone is empowered to appoint
the arbitrator, such arbitration clause is VALID
as there is also mutuality in that one is
empowered by the other to appoint
arbitrator,
Example: IN government contracts the
government officials has the right to appoint
arbitrator, and since other party agrees to
such condition, the contract is valid.

There should be certainty in the existence of

a dispute, place of arbitration, mutuality of
arbitration award etc. and also the subject
matters of arbitration must also be lawful to
make the agreement legal and valid.

Forms of arbitration agreement.

page 158.
An arbitration agreement is treated as in
writing if it is contained in a document signed
by the parties, contained in exchanged
letters, telex, telegrams., exchange of
statement of claim and defence.

There is no prescribed form of arbitration

agreement. What is required is that it must
be in writing.
There need not be separate arbitration
agreement, but if there is reference to
arbitration, then such reference itself
constitutes arbitration clause and in turn , an
arbitration agreement.
Guidelines for drafting Arbitration
agreement/clauses.
Poorly drafted arbitration clauses become
unenforceable and cause unnecessry costs
and delay.
Basic drafting guidelines.
Parties must first decide whether institutional
arbitration or ad hoc arbitration.
When the parties seclect ad hoc arbitration (
non administered ) they can select arbitration
rules developed for non administered
arbitration by UNCITRAL.
The parties should select a set of arbitration
rules and use the model clause recommended
for these arbitration rules as a starting point.
They should cover not only all disputes
'arising out of the contract, but also all
disputes ' in connection with ' or ' relating to '
the contract.
The parties should select the place of
arbitration based both on practical and
juridical consideration.
The parties should specify the number of
arbitrators, usually one or three, an odd
number.
The parties should specify the method of
selection and replacement of arbitrators and
if ad hoc arbitration is chosen, then they
should select an appointing authority of
arbitrators.
specify the language of arbitration.
In international transactions, parties should
specify the rules of law governing the
contract.

Composition of Artbitral Tribunal.

Section 10 - 15 deals with composition of AT
and appointment of Arbitrators.

The parties are entitled to appoint arbitrators

according to their own choice.
As also their numbers.
But they shall not be even numbers.
If parties fail to decide on number, then
Arbitrary Tribunal shall consists of one
arbitrator.
If they want more, then it must be spelt in
agreement.
Under the new act,( not act of 1940 ) the
third umpire is called the ' Presiding
Arbitrator". Former act called him, umpire.
The presiding arbitrator that is the third
arbitrator is appointed by the two others,
within 30 days from the date of their
appointment.
Appointment of arbitrators
Section 11 page 198.
A person of any nationality may be the
arbitrator , unless otherwise decided by the
parties.
This is a must in international commercial
transactions.
Example: if an international commercial
dispute is between india and sri lanka , the
arbitrator must be from a third country and
not from india or sri lanka.

The parties are at free to agree on a

procedure for appointing the arbitrators.

In arbitration with three arbitrators, each

party appoints one arbitrator, and the two
appointed arbitrators appoint the third who
acts as the Presiding Arbitrator.

Appointment of arbitrator by court.

Section 11 page 199.
If a party fails to appoint an arbitrator within
30 days from the date of request from the
other party, or
if the two fails to appoint the presiding
arbitrator within 30 days form the date of
their appointment, then the appointment is
made upon request of a party, by the chief
justice or any person or institution designated
by him.
Likewise, In arbitration by a sole arbitrator , if
the parties fail to agree on the arbitrator
within 30 days from the receipt of a request
by one party, then the appointment is made
upon request by a party by the chief justice or
any person or institution designated by him.

Further in an international commercial

transaction if the parties fail to appoint …..
then the chief justice or….
In india, without request from party the chief
justice should not make appointment of an
arbitrator.
Under an appointment procedure, a party
may request the Chief Justice or any person
or institution designated by him to take
necessary measure if :
a party fails to act as required under that
procedure. Or
the parties or the two arbitrators appointed
may fail to reach an agreement.
a person or institution may fail to perform
any function entrusted to him under that
procedure.
The chief justice or the person or the
institution and their decision shall be final.
The CJ or others shall regard the qulification
of the arbitrator.
other considerations required of an
independent and impartial arbitrator.
if others failed, the CJ can appoint an
arbitrator of a nation other than the
nationality of the parties in an international
commercial transaction.
The CJ can make such scheme to fulfil the
entrusted duties.
The CJ mentioned above shall deemed to be
the CJ of india in cases of international
commercial transactions.
The Act lays down neither any qualification
nor guiding principles to be considered while
appointing the third arbitrator.
The parties may appoint whomsoever they
please to appoint to decide their dispute.
They can choose him by lot.
The arbitrator withdrew midway… held he
could not be allowed to do so.

Qualities and qualification of arbitrator.

page 204
An arbitrator is a private , neutral person
chosen to arbitrate a disagreement, as
opposed to a court of law.
He is resorted to settle any non criminal
disputes.
He conducts an arbitration, and serves as a
judege to conduct a mini trial, less formally
than a court trial.
Arbitrators must have :
legal capacity.
Trusted by the parties.
Act with impartiality.
Act with independence, competence,
diligence and discreetness.
Must possess experience in particular
industries or sectors and some personal and
professional skills.
the qualities shall be upto the parties to
decide.
He must act judicially and impartially.
He must give fair and equal hearing to both
parties.
He must not have any interest direct or
remote in the subject matter of the dispute.
He must not misconduct himself.
..by accepting improper gratification.
He must encourage settlement.
He must not exceed his authority.
He must observe the rules of natural justice.
He must give a speaking final award and sign
and file the award within due time.

Removal of arbitrator.
page 207.
Section 12: provides the grounds on which
appointment of an Arbitrator can be
challenged by a parties to arbitration.

Section 13 prescribes the procedure to be

adopted for challenging the appointment.

Eight grounds for challenging and on which

he can be removed through civil court.

it is the duty of the arbitrator to disclose in

writing the circumstances which may affect
his impartiality or independence to the party
who appoints him. This he may to at the time
of appointment or after it.

if post appointment it is found that arbitrator

do not possess the qualifications.

Any party during the arbitral proceedings

become aware of any conditions which
disqualifies the arbitrator.
when his impartiality is in doubt on justifiable
grounds.

the party who appoints the arbitrator

knowing his disqualifications, cannot
challenge the appointment.

The challenge shall be made within 15 days of

knowing the fact of disqualification.
Otherwise his right to challenge would be
deemed to have been forfeited.

The arbitrator should not have any

connection with any of the party to the
dispute so as to doubt his impartiality.

The personal employment or professional

friendship raising reasonable doubt of bias.

The court has the inherent power to remove

an arbitrator when bias attributed is evident
from circumstances which need not be overt.

The parties are free to challenge through an

agreed procedure for challenging. If there is
no such procedure agreed, then the Arbitral
Tribunal will decide whether the Arbitrator
must be removed or not.

If the challenge become unsuccesful the

Arbitral Tribunal must proceed with
arbitration.
The Arbitral Tribunal permit the challenging
party to apply to the court to set aside the
award. And if did set aside the court to decide
whether fee to pay or not to arbitrator.

Reasons to terminate arbitral proceedings.

page 210.
Gets termianated due to failure or
impossibility of the arbitrator to act which
may be due to :
1. death , ill health, accident etc.
2. arbitrator subsequently getting interest in
the subject matter of dispute.
3. When proceedure often meet with delay.

The term ' termination of the mandate' does

not mean termination of arbitration
agreement. It only mean termination of
arbitrator.

The arbitrator can withdraw from office for

any reason and on his withdrawal the
proceedings that is ' the mandate of
Arbitrator ' gets terminated.

Similarly by the agreement of parties '

mandate of arbitrator ' may be terminated.

A ' substituted arbitrator ' is appointed if the

rules of appointment provides.

AS per the agreement, the new arbitrator can

proceed from where it was left.
Any ruling of the Arbitral Tribunal do not go
invalid by the substitution.

The parties may decide to start a de novo

proceedings.

The arbitration clause may contain the effect

of insolvancy of a person with regard to the
arbitral proceedings.

The official assignee adopts the contract only

if its beneficial to the estate of the insolvant.

Arbitral Tribunal.
page 216.
It shall exercise its authority within the terms
of reference of disputes.
The arbitration clause in the contract is
independent of terms of contract. So even if
the contract become void, it does not ipso
jure invalidate the arbitration agreement.
The tribunal may have its own rules or
proceedings provided it do not vitiate the
terms of refernce of arbitration.
The arbitrators can not question the validity
of the arbitration agreement itself.

The arbitration clause survives repudiation of

the rest of the contract and still remain valid
for the settlement of resulting dispute as
well.
The party though appointed the arbitrator,
can raise the plea of "ultra vires jurisdiction",
provided this shall be done before submiting
any counter statement by the other party.
However, if tribunal can admit the plea even
after counter statement if it justified the
delay.

If the Tribunal exceeds its authority, the party

shall raise such plea immediately after the
issue is raised during the arbitral proceedure.

If the Tribunal rejects any such jurisdictional

plea and goes on with procedure and submits
its award, the parties can challenge the award
in court.

The party aggrieved can approach the court

for setting aside the award- section 34.

If the terms of contract do not allow the

parties to go for arbitration then arbitrators
are out of jurisdiction to settle any dispute.
case laws:
The dicision of the arbitrator as to jurisdiction
is not final.
Failure of arbitrator to administer oath shall
not invalidate the statement of witnesses.

An arbitrator has power to award interest for

the period prior to reference. But no such
power for the period from date of reference
till the date of award.( State of Kerala Vs.
Mythri constuctions.)
An arbitrator has no jurisdiction to entertain
matters excluded from arbitration.

Section 17 empowers the Tribunal to order

necessary interim measures.
But it has no such power suo motu, but at the
request of either party.

Principal steps in Arbitration.

page 222. Heading as in syllabus.
Request for arbitration:
begins with claimant submitting request for
arbitration to the WIPO Arbitration and
Mediation Center. Request contains dispute
summary.
Answer to Request for Arbitration.
within 30 days or receipt of the request , the
respondent must file an answer to the requst.
Establishment of the Tribunal.
The parties may decide the number of
arbitrators, if they no decide, the WIPO
center will appoint a sole arbitrator, except
when the center decides 3 is appropriate.
Settlement of Claim.
..must be filed in 30 days of the constitution
of the tribunal.
Settlement of defence.
must be filed in 30 days after receipt of claim
statement.
Further written statements and witness
statements :
The Tribunal may schedule further
submissions.
Hearing:
By party request, or by tribunal discretion a
hearing may be held for the presentation of
evidence by witnesses and experts, and for
oral argument.
Closure of proceedings
when tribunal satisfied that adequate
opportunity had provided to present
submissions and evidence, it will declare
closure of proceedings.
Final award.
should be delivered within three months of
closure of proceedings.

conduct the arbitrar proceedue in an

impartial way.
so, there must be principles of natural justice
with equal opportunity to both the parties.
The conduct of arbitral proceedings is very
important because as far as rules of
proceedings are concerned, it frames its own
rules and it is not bound by CPC or the Indian
Evidence Act.

Equal treatment of parties.

The cardinal principle of natural justice is that
no person should be condemned to unheard.
Audi alterum partem.
Determination of rules of procedure.
Arbitration Tribunal is not bound to follow
the provisions of CPC,1908 and Indian
Evidence Act,1872.
The power includes the power to determine
the admissibility, relevance, materiality and
weight of any evidence.
The arbitrator has to follow the rules dictated
in the arbitration agreement.
Place of arbitration.
Parties are free to agree on place.
if not decided, then AT will determine.
if arbtration agreement has given full
freedom to AT , then they can decide.
Though fixed by agreement. AT can sit
anywhere :
for consultation of its members.
for hearing witnesses.
experts or parties.
for inspection of documents.
goods or other property.
Commencement of proceedings.
Usually the aggrieved party invoke the
arbitration clause. And so his request to refer
to arbitration must be received by the
respondent.
Since arbitration agreement is arrived at
mutual consent, there is no need for consent
of the respondent for the request of
arbitration by the aggrieved party.
Language.
if both party fail to agree on language then AT
will decide it.
AT can insist that the documents also be
translated to that language.
The choosing of a common language in
international commercial arbitration is
necessary since parties may use different
languages.
Statements of claim and defence.
Statements of claim is raised by the plaintiff
and the other by the respondent.
They must follow a procedure regarding this.
Time limit for submission may be fixed by the
parties themselves.
The plaintiff narrate the facts behind his
claim. The points at issue and the relief of
remedial claim.
The parties can submit documents in support
their claims or defence or quote their
reference number.
AT can allow amend or supplement the claim
and defence. Or he can reject as well.

Oral hearing and written proceedings.

page 232.
AT has the discretion to hold oral or on basis
of documents.
IF agreement does not excude oral, then at
the request of the party , AT can hold oral
hearing.
Notice under CPC Section 80.
A is going to file a suit against B.
Here A need not give any notice of this to B
B will know of the suit through summons.
This is the case generally.

But as per secion 80 of CPC prior to institution

of any suit against government or its officers
in respect of any act purporting to be done by
such public officer in his official capacity, two
months notice is necessary. This means a suit
can only be inititated after the expiry of two
months.
Thus section 80 contains a rule of procedure.
The section describes two type of suits.
1. against government .
2. against public officers in respect of acts
done or purported to have done by such
officer in their official capacity.

Determination of rules of procedure in AT

OR natural justice in Arbitral proceedings.
page 240.
AT is not bound to follow provisions of CCP
and Indian Evidence Act,1872.
They are applicable only to the judicial
proceedings, whereas the arbitral
proceedings are quasi-judicial proceedings.
Further they will hamper quick justice due to
technicalities.
The procedure to be followed by AT is one
narrated in the arbitration agreement.

The principles of natural justice:

Doctrine of bias or nemo debut esse judix non
propria causa. That no man shal be judge of
his own cause.
Doctrine of audi alterum partem.
No person shall be punished before being
heard.

Justice must not merely be done but appear

to be done manifestedly and undoubtedly by
the arbitrator.

Powers, duties and functions of Arbitrator/

Arbitral Tribunal.
page 248.
Arbitrators are free than judges to make
decisions, because they do not have to abide
by the principle of STARE DECISIS ( the policy
of courts to follow the principles established
by legal precedents.)
Arbitrators could be used to arbitrate any non
criminal cases.
The powers and functions of AT are only the
powers and duties of Arbitrators as the
proceedings of the Tribunal is only done by
arbitrators.
Powers:
Arrange arbital institutions or individual
arbitrators to facilitate arbitral proceedings.

The arbitrators may have his own rules of

proceedings , without violating the terms of
reference of arbitration.

empowered to order interim measures if

parties agree for it.
He can fix the place of arbitration.

He has the discretion to hold oral or

document hearing.

He can dismiss the claim and terminate

proceedings if statements are not submitted
in time.
He can seek the opinion of experts.
He can seek the assistance of courts in taking
evidence.
He can fix the cost of arbitration and can
direct the parties to deposit a certain amount
as advance payment towards cost.

The arbitrator has the lien on the award for

any unpaid costs of arbitration. Section 38
and 39.

When final award is declared, the arbitration

proceedings comes to an end.
He cant make any corrections afterwards
except clerical or typographical errors.
He can correct any error from any accidental
slip or omission or any error which is
apparent on the face of the award.
Nirmala bhai Vs. Girija bhai.

He may interpret the award if parties request.

He can extend the time for making the award
if all the parties agrees to it.

if there is a provision to this effect.

In addition to the above decided cases has
given the following powers.

Order specific performance of the contract

under certain restrictions.
Order dissolution of partnership.
award interest.
fix the time and period of payment.
award cost.
Determine the question of legal heirs of a
deceased party to the arbitration.

Duties of the arbitrator

page 252.
Ensure that his appointment is in order.
Avoid the award being vitiated due to ultra
vires jurisdiction.
Ensure that work completes in allowed time.
Act judicially and impartially.
He must give a fair and equal hear hearing to
both parties.
He must not have any interest in the subject
matter of dispute.
he must not give any chance to cast aspire on
his impartiality.
He must not misconduct himself during the
proceedings. For instance, he shall not accept
any improper gratification or bribe from any
party.
He must encourage settlement of the arbitral
dispute.
He must not exceed his authority.
He must observe the rules of natural justice.
He must give a speaking final award on all the
matters referred to him.

Making of Award.
page 255.
Present Act has encouraged voluntary
settlement of disputes even during the
pendency of disputes before arbitration and
even in such settlement the arbitrator is
empowered to pass awrards whch has the
same effect and status as any other arbitral
award.
Award must state the reasons for the
decision.
Arbitral tribunal is empowered to levy
interest and cost.
For domestic arbitration the substantive law
of india is applicable.
Though as regards the procedure of
arbitration, the arbitrator can with the
consent of the parties , apply agreed rules of
their own, but as regards the substantive
portion of the disputes still the Indian
substantive laws like Indian Contract Act,
Partnership Act, sale of goods act, are
applicable.

International commercial arbitration.

The arbitral tribunal will decide the dispute as
per the rules of law designated by the parties.
If the parties fails to designate a legal system ,
then the arbitral tribunal has the authority to
apply rules of law as it considers proper and
appropriate depending upon the
circumstances of the dispute.
In international commercial arbitration, the
problem of conflict of laws often arise.

Panel of arbitrators.
Section 29.
if more than one arbitrator then decision by
majority.
The interim orders are not arbitral awards,
but they are only arbitral decisions and they
need not be in writing nor be signed by
arbitrators.
The present act does not allow even number
of arbitrators hence majority is possible.
In case each party appoints one arbitrator,
then the two arbitrators must appoint the
third arbitrator called Presiding Arbitrator.
The presiding arbitrator is not an umpire as
under the old act. Here only majority decision
prevails.
All the arbitrators must execute the award at
the same time and place, though the decision
may be different.

Essentials of valid award.

page 267.
In writing.
Contents of award.
circumstances which led to appointment of
arbitrators, substance of claim and defence,
the points of difference, the evidence
adduced, the arguments urged and finally the
findings, final operative portion containing
directions.
Reasons for the award.
Certain as to its meaning and intent.
Interim arbitral award.
Interest for the award amount.
No punitive compensation.
costs of arbitration.
Arbitral award- is like decree of court.
Arbitral award final and binding.
Award to be read as a whole.
Rectification of clerical mistakes and errors.
Award to confirm to arbitral agreement.

Additional award. If the parties agree, then a

party by notice to the to other party may
request within 30 days form the receipt of
arbitral award, the tribunal to make
additional arbitral awards as to claims
presented in the proceedings but omitted
from the award.

Modification of award.
The tribunal has the power to modify even
after award is passed. But such modification
is the discretionary power of the tribunal and
must be based on sufficient reasons for such
modification.
When once the arbitral award is made in a
dispute, for the same dispute, there cannot
be another arbitrary proceedings. That is
proceeding is barred by the doctrine of res
judicata.
On making the arbitral award the arbitral
proceedings is terminated and the arbitral
tribunal passes an order to this effect.

even without making the award the tribunal

may order termination of proceedings under
the following three circumstances.:

if the claimant withdraw his claim.

The tribunal then give the other party
opportunity state his objections and counter
claims.
when the parties mutually agrees to
terminate the proceedings.
if the proceeding becomes impossible of
performance as under the provisions of
Indain contract act.
The mandate of the arbitral tribunal gets
terminated with the termination of the
arbitral proceedings. Usually the AT comes to
an end, with the termination of arbitral
proceedings.

Under the following two circumstances, the

AT continues to have power to act inspite of
the proceeding are terminated.
1. for making correction.
2. if any party to the arbitral proceedings files
an application in court for setting aside the
award and court directs the tribunal to once
again resume and conduct the proceedings,
then the arbitral proceedings are continued.

Effect of Artbitral Award.

page 299.
An award is equivalent to the judgement of a
trial court. It is equivalent to the decree
passed for the enforcement of the judgment.
In other words, an award need not further
decree for its enforcement.
The effect of arbitral award is it is final and
there cannot be any further award on the
same subject matter of dispute.
No appeal possible.
However, the aggrieved party can apply to
the civil court only on specified grounds as
provided under the Act for setting aside the
award.
The court has no power to vary, change or
modify the arbitral award or to decide any
further matter already decided in the award,
but it can only set aside the award under
section 34 of the Act.
The award is binding on the parties and also
persons claiming under them. The persons
include assignees of the arbitral contract,
legal reps of the deceased, arbitral party or
persons who have participated in the arbitral
proceeding on behalf of the deceased, either
to enforce the claim or defend the claim on
behalf of a party.
Receiver or the Administrator of assets in
which thre is arbitral proceedings are also
included in the persons claiming under the
parties clause.
The award shall be final and puts an end to
the proceedings.
Both on facts and law, the award becomes
final. There is no provision for appeal, nor for
review, but for correction of mistakes unless
the same is apparent on the face of the
award.

Enforcement of award.
page 301.
Under the Arbitration Act, 1940, an award
could not be directly enforced. But only
through the decree of a civil court.
But the present Act, 1996 has allievated all
this anomaly.
The time limit for setting aside an award is
three months.
once this time limit expired, then the party in
whose favour the award is passed can directly
enforece the award under the Code of Civil
Procedure, 1908 in the same manner, as if it
were a decree of the court.
The supreme court in a case held that, for the
works executed in india and the award passed
and delivered in London, but still on the basis
of the award , it could be directly enforced in
Bombay.
In mattapally chellamaya Vs. Mattappally
venkataraman, it was held that an award
could be enforced in part.

Even foreign awards under the New York

convention 1958 and the Geneeva
Convention 1927, are enforceable in
accordance with the provisions contained in
sections 49 and 58.

….END of UNIT - 2 …....

 UNIT-3
CONCILIATION
Page 371.
syllabus: meaning - kinds - facilitative,
evaluative, court annexed, voluntary and
compulsory - qualities - duties - Role - stages
of conciliation - Procedure - conciliation under
statutes : ID Act,1947, Family Courts Act,
Hindu Marriage Act, Arbitration and
conciliation Act,1996.

Another means of settlement.

It has been given legal recognition through
Arbitration and Conciliation Act,1996 through
provisions of sections 61 to 81.
.
Conciliation is a process of help and assist the
parties to reach an amicable settlement of
their disputes.
Conciliator adopts his own means and
methods to settle the disputes.
The Act provides the procedure of conducting
conciliation.

The provisions relating to conciliation is

almost similar to rules of conciliation provided
in UNCITRAL.
Conciliation is discussion without litigation.
Discussion between parties made possible
through a conciliator.
Like in arbitration there need not be any
agreement.
conciliator comes to light only when the
problem arise.
Mutual understanding is necessary.
The sections are resorted to only when there
is no rules as such agreed.
There are 21 sections relating to conciliation.

conciliation is not possible where the dispute

is regulated by laws.
Only when the parties agrees to the
application of the conciliation provisions,
conciliation is applicable.
applicable to disputes arising from contractual
or non contractual relationships.
Even compoundable offences ( section 320
crpc) can be brought to conciliation table.
legal relationship means both parties should
have right to sue and be sued.

Advantages & disadvantages of conciliation.

page 375.
Held in private so confidentiality maintained.
Informal and simple.
no time delay as it is quick.
inexpensive.
no lengthy proceedings, time saved.
Technical issues, technical hands will help.

conciliator may not be legally qualified.

since simple procedure chance of injustice.

Kinds of conciliation.
Facilitative conciliation.
conciliator merely facilitates, do not give his
opinion.
helps parties overcome differences and find
solution.
since the relationship of parties at odds
changes due to conciliation , this is called
transformative approach.
this type applied in labour disputes.
Evaluative .
conciliator gives his opinion on the merrits of
the issues.
His opinion is like that of a third party and so
may not be binding.
plus and minus of each partys arguments is
analysed.
this type is only advisory.
Court Annexed conciliation.
conciliatory service is provided by court.
The judges,lawyers and parties become
participants.
It is as if he judge refer the case to a
mediator.
Resolution is under the supervision of the
judeges so it is more coordinated.
Voluntary conciliation.
parties are free to use conciliation.
Both parties refer the disput for conciliation.
Parties are free to accept or reject decision.
Compulsory conciliation.
The dispute is referred to board of
conciliation, where the procedure is made
compulsory.
if voluntary useless then compulsory is made
use of.
in cases where parties reluctant to meet each
other, compulsory conciliation is useful.
Qualities of a conciliator.
quality must to win trust and confidence of
parties.
Independent and impartial.
must be above suspicion.
integrity and neutrality.
not influencable by others.
Hard working, physically and mentally fit.
quality of get along with people.
Tactness and ability to guide and control the
dicussion to reach ahsore with a good catche.-
reans.
common sense and practical mind.
A special alertness of mind.
Fully familiar with laws and regulations
concerning the industrial relations and
settlement of industrial disputes.

Generally there is only one conciliator.

if parties agree it can be raised.
if parties go for sole conciliator then they can
select jointly.
if they require two , then each of the party
can select one.
in case of three conciliators, the parties may
agree on the third one to take charge as
presiding conciliator.

Qualification of conciliator.
page 387.
In selecting the conciliator the parties may
seek the assistnce of persons or institutions.
While appointing the conciliator the following
aspects must be checked into.
conciliator is independent and impartial.
In the case of sole or third conciliator it is
preferable to appoint a conciliator of
anationality other than the nationality of the
parties.
Conciliators appointed through institutions is
recommended as they will be experts in the
field having all the traits of qualities required
for the work.
Role of a conciliator, duties and powers.
page 388. syillabus caption.

Role important.
success depends on the ability and efficiency
of the conciliators.
The conciliator is not bound by CCP or IE act.
He decide his own procedure.
However they must follow principles of
natural justice.
Deal in an impartial and independent style.
conduct the conciliatory procedures
efficiently and appropriate to the
circumstances of the case.
At any stage of proceedings he may propose
for settlement. It need not be in writing and
with reasons.
The conciliator cannot assume the role of an
arbitrator in a case where he is playing as
conciliator.
He must not be presented as a witness either
in any judicial or arbitral proceedings by the
parties.
However if the parties agree to provide the
above role then conciliator can put on the
coat of an arbitrator or counsel.

STAGES of Conciliation.
syllabus caption.
page 392.
conciliation means settlement through
discussion without litigation.
discussion between the parties made through
the assistance of conciliator.
conciliator adopts his own rules and
procedures which are not strictly in the
nature of legal procedure.
following steps in the procedure:
one of the party sends an invitation to the
other party for conciliation as per the
provisions of Arbitration and Conciliation Act,
1996.
in the invitation he must briefly identify the
issue.
if the other party accepts the invitation in
writing the process of conciliation starts.
In case the other party rejects then there is no
conciliation.
if no reply within 30 days or as said in
invitation, then it is treated as the rejection of
the invitation to conciliate.
He must inform the other party that I taken it
as rejection.
The above provisions are meant to keep
certainty in the proceedings, and not to keep
pending the invitation for long.

The conciliator after appointment may

request the parties to give him a written
statement of the details of dispute and points
at issue.
Accordingly each party give the statement as
required then send a copy to the other party
also.
Second the conciliator may request the
statement of the position of the party, the
facts and grounds, together with documents
supporting them. Each party send the copy of
this also to the other party.
He may request appropriate additional
information.

Principles and procedure of conciliation.

page 395.
1. Impartial and independent in nature.
Section 67-1: conciliation proceedings should
be conducted impartially and conciliator must
act in an independent manner.
2. Just and fair.
Section 67-2: conciliator should be guided by
the principles of justice, fairness, and
objectivity and should give equal importance
to all.
3. Confidentiality.
4. Duty of disclosure of information.
He must disclose to the other what he
received from the other relating to the
dispute.
5. co-operation with the conciliator.

Procedure of conciliation.
1. Commencement of conciliation
proceedings.
2. Submission of statements to conciliator.
3. Conduct of conciliation proceedings.
4. Administrative assistance.
Conciliator along with parties may approach
an institution for administrative assistance.

The conciliator is not bound by the provisions

of CCP or Indian Evidence Act.
He is free to adopt his own procedure in
conducting the conciliation proceedings.

Disclosure of information to the other party

also.
cooperation of parties with conciliator
suggestions by parties for settlement of
dispute.

Settlement Agreement.
page 401
The end product of conciliation is the
settlement agreement.
Section 73.
if the conciliator thinks that there is some
element of settlement acceptable to the
parties, he must formulae the terms of a
possible settlement.
He must submit such settlement.
After receiving the observations he may
rework it .
if the parites reach an agreement on a
settlement of disputes, they shall draw up the
terms and sign a written settlement
agreement, and also request the conciliator to
draw up a written settlement agreement.

Once the parties sign it, it is final and binding.

The conciliator shall authenticate the
settlement agreement and furnish a copy to
each of the parties.

The settlement agreement will have the same

status as that of an award made after
arbitration proceedings.

confidentiality.
page 402.
All matters relating to conciliation shall be
kept confidential by the conciliator.
However, he can disclose it if it is necessary
for implementation and enforcement of the
settlement agreement.
Both section 70 and 75 requires the attribute
of confidentiality from the conciliator.

The confidential matters shall not be used in

other proceedings. If used in civil suits, the
evidence tendered become inadmissible.

if the confidential matters conveyed in

conciliation proceedings are used in arbitral
proceedings, the award in such arbitral
proceedings is liable to be set aside.

Parties to conciliation proceedings should not

refer such proceedings before the arbitration
proceedings, which may be initiated after the
failure of the conciliation proceedings.

The proof of loss from breach of

confidentiality by the conciliator or by the
other party need not be proved.

A conciliator shall not be called as a witness in

any other subsequent proceeding, whether in
arbitration or civil suit, because his role is that
of a confidential negotiator.

Termination of conciliation proceedings.

page 403.
By signing the settlement agreement. Date of
signing is the date of termination.

By written declaration of the conciliator.

Date of declaration is the termination date.

By a written declaration by the parties to the

conciliator.

By a written declaration by one party to the

other party and the conciliator.

case: settlement agreement drew up by the

concilitor himself secretly and sent to the
court in a sealed cover was held illegal and
not binding on the parties. It also held that
unless settlement agreement signed by the
parties it is not valid.

Parties to conciliation proceedings must not

initiate any arbitral or judicial proceedings
regarding a dispute which is the subject
matter of the conciliation proceedings.
However, if a party for preservation of his
rights may do this.
In arbitral proceedings there is no such
restrictions.

Costs of conciliation :
Costs are expenses incurred in litigation or
professinal transactions, consisting of money
paid for stamps, to the officers of court, to
the counsel, and solicitors, for their fees.
costs means reasonable coasts relating to the
following:
Fee and expenses of the conciliator and
witnesses called by conciliator with parties
sanctions.
Fee paid for expert advice.
Any assistance provided under section 64-2-b
and section 68.
Any other incurred in connection with
conciliation and settlement agreement.
The conciliator fixes his fee and upon
termination gives written notice to the
parties, this cost shall be beared equally,
unless otherwise provided the settlement
agreement.

If the required deposit towards costs are not

paid in full in 30 days, he may either suspend
or terminate the proceedings by making a
written declaration.
Upon termination of the proceedings the
conciliator shall render accounts of deposits
received and return the unexpended balance
to the parties.

The following are the prohibited evidences

from conciliation proceedings tobe introduce
in arbitral or judicial proceedings :
1. views expressed or suggestions made by
the other party in respect of a possible
settlement of the disputes.
2. Admissions made by party in the course of
conciliation proceedings.
3. Proposals made by conciliator.
4. The fact that other party had indicated his
willingness to accept a proposal made by the
conciliator.

Difference between Arbitration &

conciliation.
page 409.
Only one similarity. Both having third parties
as settlement providers.

Differences:
1. Agreement.
2. Existence of dispute:
Artbitration agreement may be made even
without any present dispute and in
anticipation of that may arise in future. ( but
arbitrators are appointed only to settle
present dispute-reans)

The need for conciliation arise only when the

dispute arise.

3. Acceptance of the other party:

4. Role of arbitration.
In conciliation the conciliator merely offers
simple help and assists the parties arrive at a
settlement to amicably settle their dispute.
But in arbitration he actively arbitrates and
makes an award in the end.
5. Form of settlement.
Award is in the nature of judgment, requiring
no further decree from civil court for
implimentation , award itself being a decree.
6. Confidentiality.
conciliation requires more confidentility.
7. Unilateral termination - is possible in
conciliation but not in arbitration since it is
based on an agreement signed by both the
parties.
8. Disabilities:
The conciliator cannot act as an arbitrator, or
a representative or a counsel in any dispute
where he already acted as a conciliator. He
cannot even stand a witness.
No such restrictions on arbitrator.
9. Evidence in judicial proceedings.
The arbitration proceedings or award can be
used as an evidence in judicial proceedings.
10. Procedure.
11. Number of provisions: 43 in arbitration
and twenty one in conciliation.
12. Recent origin: arbitration is old.
13. Statutory recognition:
Arbitration got it in 1940 but other in 1996.

Conciliation under Industrial Disputes Act.

page 419.
Industrial disputes mechanisms under ID act.
1. Works committee.
2. Conciliation officers.
3. Board of conciliation.
4. Courts of inquiry.
works committee:
100 + workers in any preceeding 12 months,
the government may require the industry to
constitute a works committee consisting reps
of both employers and employees.
Conciliation officer.
The appro government by notification
appoints conciliation officers. May be
appointed permanently or for a certain
period. Main duty is to settle disputes
through conciliation.
Board of conciliation:
The appro government by notification
appoints a board of conciliation. The board
consits of a chairman and two or more
members.

The chairman is independent but other

represents both parties.
The government may refer any disputes by
order in writing to a board of conciliation.

if conciliation fails it sends a report stating the

steps taken and reasons for failure. Report
submission in two months and government
publish it in 30 days.
The Board has same power as a civil court
under CPC.
Courts of inquiry.
The apprpriate government by notification
constitutes the court of inquiry for conducting
an inquiry into the dispute and settle it
through the process of concilation.
It may consits of one person or persons and
one being the presiding officer who is
independent and one who is not connected
with the dispute.
The government may refer a dispute to the
committee in writing.

Conciliation under the Family Courts Act,

1984.
page 425.
The preamble: " an Act to provide for the
establishment of Family Courts with a view to
promote conciliation in, and secure speedy
settlement of disputes relating to marriage
and family affairs and for matters connected
therewith.
The Act make it obligatory on the part of the
court to make a conciliatory efforts first
without any rigid rules of procedure and
informal .
The Act provide for the service of medical
experts and others.
Parties are not entitled to engage legal
practitioners. However, in the interest of
justice, court may seek the legal advice from
amicus curiae.
Act simplified the rules of procedure to effect
an efficient and speedy solution.
Act allowes only one right of appeal to High
court.

Conciliation proceedings under the Family

court.
Section 9 of the Act deals with the " duty of
the family court to make effort for settlement
"
1. first to assist and persuade the parties in
arriving at a settlement.
2. if during proceedings the court feel that
there is possibility of a settlement it may
adjourn for a certain period to persuade them
to reach a settlement.
The act provides for the service of medical
experts to render them good counselling.

The concerned High court may frame

necessary rules for regulating the procedure
of conciliation proceedings.

In any suit or proceeding pending at any stage

in the family court, if the court thinks that
there is a reasonable possibility of a
settlement between the parties, the court
may adjourn the proceedings for such period
for settlement through conciliation.

Conciliation under the Hindu Marriage Act,

1955.
Section 23-2 provides that the court shall
make every endeavour to bring about a
reconciliation between the parties which
means that the court must conduct
conciliation proceedings before granting the
relief sought for.
Family courts are set up for this, they are less
formal, based on the notion of providing
settlement through conciliation.

The rules under the Act provides for

conciliation a part of the Hindu Marriage Act.

Matrimonial disputes likes divorce,

annulment, separtation, maintenance,
settlement of matrimonial property and child
custody, all these matters are provision for
through the conciliatory efforts by courts.
….END of UNIT-3 …...
 UNIT - 4
NEGOTIATION.
Page 438.
Syllabus: Meaning--different styles of
negotiation--different approaches to
negotiation---phases of negotiation--qualities
of a negotiator--power to negotiate.

word comes from latin , negotiatus which

means to carry on business.

Negotiation is a dialogue intented to resolve

disputes, to produce an agreement upon
course of action, to bargain for individual or
collective body of persons and to satisfy his
their various interests.

Essentials of negotiation.
Essentials is nothing more than the tips and
toos required for an HR professional to
become effective negotiators.

Master preparation techniques.

Match the right negotiation tactic to the right
situation.
Reshape negotiation process when deals get
bumpy or contentious.
Effectively influence bosses and peers.
Struck good deals with vendors and
consultants.
Protect organisation from legal disputes.
Negotiation occurs in almost all walks of
human life. Business, charity,legal
proceedings, nations, marriage,divorce,
parenting, and everyday life.
Study of negotiation is called negotiation
theory.
professional negotiators like peace
negotiation, union negotiators, diplomats,
legislators, brokers.

Negotiation is usually through a trained

negotiator acting on behalf of a particular
individual / organisation.

Approaches.
page 441.
Negotiation has three approaches.
First approach:
Negotiation involves three basic elements.
Process, behaviour, substance.
process refers to how parties negotiate.
the context of negotiation, parties, the tactics
used, the sequence and stages all these play
out in.

Behaviour refers to relationships among

these parties, the communication between
them, styles they adopt.

Substance means what parties negotiate

over, the agenda, the issues, the options, and
agreements reached.
Second approach.
involves 4 basic elements.
strategy, processes and tools, tactics ,
persuasion and influence.

Strategy involves the top level goals.

Precesses comprise the steps followed .

Tactics include detailed statements and

actions and responses to others statements
and actions.

persuasion include convincing and

dominating skills. Skilled negotiators may use
a variety of tactics ranging from negotiation
bypnosis, to a straight forward presentaion of
demands or setting preconditions to more
deceptive approaches to bring about the
settlement through negotiations.

Third approach.
This is bad guy / good guy tactic. When one
negotiator acts as a bad guy by using anger
and threats. The other negotiator act as a
good guy by being considerate. The good guy
blames the bad guy for all the difficulties
while trying to get concessions and
agreement from the opponet.

Ten new rules of global negotiations.

Advocated by Hernandez and Graham.
1.Accept only creative outcome.
2.Understand cultures especially your own.
3. Don’t adjust to cultural difference, exploit
them.
4. Gather the intelligence and reconnoiter the
terrain.
5. Design the information flow and process of
meetings.
6. Invest in personal relationships.
7. persuade with questions, seek information
and understanding.
8. make no concessions until the end.
9. use techniques of creativity.
10. continue creaivity after negotiations.

Styles of negotiations: page 444

Styles used during a negotiation depends on
the context and the interests of the other
party, among other factors. Styles can change
over time also.
Five styles of negotiations:
Accommodating.
Avoiding.
Collaborating.
competing.
Compromising.
Forcing.
Smoothing.
confronting.
Confronting : in this style or strategy, the
negotiator participant faces the conflict head-
on and aims at a solution that is mutually
satisfactory. The negotiator strives to find a
solution that is acceptable to both sides, this
style tries to maximise the outcomes for both
the sides.

of the five negotiating strategies the

confronting strategy is viewed as the best
one. It is a strategy that really seeks a solution
to the conflict.

Benefits of contronting approach:

1. it is productive since both sides gain.

2. it seeks a creative solution by ascertaining
correctly the cause of differences.
3. it aims at a solution that integrates the
interest of both.
4. it maintains self respect of both and
creates mutual respect between them.

Strategies in Negotiation. Page 447.

following strategy must be applied.
1. needs of both parties should be explored.
2. progressive needs of parties considered.
3. objectives may need tobe reviewed.
4. Tactical ploys may need to be used.
5. concessions may have to be given out.
6. settlement to be agreed and recognised.
7. agreement needs to be documented.
Advantages and disadvantages :
page 448.
1. precedurally it is most flexible form of
dispute settlement.
2. it involves only the parties interested.
3. parties are free to negotiate as per their
needs.
4. it ensures negotiation with all parties.
5. safeguards are available to prevent
inequities in the bargaining process.
6. in negotiation chances of reaching an
agreement is more.
So negotiation is referred to as a win-win-
approach.
7. it is a voluntary process so no compulsion
to participate by anybody.
8. privacy in dispute is protected.
9. negotiation binds only the parties.
10. The consequent agreement is reflective of
the interest of all.
11. it preserves relationships.
12. less expensive.

Disadvantages:
if viewpoints of parties is too distant solution
is far away.
there is some die-hard bargainers who
prolong decisions.
Lack of trust of negotiators by other party will
not help reach a solution.
Informational vacuums which leads to
dilemma.
cultural and gender differences may block
progress.
communication problem is another
disadvantge.
Emotions like anger pride guilt regret worry
of the negotiators affect the success of
negotiation.

Phases of negotiation:
page 451.
preparation of gathering information.
Sharing of information.
Bargaining.
Conclusion of negotiation.

Qualities and qualification :

planning skill.
Ability to think clearly under stress.
Common sense, general practical intelligence.
Verbal ability.
product knowledge.
personal integrity.
ability to perceive and exploit power.
Other qualities:
risk taking, goal striving, capacity for
initiative, team leadership, open mindedness.
Patience, trust, compromising, verbal clarity,
warm rapport, gain opponents respect,
ethical standard, analytical ability,
decisiveness, negotiating experience,

Power of negotiator.
page 454.
Title power-if he is qualified then he has the
title power.
Position:
His formal position as negotiator in an
organistion confers power. Example if a
negotiator is a marketing manager, then he
can influence and win negotiations taking
place.
Knowledge or expertise.
Character.
Reward and punishment.
Behaviour style.
Reverent power.
charismatic power.
expertise power.
situation power.
Information power.

Qualities to become a powerful negotiator.

page 456
Knowing thyself.
Doing hardwork.
Practice Double and triple thinking.
..anticipate what other party wants. This is
called double thinking. A smart negotiator will
try to anticipate what other party think about
the first party. This is called triple thinking.
Building trust.
Develop external listening.
He must not think internally lest he should
miss the important non verbal messages,
facial expressions.
Asking questions to uncover the needs or
interest of the other party.
keep up own confidence.
know what he want or what a win is.
…settlement range.
Enjoy the process.

Negotiation and Arbitration:

page 460.
Both are forms of ADRS.
Both are private , speedy, less costly, and
ensure confidentiality.

differ in functions and the people who play a

part in the processes.

In arbitration an arbitrator is appointed by

both parties while a facilitator oversees a
negotiation.

in arbitration the arbitrator decides the

award. In negotiation the parties decides
themselves with the help of a negotiator.

The result of negotiation is called a

memorandum of agreement. This document
is not as legally binding as an award.
An award cannot be appealed to a court. A
court can question or overturn a
momorandum of agreement.

Arbitrators are usually lawyers , whereas this

may not be the case with facilitators.

Types of negotiation. Page 462.

1. Distributive negotiation.
2. Integrative negotiation.

END UNIT-4
 UNIT-5.
MEDIATION.
page 466.
Syllabus: Meaning - Qualities - Role -
Characteristics - Voluntary, collaborative,
controlled,confidential, informal, impartial
and neutral, self responsbile - models of
mediation - code of conduct for mediators.

Mediation is a structured negotiation carried

out with the assistance of a neutral third
party called the Mediator.

Mediation is now being used extensively for

commercial cases and high values.

it is one of the most preferred dispute

resolution mechanism where conventional
negotiatiions have failed.

Mediation is inexpensive and can be

deployed even where there is point of law.

court proceedings, arbitrations and

adjudication, only these methods have
jurisdiction to decide legal entitlements, and
hence are largely confined to making
monetary awards.

Mediation on the other hand permits

solutions aimed at the commercial interest of
parties.

Entire mediation process is confidential.

Qualifications of mediator:
Must have mediation training and
experience.
Mediator need not have the field knowledge,
if yes it is good.

Mediation service providers will help in the

event of not getting any mediators.

Role of Mediator in the process.

His role is only to facilitate the negotiations
between the parties.

Mediator does not decide anything, and does

not usually express his views on the strengths
or weakness of any party's position.

The parties can speak to the mediator in

complete confidence.

The mediator offers the potential solutions

which the parties themselves might not have
expected.

The interest of the parties rather than their

legal rights will dominate the process.

Procedure of Mediation Process.

page 469.
Preparation stage.
each party prepares a brief written summary
of his position with the key supporting
documents. These are exchanged between
the parties and sent to the mediator before
mediation.

The parties must enter into a written

mediation agreement once the details of the
mediation like place, time, name of mediator
have been agreed.

Process stage:
Mediation is not having any fixed procedural
rules. It is flexible.
Procedural format is as follows:
There is a written mediation agreement
between the parties creating obligations of
confidentiality on the participants and stating
that the mediation is ' without prejudice'
At the opening of the meeting each party
biefly set out its position.
Then followes a series of meeting of
confidential nature between the mediator
and each of the teams.
Then lead to joint meeting between some or
all of each party.
This dispute is broken down to details for
easy solution.
if a settlement is made then it is reduced to
writing and signed.
The period of mediation may be a minimum
of one day and maximum one month.
Essential characteristics of mediation
process.
Collaborating, controlled, confidential,
informal, impartial, and neutral, self-
responsible.

The process of mediation should be voluntary

participation by the parties.
No force is to be exerted on them.

mediator helps them arrive at a settlement.

if any settlement is arrived at by the parties
they record the decision.

Collaborating.
Tough problems shall be sorted out in a
creative approach to it by the
collaborators/mediators.
Controlled.
Parties control the procedure of mediation.
Not the mediators. It is non binding and it
depend upon their choice to fix a mediator.
Parties cannot be forced to accept the
decision.

confidential.
The procedure of mediation is confidential.
Informal procedure.
The procedure of mediation is an informal
one and no strict procedure is fixed by law.
The parties are free to arrive at a conclusion.
Medial process impartial and nuetral.
The parties themselves are responsible for
their decisions, as the mediator is only aiding
them to come to a conclusion and it is not
mediators decision at the outset.

Models of mediation:
page 474.
1. Faciliatative mediation
2. Evaluative mediation.
3. Transformative mediation.
4. Narrative mediation.
5. Bargaining mediation.
6. Theraphy mediation.

Facilitative.
Mediator just facilitates a decision.
Evaluative.
Legal practitioners offers this type of
mediation. They evaluate the pros and cons
of the case in a legal manner. They advice as
to the legal hurdles if opt to go legal way.
Transformative mediation.
There is no structure of mediation. It is more
of an impersonal and mediator empower the
parties to take their own decision.
Narrative mediation.
It is a different mode of mediation. An
entirely new approach is adopted. The
parties narrate their version of dispute story
and mediator can learn a lot from it including
the nature of parties.
The mediator tell an alternative story which
help the parties to understand the situation
in a better manner.
Bargaining mediation.
It is a voluntary process. Also known as
collective bargaining process.
Points of issue are clarified by the mediator,
generating options , exploring alternatives,
keeping talks moving, making suggestions,
Therapy mediation.
It is adolescent mediation. It is applied to
prevent family breakdown by working
directly with young people and their families
or caregivers to resolve conflict and improve
relationships.

Qualities, Duties and Responsibilities of

Mediator. Page 480.
The mediators personal conduct becomes
important as he is holding a post of
confidence and requires efficiency in
conducting the mediation.

Most important code of conduct for mediator

OR qualities and qualifications :

He has to be neutral.
He must inform the process of mediation to
parties so that they may be prepared.
He should preserve utmost confidentiality.
He must attend mediation training
continuosly.
He should be unbiased and impartial.
He should specialise in his field.
He should help parties get legal advise if
needed.
He should take care of psychological and
physical well being of all the participants.

Advantages and disadvantages .

It is less costly.
most mediations completes in one or two
days.
Time saving.
preparation for mediation is simpler.
Advocates are not needed.
Mediation is fast moving process than court
litigation.
In mediation parties are free to talk whereas
in litigation only lawyers can speak.

Mediation allows the parties to work

together in a higher spirit than before.

After settlement if other matters come for

solution, a new mediation can be set up.

Mediation is so informal that parties can

reschedule them in any way.

Mediation is a private affair and not subject

to public knowledge and media attention.

There is generally no appeal as in other ADRS

methods.
Mediation do not effect any incidental
problems usually seen with other court
decided cases.

Risk of unfavourable awards are avoided as

mediation is very informal.

Disadvantages:
does not always result in settlement
agreements.
If mediation fails, subsequent personal
equations will aggravate.
No legal precedent.
No formal discovery process, every aspect of
mediation is informal.
No formal rules of procedure.

END OF UNIT-5.