Source: http://peractolegal.com/arbitration-and-conciliation-act-1996/
Timestamp: 2019-04-20 20:34:50+00:00

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Provided that Parts I, III and IV shall extend to the State of Jammu and Kashmir only in so far as they relate to international commercial arbitration or, as the case may be, international commercial conciliation.
Explanation.—In this sub-section, the expression “international commercial conciliation” shall have the same meaning as the expression “international commercial arbitration” in clause (f) of sub-section (1) of section 2, subject to the modification that for the word “arbitration” occurring therein, the word “conciliation” shall be substituted.
1. Came into force on 22-8-1996 vide G.S.R. 375 (E), dated 22nd August, 1996.
(4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.
(7) An arbitral award made under this Part shall be considered as a domestic award.
(b) in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement.
Where at least one of the parties is an individual having nationality of another country other than India or a body corporate which is incorporated in any country other than India or an association or a body of individuals whose central management and control is exercised in any country other than India or the government of a foreign country, the same would be a case of international commercial arbitration. The respondent here in is a body corporate which is incorporated in a country other than India and therefore, in terms of the aforesaid definition the present admittedly is a case of international commercial arbitration; Dominant Offset Pvt. Ltd. v. Adamovske Strojirny A.S., 1997 (2) Arb LR 335.
3. Receipt of written communications.
(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee’s last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.
(b) any requirement under the arbitration agreement,has not been omplied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.
In the present case, it was held that courts in India have no power to issue interim order under section 9 of the Act in the matter when arbitration is held at a place outside India. If court is not having jurisdiction to pass any interim order, in such cases, inherent powers not to be exercised, to confer jurisdiction upon itself. To exercise any inherent power court must have jurisdiction over the proceedings before it; Marriat International Inc. v. Ansal Hotels Ltd., 2000 (3) Arb LR 369.
(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
The arbitrator is competent to decide the objection on its own jurisdiction whether appointed as per the terms of the agreement within the provisions of section or appointed under the provisions of section 11; State of Jharkhand v. R.K. Construction (Pvt.) Ltd ., AIR 2006 Jhar 98.
(i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and an willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement. While there is no specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement.
(ii) Even if the words ‘arbitration’ and ‘arbitral tribunal (or arbitrator)’ are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settle­ment of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are: (a) The agreement should be in writing, (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal, (c) The private tribunal should be empow­ered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them.
(iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to Arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to set­tlement of disputes, contains words which specifically ex­cludes any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agree­ment, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the Authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the Authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement.
(iv) But mere use of the word ‘arbitration’ or ‘arbitrator’ in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as “parties can, if they so desire, refer their disputes to arbitration” or “in the event of any dispute, the parties may also agree to refer the same to arbitration” or “if any disputes arise between the parties, they should consider settlement by arbitration” in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that “if the parties so decide, the disputes shall be referred to arbitration” or “any disputes between parties, if they so agree, shall be referred to arbitration” is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitra­tion as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agree­ment to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future; Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719.
may be commenced or continued and an arbitral award made.
It is not duty of court to adjourn a matter to enable parties to report to court about appointment of Arbitrator and then make reference; Pawan Sharma v. Tarkeshwar Shah, AIR 2007 (NOC) 156 (HP).
The expression ‘first statement on the substance of the dispute’ contained in sub-section (1) of section 8 must be contra-distinguished with the expression ‘written statement’. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, needed is a finding on the part of judicial authority that the party has waived his right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the dispute, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction of the court; Rashtriya Ispat Nigam Ltd. v. Verma Transport Company, AIR 2006 SC 2800.
(i) The language of section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator; P. Anand Gajapathi Raju v. P.V.G. Raju (Dead), 2000 (4) SCC 539.
(ii) Mere existence of arbitration clause in agreement does not bar jurisdiction of Civil Court automatically; Mahesh Kumar v. Rajasthan State Road Transport Corporation, AIR 2006 Raj 56.
Power of Court to refer parties for arbitration would and must necessarily include, imply and inhere in it the power and jurisdiction to appoint Arbitrator also; Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., Kochi, AIR 2007 (NOC) 233 (Ker).
Scope and object of section 8 of the Arbitration and Conciliation Act, 1996 and section 34 of the Arbitration Act, 1940 is different. Therefore, these two respective provisions of different Acts have no application to deprive the party of the legitimate right to invoke section 8 of the Arbitration and Conciliation Act to have the matter relating to the disputes referred to arbitration, in terms of the arbitration agreement; Kalpana Kothari v. Sudha Yadav, AIR 2001 SC 404.
(e) such other interim measure of protection as may appear to the court to be just and convenient,and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.
A party or a person is entitled to interim protection if action of the other party is either in breach of the terms of the agreement or militates against equity, fair play or natural justice, otherwise not; Baby Arya v. Delhi Vidyut Board, AIR 2002 Del 50.
Pendency of any arbitral proceedings is not a pre-condition for exercise of power by court. The court may grant interim relief before or during arbitral proceedings or at anytime after making of the arbitral award but before it is enforced; Globe Cogeneration Power Ltd. v. Sri Hiranyakeshi Sahkari Sakkere Karkhane Niyamit, AIR 2005 Kant 94.
Section 9 of the Arbitration and Conciliation Act, 1996, only deals with the interim measure by the court. Obviously it is not within the scope of this section to inquire into the claim and the counter-claim made by both the parties in regard to the custody of the articles beyond what has been admitted by the respondent; Narain Sahai Aggarwal v. Santosh Rani, 1997 (2) Arb LR 322.
The parties are at liberty to determine the number of arbitrators, but such number shall not be an even number. If the parties fail to provide for an odd number of arbitrators, the arbitral tribunal shall be constituted by a sole arbitrator; Sri Venkateshwara Construction Co. v. Union of India, AIR 2001 AP 284.
In the present case, a contract between the two parties M and S provided that each party shall nominate one arbitrator and the two arbitrators shall then appoint an umpire before proceeding with the reference. S invoked arbitration clause and appointed an arbitrator under the agreement after the 1996 Act came into force. It was contended by the M that the arbitration agreement provided for the appointment of two arbitrators while section 10(1) of the 1996 Act does not envisage the appointment of an even number of arbitrators and that the only remedy in such a case was by way of suit and not by arbitration. The Supreme Court held that there is nothing in section 7 to indicate the requirement of the number of arbitrators as a part of the arbitration agreement. Thus the validity of an arbitration agreement does not depend on the number of arbitrators specified therein. The number of arbitrators is dealt with separately in section 10 which is a part of machinery provision for the working of the arbitration agreement. It is, therefore, clear that an agreement specifying an even number of arbitrators cannot be a ground to render the arbitration agreement invalid under the 1996 Act. In view of the term in the arbitration agreement that the two arbitrators would appoint an umpire, the requirement of section 10(1) was satisfied. In other words, the arbitration agreement was not for an even number of arbitrators and section 10(2) was not attracted. The arbitration agreement was deemed to be one providing for three arbitrators; M.M.T.C. Ltd. v. Sterlite Industries (India) Ltd., AIR 1997 SC 605.
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final.
(10) The Chief Justice may make such scheme1 as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to ‘‘Chief Justice’’ in those sub-sections shall be construed as a reference to the ‘‘Chief Justice of India’’.
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court.
As per the Webiters Dictionary ‘A party’ in context of legal affairs is one of the litigants in legal proceeding, the plaintiff or defendant or a signatory to a legal instrument.
The Chambers Dictionary defines ‘a party’ as each of the individuals or groups concerned in a contract agreement, law suit, etc.
As per Oxford Dictionary the word ‘parties’ refers to a person or persons forming one side in an agreement or dispute.
Whartons Law Lexicon, 14th edition defines the word ‘parties’ as persons jointly concerned in any deed or act; litigants.
As per Oxford Dictionary the word ‘agreement’ means an arrangement between the parties as to a course of action.
As per Wharton’s Law Lexicon ’agreement’ means a consensus of two or more minds in anything done or to be done.
Chambers Dictionary describes the word ‘agreement’ as a contract or term; a joint decision made after discussion.
Exercise of discretion for appointment of same arbitrator even after forfeiture of right is improper; Suri Constructions v. State of Rajasthan, AIR 2006 Raj 53.
It is well settled that where an arbitrator is named in the arbitration agreement, the provisions of section 11 of the Act are not attracted and the court will not have jurisdiction to try and decide the petition filed by party for appointment of another arbitrator; Kamla Solvent v. Manipal Finance Corpn. Ltd., AIR 2001 Mad 440.
Under section 11, there is no provision fixing any time limit except under sub-section (5) which provides the time limit of 30 days from the receipt of the request from the party for appointment of an arbitrator. Under sub-section (6) no such time limit have been fixed. It is required under the procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment; Ansal Properties & Industries Ltd. v. Himachal Pradesh State Electricity Board, AIR 1997 Arb LR 11.
The existence of the arbitration clause and the validity of reference shall only be decided by the Arbitrator. It is also within the domain of the Arbitrator to decide whether the claim of the petitioner has already been settled on full satisfaction; Navratandas & Co. (P) Ltd. v. Tata Iron & Steel Co., AIR 2006 Jhar 7.
1. See Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, published in the Gazette of India, Extra., Pt. III, Sec. 1, dated 16th May, 1996.
(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.
1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.
(2) If a controversy remains concerning any of the grounds referred to inclause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.
During pendency of arbitration, civil court has no jurisdiction to entertain petition and decide nature of objections raised therein. Questions can be raised before and decided by arbitrator; State of Jharkhand v. Himachal Construction Co. Pvt. Ltd., AIR 2006 NOC 249 (Jhar).
The Arbitrator himself in exercise of power conferred on him by or under section 16 can decide the question whether or not the arbitration clause in question was scored out at the time of agreement between the parties and as such, whether or not he has jurisdiction to decide the matter or adjudicate the dispute; State of Orissa v. Surendranath Kanungo, AIR 2004 Ori 153.
(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.
(2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).
(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
Section 21 of the Act lays down that unless and otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by respondent; Y. Parthsarthy v. G.M., Railway Electrification, Allahabad, 1997 (2) Arb LR 347.
(4) The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.
Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.
(3) All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.
(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.
(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.
(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.
(6) In this section the expression “Processes” includes summonses and commissions for the examination of witnesses and summonses to produce documents.
(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.
(3) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.
(2) Notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.
Where the arbitrator has awarded interest from the date of the award till the date of payment, disallow interest from the date of the decree or determine a different rate at which the interest is to be paid or confirm the grant of interest as awarded in the award. In the instant case, the arbitrator is entitled to grant pre-reference, pendente lite and future interest, however, the claimant did not claim any pre-reference interest in proceedings before the arbitrator in the present facts and circumstances could not have granted interest from the date the arbitrator entered upon the reference by sending notice to the claimant and respondent on 26-4-1991 to the date of award at the rate of 15% p.a. on the amounts awarded; State of Orissa v. B.N. Agarwal, AIR 1997 SC 925.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.
(iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award.
Arbitrator has power to award interest at all four stages. It was held that the direction to pay interest from date of award cannot be faulted under section 31(7); T.P. George v. State of Kerala, AIR 2001 SC 816.
It is seen that by express agreement between the parties, arbitrability of the claim for refund of the hire charges was referred to arbitration and T came to be appointed as arbitrator and entered upon that reference. But when claim was made, he enlarged the dispute unilaterally without there being any agreement by the appellant. Infact they objected to the enlargement of the scope of the arbitration. Since arbitrator went on adjudicating the disputes, they were left with no option but to participate in the proceedings as the claims were pressed for and parties submitted to the jurisdiction of the arbitrator. Therefore, it did not amount to acquiescence. The arbitrator went out of their way to declare that whatever amount in addition was due from respondent No. 1 upon the bahikhatta account was remitted having regard to his labour and poverty and the whole unspecified amount found due against respondent No. 2 was remitted in full in view of his labour and poverty. It was contended that the award was decided outside the authority of the arbitrators. It was held that the arbitrators had clearly misdirected themselves and had exceeded the scope of their authority and the award was, therefore, set aside; Union of India v. G.S. Atwal & Co., AIR 1996 SC 2965.
Explanation.—Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.
The arbitration court cannot interfere with the award on the ground that the award is erroneous if the award is otherwise proper. It is not open to the arbitration court to re-appreciate reasonableness of reasons in the arbitral award; Union of India v. Pam Developments P. Ltd., AIR 2004 NOC 353 (Cal).
The award made by the arbitrator was partially vitiated on account of overlooking the contents of the document brought to his notice and therefore, to that extent the award should have been modified by the High Court. Virtually allotment of land was not in recognition of any statutory entitlement but was only by way of compassion; State of Karnataka v. Siddaiah, AIR 2001 SC 397.
Where an arbitrator passed a non-speaking award granting certain lumpsum amount and award did not contain any decision or arbitrability of the claims, such award is liable to be set aside; Tamil Nadu Electricity Board v. Bridge Tunnel Constructions, AIR 1997 SC 1376.
While considering legality and validity of award, High Court cannot substitute its own findings as if sitting in appeal over award. High Court has no jurisdiction to interfere with award; Ram Prasad Sharma v. Jharkhand State Housing Board, AIR 2006 NOC 258 (Jhar).
It is axiomatic that the arbitrator being a creative of the agreement must operate within the four corners of the agreement and cannot travel beyond it. More particularly, he cannot award any amount, which is ruled out or prohibited by the terms of the agreement. In the present case, the agreement between the parties clearly says that in measuring the built up area, the balcony areas should be excluded. The arbitrators could not have acted contrary to the said stipulation and awarded any amount to the appellant on that account; New India Civil Erectors (P) Ltd. v. Oil and Natural Gas Corporation, AIR 1997 SC 980.
The right to file an application under section 34 to set aside an award is statutory and the same is unconditional and unqualified; The Supdtg. Engineer (Highway & Rural Works), Chennai v. D.G. Deivasigamani, AIR 2005 Mad 59.
Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
Forum of appellate court must be determined with reference to definition of court in section 2(1)(e) of the Act. If a High Court does not exercise the original Civil Jurisdiction, it would not be a ‘Court’ within the meaning of the said provision; Pandey & Co. Builders Pvt. Ltd. v. State of Bihar, AIR 2007 SC 465.
A second appeal against the order of arbitral tribunal is not maintainable under this section; Cref Finance Ltd. v. Puri Construction Ltd., AIR 2001 Del 414.
39. Lien on arbitral award and deposits as to costs.
(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.
(1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the deceased or as respects any other party, but shall in such event be enforceable by or against the legal representative of the deceased.
(1) Where it is provided by a term in a contract to which an insolvent is a party that any dispute arising thereout or in connection therewith shall be submitted to arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far as it relates to any such dispute.
(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall be submitted to arbitration in accordance with the arbitration agreement, and the judicial authority may, if it is of opinion that, having regard to all the circumstances of the case, the matter ought to be determined by arbitration, make an order accordingly.
(3) In this section the expression “receiver” includes an Official Assignee.
Application for execution proceedings made at place D, residing place of judgment debtor, while award was passed at place I. Held that decree cannot be executed unless and until court at place I transfer decree to court at place D; Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal, AIR 2006 MP 34.
Section 42 provides that notwithstanding anything contained elsewhere in this part or in any other law for the time being in force, where with respect to an arbitrator agreement any application under this part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court. As already stated in the present case that the petitioner-company is a consortium partner with S Co. and L&T Ltd. and the three companies are equally liable and the contracts were executed by S as the leader of the consortium. The Bank guarantees which are subject matter before the High Court of Delhi. The leader of consortium S had already approached the High Court of Delhi as such according to section 42, all subsequent applications arising out of the arbitration agreement and arbitral proceedings shall have to be made in the High Court of Delhi and no other Court had jurisdiction to entertain such applications. Thus, the Court of the District Judge; Jaipur City had no jurisdictions to entertain the application submitted under section 11(6) read with section 8; Sirojexport Co. Ltd. v. Indian Oil Corpn. Ltd., AIR 1997 Raj 120.
(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in Court.
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.44. Definition.—In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960— (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.
In the absence of any serious challenge to the commercial contract or to the arbitration agreement, it has to be found that the agreement was valid, operative and capable of being performed and that there are disputes between the parties with regard to the matters agreed to be referred to arbitration; State of Orissa v. Klockner & Co., AIR 1996 SC 2140.
A judicial authority does not have discretion for refusing to refer the parties to arbitration. Section 45 of the 1996 Act uses the mandatory expression ‘shall’ and makes it obligatory upon the judicial authority to refer the parties to arbitration, if conditions specified therein are fulfilled. Stay of suit is mandatory if the conditions specified in section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 are fulfilled; State of Orissa v. Klockner & Co., AIR 1996 SC 2140.
Explanation.—In this section and all the following sections of this Chapter, “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.
An application for enforcement of award accompanied by Xerox copy of original award certified to be true copy by International Chamber of Commerce was filed and subsequently before delivery of judgment the said copy was duly authenticated as required under law, it was held that it would not be said that the application was made without the original award or the copy of the award; Renusagar Power Co. Ltd. v. General Electric Co., AIR 1985 SC 1156.
Explanation.—Without prejudice to the generality of clause (b) of this section, it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.
(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.
An interim award was made at London by an arbitral tribunal constituted by the international Chamber of Commerce. The agreement was made at New Delhi and agreement was governed by the law in force in India. Court held that the law expressly choosen by the parties in respect of all matters arising under their contract, which must necessarily include the agreement contained in the arbitration clause, being Indian law and the exclusive jurisdiction of the courts in Delhi having been expressly recognised by the parties to the contract in all matters arising under it, and the contract being most intimately associated with India, the proper law of arbitration and the competent courts are both exclusively Indian, while matters of procedure connected with the conduct of arbitration are left to be regulated by the contractually chosen rules of the ICC to the extent that such rules are not in conflict with the public policy and the mandatory requirements of the proper law and of the place of arbitration; National Thermal Power Corpn. v. Singer Co., AIR 1993 SC 998.
For enforcement of a foreign award, there is no need to take separate proceedings such as one for deciding enforceability of award to make rule of court or decree and other to take up execution thereafter; Fuerst Day Lawson Ltd. v. Jindal Export Ltd., AIR 2001 SC 2293.
A foreign award will not be enforced if it is proved by the party against whom it is sought to be enforced that the parties to the agreement were, under the law applicable to them, under some incapacity, or, the agreement was not valid under the law to which the parties have subjected it, or, in the absence of any indication thereon, under the law of the place of arbitrations; or there was no due compliance with the rules of fair hearing; or the award exceeded the scope of the submission to arbitration; or the composition of the arbitral authority or its procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the place of arbitration; or the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority or the country in which, or under the law of which, that award was made. The award will not be enforced by a court in India if it is satisfied that the subject matter of the award is not capable of settlement by arbitration under Indian law or the enforcement of the award is contrary to the public; National Thermal Power Corpn. v. Singer Co., AIR 1993 SC 998.
Before proceeding to execute a foreign award as a decree of a court, the court is required to record its satisfaction that such a foreign award is enforceable. This, however, does not mean that court cannot pass any interim order in order to protect interest of person applying for enforcement and execution of a foreign award; Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., AIR 2004 Cal 142.
Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
Explanation.—Without prejudice to the generality of clause (e), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.
(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be, after it is made before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.
By section 85 of the Act of 1996, the earlier Act of 1940 was repealed and the only exception is provided in sub-section (2) of said section where a proceeding which had commenced when the Act of 1940 was in force and continued even after coming into force of Act of 1996 and all the parties thereto agreed that the old Act of 1940 shall apply to the said proceeding. Where the agreement was made in the year 2000, and the suit filed in the year 2003 when the Act of 1940 had already been repealed by the Act of 1996, parties cannot take the help of the exception provided in sub-section (2) of the Act of 1996; Rajan Kumar Verma v. Sachchidanand Singh, AIR 2006 Pat 1.
The foreign award given after the commencement of the Arbitration and Conciliation Act, would be governed by that Act, although the proceedings of arbitration had commenced prior to enforcement of the Arbitration and Conciliation Act, 1996; Fuerst Day Lawson Ltd. v. Jindal Export Ltd., AIR 2001 SC 2293.
(2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance, shall be deemed to have been made, done or taken under the corresponding provisions of this Act.
1. Each Contracting State shall recognise an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of defined legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.
3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative and incapable of being performed.
If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.
1. This Convention shall be open until 31st December, 1958 for signature on behalf of any Member of the United Nations and also on behalf of any other State which is or hereafter becomes member of any specialised agency of the United Nations, or which is or hereafter becomes a party to the Statute of the International Court of Justice, or any other State to which an invitation has been addressed by the General Assembly of the United Nations.
2. The Secretary-General of the United Nations shall transmit a certified copy of this Convention to the States contemplated in article XIII.
4. The Tribunals of the Contracting Parties, on being seized of a dispute regarding a contract made between persons to whom Article I applies and including an Arbitration Agreement whether referring to present or future differences which is valid in virtue of the said article and capable of being carried into effect, shall refer the parties on the application of either of them to the decision of the Arbitrators.
5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who shall notify such deposit to all the Signatory States.
7. The present Protocol may be denounced by any Contracting State on giving one year’s notice. Denunciation shall be effected by a notification addressed to the Secretary-General of the League, who will immediately transmit copies of such notification to all the other Signatory States and inform them of the date on which it was received. The denunciation shall take effect one year after the date on which it was notified to the Secretary-General, and shall operate only in respect of the notifying State.
8. The Contracting States may declare that their acceptance of the present Protocol does not include any or all of the under-mentioned territories: that is to say, their colonies, overseas possessions or territories, protectorates or the territories over which they exercise a mandate.
Article 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.
(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon.
If the award has not covered all the questions submitted to the arbitral tribunal, the competent authority of the country where recognition or enforcement of the award is sought can, if it thinks fit, postpone such recognition or enforcement or grant it subject to such guarantee as that authority may decide.
Article 3.—If the party against whom the award has been made proves that, under the law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and (c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.
A translation of the award and of the other documents mentioned in this Article into the official language of the country where the award is sought to be relied upon may be demanded. Such translations must be certified correct by a diplomatic or consular agent of the country to which the party who seeks to rely upon the award belongs or by a sworn translator of the country where the award is sought to be relied upon.
Article 5.—The provisions of the above Articles shall not deprive any interested party of the right of availing himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.
Article 6.—The present Convention applies only to arbitral awards made after the coming into force of the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923.
Article 7.—The present Convention, which will remain open to the signature of all the signatories of the Protocol of 1923 on Arbitration Clauses, shall be ratified.
It may be ratified only on behalf of those Members of the League of Nations and Non-Member States on whose behalf the Protocol of 1923 shall have been ratified.
Article 8.—The present Convention shall come into force three months after it shall have been ratified on behalf of two High Contracting Parties. Thereafter, it shall take effect, in the case of each High Contracting Party, three months after the deposit of the ratification on its behalf with the Secretary-General of the League of Nations.
Article 9.—The present Convention may be denounced on behalf of any Member of the League or Non-Member State. Denunciation shall be notified in writing to the Secretary-General of the League of Nations, who will immediately send a copy thereof, certified to be in conformity with the notifications, to all the other Contracting Parties, at the same time informing them of the date on which he received it.
The denunciation shall come into force only in respect of the High Contracting Party which shall have notified it and one year after such notification shall have reached the Secretary-General of the League of Nations.
The denunciation of the Protocol on Arbitration Clauses shall entail, ipso facto, the denunciation of the present Convention.
Article 10.—The present Convention does not apply to the colonies, protectorates or territories under suzerainty or mandate of any High Contracting Party unless they are specially mentioned.
Article 11.—A certified copy of the present Convention shall be transmitted by the Secretary-General of the League of Nations to every Member of the League of Nations and to every Non-Member State which signs the same.

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