Introduction
The UNCITRAL Model Law which was passed in the year of 1985, by the United Nations
Commission on International Trade Law (UNCITRAL), made a significant contribution in
passing The Arbitration and Conciliation Act, 1996 in India. While adopting the Model Law,
United Nations General Assembly had recommended that all countries had to give due
consideration to the said Model Law for the purpose of uniformity of the law related to
international commercial arbitration and conciliation. In this regard, India has passed The
Arbitration and Conciliation Act, 1996.
The Arbitration and Conciliation Act, 1996
This Arbitration and Conciliation Act consolidates all the laws relating to domestic arbitration,
international arbitration, enforcement of foreign awards in India. The Arbitration and Conciliation
Act also defines the law related to conciliation and other matters related therewith. This
Arbitration and Conciliation Act has become very beneficial for both consumers and businesses
to ensure cost-effective solutions to their dispute without any undue delay and unreasonable
harassment. The main reason for the passing of this Act is so that the parties become capable to
solve their dispute outside the court in the presence of an arbitrator appointed by themself.
Matters coming under the purview of the Arbitration and
Conciliation Act, 1996
Generally, it is considered that the matters which can be decided by the civil court all come
under the purview of this Arbitration and Conciliation Act, but this is not true. The matters
which are related to morality, status, and public policies are not generally referred to as
arbitration. However, the following matters can be referred to arbitration:
Cases related to the specific question of law,
Cases related to actual possession of the land,
Cases related to damages under any contract,
Cases related to disputes arising in any contract,
Cases under which pure question of law is arising out of contract,
Disputes of law and facts,
Cases related to winding up of a company.
Appointment of the Arbitrator (Section 10 and Section 11)
Section 10 of this Arbitration and Conciliation Act provides that parties have the power to decide
the number of arbitrators but such numbers shall not be an even number. However according to
Section 11, the parties are free to decide the procedure of appointment of arbitrator or arbitrators
in the arbitration agreement but when no such procedure is determined, then each party is
required to appoint one arbitrator and the two arbitrators so appointed must have to appoint the
third one. If the parties fail to appoint the arbitrator according to the above procedure within 30
days from the date of request made or the arbitrators appointed fail to agree on one person, any
party may request the Chief Justice to nominate an arbitrator to them. However, if the parties
have not agreed on the procedure of appointing one arbitrator or fails to agree on one person
within 30 days from the receipt of a request made by another party, the nomination shall be made
by the Chief Justice on the request of one of the parties. However, where an appointment
procedure has been agreed upon by the parties, but the parties fail to act as required, a party may
request the Chief Justice to nominate an arbitrator and then the decision of Chief Justice is final.
Powers of the arbitrator in an arbitration proceeding
The arbitrator is the one who will give the arbitral award, therefore, The Arbitration and
Conciliation Act, 1996 provides several powers to him in order to decide the award.
Power to administer an oath to the parties and witnesses
The arbitrator has the power to administer the oath to the parties and witnesses. He also could
issue interrogatories to the parties if he thought it necessary to do so. There is no express
provision relating to that power being given under The Arbitration and Conciliation Act, 1966.
However, it is implicitly applied to the fact that he acts like a quasi-judicial authority in
arbitration.
Power to take interim measures
According to Section 17 of this Act, when any party during the arbitration proceeding or at any
time after making of the arbitral award, may seek the interim measure before the arbitration
tribunal. The arbitration tribunal has the power to take an interim measure relating to:
Appointment of guardian for minor or person of unsound mind;
For the protection of:-
1. Interim custody and sale of goods which are subjected to the arbitration agreement;
2. Securing amount which is disputed in the arbitration;
3. Detention, prevention or inspection of any property or thing which is subjected to
arbitration;
4. Appointment of receiver;
5. Such other interim measure is necessary for the eyes of the Court.
Power to proceed to ex-parte
In any arbitration proceeding, the arbitrator has the power to proceed to ex-parte i.e in the favour
of one party if another party contravenes any provision of this Act. According to Section 25, there
are three conditions under which the court may pass an ex- parte award:
1. When the claimant fails to communicate his statement of claim in accordance
with Section 23(1) of the Act.
2. When the respondent fails to communicate his statement of claim in accordance with
Section 23(1) of the Act.
3. When any party fails to appear at an oral hearing or to produce the document or to
produce documentary evidence.
The court, however, doesn’t proceed ex-parte against any party without giving him the notice
regarding the court’s intention to proceed ex parte on a specific date, time and place.
Power to appoint an expert
According to Section 26 of the Arbitration and Conciliation Act, the arbitrator has the power to
appoint one or more experts to report to him on a specific issue, if he finds it necessary in any
case. The arbitrator also has the power to give the expert any relevant information or documents
or property for the purpose of his inspection. If necessary the arbitrator also has the power to
appoint the expert as a participant in a hearing but in order to appoint an expert, the expert must
have to show the parties that he has expertise in matters related to this case.
Power to make awards
Power to make awards is the most important power as well as the duty of arbitrators which is
given under The Arbitration and Conciliation Act, 1996. However, the rules applicable in an
arbitration proceeding is:
In matters related to international commercial arbitration, the arbitral dispute shall be
decided according to the rules of proceeding which is decided by the parties but if they
fail to decide it, then the arbitrator himself decides the rules which are applicable.
In other matters, the arbitral tribunal shall have to decide the rule which is in
accordance with the substantive law.
However, with such aforesaid power, at the time of making such an award, the arbitrator also has
the duty to consider the following necessary aspects:
The party who is entitled to costs;
The party who pays the cost;
The amount and method of determining those costs;
The manner in which the costs shall be payable;
The cost of the arbitration proceeding or any other expenses fixed by the arbitration
tribunal
If the number of arbitrators is more than one, then the decision must be signed either by all the
arbitrators or by the majority of them.
Duties of an arbitrator in an arbitration
In arbitration, the parties may impose specific duties on the arbitrator at the time of appointment.
The general duties which the arbitrator has to fulfil in all kinds of arbitration are-
Duties to be independent and impartial
Section 12 and Section 18 of The Arbitration and Conciliation Act, 1996 imposed an important
duty on the arbitrator that in any arbitration proceeding that he must have to be independent and
impartial. By being independent it means that there is no such personal or professional
relationship between the arbitrator or parties which may affect the final judgment, however, by
impartial, it means that the arbitrator should neither favor nor oppose any party and should give
equal treatment to both parties.
Duty to determine time and place of arbitration
According to Section 20 of this Act, it is the duty of the arbitrator to appoint the time and place of
arbitration if the parties have failed to decide it amongst themselves. But at the time of
determination, the arbitrator must keep in mind the circumstances including the convenience of
the parties. The arbitrator unless otherwise agreed by the parties, also has the power to decide
other places to hear the witness or expert or to an inspection of documents, goods, and other
property.
Duty to disclosure
According to Section 12 of this Act, there is an obligation on an arbitrator to disclose all the
relevant facts which are required to be known by both parties at the time of his first encounter
with them.
In the case of Steel Authority of India v. British Marine 2016, the Court said that the arbitrator
must have to disclose all such facts which are likely to affect impartiality or which might create
an appearance of partiality or bias.
Duty to effectively resolve the dispute
The arbitrator should have to make effective decisions without doing any misconduct. However,
there is no guideline of misconduct that is given under the Act, its scope is to develop by case to
case. The acts which are generally considered as misconduct on the parts of the arbitrator are:
Fails to comply with terms, that is expressly or impliedly given;
Making awards that oppose public policy;
To be bribed or corrupted;
Breach the rule of natural justice.
Duty to determine the rule of procedure
According to Section 19, the arbitration procedure is not bound by any code of procedure. Earlier
parties are free to agree on the procedure that may be followed by the arbitration tribunal, It
always depends upon the will of the parties but if they do not have any prior agreement on this,
then the arbitrator has all the power to decide the procedure for such a case. this power includes
the power to determine the admissibility, relevance, materiality or weight of any evidence.
Duty to interpret or correct the award
According to Section 33 of this Act, it is a duty of the arbitrator to correct or interpret the award
passed by himself within 30 days from the date of receipt:
A party with notice to another party may request arbitration tribunal to correct any
error like any typographical, computation, clerical, or any other error of similar nature;
A party with a notice to another party may request to interpret any specific part or
parts of the award.
In this section, the court also may correct any error of the award on its own initiative within thirty
days from the date of the arbitration award.
Conclusion
These general powers and duties are important for an arbitrator to conduct fair arbitration
proceedings, the arbitrator must also have to draw the checklist upon his specific duties given
under the agreement. These duties differ from case to case so for every particular case so it is
very impactful in every case.
Introduction to Conciliator
A conciliator in a conciliation proceeding is a neutral adjudicator whose role is to decide
on the course of the proceedings, aid the parties in reaching a settlement that is mutually
beneficial and to uphold and abide by the principles of fairness, neutrality, justice and
objectivity while striving to reach a settlement as well as during the course of the
decision-making process. The Arbitration and Conciliation Act, 1996 bestows upon the
conciliator certain responsibilities and provides for some guidelines that a conciliator has
to follow. Unlike mediation, the conciliator is pro-active in the conciliation process and
autonomy is allowed to him/her on certain grounds. However, that autonomy is limited
unlike arbitration. The various aspects of a conciliator's role in conducting the
conciliation proceeding has been discussed below:
According to section 63 of the Act, there could either be a sole conciliator or two or three
conciliators, according to the wishes of the parties. In case of more than one conciliator,
they shall work jointly and in cooperation with each other,
According to section 64 of the Act, to conduct the proceedings of the conciliation, the
parties may appoint the conciliator or conciliators, if there are more than one. When there
are three conciliators, the parties shall appoint the two conciliators and they, in turn, shall
appoint the third conciliator. In the second part, the Act stresses that the parties may take
the assistance of a third party or institution in regards to the appointment of the
conciliator/conciliators. Such party may directly appoint the conciliator or recommend
his/her name to the parties for appointment. The condition that has been attached to this
clause is that while making the appointment, such party or institution shall keep in mind
such considerations as are required to ensure the neutrality and independence of he
conciliator. Also, the section stresses upon the fact that the parties and the conciliators
should not be of th same nationality.
According to section 67 of the Act,
-the conciliator salientian his independence and impartiality and persuade the parties in
away to help them reach an amicable settlement.
-the conciliator should not only uphold the principles of of objectivity, fairness and
justice but should also keep in mind the rights and obligations of the parties and various
circumstances surrounding the dispute.
-the conciliator may conduct the proceedings of the case in a manner that is appropriate in
his opinion. However, he should consider the circumstances leading to the case and the
wishes of the parties or any other requests of the parties that are related to the subject of
the dispute and are reasonable in the eyes of the law.
-a settlement of the dispute can be proposed by the conciliator at any time when the
proceeding sae still in force. Any such settlement proposition need not be in writing or
accompanied by a statement of reasons, necessarily.
According to section 69 of the Act, the conciliator may communicate with the parties
orally or in writing. The communication could take place either individually or in groups
as suits the needs of the proceedings. The place of such meeting shall be decided by the
conciliator in consultation with the parties.
According to sections 70 ad 75, confidentiality should be ensured from the ends of both
the conciliator as well as the parties. No information should be passed on to a third party
except in cases of enforcement or implementation of the conciliation proceedings.
According to section 80 of the Act, a conciliator should not be an arbitrator or a
representative of the parties in any kind of legal proceedings in respect to a matter that is
subject of the dispute. He/she also cannot be presented as a witness for/against the parties
in any arbitral or judicial proceeding.
Difference between the role of Arbitrator and Conciliator
Alternative dispute resolution is a settlement of dispute between the parties, it provides a
confidential and alternative method of tackling the problems which avoids going to
courts. There are various methods of alternative dispute resolution like: Arbitration,
Conciliation, Mediation, Negotiation.
Arbitration: It is a process in which disputes resolve between the parties by appointing a
independent third party who is impartial and neutral person called arbitrator. Arbitrator
hear both the parties before arriving at a solution to their dispute.
Conciliation: It is a process in which disputes resolve between the parties by appointing a
conciliator who help (amicable) the disputed parties to arrive at a negotiated settlement.
Settling the dispute without litigation, it is informal process.He does by lowering
tensions, improve communication, interpreting issues, providing technical help.
Difference between Arbitration and Conciliation:
1.The person appointed for the process of arbitration is called arbitrator. Appointment of
Arbitrator is done under provision of section 11 of Arbitration and Conciliation act 1996.
While, the person appointed for the process of Conciliation is called conciliator.
Appointment of conciliator is done under the provisions of section 64 of Arbitration and
Conciliation act 1996.
2.An arbitrator has the power to enforce his decision.While, the person appointed to settle
the dispute don't have power to enforce the decision taken by him.
3.To settle the dispute through the process of arbitration, prior agreement is required.
While, to settle the dispute through the process of Conciliation no prior agreement is
required.
4. Arbitration is available for existing and future dispute as well but conciliation is
available for existing disputes only, it don't focus on the future dispute.
5. Arbitration is a legal proceeding while conciliation is not a legal proceeding.
Both arbitrator and concilator guiding by the principle of objectivity, fairness, and
justice. They conduct the proceedings in such a manner which consider appropriate.They
help to settle the dispute between the parties.
References:
https://blog.ipleaders.in/powers-and-functions-of-an-arbitrator-under-
arbitration-and-conciliation-act-1996/
https://www.lawyersclubindia.com/articles/Arbitrator-Qualifications-
Appointment-Powers-Dut
https://indiacode.nic.in/handle/123456789/1978
https://viamediationcentre.org/readnews/MTc2/Difference-between-
Arbitration-and-Conciliation#:~:text=Arbitrator%20hear%20both%20the
%20parties,arrive%20at%20
https://viamediationcentre.org/readnews/MTYy/ROLE-OF-THE-
CONCILIATOR-IN-A-CONCILIATION-PROCEEDING
