Objects of Previous Laws Replaced:

new Act  Replaces:

o Arbitration Act, 1940
o Arbitration (Protocol & Convention) Act, 1937
o Foreign Awards (Recognition & Enforcement) Act, 1961
Need for Reform:
 1940 Act considered outdated.
 Law Commission, trade bodies, and experts called for a modern, efficient
framework aligned with economic reforms.
UNCITRAL Model Influence:
 Based on UNCITRAL Model Law (1985) on International Commercial
Arbitration.
 Also incorporates UNCITRAL Conciliation Rules (1980).
 Aims to harmonize arbitration laws globally.
Purpose of the Act:
 Consolidate and modernize law relating to:
o Domestic Arbitration
o International Commercial Arbitration
o Enforcement of Foreign Awards
o Conciliation
Main  Cover both domestic and international arbitration/conciliation.
Objectives  Ensure fair, efficient arbitral procedure.
of the Act  Require reasoned (speaking) arbitral awards.
 Ensure tribunal remains within jurisdiction.
 Minimize court interference.
 Promote settlement through mediation/conciliation.
 Make final arbitral awards enforceable as court decrees.
 Treat conciliation agreements like arbitral awards.
 Recognize/enforce foreign awards under New York and Geneva
Conventions.

Arbitration [Section 2(1)(a)]

Arbitration means any arbitration, administered by a permanent arbitral institution or not.
Essential Ingredients of Arbitration:
1. Existence of a dispute between two or more parties.
2. Reference of the dispute to a third party (arbitrator).
3. Determination by arbitrator(s).
4. Judicial manner (both sides are heard).

Arbitration Agreement [Section 2(1)(b) r/w Section 7] Defined as an agreement to refer existing or
future disputes to arbitration.
Key Provisions of Section 7:
 May be part of a contract i.e arbitration clause or a separate agreement.
 Must be in writing, and can be:
o A signed document by parties
o Exchange of communication (letters, emails, etc.) which provide a record of the
agreement.
 o Exchange of Statements of claim and defence (existence of the agreement is alleged
by one party and not denied by the other.).
 Reference in a written contract to a document containing an arbitration clause also counts.

Essentials of a Valid Arbitration Agreement:

A. Valid and Binding Contract
 Must satisfy requirements under the Indian Contract Act.

B. Intention to Refer Disputes

 Must show clear intention (animus arbitrandi) to arbitrate and be bound by the award.
 Case law: K.K. Modi v. K.N. Modi – No clear intention, so not a valid arbitration agreement.

C. Present or Future Disputes

 Must relate to a dispute in existence or one that may arise.
 Delux Silk Traders v. M/s Satyanarayan – No actual dispute means no arbitration.

D. Must Be in Writing
 As per Section 7(3) and 7(4).
 Vaidya Hari Shanker case – Agreement inferred through conduct and signature on award.
 I.T. Classic Finance Ltd. v. Grapco Mining – Unsigned clause unenforceable.

Waverly Jute Mills vs Raymond and co. 1963 SC held that if Contract was illegal and void, An
Arb. Clause which was one of the terms, must also perish along it. And a dispute was relating to
validity of the contract was in such cases for the court and not for arbitrator.

What is not Arbitrable?

The Supreme Court in Vidya Drolia Vs Durga Trading Corporation 2021 held, disputes are not
arbitrable when the cause of action and/or subject-matter of the dispute:

1. relates to actions in rem, that do not pertain to subordinate rights in personam that arise from
rights in rem;
2. affects third party rights, have erga omnes effect, require centralized adjudication, and mutual
adjudication would not be appropriate;
3. relates to inalienable sovereign and public interest functions of the State; and
4. is expressly or by necessary implication non-arbitrable under a specific statute.

Arbitral Award [Section 2(1)(c)]

 Includes interim award.

 It is a judicial decision disposing of all disputes referred to arbitration.
Contents of Arbitral Award:
1. Facts leading to arbitration.
2. Claims and counter-claims.
3. Enquiries made by arbitrator.
4. Evidence summary.
5. Determination and reasoning.
Relevant Case Laws:
  Tamil Nadu Electricity Board v. Bridge Tunnel Constructions – Reasons must be stated unless
waived.
 Goa, Daman & Diu Housing Board v. Ramakant – Arbitrator must consider and reason all
issues.

When a written communication is deemed to have been received ? When Arbitration agreement is
deemed to have been waived ? and to what extent a Court can intervene in an arbitration
agreement ?

Section 3 – Receipt of Written Communications

 General Rule: Written communication is deemed received if:
o (a) Delivered personally, or at:
 Place of business,
 Habitual residence, or
 Mailing address.
o (b) If those places cannot be found after reasonable inquiry, then:
 Communication is deemed received if sent to last known address by:
 Registered letter, or
 Any method that provides a record of delivery attempt.
 Deemed Date of Receipt: The day on which communication is delivered.
 Exception: This section does not apply to communications in respect of proceedings before
judicial authorities.

Section 4 – Waiver of Right to Object

 If a party:
o (a) any provision of this Part from which the parties may derogate, or
o (b) A requirement of arbitration agreement
o is not complied with, and still:
 Proceeds with arbitration,
 Without objecting without undue delay or within a specified time,
→ That party is deemed to have waived the right to object.

Section 5 – Extent of Judicial Intervention

 No judicial authority shall intervene in arbitration matters governed by this Part except
where expressly permitted.
 Overrides all other existing laws.
Goa, Daman and Diu Housing Board vs Ramakant V.P. Darvotkar 1991 SC held Non speaking
awards are liable to be set aside if awards are contrary to the basic features of the contract or traverse
beyond the obvious terms of such contracts.
If in making award arbitration not give elaborate reason.

Section 6 – Administrative Assistance

 To facilitate arbitral proceedings, the parties or tribunal (with party consent) may:

o Arrange administrative assistance from any:

 Suitable institution, or
  Person.

Section 7

1. Definition of AA 
An arbitration agreement is an agreement where parties
consent to submit all or certain disputes to arbitration.
 These disputes may have already arisen or may arise in
future, and must relate to a defined legal relationship,
whether contractual or non-contractual.
2. Form of Arbitration  It can be:
Agreement o A clause within a contract, or
o A separate agreement entirely.
3. Writing Requirement  The arbitration agreement must be in writing.
4. When It Is Deemed An arbitration agreement is considered to be in writing if it is found
to Be in Writing in:
 (a) A document signed by the parties.
 (b) An exchange of letters, telex, telegrams, or other
electronic communication that provides a record of the
agreement.
 (c) An exchange of statements of claim and defence, where
one party alleges the existence of an arbitration agreement
and the other does not deny it.
5. Incorporation by If a written contract refers to another document containing an
Reference arbitration clause,
 And such reference clearly incorporates that clause into the
contract,
 Then it constitutes a valid arbitration agreement.

Travancore Devaswam Board vs Panchamy Pack ltd. 2004 AA must be in writing even though not
signed by the parties.

Govind Rubber ltd. Louis Dreyfus Commodities Asia (P) ltd. 2024

In S.N Prasad vs Monnet Finance intention of the parties to refer the dispute for arbitration (Animus
arbitrandi) and also to be bound by them. If agreement shows parties may go in for a suit or may also
go in for arbitration, it is not an AA.

Discuss, when the court can refer parties to Arbitration where there is an arbitration
agreement ?

Section 8:

1. Mandatory A judicial authority must refer the parties to arbitration if:

Reference to  An action (suit or proceeding) is brought before it in a
Arbitration matter covered by an arbitration agreement, and
 A party to the arbitration agreement (or someone claiming
under them) applies for reference to arbitration:
o Before or at the time of submitting their first
statement on the substance of the dispute.
This reference shall be made notwithstanding:
 Any judgment, decree, or order of the Supreme Court or any
other Court to the contrary.
Exception: Referral shall not be made if the court finds that prima
 facie no valid arbitration agreement exists.
2. Requirement to File The application under sub-section (1) must be:
the Agreement  Accompanied by:
o The original arbitration agreement, or
o A duly certified copy of it.
Proviso:
 If the applying party does not have the original/certified copy,
and
 The other party retains it,
 Then the applicant must:
o Submit a copy of the agreement, and
o File a petition requesting the court to direct the other
party to produce the original/certified copy.
3. Arbitration Can Even if an application under sub-section (1) is pending:
Continue Despite  Arbitration can be commenced or continued, and
Pending Court  An arbitral award can be made.
Application

P. Anand Gajapathi Raju v. P.V.G. Raju, (2000) 4 SCC 539

 If all conditions under Section 8 are satisfied, court must refer the parties to arbitration.
 The court has no discretion once a valid arbitration agreement is established.
Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1

o Reaffirmed limited court interference at the Section 8 stage.

o Court must only examine prima facie validity of the arbitration agreement.
o Introduced "eye of needle" test — if the agreement is ex facie void, court can reject
reference.

Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. (2011) When a suit is filed and one party
invokes arbitration, the Court must decide the following five key issues before referring the matter
to arbitration:

 Whether there is a valid arbitration agreement between the parties as per Section 7 of the
Act.
 Whether the subject matter of the suit falls within the scope of the arbitration agreement.
 Whether all parties to the suit are also parties to the arbitration agreement.
 Whether the defendant filed the application under Section 8 before submitting the first
statement on the substance of the dispute (i.e., before filing a detailed written statement).
 Whether the reliefs claimed in the suit are of the nature that can be adjudicated by an
arbitral tribunal (i.e., not matters exclusively reserved for courts such as criminal cases,
divorce, etc.).

Discuss as to what interim reliefs can be granted by court in arbitration proceedings ?

Section 9:
1. When can a party A party may apply to the Court:
apply?  Before arbitration begins
 During arbitral proceedings
 After the award is made but before it is enforced under Section
36
 Appointment of Guardian
 For a minor or person of unsound mind involved in arbitration.
Interim Measures of Protection:
 (a) Preservation, interim custody, or sale of goods in dispute.
 (b) Securing the amount in dispute.
 (c) Detention, preservation, or inspection of any property in
dispute.
o Includes entry, sampling, experiments, etc., for
gathering evidence.
 (d) Interim injunction or appointment of a receiver.
 (e) Any other relief the Court deems just and convenient.

2. Timeline for If interim relief is granted before arbitration starts,

Starting → APs must commence within 90 days from the date of such court
Arbitration order.
→ Or within further time as the Court allows.
3. Bar on Court's Once arbitral tribunal is constituted,
Intervention After → Court shall not entertain applications under Section 9(1)
Tribunal is → Unless it finds that the Section 17 remedy (by tribunal) is not
Constituted efficacious.

Adhunik Steels Ltd. v. Orissa Manganese & Minerals Pvt. Ltd.2007

o Interim measures under Section 9 are equitable in nature.

o Court must exercise discretion judiciously and consider balance of convenience,

irreparable harm, etc.

Section 10: Number of arbitrators

Freedom to Decide the Number

 The parties are free to determine on any number of arbitrators.
 Condition: The number shall not be even (i.e., to avoid a deadlock in decisions).
Default Provision: If the parties do not agree on the number, the arbitral tribunal will consist of a
sole arbitrator.

MMTC ltd. Vs Sterlite Industries (India) Ltd 1996 SC held that an AA not be invalidated simply
because it provides for appointment of even number of arbitrators.

Section 11 – Appointment of Arbitrators (Exhaustive Brief Notes)

1. General Subsection 1
Eligibility &  Any person of any nationality may be appointed as an arbitrator,
Party  Unless parties have agreed to restrict it (e.g., Indian nationality only).
[Sub-section (2)]: Parties have complete freedom to decide the procedure for
Autonomy
appointing arbitrators.
2. Default [SS (3)] – Failing agreement under SS(3) Where 3 arbitrators are required:
Appointment
Mechanism  Each party appoints 1 arbitrator.
 The two appointed arbitrators appoint the third arbitrator, who acts
as Presiding Arbitrator.
 Sub-Section 3A-Designation Power: The Supreme Court and High Courts are
empowered to designate arbitral institutions for the purposes of the Act.
The designated arbitral institutions must be graded by the Arbitration Council
Precondition of India under Section 43-I of the Act.
for Jurisdictions with No Graded Institution:
Designation If a High Court's jurisdiction lacks any graded arbitral institution, then:
 The Chief Justice of that High Court may maintain a panel of
arbitrators.

Deemed Arbitral Institution:

In such cases, any reference to an arbitrator from that panel shall be deemed to
be a reference to an arbitral institution for the purposes of this section.
Fee Entitlement:
The arbitrator appointed by a party shall be entitled to receive fees as per the
Fourth Schedule of the Act.

[Sub-section (4)] – Failure in 3-arbitrator mechanism:

 If a party fails to appoint within 30 days of receiving a request from the

other party, or
 If two arbitrators fail to agree on the third within 30 days of their
appointment,
 Then, appointment to be made by the Supreme Court, High Court, or
their designate on an application by a party to the arbitration.

The appointment shall be made by an arbitral institution designated as

Mode of follows:
Appointment:  In ICA: Appointment is made by the arbitral institution designated by
the Supreme Court.
Designated  In Other Arbitrations (Domestic): Appointment is made by the
Arbitral arbitral institution designated by the High Court.
Institution:
[Sub-section (5)] – Sole arbitrator case:

 If parties fail to agree within 30 days of request by one party,

 Then Supreme Court/High Court or their designate will appoint on
application of party as reffered u/ss 4.
3. When [Sub-section (6)] – Court intervention allowed if:
Agreed
Procedure a) A party fails to act as required by the agreed procedure,
Fails b) Parties or appointed arbitrators fail to reach an agreement expected to
them under the procedure,
c) An institution/person fails to perform a duty entrusted by the
procedure.
Unless the agreement provides alternative remedy, Court/designate will
intervene.

6B: designation any person or arbitral institution by the SC or HC for this

section not amount to delegation of judicial power by the Court.

6. Disclosure [Sub-section (8)]: Before appointment of arbitrator, AI shall seek written

& Impartiality disclosure from prospective arbitrator as per Section 12(1).

Must consider:
 (a) Any qualifications of Arbitrator required under party agreement.

(b) Contents of disclosure, including potential conflict of interest, to ensure

independence and impartiality.

7. [Sub-section (9)]: In ICA (International Commercial Arbitration), where parties

International are of different nationalities,
Commercial
Arbitration The Supreme Court or designate may appoint an arbitrator of a third
nationality to ensure neutrality.
9. Multiple [Sub-section (11)]:
Requests to
Different High  If more than one requests are made to different AI u/ss,
Courts  The first Court approached will have exclusive jurisdiction to decide.
Section 11(13)  AI shall dispose of application for appointment of arbitrator
Time Limit for expeditiously.
Appointment  An endeavour must be made to dispose of the matter within 60
days from the date of service of notice on the opposite party.
Application

Section 11(14) AT is empowered for:

o Determination of arbitrators’ fees, and

o Manner of payment to the arbitral tribunal.
Subject to rates in the Fourth Schedule taken into consideration.

Explanation Clause: This sub-section does not apply to:

 ICA, and
 Arbitrations (other than ICA) where parties have agreed to institutional
rules for fees.

Perkins Eastman Architects DPC v. HSCC (India) Ltd. (2019) 9 SCC 389

 A party interested in the outcome of the dispute cannot unilaterally appoint a sole arbitrator.
 Ensures impartiality of arbitrators and upholds the principle of natural justice.

What is the ground to challenge the appointment of Arbitrator ? Discuss Procedure also.

Section 12: Grounds for Challenge

1. Mandatory When a person is approached for appointment as an arbitrator, they must

Disclosure disclose in writing:
 (a) Any past or present relationship (direct or indirect) or
interest:
o With any party or SM of dispute.
o Whether financial, business, professional, or other kinds.
o That could cause justifiable doubts as to their
independence or impartiality.
 (b) Any circumstances affecting their ability to:
o Devote sufficient time, and
o Complete arbitration within 12 months.
Explanation 1: The Fifth Schedule provides guiding grounds to assess
doubts about impartiality or independence.
 Explanation 2: Disclosure must be made in the form prescribed in the
Sixth Schedule.

2. Continuous The arbitrator must continually disclose (in writing and without delay) any
Disclosure of such relevant circumstances throughout the arbitration, unless already
Circumstances informed.
3. Grounds for An arbitrator may be challenged only if:
Challenge  (a) Justifiable doubts arise as to their independence or
impartiality, or
 (b) They do not possess qualifications as agreed to by the parties.
4. Restrictions on A party can challenge an arbitrator appointed by them (or where they
Challenge participated in the appointment) only if the grounds become known after
the appointment.
5. Ineligibility to  Any person falling under the Seventh Schedule categories (e.g.,
be Appointed significant past relationships, close ties with party/counsel) is
ineligible to be appointed as arbitrator.
 Proviso (Waiver Clause):
o Post-dispute, parties can waive this ineligibility by
express written agreement.

Section 13 – Procedure for Challenging Arbitrator

1. Party Autonomy Parties may agree on their own procedure for challenging an arbitrator.
2. Default If no procedure is agreed:
Procedure  Any party who wants to Challenge must be made within 15 days
from:
o Knowledge of tribunal constitution, or
o Awareness of grounds under Section 12(3).
 Challenge must be sent as a written statement to the tribunal.
3. Decision on  Arbitrator may withdraw voluntarily.
Challenge  Otherwise, tribunal decides the challenge.
4. Proceeding If challenge is rejected, tribunal continues proceedings and makes an
Despite award.
Challenge
5. Post-Award Challenging party may apply to set aside award under Section 34.
Remedy
6. Fee Discretion Court may decide whether challenged arbitrator is entitled to fees.

(A) When the mandate of an arbitrator may be terminated on failure or impossibility of an act ?
(B) What are the other circumstances other than those mentioned in Section 13 or 14, when
mandate of an arbitrator shall terminate ?

1. Termination of The mandate of an arbitrator shall terminate and he shall be substituted

Mandate by another arbitrator if:
a) He becomes de jure/de facto unable to perform his functions, or
fails to act without undue delay;
b) He withdraws from his office, or the parties agree to the
termination of his mandate.
2. Court Intervention If there is a controversy regarding the grounds under clause (a) of
subsection (1),
→ A party may apply to the Court to decide on the termination of the
arbitrator's mandate
 (Unless otherwise agreed by the parties).
3. No Implication of If the arbitrator withdraws under this section or under Section 13(3),
Validity or the parties agree to termination,
→ It does not imply acceptance of the validity of the grounds (such as
bias, incapacity, etc.).

Section 15 – Termination of Mandate and Substitution of Arbitrator

1. Additional The mandate of an arbitrator shall terminate (in addition to grounds in

Grounds for Sections 13 or 14):
Termination a) Where he withdraws from office for any reason;
b) Where mandate terminates by agreement of the parties.
2. Appointment of Where an arbitrator's mandate terminates,
Substitute → A substitute arbitrator shall be appointed as per the rules
Arbitrator applicable to the original appointment.
3. Hearings May Be Unless otherwise agreed,
Repeated → Hearings held before the replacement may be repeated at the
discretion of the arbitral tribunal.
4.. Validity of Prior Unless otherwise agreed,
Orders → Any order or ruling made before the replacement remains valid
and is not invalid merely because of the change in arbitrator.

Section 32(3) lays down that the mandate of Arbitral Tribunal shall terminate with termination of
arbitral proceedings.

Section 25(a) makes mandatory on the part of arbitral tribunal to terminate its proceedings. Once the
proceedings before the arbitral tribunal terminates, it becomes functus officio.

29A(4) If award is not made within the time limit (original + extended): mandate is terminated.

1. Competence to The arbitral tribunal may rule on its own jurisdiction, including:
Rule on  Objections to the existence of the arbitration agreement.
Jurisdiction  Objections to the validity of the arbitration agreement.
a) An arbitration clause in a contract is treated as independent of
the rest of the contract.
b) Even if the contract is declared void, the arbitration clause
remains valid.
2. Plea of No A plea that the arbitral tribunal does not have jurisdiction must be raised:
Jurisdiction  Before submission of statement of defence.
 Even if the party appointed or participated in appointing the
arbitrator.
3. Exceeding A plea that the arbitral tribunal is exceeding its authority must be raised:
Scope of  As soon as the issue is raised in the proceedings.
Authority
4. Late Pleas Tribunal may admit a delayed plea (under 16(2) or 16(3)) if:
 Delay is justified.
5. Decision on  The arbitral tribunal shall decide the plea under sub-sections (2) or
Jurisdiction (3).
 If rejected, it will continue proceedings and make an award.
6. Remedy Aggrieved party may challenge the award under Section 34.
Against
Tribunal’s
Decision
Konkan Railway Corporation Ltd. v. Rani Construction (P) Ltd. 2002

 Section 16 confers power on the arbitral tribunal to rule on its own jurisdiction, including
objections regarding the existence or validity of the arbitration agreement.
 Based on the principle of kompetenz-kompetenz, i.e., a tribunal can determine its own
jurisdiction.
 Court intervention is limited at this stage; parties must raise jurisdictional objections before
the tribunal itself.

Narayan Prasad Lohia v. Nikunj Kumar Lohia 2002

 Even if a party has appointed an arbitrator, it can still challenge the tribunal’s jurisdiction
under Section 16(2).

 An objection to the composition of the arbitral tribunal is valid if raised before filing the
statement of defence.

 Section 16 read with Section 10 indicates that certain objections are derogable, i.e., the
parties can waive them.

Section 17:

1. Power of A party may, during the arbitral proceedings may apply to the arbitral
Tribunal to tribunal—
Grant Interim
Measures The application can be made:

 (i) For the appointment of a guardian for a minor or a person of

unsound mind for the purposes of arbitral proceedings; or

 (ii) For an interim measure of protection in respect of the

following matters:

List of permissible interim measures under Section 17(1)(ii):

 (a) Preservation, interim custody, or sale of goods which are the

subject-matter of the arbitration.

 (b) Securing the amount in dispute in the arbitration.

 (c) Detention, preservation, inspection of any property or thing

involved in arbitration.

o May include: entering premises, taking samples, making

observations, or conducting experiments.

 (d) Grant of interim injunctions or appointment of a receiver.

 (e) Any other just and convenient interim measure as per

tribunal's discretion.

The arbitral tribunal shall have the same powers as a civil court for
 granting interim relief under this section.

2. Enforceability of Subject to any appeal under Section 37, any interim order passed by the
Tribunal Orders arbitral tribunal under Section 17 shall be deemed to be an order of the
Court and shall be enforceable under the Code of Civil Procedure,
1908, in the same manner as a civil court order.

State of U.P. v. Janki Saran, AIR 1973 SC 2071, the Supreme Court had observed that "taking other
steps in the suit proceeding" connotes the idea of doing something in aid of the progress of the suit or
submitting to the jurisdiction of the Court for the purchase of adjudication of the merits of the
controversy in the suit.

What rules of Procedure is to be adopted by the Arbitral Tribunal ?

Or
"In arbitral proceedings the parties shall be treated with equality and each party shall be given full
opportunity to present his case." - Explain.
Section 18 – Equal treatment of parties
 Mandate: All parties must be treated equally.
 Right: Each party must be given a full opportunity to present their case.
Section 19 – Determination of rules of procedure
 (1) The arbitral tribunal is not bound by the:
o Code of Civil Procedure, 1908 (CPC)
o Indian Evidence Act, 1872
 (2) Parties are free to agree on the procedure.
 (3) If there's no agreement, the arbitral tribunal may conduct proceedings as it sees fit,
subject to Part I of the Act.
 (4) The tribunal may decide on:
o Admissibility, Relevance, Materiality, Weight of any evidence

(A) Discuss the Law regarding place of Arbitration under Arbitration and Conciliation Act 1996.
(B) What is the procedure of commencement of arbitral proceedings?

Section 20 – Place of arbitration

 (1) Parties may agree on the place of arbitration.
 (2) In absence of agreement, the tribunal decides, considering:
o Circumstances of the case
o Convenience of parties
 (3) The tribunal may meet at any location for:
o Consultation with parties
o Hearing witness, experts or parties
o Inspections of documents or record.

Sunshine Chemicals Industry v. Orient Carbons and Chemicals Ltd. 2001 A conjoint reading of
indicates that:
 If no agreement exists on the place of arbitration,
 The parties may authorize any person or institution to determine the venue of arbitration.
Section 21 – Commencement of arbitral proceedings
 Unless otherwise agreed:
o Arbitral proceedings commence on the date the respondent receives a request for
arbitration regarding a dispute.

When statements of claims and defence may be filled in arbitral proceedings ? What should they
contain ? Can they be amended ? If so, when and on what terms ?
1. Submission of Within the time:
Statements  Agreed by parties, or
 Determined by the arbitral tribunal:
Claimant must:
 State facts supporting the claim
 Identify points at issue
 Specify relief or remedy sought
Respondent must:
 State defence to each point raised
Parties may agree on a different structure or content of statements.
2. Submission of Parties may:
Documents  Submit relevant documents with statements
 Or give references to evidence/documents they will submit
later
2A. Counterclaim and  Respondent may:
Set-off (Inserted via o Submit counterclaim or plead set-off
2016 amendment)  Condition: It must fall within the scope of the arbitration
agreement
 Arbitral tribunal is bound to adjudicate on such
counterclaims/set-offs
3. Amendment of Either party may amend or supplement claim/defence
Statements Unless:
 Parties have agreed otherwise, or
 Tribunal finds the amendment inappropriate due to delay
4. Time limit (2019 The statement of claim and defence under this section shall be
Amendment) completed within a period of 6M from the date the arbitrator or all the
arbitrators, as the case may be, received notice, in writing, of their
appointment.

Section 24:

1. Mode of Conducting Arbitral tribunal has the discretion to decide:

Proceedings  Whether to hold oral hearings (for evidence or oral
arguments), or
 Conduct the proceedings based on documents and materials,
 Unless parties have agreed otherwise.
Proviso 1
 If a party requests an oral hearing, the tribunal must hold
such a hearing at an appropriate stage.
Exception: If parties have agreed not to hold oral hearings, then the
tribunal is not required to do so.
 Proviso 2
 The tribunal should conduct oral hearings on a day-to-day
basis as far as possible.
 No Adjournments granted unless Sufficient cause is made
out.
 The tribunal may impose costs, including exemplary costs,
on the party seeking unjustified adjournment.
2. Notice of Hearings Parties must be given sufficient advance notice of:
 Any hearing, or
 Any meeting of the arbitral tribunal (e.g., for inspection of
documents, goods, or property).
3. Communication of All:
Information  Statements,
 Documents, or
 Applications made to the arbitral tribunal by one party
➤ Must be shared with the other party.
Any:
 Expert report or
 Evidentiary document used by the tribunal for its decision
➤ Must be communicated to both parties.

Section 25:

1. Default by Claimant If the claimant fails to submit the statement of claim as required
under Section 23(1),
And fails to show sufficient cause,
➤ The arbitral tribunal shall terminate the proceedings.
2. Default by Respondent If the respondent fails to submit the statement of defence as per
Section 23(1),
And fails to show sufficient cause,
➤ The tribunal shall continue the proceedings.
Such failure:
 Shall not be treated as admission of the claimant’s
allegations.
 Tribunal has discretion to forfeit respondent’s right to file
the defence.
3. Failure to Appear or  If any party fails to:
Produce Evidence o Appear at an oral hearing, or
o Produce documentary evidence,
The tribunal may:
➤ Continue the proceedings, and
➤ Make an award based on the available evidence.

Section 26: Expert Appointed by Arbitral Tribunal

1. Appointment of Expert Arbitral tribunal may appoint one or more experts

➤ To report on specific issues relevant to the case.
2. Party's Obligation The tribunal may require a party to:
 Provide the expert with relevant information, or
 Produce or provide access to documents, goods, or
property
➤ For inspection by the expert.
Section 27 – Court Assistance in Taking Evidence

1. Application to Court  The arbitral tribunal, or

 A party (with the tribunal’s approval),
➤ May apply to the Court for assistance in taking
evidence.
2. Contents of the The application must specify:
Application  (a) Names and addresses of:
o The parties, and
o The arbitrators.
 (b) General nature of:
o The claim, and
o The relief sought.
 (c) Evidence to be obtained:
o (i) Name and address of any:
 Witness or expert witness, and
 A statement of the subject-matter of their
testimony.
o (ii) Description of:
 Any document to be produced, or
 Property to be inspected.
3. Court’s Role The Court may, within its competence and according to its rules on
evidence,
➤ Execute the request by ordering the evidence to be provided
directly to the arbitral tribunal.
4. Powers of the Court While passing an order under sub-section (3), the Court may:
➤ Issue same processes to witnesses as it would in civil suits
before it.
5. Penalties for Default If a person:
 Fails to attend,
 Refuses to give evidence,
 Makes any other default, or
 Is guilty of contempt to the tribunal during proceedings,
➤ Then, on representation by the tribunal,
➤ The Court may impose same penalties and
punishments as it would in regular civil suits.
6. Meaning of “Processes” The term “Processes” includes:
 Summonses,
 Commissions for examination of witnesses, and
 Summonses to produce documents.

Section 28:

1. Domestic Arbitration (1)(a): Domestic Arbitration (Place of Arbitration in India,

(Place of Arbitration in Non-International Commercial Arbitration)
India, Non-International  Arbitral tribunal shall apply the substantive law in force
Commercial Arbitration) in India to decide the dispute.
➤ 28(1)(b): International Commercial Arbitration (Seated in
India)
 28(1)(b)(i):
o If parties have designated rules of law, the
tribunal shall apply those to decide the dispute.
 28(1)(b)(ii):
o If parties have designated a country's law or
 legal system, it is presumed to refer to that
country's substantive law,
➤ Not its conflict of laws rules, unless stated otherwise.
28(1)(b)(iii):
If the parties fail to designate the applicable law,
➤ The tribunal shall apply rules of law it considers appropriate,
considering all surrounding circumstances.

2. Equity-Based Decision The arbitral tribunal may decide based on equity or fairness,
(ex aequo et bono / ➤ Only if expressly authorised by the parties.
amiable compositeur)
3. Consideration of Contract While making an award, the tribunal shall:
and Trade Usages  Consider the terms of the contract, and
 Applicable trade usages related to the transaction.

Ex Aequo et Bono meaning "according to what is equitable and good."

In arbitration, this allows the arbitral tribunal to decide a dispute based on fairness, equity, and
justice rather than strictly applying legal rules.

Amiable Compositeur A French term meaning "friendly mediator."

 It refers to a tribunal or arbitrator empowered to resolve the dispute by equity rather than
legal rules, often without being bound by strict provisions of law, but still based on the
contractual spirit.

Section 29A: Time Limit for Award

1. Time Limit for Award For domestic arbitration:

➤ Award must be made within 12 months from the date of
completion of pleadings under Section 23(4).
For international commercial arbitration:
➤ Award should be made as expeditiously as possible.
➤ Endeavour to make award within 12 months from date of
completion of pleadings.
2. Incentive for Early Award If award is made within 6 months from the date tribunal enters
upon the reference,
➤ Arbitrators shall be entitled to additional fees,
➤ As mutually agreed by the parties.
3. Extension of time Parties may mutually agree to extend the 12-month time
period,
➤ But not beyond 6 months.
4. Mandate Termination If award is not made within the time limit (original +
extended):
➤ Mandate of arbitrator(s) shall terminate,
➤ Unless the Court extends the period before or after expiry.
Proviso 1:
➤ If delay is due to arbitrator(s), Court may reduce their fees
by max 5% per month.
Proviso 2:
➤ If an application under sub-section (5) is pending,
➤ Mandate continues till it is disposed.
Proviso 3:
➤ Arbitrators must be heard before fee reduction.
 5. Application for Extension Any party may apply for extension,
➤ Court may grant only if sufficient cause exists,
➤ And may impose terms and conditions.
6. Substitution of Arbitrators Court may substitute one or all arbitrators while granting
extension.
Proceedings will continue from the existing stage,
➤ Based on existing evidence and record.
New arbitrators are deemed to have received all prior
material.
7. Continuity of Tribunal New arbitral tribunal shall be considered a continuation of the
old one.
8. Imposition of Costs Court may impose actual or exemplary costs on any party.
9. Expeditious Disposal Application under sub-section (5) should be disposed of within
60 days
➤ From date of service of notice to opposite party.

Section 29B – Fast Track Procedure

1. Agreement for Fast Track Parties to an arbitration agreement may opt for fast track
procedure:
 At any stage, either before or at the time of
appointment of the arbitral tribunal.
Agreement must be in writing.
Overrides other provisions of the Act.
2. Sole Arbitrator Parties may agree that the tribunal shall consist of a sole
arbitrator.
Such sole arbitrator is to be mutually chosen by the parties.
3. Procedure to be Followed The arbitral tribunal shall follow the below process in fast
track:
 (a) Decide dispute based on written pleadings,
documents, and submissions.
o No oral hearing by default.
 (b) Tribunal may call for further information or
clarifications from the parties.
 (c) Oral hearing may be held only if:
o All parties request it, or
o Tribunal deems it necessary for clarification.
 (d) If oral hearing is held:
o Tribunal may dispense with technical
formalities.
o May adopt appropriate procedure for quick
disposal.
4. Time Limit for Award Award must be made within 6 months from the date the tribunal
enters upon reference.
5. Delay Consequence If award is not made within 6 months, then:
Provisions of Section 29A(3) to 29A(9) apply.
 Includes: mandate termination, court extension, fee
reduction, substitution of arbitrator, etc.
6. Arbitrator’s Fee Fees and payment terms shall be:
 As agreed between the arbitrator and the parties.

Section 30 – Settlement
 1. Encouragement of Not incompatible with arbitration for the tribunal to promote
Settlement settlement.
With party consent, tribunal may use:
 Mediation
 Conciliation
 Other procedures
Can be used any time during proceedings.
2. Termination on Settlement If parties settle the dispute during proceedings:
 Tribunal shall terminate the proceedings.
 If parties request and tribunal agrees, it may record the
settlement as an award on agreed terms.
3. Award on Agreed Terms Such an award must:
 Be made as per Section 31.
 Clearly state that it is an arbitral award.
4. Legal Status An award on agreed terms has the same status and effect as
any other award on the merits.

Section 31 – Form and Contents of Arbitral Award

1. Writing and Signature Award must be in writing.

Must be signed by tribunal members.
2. Majority Signatures In multi-member tribunals:
 Majority signatures are valid if reason for missing
signature is given.
3. Reasoned Award Award must state reasons, unless:
 (a) Parties agree no reasons are required, or
 (b) It is an award on agreed terms (as per Section 30).
4. Date and Place  Award must state:
o The date of award.
o The place of arbitration (as per Section 20).
o Award is deemed made at that place.
5. Delivery A signed copy of the award shall be delivered to each party.
6. Interim Award  Tribunal may pass interim arbitral awards on issues
that could be subject to a final award.
7. Interest (a) Tribunal may grant pre-award interest (from cause of
action to award date) at a reasonable rate, unless agreed
otherwise.
(b) Unless stated otherwise:
 Post-award interest = 2% higher than current interest
rate (as per Interest Act, 1978) from award date till
payment.
8. Costs  Tribunal shall fix costs of arbitration in line with
Section 31A.
 "Costs" include:
o (i) Arbitrator & witness fees/expenses
o (ii) Legal fees/expenses
o (iii) Administrative fees (if institutional
arbitration)
o (iv) Other related expenses (arbitral
proceedings/award)
Section 31A – Regime for Costs

1. Discretion to Award Costs Court or Arbitral Tribunal has full discretion to decide:
o (a) Whether costs are payable,
o (b) How much costs are to be paid, and
o (c) When costs should be paid.
Definition of “Costs” under this section includes:
 (i) Fees/expenses of arbitrators, courts, and witnesses.
 (ii) Legal fees and expenses.
 (iii) Administrative fees (e.g., arbitral institution’s
charges).
 (iv) Other expenses related to arbitration or court
proceedings.
2. Who will pay General Rule: The unsuccessful party should pay the costs of
the successful party.
 Exception: Tribunal/Court may deviate for recorded
reasons (in writing).
3. Factors to Consider When Tribunal/Court shall consider all relevant circumstances, such
Awarding Costs as:
 (a) Conduct of all parties.
 (b) Whether the party has partially succeeded.
 (c) Whether frivolous counterclaims caused delay.
 (d) Whether a party made a reasonable offer that was
unreasonably refused.
4. Flexibility in Cost Orders  Tribunal/Court can order costs in any form, including:
o (a) A proportion of another party’s costs.
o (b) A specific amount in respect of another
party’s costs.
o (c) Costs from/until a specific date.
o (d) Costs incurred before arbitration started.
o (e) Costs related to specific steps in
proceedings.
o (f) Costs for particular issues or segments of
proceedings.
o (g) Interest on costs from/until a certain date.
5. Validity of Cost Agreements Any pre-agreement that a party will pay all/part of the costs is
valid only if:
 It is made after the dispute has arisen.
 This protects parties from being forced into unfair cost-
bearing obligations before a dispute exists.

Section 32 – Termination of Proceedings

1. Final Termination Arbitration proceedings end either:

 With the final arbitral award, or
 With a formal termination order by the arbitral tribunal
under sub-section (2).
2. When Tribunal Can The tribunal may issue a termination order in the following cases:
Terminate Proceedings  (a) Withdrawal of claim:
Without Award o If the claimant withdraws the claim,
o Except: If the respondent objects, and the tribunal
sees that the respondent has a legitimate interest
in getting a final decision.
  (b) Mutual agreement:
o If both parties agree to end the proceedings.
 (c) Unnecessary/impossible:
o If the tribunal believes that continuing the
arbitration is unnecessary or impossible (e.g.,
death of a party in personal claims, bankruptcy,
etc.).
3. End of Tribunal’s Role The mandate of the tribunal ends after the proceedings terminate.
Exception: The tribunal’s role may continue for limited purposes
under:
 Section 33 (corrections/interpretation/additional award),
 Section 34(4) (when the court adjourns setting aside
proceedings to allow the tribunal to fix issues).

Section 33 – Correction, Interpretation, and Additional Award

1. Request by Parties Within 30 days from receiving the award:

 (a) Any party (with notice to the other) can request
correction of:
o Computation errors
o Clerical/typographical mistakes
o Other similar errors
 (b) If agreed in advance, a party can also request
interpretation of a part of the award.
2. Tribunal’s Duty on If the request is justified, tribunal must:
Valid Request  Make correction or
 Give interpretation within 30 days from receiving the
request.
Interpretation becomes part of the award.
3. Tribunal’s Own Tribunal can on its own correct such minor errors within 30 days
Initiative from the date of award.
4. Request for Additional If a party finds that some claims were omitted, it can request (with
Award notice):
 For an additional arbitral award to cover omitted
claims.
 This must also be done within 30 days from receipt of the
award.
5. Time Limit for Tribunal must pass the additional award within 60 days from the
Additional Award date of request, if justified.
6. Extension Tribunal can extend the time period for corrections, interpretation,
or additional award if necessary.
7. Application of Section All the requirements (writing, reasons, signatures, date, place,
31 delivery) under Section 31 also apply to:
 Corrections,
 Interpretations, and
 Additional awards under Section 33.

Section 34 – Application for Setting Aside Arbitral Award

1. Limited Court A party can challenge an arbitral award only by filing an application to
Recourse set it aside under sub-sections (2) and (3).
2. Grounds to Set The court can set aside an arbitral award only if:
Aside the Award (a) Party making the application proves (based on tribunal record)
 that:
1. Incapacity – One of the parties was legally incapacitated.
2. Invalid agreement – The arbitration agreement is not valid
under the applicable law.
3. No notice or unfair hearing – The party wasn’t properly
notified of:
o Arbitrator’s appointment, or
o Arbitration proceedings,
o OR was otherwise unable to present the case.
4. Award goes beyond the scope of arbitration:
o If only part of the award is outside the scope, only that
part can be set aside.
5. Tribunal composition/procedure was:
o Not as per agreement, or
o Not as per the Act if no agreement existed.

(b) Court finds that:

1. The subject matter is not arbitrable under current Indian
law.
2. The award is against public policy of India.
Explanation 1 (Award conflicts with public policy only if):
 Induced/affected by fraud or corruption.
 Violates Section 75 (confidentiality in conciliation) or Section
81 (inadmissibility of evidence in other proceedings).
 Contravenes the fundamental policy of Indian law.
 Conflicts with basic morality or justice.
Explanation 2:
 Review of whether it violates “fundamental policy” must not
involve re-evaluation of evidence or legal merits.
(2A) Patent Illegality For non-international arbitrations, a domestic award can be set aside
– Domestic if there is:
Awards Only  Patent illegality on the face of the award.
 But it cannot be set aside for:
o Mere legal error, or
o Re-appreciation of evidence.
3. Time Limit for  Within 3 months from:
Application o Date of receiving the award, or
o If Section 33 request was made: from date of disposal
of that request.
 Court can extend by 30 days if sufficient cause is shown, but
not beyond that.
4. Adjournment to On request of a party, the court may adjourn the setting-aside
Rectify Award hearing and allow the tribunal to:
 Resume arbitration, or
 Take steps to remove the grounds of challenge
5. Mandatory Application must be accompanied by an affidavit confirming
Notice Before compliance.
Application
6. Time Limit for Court must try to dispose of the application within 1 year from the
Disposal date notice under sub-section (5) is served.

Section 35 – Finality of Arbitral Awards

An arbitral award is final and binding on:

 The parties to the arbitration, and

 Any person claiming under them (e.g., legal heirs, assignees).
 This is subject to provisions of Part I, especially Section 34 (setting aside of award).
Section 36 – Enforcement of Arbitral Awards

1. Enforcement Like Once the time limit to challenge the award under Section 34 expires,
a Court Decree the award:
 Can be enforced like a civil court decree, under the CPC, 1908.
 No further action or confirmation needed unless challenged.
2. Challenge Does Merely filing an application under Section 34:
Not  Does NOT automatically stop (stay) enforcement of the award.
Automatically Stay is only granted:
Stay Enforcement  When a separate application for stay is made, and
 The Court specifically orders the stay.
3. Court’s Power to Court may grant stay of enforcement:
Grant Stay o After a stay application under Section 36(2),
o Based on recorded reasons,
o With or without conditions (e.g., security, deposit, etc.).
Special Case: Monetary Awards
 While considering stay on money awards, Court must follow the
CPC provisions for staying money decrees.

Proviso: Stay Mandatory in Fraud/Corruption Cases

If prima facie evidence shows:
 (a) The arbitration agreement or contract was induced/effected
by fraud or corruption, OR
 (b) The making of the award was induced/effected by fraud or
corruption,
➤ The court must grant an unconditional stay of the award
until the challenge under Section 34 is decided.
Explanation: This protection applies to all cases, irrespective of when
proceedings began (before or after the 2015 amendment).

Section 37 – Appealable Orders

1. Appeals from Appeal lies only from the following Court orders to the court
Court Orders authorized to hear first appeals from original decrees:
Clause Appealable Court Order
(a) Refusal to refer parties to arbitration under Section 8
(b) Granting or refusing interim measures under Section 9
Setting aside or refusing to set aside an arbitral award under
(c)
Section 34
Note: No appeal lies from any other court order outside this list.
2. Appeals from Appeal also lies from the following orders of an arbitral tribunal:
Arbitral Tribunal Clause Appealable Tribunal Order
Orders Accepting a plea that the tribunal has no jurisdiction (Section
(a)
16(2) or 16(3))
(b) Granting or refusing an interim measure under Section 17
3. No Second Appeal No second appeal shall lie from an order passed in appeal under this
section.
Exception: The right to appeal to the Supreme Court is not affected.
Section 38 Deposits

1. Fixing of Deposit  The arbitral tribunal may fix the amount of a deposit (or
supplementary deposit) in advance for costs expected to be
incurred.
 These costs are those referred to in Section 31(8), which include
arbitrator fees, expert costs, etc.
 If there's a counter-claim, the tribunal may fix separate
deposits for:
o The main claim, and
o The counter-claim.
2. Payment of  The deposit must be paid in equal shares by both parties.
Deposits  If one party fails to pay:
o The other party may pay that share.
 If neither party pays the deposit:
o The tribunal may suspend or terminate the arbitral
proceedings for that claim or counter-claim.
3. Return of Balance After termination of proceedings, the tribunal shall:
 Give an account of the deposits received.
 Return any unspent amount to the concerned party or parties.

Section 39 – Lien on Arbitral Award and Deposits as to Costs

1. Lien by Arbitral Unless otherwise agreed, the arbitral tribunal has a lien on the
Tribunal arbitral award for unpaid costs.
2. Court Intervention
If tribunal refuses to deliver the award due to unpaid costs, the Court
if Tribunal
can intervene.
Withholds Award The Court may order:
 Payment of the demanded costs into Court by the applicant.
 Delivery of the award by the tribunal to the applicant.
 Post-inquiry, a reasonable amount be paid to the tribunal.
 Remaining balance to be refunded to the applicant.
3. Who Can Apply Any party may apply unless a fixed fee agreement exists.
The tribunal has a right to appear and be heard on the application.
4. Court’s Power on If the award does not sufficiently address costs, the Court may make
Costs appropriate orders regarding the costs of arbitration.

Section 40 – Arbitration Agreement Not Discharged by Death

1. Continuity Despite AA agreement continues to be enforceable even after a party’s death.

Death It can be enforced by/against the LRs of the deceased.
2. Mandate of The arbitrator's appointment is not terminated by the death of the
Arbitrator Not party who appointed them.
Terminated
3. Overriding Laws Section not override laws that extinguish legal rights upon death.

Section 41 – Provisions in Case of Insolvency

(1) Contractual Arbitration Clause Enforceable by Receiver If a contract (involving an
insolvent person) contains an arbitration clause, and the receiver adopts the contract,
→ then the arbitration clause is enforceable by or against the receiver.
(2) Pre-insolvency Arbitration Agreement
 If the insolvent person became a party to an arbitration agreement before insolvency,
→ and the dispute is related to insolvency proceedings,
→ judicial authority may refer the matter to arbitration if appropriate, on application by:
o the other party, or
o the receiver.
(3) Receiver Includes Official Assignee

Section 42 – Jurisdiction Once an application under the Act is made to a specific Court regarding an
arbitration agreement,
→ only that Court shall have exclusive jurisdiction over:
o all arbitral proceedings, and
o all subsequent applications arising from that agreement.
No other Court can entertain applications in that matter thereafter.

Section 42A – Confidentiality of Information by All parties (arbitrator, arbitral institution, parties)
must maintain confidentiality of:
o Arbitral proceedings, and
o All related information.
Exception: Disclosure of the award is allowed only when necessary for implementation or
enforcement.

Section 42B – Protection for Good Faith Actions No legal action can be taken against:
o Arbitrators, Institutions, or Anyone acting under the Act,
→ for anything done in good faith under:
o the Act,
o or the rules/regulations framed under it.

PART III

CONCILIATION

Section 61 – Application and Scope of Conciliation

(1) General Applicability
 Applies to all disputes arising out of legal relationships (whether contractual or non-
contractual),
→ unless excluded by:
o any existing law, or
o mutual agreement between the parties.
(2) Exception: This Part does not apply to disputes that cannot be submitted to conciliation under any
prevailing law.

Section 62 – Commencement of Conciliation Proceedings

1. Initiation: One party sends a written invitation to the other to conciliate, with brief details of
the dispute.
2. Acceptance: Conciliation starts only when the other party accepts the invitation in writing.
3. Rejection: If the other party rejects the invitation, → conciliation will not proceed.
 4. If no reply is received within 30 days (or any specified time),
 The initiating party may treat it as a rejection and must inform the other party
in writing.
Section 63 – Number of Conciliators
(1) Default Rule: One conciliator by default.
(2) By Agreement: Parties may agree to have two or three conciliators.
(3) Joint Action: If there is more than one conciliator, they should act jointly as a general rule.

Section 64 – Appointment of Conciliators

(1): Methods of Appointment:
 One Conciliator:Parties mutually agree on a sole conciliator.
 Two Conciliators: Each party appoints one conciliator.
 Three Conciliators: Each party appoints one conciliator,
and both mutually agree on a third, who acts as the presiding conciliator.
(2): Assistance from Institutions or Persons
 Parties can seek help from institutions/persons in appointing conciliators:
o (a) One party may request recommendations.
o (b) Both parties may agree to let the institution/person directly appoint conciliators.
Safeguards:
 Institutions/persons must:
o Ensure independence and impartiality of conciliators.
o For sole or presiding conciliator, prefer different nationality from the parties.

Section 65 – Submission of Statements to Conciliator

(1) Initial Request:
 Conciliator may ask each party to submit a brief written statement:
o Describes nature of dispute and key issues.
o Copy to be shared with the opposing party.
(2) Further Statement:
 Conciliator may request detailed written submissions:
o Includes positions, facts, grounds, and evidence.
o Copy to be shared with the other party.
(3) Additional Info:
 At any stage, the conciliator may ask for more information as needed.
Explanation:
 The term “conciliator” includes sole, two, or three conciliators in all following sections.