Law of Arbitration

1. Niddhi Parmar
Vinod Kothari Consultants Private Limited
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Law of Arbitration

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3. • Alternative Dispute Resolution is a method for resolving
disputes outside of the official judicial mechanisms
▫ Classified into 4 types
 Negotiation
 Voluntary – no involvement of 3rd party who facilitates or imposes.
 Mediation
 Involvement of 3rd party who facilitates the resolution process
▫ Does not impose a resolution on the parties
 Collaborative law
 Each party has an attorney who facilitates the resolution process within
specifically contracted terms
 Arbitration
 Involvement of 3rd party who imposes a resolution
 Occurs due to arbitration clause. Also known as “Scott Avery Clause”
What is ADR

4. • Constitution of India
▫ Part IV - Directive principles of state policy (Article 36 –
51)
 Promotion of international peace and security
 The state shall endeavour to encourage settlement of
international disputes by arbitration (Article 51)
▫ Part XI – Relations between the union and the states
 Subject-matter of laws made by Parliament and by the
Legislatures of States (Article 246)
 Power to make laws with respect to any of the matters
enumerated in List III (Concurrent List) in the Seventh Schedule
▫ Civil procedure, including all matters included in the Code of Civil
Procedure at the commencement of this Constitution, limitation and
arbitration (Para 13).
Indian Scenario

5. • Black‟s Law Dictionary (4th Edition) defines the term
„arbitration‟
▫ The submission for determination of disputed matter to
private unofficial persons selected in manner provided by
law or agreement.
• Section 2 (1) (a) of the Arbitration and Conciliation Act,
1996 defines the term “arbitration” as follows–
▫ “arbitration” means any arbitration whether or not
administered by permanent arbitral institution;
 See next slide
Arbitration: Meaning

6. • Two modes of arbitration
▫ Institutional arbitration and ad hoc arbitration
• Institutional arbitration
▫ A specialised institution take on the role of administering the
arbitration process
 Each institution has its own set of rules and own way to assist in the process
 Eg. of some global institutions - London Court of International Arbitration (LCIA),
the International Chamber of Commerce (ICC), Singapore International
Arbitration Centre (SIAC)
 Eg. of some Indian institutions – Indian Council of Arbitration (ICA), Indian
Institute of Arbitration & Mediation (IIAM)
• Ad hoc arbitration
▫ Not administered by an institution
 Parties shall decide all aspects of arbitration such as number of arbitrators,
manner of their appointment, procedure for conducting the arbitration, etc.
Modes of Arbitration

7. Modes of Arbitration
Institutional Arbitration
• More expensive
• No need of framing the
process
▫ Institutional arbitrators
have there own rules
• Parties may select the
arbitrator from the list
▫ Based on specialisation
• More flexible when foreign
country is involved
• Remuneration – have their
own scale for determining
Ad hoc Arbitration
• Less expensive
• Parties may control the process
▫ Process for appointment,
proceedings – all are decided
by the parties
• Delay in process due to
disagreement
• Selection of arbitral tribunal
▫ Shall rely on their own views
▫ Difficult in case of
international arbitration
• Lack of expertise in drafting the
arbitration clause or agreement
• Remuneration – parties need to
decide the scale

8. Why Arbitration?
Arbitration Matters
• Cost of the proceeding
▫ Lower as compared to
courts
• Time efficient
• Power with the parties
▫ Arbitrator is appointed by
the parties
• Specialisation
▫ Since arbitrator is
appointed by the parties,
they may appoint a person
who possess specialised
knowledge in that sector/
area
Court Matters
• Cost of the proceeding
▫ Heavy cost
• Time taking process
• Power with the parties
▫ No power in the hands of
arbitrator except
jurisdiction
• Specialisation
▫ The judge may or may not
posses the required skills.
 Rely on expert view

9. 1859
• Act No. VIII dealing with the Code of Civil Procedure; Chapter VI – Reference to Arbitration
• Sections 312 – 325 deals with reference to arbitration between the parties to a suit
• Sections 326 – 327 deals with arbitration without the intervention of any court
• See. http://lawmin.nic.in/legislative/textofcentralacts/1859.pdf.
1872
• The Indian Contract Act, 1872 came into force on April 25, 1872
• Section 28 permitted settlement of dispute by arbitration
1899
• Indian Arbitration Act, 1899 came into force on July 1, 1899 – based on the British Arbitration
Act, 1889
• Act 1899 was confined only to Presidency Towns viz. Calcutta, Bombay and Madras.
1908
• The Code of Civil Procedure 1908 was enacted
• Provisions relating to the law of arbitration contained in Schedule II which extended to the
other parts of the British India
History of the law of arbitration (1/3)

10. 1937
• The Arbitration (Protocol and Convention) Act 1937
• India was a signatory to the convention on the execution of foreign arbitral award
1940
• In 1925, the Civil Justice Committee recommended various changes in the arbitration law
• The Arbitration Act, 1940 was enacted
1961
• India was signatory to the New York Convention 1958.
• For implementing the convention the Foreign Awards (Recognition and Enforcement) Act 1961
was enacted
• The Arbitration (Protocol and Convention) Act 1937 was repealed
1978
• The Eight Law Commission established in 1977 under the Chairmanship of Justice H. R.
Khanna presented 10 reports i.e. from report no. 71 till 80 (between 1978 and 1979)
• The Law Commission of India suggested amendment in the Arbitration Act 1940 in Report
No. 76.
History of the law of arbitration (2/3)

11. 1996
• Enactment of the Arbitration and Conciliation Act 1996
• Based on United Nations Commission on International Trade Law (UNCITRAL) – model law
on International Commercial Arbitration
2001
• The 16th Law Commission established in 2000 under the Chairmanship of B. P. Jeevan Reddy
presented 11 reports i.e. from report no. 175 till 185 (between 2000 and 2003)
• Report No. 176 recommended the Arbitration and Conciliation (Amendment) Bill, 2002
2014
• The 20th Law Commission established in 2013 under the Chairmanship of D.K. Jain and A. P.
Shah presented 19 reports i.e. from report no. 244 till 262 (between 2014 & 2015)
• Report No. 246 recommended amendments to the Arbitration and Conciliation Act, 1996
2015
• Enactment of the Arbitration and Conciliation (Amendment) Act 2015
• Based on the recommendation od the 20th LC
History of the law of arbitration (3/3)

12. • Conciliation
▫ Conciliator brings the disputants to agreement – negotiated
settlement
▫ Conciliator is appointed only after the dispute has arisen
• Mediation
▫ It is a structured process
▫ Mediator assists the disputants to reach a negotiable
settlement
▫ This process results in signed agreement which defines the
future behaviour of the parties
Some similar terms

13. Points for
discussion
Arbitration Conciliation
Pre-condition The process can start only if there
is Arbitration Agreement between
the parties to dispute
No such requirement
Appointment Can be even before dispute arises Appointed only after the
dispute has arisen
Number can be
even/odd
Number of arbitrators need to be
odd
Number of conciliator can be
even
Decision is known as Arbitral award Settlement
Signed by Arbitral tribunal members Parties concerned
Difference between the 2 terms
Arbitration agreement specifies for even number of arbitrator. Can the said agreement may
be treated as an invalid agreement?
No. In MMTC Ltd. v. Sterlite Industries (India) Ltd. [1996] it was held that the number of
arbitrators is dealt separately in section 10 which is a part of the machinery provision for
the working of the arbitration agreement.
Therefore, the arbitration agreement specifying an even number cannot be the
ground to render the arbitration agreement invalid under the Act

14. Scheme of the Act
• The Act is divided into 4 parts and 3 schedules
Part I – Arbitration (sections 2-43)
• Divided into 10 chapters
• General provisions, Arbitration agreement, Composition of arbitral tribunal, Jurisdiction of arbitral tribunal,
Conduct of arbitral proceedings, Making of arbitral award and termination of proceedings, Recourse against
arbitral award, Finality and enforcement of arbitral awards, Appeals, Misc.
Part II – Enforcement of certain foreign awards (sections 44-60)
• New York Convention Awards, Geneva Convention Awards
Part III – Conciliation (sections 61-81)
Part IV – Supplementary provisions (sections 82-86)
First Schedule – Convention on the Recognition and Enforcement of Foreign Arbitral
Award
Second Schedule – Protocol on Arbitration Clauses
Third Schedule – Execution of Foreign Arbitral Awards

15. • Arbitrator
▫ A person appointed by the parties to settle a dispute
• Arbitral award
▫ It includes an interim award
▫ Generic points:
 Shall be in writing and dated
 Oral decision is not an award
 An arbitral award = decree of the court
 Such award shall be signed by the members of the arbitral tribunal
 Signature of majority of members is sufficient with a suitable reasoning
for the omitted signature
 Award shall also mention the reason except
 Where the parties have agreed that no reasons are to be given, or
 the award is an arbitral award on agreed terms under section 30
(settlement).
Important terms

16. • Arbitration Agreement
▫ Section 2 (1) (b) defines the term to mean an agreement referred to in
section 7
 Section 7 defines the „arbitration agreement‟ to mean an agreement by
parties to submit the arbitration or certain dispute which has arisen or which
may arise between them in respect of defined legal relationship whether
contractual or not
 May be in the form of an arbitration clause in the contract or in the form of a
separate agreement
 Shall be in writing
 Reference in a contract to a document containing the arbitration clause
constitutes an arbitration agreement if the contract is in writing and the
reference is such as to make that arbitration clause part of the contract
 In Hindustan Petroleum Corporation Ltd. v. M/s Pink City Midway Petroleum [AIR
(2003) SC 2881] – The jurisdiction of civil court is barred after an application
under section 8 of the Act is made for arbitration
 In Mahesh Kumar v. Rajasthan State Road Corporation [AIR (2006) Raj 56] Raj
HC held that mere existence of arbitration clause in agreement does not bar
jurisdiction of Civil Court automatically
▫ Objection may be raised not later than submission of its first statement of defence on
the substance of the dispute.
Important terms

17. • KK Modi Vs KN Modi (1998 AIR SC 1297)
▫ The arbitration agreement must contemplate that the decision of the
tribunal will be binding on the parties to the agreement.
▫ The jurisdiction of the tribunal to decide the rights of the parties must
derive from their consent, or from an order of the Court or from a
statute, the terms of which make it clear that the process is to be an
arbitration.
▫ The agreement must contemplate that substantive rights of the parties
will be determined by the agreed tribunal.
▫ The tribunal will determine the rights of the parties in an impartial
and judicial manner with the tribunal being fair and equal to both
sides.
▫ The agreement of the parties to refer their disputes to the decision of
the tribunal must be intended to be enforceable in law.
▫ The agreement must contemplate that the tribunal will make a decision
upon a dispute which is already formulated at the time when a
reference is made to the tribunal.
Essential ingredients of an arbitration
agreement

18. • Section 2 (1) (d) defines „arbitral tribunal‟ to mean a sole arbitrator or a
panel of arbitrators
• Number of arbitrators
▫ Parties may determine the number of arbitrators – such number shall not be an
even number
▫ On failure – the arbitral tribunal shall consist of sole arbitrator
• Appointment of arbitrator
▫ Parties may determine the procedure for appointment of arbitrator
 In not acted on time– below process shall be followed
▫ On failure – arbitrator shall be appointed by the manner provided u/s. 11
 Arbitrator could be of any nationality
 Arbitration with 3 arbitrators
 Each party shall appoint 1 arbitrator and the two shall appoint 3rd arbitrator who shall
be presiding arbitrator
 Within 30 days
▫ If the parties fails to appoint their arbitrator
▫ Two appointed arbitrator fails to agree on the 3rd arbitrator
Composition of arbitral tribunal
the arbitrator shall be
appointed by the SC or HC or
any person or institution
designated by such court

19. • Appointment of arbitrator
▫ In case of sole arbitrator – if the parties fail to agree on the
appointment of a sole arbitrator within 30days
 Appointment shall be made by the SC or HC or a person or institution
designated by such person
▫ Arbitrator appointed by the SC or HC or a person or institution
designated by such person is final
▫ Where the parties belong to different nations – the arbitrator may
be of different nation altogether (in case of sole arbitrator or 3rd
arbitrator)
▫ An application made to the SC or HC or a person or institution
designated by such person shall be disposed within a period of 60
days from the date of service of notice on the other party
▫ Fees and manner of the arbitral tribunal shall be such as specified
in the Fourth Schedule.
Composition of arbitral tribunal

20. • In Atlaz Degi-Tel Pvt Ltd Vs Atlaz Technology Pvt Ltd
[2002(4) RAJ 625 (Bom)]
▫ Arbitration is a remedy for affording reliefs to the party
affected by the breach of agreement
 arbitrator cannot conduct a trial of any act which amounts to
an offence, though the same act may be connected with the
discharge of any function under the agreement
▫ Although the transaction is question is a commercial
transaction arising out of an agreement
 offence u/s 138 NI Act appears to have been committed in
the course of such transaction and as such the process issued
u/s 138 should not be quashed.
Whether an arbitral tribunal can entertain criminal
complaint?

21. • Whether an arbitrator may be challenged?
▫ An arbitrator shall disclose in writing the grounds likely to give rise to
justifiable doubts as to his independence or impartiality
 On the grounds as stated in the Fifth Schedule
 Disclosure shall be made in the form specified in Sixth Schedule
 From the time of his appointment and throughout the arbitral proceedings
▫ An arbitrator may be challenged if –
 circumstances exist that give rise to justifiable doubts as to his
independence or impartiality, or
 he does not possess the qualifications agreed to by the parties.
 Challenge procedure under section 13
▫ Arbitrator shall not be eligible to be appointed if the relationship with
the parties falls under the categories specified in the Seventh
Schedule
 Subsequent to the dispute have arisen between them – applicability of
sub-section (5) may be waived by an express agreement in writing
Grounds for challenge

22. • Arbitral Tribunal is not bound by the Code of Civil
Procedure, 1908 or the Indian Evidence Act, 1872
▫ Parties are free to agree on the procedure to be followed
by the arbitral tribunal in conducting the proceedings
▫ Failing any agreement – arbitral tribunal may conduct the
proceedings in the manner it consider appropriate
• The CPC provides for rules relating to suits, judgement,
decree, interest cost etc.
• The Evidence Act makes the law relating to evidence and
applies to all judicial proceedings in or before the Court
▫ Not to proceedings before arbitral tribunal
Rules of procedures for conducting the proceedings

23. • Place of arbitration
▫ Parties may decide
▫ In case of failure of any mention in the agreement – place
shall be determined by the arbitral tribunal (convenient to
the parties)
• Commencement of proceeding
▫ Date on which a request for that dispute to be referred to
the arbitration is received by the respondent
• Language
▫ Parties may decide
▫ In case of failure of any mention in the agreement –shall be
determined by the arbitral tribunal
Arbitration proceedings

24. • Section 23 to 27 stipulates the procedure to be followed in
arbitration proceedings
▫ Claimant shall state the facts supporting his claim, the points at
issue and the relief or remedy sought,
▫ the respondent shall state his defence in respect of these
particulars
▫ The parties may submit with their statements all documents they
consider to be relevant or may add a reference to the
documents or other evidence they will submit.
▫ Unless otherwise agreed by the parties, either party may
amend or supplement his claim or defence during the course of
the arbitral proceedings,
 unless the arbitral tribunal considers it inappropriate to allow the
amendment or supplement having regard to the delay in making it.
Arbitration procedure

25. • Default by the parties – without showing sufficient cause
▫ the claimant fails to communicate his statement of claim in
accordance with sub-section (1) of section 23,
 the arbitral tribunal shall terminate the proceedings;
▫ the respondent fails to communicate his statement of
defence in accordance with sub-section (1) of section 23,
 the arbitral tribunal shall continue the proceedings without
treating that failure in itself as an admission of the allegations
by the claimant.
▫ a party fails to appear at an oral hearing or to produce
documentary evidence,
 the arbitral tribunal may continue the proceedings and make
the arbitral award on the evidence before it.
Arbitration procedure

26. • In an arbitration other than an international commercial arbitration
▫ the arbitral tribunal shall decide the dispute submitted to arbitration
in accordance with the substantive law for the time being in force in
India;
• In international commercial arbitration
▫ the arbitral tribunal shall decided the dispute in accordance with the
rules of law designated by the parties as applicable to the substance
of the dispute;
▫ any designation by the parties of the law or legal system of a given
country shall be construed, unless otherwise expressed, as directly
referring to the substantive law of that country and not to its conflict
of laws rules;
▫ failing any designation of the law under clause (a) by the parties, the
arbitral tribunal shall apply the rules of law it considers to be
appropriate given all the circumstances surrounding the dispute.
Substance of dispute

27. • Can an arbitral tribunal provide an interim measures?
▫ Yes. Section 17 permits an arbitral tribunal to provide an interim
measures of protection as deems fit
 the preservation, interim custody or sale of any goods which are the
subject-matter of the arbitration agreement;
 securing the amount in dispute in the arbitration;
 the detention, preservation or inspection of any property or thing;
 interim injunction or the appointment of a receiver;
 such other interim measure of protection as may appear to the
arbitral tribunal to be just and convenient
 Arbitral tribunal shall have the same power for making order as vested
with the courts
▫ Arbitral tribunal may require a party to provide appropriate
security in connection with the measures ordered
▫ Operative till the dispute is resolved by an award to protect the
interest of a party
Measures provided by the arbitral tribunal

28. • Section 29A (Amendment Act) provides for time limit for
arbitration award
▫ Award shall be made within a period of 12 months from the
date the arbitral tribunal enters upon the reference
 Date on which the arbitrator(s) receive notice in writing of their
appointment
 Period may be extended by 6 months if the parties consent
▫ If the award is not made within the specified time – the mandate of the
arbitrator(s) shall be terminated unless the court has extended the period
▫ If the Court finds that the proceedings have been delayed by the arbitral
tribunal – then Court may order reduction in fees not exceeding 5% for each
month of such delay
▫ Extension may be on an application of any of the parties – such application shall be
disposed within a period of 60 days from the date of service of notice on the opposite
party
▫ If the award is made within a period of 6 months
 Arbitral tribunal shall be entitled to receive such amount of
additional fees to the parties as they may agree
Arbitration Award

29. • Section 31provides for form and contents of arbitral award
▫ Arbitral award shall be made in writing and shall be signed by
the members of the arbitral tribunal.
▫ Reason upon which the award is based unless
 the parties have agreed that no reasons are to be given, or
 the award is an arbitral award on agreed terms under section 30
(settlement).
▫ Award shall state the date and place of arbitration
▫ Arbitral tribunal shall send the signed copy to each party
▫ Where award is for the payment of money
 the arbitral tribunal may include in the sum for which the award is
made interest, at such rate as it deems reasonable
 Rate of interest @ 2% higher than the current rate of interest
prevalent on the date of award from the date of award to the
date of payment
 Cost of arbitration shall be fixed by the arbitral tribunal
Arbitration Award

30. • Whether awards made in an international commercial
arbitration shall be considered as foreign awards?
▫ In Bhatia International Vs Bulk Trading S.A. [(2002) AIR SC
1432]
 Award made under Part I of the Act – Domestic Awards;
 Award made in an arbitration held in a non-convention country
– Domestic Awards;
 Award made in an arbitration held in a convention country –
Foreign Awards;
Determining domestic & foreign award

31. • The party shall make an application for setting aside the arbitral award
• Award may be set aside by the Court only if -
▫ the party making the application furnishes proof that
 a party was under some incapacity, or
 the arbitration agreement is not valid under the law or
 the party making the application was not given proper notice of the appointment of an arbitrator
or of the arbitral proceedings or was otherwise unable to present his case
 the arbitral award deals with a dispute not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matter beyond the scope of the submission to
arbitration:
 the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in conflict with a provision of this Part from
which the parties cannot derogate, or, failing such agreement, was not in accordance with this Past;
or
▫ the Court finds that
 the subject-matter of the dispute is not capable of settlement by arbitration under the law for the
time being in force, or
 the arbitral award is in conflict with the public policy of India.
• Such application may not be considered if –
▫ An application for setting aside has been made after 3 months have elapsed from the date on
which the party making that application had received the arbitral award,
▫ if a request had been made under section 33 (correction of award), from the date on which that
request had been disposed of by the arbitral tribunal
 However, the option to provide sufficient cause is always available
Setting aside arbitral award

32. • An appeal shall lie from the following orders to the Court
authorised by law to hear appeals from original decrees of the
Court passing the order
▫ refusing to refer the parties to arbitration under section 8;
▫ granting or refusing to grant any measure under section 9;
▫ setting aside or refusing to set aside an arbitral award under section
34.
• Appeal shall also lie to a court from an order of the arbitral
tribunal
▫ accepting the plea referred to in sub-section (2) or sub-section (3) of
section 16; or
▫ granting or refusing to grant an interim measure under section 17.
• No second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or taken away
any right to appeal to the Supreme Court.
Appealable order

33. • Section 2 (1) (e) defines the term “court” to mean –
• In the case of an arbitration other than international commercial arbitration
▫ 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 to decide
the questions forming the subject-matter of the arbitration 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;
• In the case of international commercial arbitration
▫ the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to
decide the questions forming the subject-matter of the arbitration if the same had
been the subject-matter of a suit, and in other cases, a High Court having jurisdiction
to hear appeals from decrees of courts subordinate to that High Court
• Ankati Satyamaiah Vs. Sallangula Lalaiah [(2003)(2) RAJ 433 (AP)]
▫ It was held that the definition of the word 'court' in the expression 'Principal civil court
of original jurisdiction' in Section 2(1) (e) in conjunction with the meaning given in
Section 2(4) of CPC and Section 3(17) of the General Clauses Act, indicates that it
implies the Court of District Judge i.e. 'Principal civil court of original jurisdiction' in a
district. Also, the definition expressly excludes any other civil court of a grade inferior
to such courts.
In which court an appeal can be filed?

34. • The parties at any stage either before or at the time of appointment of the
arbitral tribunal agree in writing to have their dispute resolved by fast track
procedure (section 29B – Amendment Act)
▫ The arbitral tribunal shall decide the dispute on the basis of written pleadings,
documents and submissions filed by the parties without any oral hearing;
▫ The arbitral tribunal shall have power to call for any further information or
clarification from the parties in addition to the pleadings and documents filed by
them;
▫ An oral hearing may be held only, if, all the parties make a request or if the arbitral
tribunal considers it necessary to have oral hearing for clarifying certain issues;
▫ The arbitral tribunal may dispense with any technical formalities, if an oral hearing is
held, and adopt such procedure as deemed appropriate for expeditious disposal of
the case.
• Award shall be made within a period of 6 months from the date the arbitral
tribunal enters upon the reference
▫ Failure to comply with the specified time lines then provisions of section 29A shall
apply
Fast track procedure

35. • Arbitration Clause
• Reference to arbitration agreement
• Procedure for appointment of arbitrator
▫ Name of the arbitrator
• Place of arbitration
• Period within which the arbitrator shall make an award
• Arbitration fees to be borne
Points to be considered while drafting an agreement

37. Scheme of the Act post Amendment Act
• The Act is divided into 4 parts and 7 schedules
Part I – Arbitration (sections 2-43)
Part II – Enforcement of certain foreign awards (sections 44-60)
Part III – Conciliation (sections 61-81)
Part IV – Supplementary provisions (sections 82-86)
First Schedule – Convention on the Recognition and Enforcement of Foreign Arbitral Award
Second Schedule – Protocol on Arbitration Clauses
Third Schedule – Execution of Foreign Arbitral Awards
Fourth Schedule – Determination of the fees of the arbitral tribunal and the manner of its payment
Fifth Schedule – Parameters determining whether circumstances exists which give rise to justifiable
doubts
Sixth Schedule – Disclosure shall be made by an arbitrator
Seventh Schedule – Eligibility to be appointed as an arbitrator

38. • Previous services for one of the parties or other involvement in the case
▫ arbitrator has within the past 3 years served as counsel for one of the parties
or an affiliate of one of the parties or has previously advised or been
consulted by the party or an affiliate of the party making the appointment in
an unrelated matter
 but the arbitrator and the party or the affiliate of the party have no ongoing
relationship
▫ arbitrator has within the past 3 years served as counsel against one of the
parties or an affiliate of one of the parties in an unrelated matter
▫ arbitrator has within the past 3 years been appointed as arbitrator on two or
more occasions by one of the parties or an affiliate of one of the parties.
▫ arbitrator‟s law firm has within the past 3 years acted for one of the parties
or an affiliate of one of the parties in an unrelated matter without the
involvement of the arbitrator.
▫ arbitrator currently serves, or has served within the past 3 years, as
arbitrator in another arbitration on a related issue involving one of the
parties or an affiliate of one of the parties
Circumstances under Schedule V but not covered under
schedule VII

39. • Relationship between an arbitrator and another arbitrator or counsel
▫ arbitrator and another arbitrator are lawyers in the same law firm.
▫ arbitrator was within the past three years a partner of, or otherwise affiliated with, another arbitrator or any
of the counsel in the same arbitration.
▫ A lawyer in the arbitrator‟s law firm is an arbitrator in another dispute involving the same party or parties or
an affiliate of one of the parties.
▫ A close family member of the arbitrator is a partner or employee of the law firm representing one of the
parties, but is not assisting with the dispute.
▫ arbitrator has within the past three years received more than three appointments by the same counsel or the
same law firm.
• Relationship between arbitrator and party and others involved in the arbitration
▫ arbitrator‟s law firm is currently acting adverse to one of the parties or an affiliate of one of the parties.
▫ arbitrator had been associated within the past three years with a party or an affiliate of one of the parties in
a professional capacity, such as a former employee or partner.
• Other circumstances
▫ arbitrator holds shares, either directly or indirectly, which by reason of number or denomination constitute a
material holding in one of the parties or an affiliate of one of the parties that is publicly listed.
▫ arbitrator holds a position in an arbitration institution with appointing authority over the dispute.
▫ arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an
affiliate of one of the parties, where the affiliate is not directly involved in the matters in dispute in the
arbitration.
Circumstances under Schedule V but not covered under schedule VII
Cont…

40. • In order to recover the dues from the borrower following
alternatives are available –
▫ First
 Blank cheques collected/ cheques bounce – issue notice under
section 138 of the Negotiable Instrument Act
▫ Second
 Where loan agreement does not contain „arbitration clause‟ -
file civil suit for the outstanding amount
▫ Third
 Where the loan agreement contains „arbitration clause‟ –
commence arbitration proceeding
Recovery measures available with NBFCs