International Commercial Arbitration - India and Global Perspective

DISSERTATION (YEAR MAY 2015-2016)
BHARATI VIDYAPEETH UNIVERSITY PUNE (INDIA)
NEW LAW COLLEGE PUNE
Erandwane, Pune – 411 038
“INTERNATIONAL COMMERCIAL ARBITRATION : INDIA &
GLOBAL PERSPECTIVE”
Research Report by
AVINASH MURKUTE
ROLL NO. 31
EXAMINATION UNIVERSITY SEAT NO. 1614960210
LLM ONE YEAR COURSE (2015-16)
Submitted to
PROF. (ADV.) U. S. DIVE Sir
NLC, Bharati Vidyapeeth, Pune
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BHARATI VIDYAPEETH DEEMED UNIVERSITY
NEW LAW COLLEGE
PUNE – 411 038
CERTIFICATE
This is to certify that the entire work embodied in the reasearch paper titled
GLOBAL PERSPECTIVE” has been carried out by Avinash W.
Murkute under my supervision and guidance in the Department of law,
New Law College, Bharati Vidyapeeth Deemed University, Pune for
Masters of Laws (One Year Program).
Place:- Pune Signature
Date:- 18/05/2016
Prof. (Adv.) U. S. DIVE
(Research Guide)
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DECLARATION
I hereby declare that the entire work embodied in the reasearch paper titled
GLOBAL PERSPECTIVE” is written by me and submitted to New Law
College, Bharathi Vidyapeeth Deemed University Pune. The present work is of
original in nature and the conclusions drawn are based on the data collected by me. To
the best of my knowledge this work has not been submitted previously, for the award
of any degree or diploma, to this or any other university.
Date:- 18/05/2016
AVINASH MURKUTE
LL.M (One Year Program)
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ACKNOWLEDGEMENT
I wish to acknowledge my indebtedness to Prof. Adv. U. S. Dive my teacher
and guide for the valuable guidance and advice. It is his illuminating comments and
suggestion which have enabled me to successfully complete my work.
I also express my propound sense of gratitude and sincere thanks towards all
my teachers for their committed involvement and for their different look of the
subject and their proper direction.
I sincerely thank all the faculty member and college librarian for their
cooperation and assistance.
I will be failed in my duty if I didn’t thank my colleagues and friends who have
supporting me morally.
I cannot finish without thanking my family for their material and spiritual
support in all aspects of my life.
Date:- 18/05/2016
(AVINASH MURKUTE)
LL.M (One Year Program)
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TABLE OF CONTENTS
S.N. TOPIC PAGE NO.
(1) INTRODUCTION – IMPORTANCE OF RESEARCH 2
(2) STATEMENT OF PURPOSE – SCOPE OF RESEARCH 5
(3) HYPOTHESIS 7
(4) RESEARCH METHODOLOGY 9
(5) SOURCES OF DATA COLLECTION 11
(6) CONTENT – CHAPTERISATION 14
(6.1) MODELARBITRATION LAW (MAL) 14
(6.2) GENERAL PROVISIONS OF ARBITRATION 32
(6.3) ARBITRAL TRIBUNAL 42
(6.4) ENFORCEMENT OF FOREIGN AWARDS 53
(6.5) ONLINE ARBITRATION 60
(7) INTERVIEWS & EXPERT OPINIONS 73
(8) CONCLUSION & REMARKS 84
(9) BIBLIOGRAPHY 85
(10) MISCELLANEOUS 86 / 110
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INTRODUCTION - IMPORTANCE OF RESEARCH
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1. INTRODUCTION - IMPORTANCE OF RESEARCH
Every business has a risk of facing disputes which might be created
intentionally or otherwise. Financial implications of such disputes differ from
business to business and industry to industry and rest on facts and
circumstances of particular case. Disputes are defined, segregated and are seen
with different views of different parties. Parties include shareholders,
distributirs, labours, customers, contractors and so on. Post globalization and
due to rapid growth in India the pendency in the court cases is alarming and
thereby utmost slow adjudication of commercial disputes. That affects free
business decision making and everything remains in limbo causing uncertainty
of dispute settlement. There is now a widespread recognition and acceptance of
commercial arbitration as a speedy mean to resolve disputes rather than routine
court litigation. Arbitration is a method of settlement of disputes by way of an
alternative to the normal judicial method. It is quassijudicial mechanism.
Various means of alternative dispute resolution (ADR) includes conciliation,
mediation and negotiation arbitration. Post year 1980, commercial arbitration
has been widely recognized in different parts of global trade. Global business
firms prefers ADR to routine courts having different legal systems. Even
private arbitration is preferred. Certain other systems like “Panch Parmeswar”
were already in use. “Panchayat” at village levels were also in tradition. In
England seventeen century onwards, many business disputes were resolved by
arbitration by the merchant and craft guilds1
. The Arbitration & Conciliation
Act of 1996 in India as amended from time to time is based on United Nations
Commission on International Trade Law (UNICITRAL). It is transparent,
flexible, speedy and effective mechanism. This Act promotes settlement of
1 Stone, Arbitration National, page 2
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disputes outside the court in an easy manner by mutual consent. Thus
interference by the courts in arbitration has been reduced. Part XIII – Trade,
Commerce and Intercourse within the territory of India of the Constitution of
India and especially Article 301 deals with freedom of trade, commerce and
intercourse. This study is to examine its importance in global, institutional,
personal, Indian disputes with a special reference to Online Dispute Resolution
(ODR) and shall made attempts to check ground reality vis-a-vis its financial
impact on disputing parties and how it affects the arbitration process.
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STATEMENT OF PURPOSE- SCOPE OF RESEARCH
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2. STATEMENT OF PURPOSE- SCOPE OF RESEARCH
The scope of this research is mainly to carry out a comprehensive study on how
the concept of arbitraton evolved from traditional times to Model Arbitration
Law (MAL) of UNICITRAL and its comparision with Indian legislation of
1996. Business and dynamics of business, especially, in the online and Intenet
arena are fast changing. New concepts of businesses are built. Some are long
term and some are fly by night operators. Disputes of new forms and features is
the reality and law needs to keep pace with the reality of the society, customs
and business dynamics and hence apart from other parts of the study, a special
emphasis shall be provided on Online Dispute Resolution (ODR), its processes,
examples, case studies and enforcement. Although, there is vast information to
study, this project shall discuss core issues and compare financial and other
implications.
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3. HYPOTHESIS
ADR (Alternative Dispute Resolution) reduce burden on judiciary. It offers
flexible, speedy, convenient, time-saving alternative to disputing parties to
resolve their business disputes amicable and focus on their business needs.
Arbitration, based on MAL (Model Arbitration Law) of the UNCITRAL is
becoming an International Law which is ratified by civilized nations.
Similarly, is arbitration unsuitable for the parties having financial disparity in
cases where the arbitrators are appointed by the process of law wherein old
horses like retired judges are appointed and does this process is settlement of
old age for such arbitrators, needs to cheked.
How arbitration is helping to resolve petty disputes including public utility bills
and marital discords, needs to be checked.
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RESEARCH METHODOLOGY
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4. RESEARCH METHODOLOGY
The present research is a Doctrinal or Non Empirical research because the data
is collected from the secondary sources which includes books, articles, journals,
magazines, case laws, commentaries, Internet, statutes, treaties, digital
repositories, online magazines, newsletters, awards, orders, interviews,
Government reports, websites, etc.
The date collected from various above sources was not only just collated but
also authenticated from official sources and their official publications.
On Internet data is abundant but the issue if of authenticity. Some data on
Internet is deliberately published to misled the audiences or for other intentions,
hidden intensions.
Researcher has taken sufficient care to authenticate the date and just not overlap
or repeat it contextually.
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SOURCES OF DATA COLLECTION
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5. SOURCES OF DATA COLLECTION
The researcher has employed the secondary sources of data, because the present
research is a Doctrinal or Non Empirical.
The sources of data includes
(1) Books
(2) Articles
(3) Internet
(4) Commentaries
(5) Case Laws
(6) Treaties
(7) International Treaties
(8) Official Government Publications
(9) Government Websites
(10) Departmental Websites
(11) Recent news material in print media
(12) News reports in online media
(13) Digital repositories
(14) Online magazines
(15) Legal newsletters
(16) Awards
(17) Orders
(18) Government reports
(19) Dedicated websites,
(20) Interviews etc.
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CONTENT – CHAPTERISATION
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6. CONTENT – CHAPTERISATION
6.1 – MODELARBITRATION LAW – MAL
BACKGROUND OF ARBITRATION -
Arbitration has been an alternative to litigation for hundreds of years. It was used as
early as the thirteenth century by English businesses who preferred to have their
disputes resolved according to their own customs rather than by public law.
Commercial arbitration in the United States can be traced to American Revolution in
New York and several other colonies and is widely used today. Labour arbitration
became well used in during 1940s and now more than 95 percent of all collective
bargaining contracts contain a provision for final and binding arbitration.
Additionally, arbitration is used to resolve disputes in the real estate industry, disputes
between consumers and manufacturers, family disputes, medical malpractice claims,
securities disputes, attorney's fee disputes, disputes between employees - employers
having no trade union, community disputes and civil rights disputes. It is now even
used in disputes related to compensation / salaries paid to sports people.
Arbitration originated in Roman and Canon law and was revised in the Middle Ages
in European civil law systems. In the common law, arbitration has been a feature of
dispute resolution since advent of 14th
century. Early forms of arbitration were dispute
resolution procedure created and managed by trade groups – merchant or
manufacturer community.
In England from the 17th
century onward, many business disputes were redressed by
arbitration conducted by the merchant and craft guilds.
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In 19th
century Germany, courts of arbitration were established by the stock exchanges
of the city states, the chambers of commerce, and the local associations of the traders
in Coffee, Colonial products and other items.
The New York Chamber of Commerce set up an arbitration system in 1768 in order to
settle business disputes according to trade practice rather than legal principles. In
1927, the American Arbitrations Associations' Yearbook of Commercial Arbitration
listed over 1000 trade associations that had systems of arbitration.
Pune, Maharashtra, India too have association of traders and others by the name of
MCCIA which stands for Mahratta Chamber Of Commerce Industries & Agriculture
Pune which is affiliated to Indian Council of Arbitration, New Delhi (ICA).
UNICITRAL – UNITED NATIONS COMMISSION ON INTERNATIONAL
TRADE LAW
UNCITRAL has been recognized as the core legal body of the United Nations system
in the field of international trade law for modernization and harmonization of rules on
international business. These include:
• Conventions, model laws and rules
• Legal and legislative guides and recommendations
• Case law and enactments of uniform commercial law
• Technical assistance in law reform projects
• Regional & national seminars on uniform commercial law
UNICITRAL- The Commission carries out its work at annual sessions, which are
held in alternate years at United Nations HQ in New York and at the Vienna
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International Centre at Vienna. Each working group of the Commission typically
holds one or two sessions a year, depending on the subject-matter to be covered; these
sessions also alternate between New York and Vienna.
In addition to member States, all States that are not members of the Commission, as
well as interested international organizations, are invited to attend sessions of the
Commission and of its working groups as observers. Observers are permitted to
participate in discussions at sessions of the Commission and its working groups to the
same extent as members.
The Commission has established six working groups to perform the substantive
preparatory work on topics within the Commission's programme of work. Each of the
working groups is composed of all member States of the Commission.
The six working groups and their current topics are as follows:
• Working Group I - Micro, Small and Medium-sized Enterprises
• Working Group II - Arbitration and Conciliation
• Working Group III - Online Dispute Resolution
• Working Group IV - Electronic Commerce
• Working Group V - Insolvency Law
• Working Group VI - Security Interests
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Regional Presence of UNICITRAL-
At its 44th session, in July 2011, establishment of UNCITRAL regional centres in
different parts of the world was considered in reaching out and providing technical
assistance to developing countries. Informed of the offer received from the Republic
of Korea for a pilot project in the Asia-Pacific region, the Commission approved the
establishment of the UNCITRAL Regional Centre for Asia and the Pacific in Incheon,
Republic of Korea.
CLOUT System-
The UNCITRAL Secretariat has established a system for collecting and disseminating
information on court decisions and arbitral awards relating to the Conventions and
Model Laws that have emanated from the work of the Commission. The purpose of
the system is to promote international awareness of the legal texts formulated by the
Commission and to facilitate uniform interpretation and application of those texts.
MAL & INDIA-
An arbitration clause stated appointment of one arbitrator by each party and an umpire
to be jointly appointed by those arbitrators.Respondent refused. On appeal of
appellant HC said arbitration clause was invalid as s/10 of the new 1996 Arbitration
and Conciliation Act (adapted from article 10 MAL). It states that parties are free to
determine the number of arbitrators, provided that such number shall not be an even
number. SLP to SC held arbitration clause was valid.
MMTC v. Sterlite Industries (India) Ltd.~Case 177:MAL2
2 Article 10 of MAL was upheld
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Other guidelines by UNICITRAL-
• International Commercial Arbitration & Conciliation
• International Sale of Goods (CISG) & related transactions
• Security Interests
• Insolvency
• International Payments
• International Transport of Goods
• Electronic Commerce
• Procurement and Infrastructure Development
Other guidelines and texts connected with MAL -
• Dispute resolution UNCITRAL Arbitration Rules, 1976
• UNCITRAL Conciliation Rules, 1980
• Recommendations for tribunals for arbitrations u/ UNCITRAL Rules, 1982
• UNCITRAL Model Law on International Commercial Arbitration, 1985
• International Commercial Arbitration, 1985
• UNCITRAL Notes on Organizing Arbitral Proceedings, 1996
• UNCITRAL Model Law on International Commercial Conciliation, 2002
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UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL
ARBITRATION 1985, amended in 2006.
Chapter I. General provisions
Article 1. Scope of application
Article 2. Defi nitions and rules of interpretation
Article 2A. International origin and general principles
Article 3. Receipt of written communications
Article 4. Waiver of right to object
Article 5. Extent of court intervention
Article 6. Court or other authority for certain functions of arbitration assistance &
supervision
Chapter II. Arbitration agreement
Article 7. Option I Defi nition and form of arbitration agreement
Option II Definition of arbitration agreement
Article 8. Arbitration agreement and substantive claim before court
Article 9. Arbitration agreement and interim measures by court
Chapter III. Composition of arbitral tribunal
Article 10. Number of arbitrators
Article 11. Appointment of arbitrators
Article 12. Grounds for challenge
Article 13. Challenge procedure
Article 14. Failure or impossibility to act
Article 15. Appointment of substitute arbitrator
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Chapter IV. Jurisdiction of arbitral tribunal
Article 16. Competence of arbitral tribunal to rule on its jurisdiction
Chapter IV A. Interim measures and preliminary orders
Section 1. Interim measures
Article 17. Power of arbitral tribunal to order interim measures
Article 17 A. Conditions for granting interim measures
Section 2. Preliminary orders
Article 17 B. Applications for preliminary orders and conditions for granting
preliminary orders
Article 17 C. Specific regime for preliminary orders
Section 3. Provisions applicable to interim measures and preliminary orders
Article 17 D. Modification, suspension, termination
Article 17 E. Provision of security
Article 17 F. Disclosure
Article 17 G. Costs and damages
Section 4. Recognition and enforcement of interim measures
Article 17 H. Recognition and enforcement
Article 17 I. Grounds for refusing recognition or enforcement
Section 5. Court ordered interim measures
Article 17 J. Court ordered interim measures
Chapter V. Conduct of arbitral proceedings
Article 18. Equal treatment of parties
Article 19. Determination of rules of procedure
Article 20. Place of arbitration
Article 21. Commencement of arbitral proceedings
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Article 22. Language
Article 23. Statements of claim and defence
Article 24. Hearings and written proceedings
Article 25. Default of a party
Article 26. Expert appointed by arbitral tribunal
Article 27. Court assistance in taking evidence
Chapter VI. Making of award and termination of proceedings
Article 28. Rules applicable to substance of dispute
Article 29. Decision-making by panel of arbitrators
Article 30. Settlement
Article 31. Form and contents of award
Article 32. Termination of proceedings
Article 33. Correction and interpretation of award; additional award
Chapter VII. Recourse against award
Article 34. Application for setting aside as exclusive recourse against arbitral award
Chapter VIII. Recognition and enforcement of awards
Article 35. Recognition and enforcement
Article 36. Grounds for refusing recognition or enforcement
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Part Two
EXPLANATORY NOTE BY THE UNCITRAL SECRETARIAT ON THE
MODEL LAW ON INTERNATIONAL COMMERCIALARBITRATION
A. Background to the Model Law
1. Inadequacy of domestic laws
2. Disparity between national laws
B. Salient features of the Model Law
1. Special procedural regime for international commercial arbitration
2. Arbitration agreement
3. Composition of arbitral tribunal
4. Jurisdiction of arbitral tribunal
5. Conduct of arbitral proceedings
6. Making of award and termination of proceedings
7. Recourse against award
8. Recognition and enforcement of awards
6.2 – INTERNATIONALARBITRATION
International arbitration is arbitration between companies or individuals in different
states, usually by including a provision for future disputes in a contract.
The predominant system of rules is the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the "New York
Convention"). The International Centre for the Settlement of Investment Disputes
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(ICSID) also handles arbitration, but it is particularly focused on investor-state
dispute settlement and hears relatively few cases.
The New York Convention was drafted under the auspices of the United Nations and
has been ratified by more than 140 countries, including most major countries involved
in significant international trade and economic transactions. The New York
Convention requires the states that have ratified it to recognize and enforce
international arbitration agreements and foreign arbitral awards issued in other
contracting states, subject to certain limited exceptions. These provisions of the New
York Convention, together with the large number of contracting states, have created
an international legal regime that significantly favors the enforcement of international
arbitration agreements and awards. It was preceded by the 1927 Convention on the
Execution of Foreign Arbitral Awards in Geneva.
Few international bodies which are involved in arbitration process are listed as under.
1) ICC – International Chamber of Commerce – Offers worldwide services and
do have India office situated in New Delhi
2) JAMS International – Founded in London (UK) in the year 1979 and has
principal offices in London and many other offices worldwide. They claim that
they have conducted more than 12,000 commercial dispute settlement.
3) BCICAC – British Columbia International Commercial Arbitration centre –
Founded in 1986 is a non-profit organization located in Vancouver, British
Columbia, Canada. It is the organization where the fee structure is published
online and that too in detailed manner giving an impression of transparency and
accountability.
4) ICDR – International Centre for Dispute Resolution. AAA i.e. The American
Arbitration Association is again a non-profit organization and ICDR functions
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under the auspices of AAA and was founded in 1996 and claim to operate in 80
countries.
5) LCIA - London Court of International Arbitration. Founded in 1883 has world
wide operation including India office at New Delhi
6) Hong Kong International Arbitration Centre. Founded in 1985 claims to
have handled 477 disputes in the year 2014 alone, 463 in the year 2013, 293 in
the year 2012 and so on. If we critically analyze the types of disputes handled
by them and increment thereto, then domain name disputes are increasing
drastically. The researched having specialization in Domain names, have
explained the details in the coming pages.
7) SIAC – Signapore International Arbitration Centre. Founded in 1991 as an
independent non-profit organization having worldwide presence including in
India.
At a glance analysis of these few organizations hints me that each and every
organization claims to be world's finest organization, which makes me guess that
arbitration is a worldwide market and there is huge scope of disputes settlement and
make some big money.
To my understanding and if anyone at all reads this research paper, law students or
other experts can approach these organizations for internship or employment and get
some fair idea of their working. Other areas of scope is make them proposal to open
office in India have you as their representative for disputes related to Indian
companies and the person can serve the clientele at Pune, Maharashtra, India.
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Moreover, the aspirant can open his own arbitration legal firm after obtaining
sufficient skills, technology and market understanding and join the race to settle the
disputes and bring disputing parties to the table and help them resolve their disputes,
move on and do more business for them and for the arbitrator and / or facilitator too.
PERMANENT COURT OF ARBITRATION, PEACE PALACE , HAGUE
It is intergovernmental organization founded in the year 1899 on the basis of
International Treaty for the benefit of International community. They too have
mentioned their fee schedule on their website in transparent and accountable manner.
It is seated in Peace Palace, Hague, Netherland.
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Permanent Court of Arbitration has below offices or divisions:
a) Administrative Council
b) International Bureau
c) Mauritius Office
d) Members of the Court
e) Panel of Arbitrators and Experts For Environmental Disputes
f) Panel for Arbitrators and Experts for Space – related Diputes
g) Financial Assitance Fund
119 countries have ratified conventions of Permanent Court of Justice. Presently Mr.
Hugo H. Siblesz is the General Secretary and head of International Bureau of the
PCA.
If we analyze the 115th
report of the year 2015 of the PCA we can see that during the
year 2015 PCA's work can be categorized as under:
1. 8 Inter-State arbitrations
2. 76 investor-state arbitrations
3. 44 arbitrations due to contractual issues
4. 1 related natural resources
5. and other 6 disputes
Recently permanent court of arbitration was a news material for law students as
Enrica Lexie case i.e. Italy V. India is making the news. Otherwise also Savarkar Case
is also important to India i.e. Republic of France v. Great Britain. Another case which
is showing as pending in the database of permanent court of arbitration is Louis
Dreyfus Armateurs SAS (France) v. The Republic of India.
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Let us see few cases from the eyes of permanent court of arbitration and international
tribunal.
a) SAVARKAR CASE
As per the original award dated 24 February, 1911 a set of 5 Arbitrators of Permanent
Court of Arbitrator of United Nations deliberated the case as under.
The case brief – Settlement of the questions of the fact and law raised by the arrest
and restoration to the P&O mail steamer “S. S. Morea” at Marcilles on the day of 8th
July 1910 of the British Indian Vinayak Damodhar Savarkar, who managed to escape
from that motor vessel where he was in captivity of foreign state and person taking
refuge in the territory of foreign state and sovereignity of the state – Extradition and
Arbitration.
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Savarkar, a revolutionary and resourceful Hindoo while in captivity of British Indian
Soldiers and en route to India for trying in some alleged murder cases to be tried in
Indian (Brithish ruled) courts, managed to slip and escape thru the toilet pot of S.S.
Morea at Marrseilles port.
The French commander of the port managed to get hold of Savarkar with single hand
and without any resistance, who in turn was returned to two Indian soldiers and one
more person who were actually shouting from the deck of the motor vessel S. S.
Morea. Savarkar was captured within few minutes of his escape as he escapted,
swimmed the waters and managed to reach the shores of Marseilles. The French
commander that he was crew member who is trying to desert the ship and voyage.
The French commander was not understaning English language and claimed that he
never received any communication from Republic of France to keep eye on S.S.
Morea as was communicated by Great Britain and Great Britain maintained that
proper SOS messages about fugitive Savarkar on board was provided to all the ports
of the voyage of the S. S. Morea. During the arbitration proceedings before the
Permanent Court of Arbitration they have provided various logs and calls to that
effect. Later French Government realized that the by mistake of the French
Commander, Savarkar, a refuge was handed over to British Indian soldiers on MV. S.
S. Morea and no proper procedure was followed in handing him to them and
requested Great Britain to restore Savarkar to them as he was not extradited in proper
manner and proper procedures and formal request from Great Britain was not
followed. As England refused to comply with the request, French Government applied
to Permanent Court of Arbitration for restoration of Savarkar.
Court held that: The Arbitral Tribunal decided that the Government of His Britanic
Majesty is not required to restore the said “Fugitive” to the Government of French
Republic.
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b) Enrica Lexie case
As per the original proceedings order of The International Tribunal For the Law of the
Sea -Year 2015 dated 24th
August 2015, Italy requested the tribunal to adjudge and
declare that India has wrongfully acted its jurisdiction over Enrica Lexie a Motor
Vessel carrying a Italian Flag and such exercise is violating immunity of the Italian
marines and only Italy has exclusive jurisdiction over the said Motor Vessel and their
marines Sergent Latorre and Sergent Girone and India has violated Piracy
Convention.
Italy further requested to the tribunal invoke provisional measures and order that India
should refrain from taking any judicial or administrative measures against above
named marines and any other form of jurisdiction over the said Motor Vessel Enrica
Lexie and India should take all the appropriate measures to lift all the restrictions on
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liberty, security and movement of marines and they should be allowed to travel and
stay in Italy throughout the pendency of the proceedings.
India submitted that two innocent Indian fishermen on board an Indian fishing vessel
St. Antony were killed by Italian marines on date 15th
February 2012 when they were
fishing in exclusive economic zone (EEZ) of India approximately 20.5 nautical miles
off the coast of India. They were killed without any contact or provocation by the
marines of Italy on board of commercial oil tanker and India denied any immunity
and privileges of the marines as it was not a warship or state vessel but a commercial
oil tanker en tourage from Singapore to Egypt.
India and Italy both parties have tried to settle the dispute at diplomats level over
several rounds and came to the conclusion that settlement over the dispute could not
be achieved by negotiation and hence the dispute was raised at the International
Tribunal.
India contended that they have fast tracked the judicial case and it is pending before
the Supreme Court of India and both the marines were under arrest out of which one
was allowed to be on parole on medical grounds and the other one is in custody of the
Supreme Court of India and is residing in Embassy of Italy in New Delhi.
Tribunal is of the opinion that humanity must apply in the laws of the say and they
have upheld the same principle in Motor Vessel Saiga and Saint Vincent and the
Grenadines v. Guinea awards. Tribunal is also having sympathy towards the families
of the two Indian fishermen who were killed by the marines and is equally concerned
over the marines and their families.
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The order dated above reads that Italy and India shall both suspend all court
proceedings and shall refrain from initiating new ones which might aggravate or
extend the dispute submitted to the arbitral tribunal or might jeopardize or prejudice
the carrying out of any decision which the arbitral tribunal may render3
.
3 Case 24 of 2015 before UNITLOS
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GENERAL PROVISIONS OF ARBITRATION
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6.2 – GENERAL PROVISIONS OF ARBITRATION
The law relating to arbitration is provided by the Arbitration and Conciliation Act,
1996. The act has been promulgated with effect from date 25th
January, 1996. The act
repealed earlier the Arbitration Act 1940, which mainly governed the law relating to
arbitration earlier. The act extends to the whole of India and part IV dealing with
supplementary provisions of this act extend to the state of Jammu and Kashmir only
in so far as they are related to 'international commercial arbitration' or, the as the case
may be 'international commercial conciliation'.
The newly implemented act is broadly based on Model Law of Arbitration adopted by
the United National Commission on International Trade Law (UNICITRAL) which
represents the internationally accepted modern concept of arbitration. It consolidates
and amended the law relating to 'domestic arbitration', 'international commercial
arbitration' and provides for the enforcement of 'foreign awards' (that is, those given
by the arbitral trinunals outside India). It also introduces the law relating to
'Conciliation'.
The new law has brought about major changes in the Indian Arbitration Law to attract
foreign investors (or FDI i.e. Foreign Direct Invetments) by creating circumstances so
that they may have confidence in the system of commercial disputes resolution and
enforcement of forein award in Inda. This has been done by removing obstacles in the
commercial dispute resolution machinery outside the court and attempting to create
environment whereby courts interference is avoided or minimised. For example,
unlike the previous law, now an arbitral award need not be filed in a Court of Law to
obtain a decree, from the Court in terms of the award, for enforcement and it is
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directly enforceable, upon expiry of the time given to challenge the award4
. Besides,
Arbitrator's powers are increased and the grounds for challenging the Award are made
more specific than under the previous law. Further, the new law, for the first time
inIndia, provides a detailed statutory framework for the conduct of 'conciliation'
proceedings outside the court as a machinery of 'Alternative Dispute Resolution
(ADR) as well.
The term 'Alternative Dispute Resolution (ADR) means alternative to litigation and
hence it includes both 'arbitration' and 'conciliation'. However, sometimes it is taken
to mean alternative to the imposed decision processes of litigation and arbitration and
hence it excludes arbitration. The international Centre for Alternative Disputes
Resolution (ICADR) is unique centre which provides ADR services to diputing
parties not only in India but also the parties all over the world. It maintains panels id
trained meditators and arbitrators to help resolve the disputes outside the court. A
significant form of ADR that has evolved in India is Lok Adalats. So far the system of
Lok Adalats has been ad hoc and need based. With the amendment effected in 2002 in
the Legal Services Authoritied Act, 1987, permanent Lok Adalats are being set up all
over the country to adjudicate cases relating to public utility services upto the value of
Rs. 10 Lakhs.
TYPES OF ARBITRATION
The Arbitration and Conciliation Act, 1966, broadly classifies arbitration as below.
1. FOREIGN ARBITRATION: This arbitration takes place outside India i.e.
where arbitral award is delivered in foreign country by foreign arbitrators under
foreign laws and in which foreign country is involved. The arbitral award delivered in
4 Secrion 36 of the Act
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a foreign arbitration is called 'foreign award'. Part II of the new act contain special
provisions with regards to the 'Enforecement of Certain Foreign Awards'.
2. ARBITRATION CONDUCTED IN INDIA: It is an arbitration in which
arbitral award is delivered in India. Part I of the Act deals with such arbitration.
Arbitration conducted in India is further divided into:
(a) International Commercial Arbitration: It is an arbitration in which one
of the parties is either of foreig national or a non-resident or body
corporate which is either incorporated or controlled in any foreign
country or the Government of a foreign country5
. Thus it is calld as an
'International Arbitration'.
(b) Domestic Arbitration: All other arbitrations except what is mentioned
above falls under the category of domestic arbitration.
3. AD HOC ARBITRATION: It is an arbitration in which the parties agree for
arbitration themselves and appoint an arbitrator or arbitrators of their own choise.
Arbitration proceedings under such arbitration are conducted as per the provisions of
the Arbitration and Conciliation Act which lack comprehensive rules of procedure. As
a result in ad hoc arbitration the parties may have to rush to court repeatedly to get the
orders even on ordinary procedural matters. For example, the Act does not contain
any criterion for scales of fees to be paid to the arbitrators, and if there is any dispute
between the parties and the arbitrators in this regards, it has to be settled by the Court.
5 See Section 2(1)(f) of the Act
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4. INSTITUTIONAL ARBITRATION: An institutional arbitration is one in
which reference is made to a tribunal or arbitrators of varios trade associations, such
as Chamber of Commerce and other bodies having machinery for adjudication of
disputes by arbitration and rules formed for the same. Arbitration proceedings under
such arbitration are conducted under rules prescribed by an established arbitral
organization. Such rules are meant to supplement the provisions of the Arbitration and
Conciliation Act in matters of procedure. The Indian Council of Arbitration, New
Delhi, and Federation of Indian Chamber of Commerce and Industry (FICCI), New
Delhi are among the most important arbitral institutions in India. MCCIA i.e.
Mahratta Chamber of Commerce, Industry and Agriculture, Pune, India, Maharashtra
also offers arbitration services to their members and others. Fees for the members of
MCCIA, which is a trade body, are slightly less compared to the fees of the non-
members.
The role of the Arbitral Institutions has been recognized. The parties, or the arbitral
tribunal with the consent of the parties may arrange for the administrative assistance
of a suitable arbitral institution6
. Provisions relating to the appointment of the
arbitrators are provided in the act.7
When the parties are not in a position to agree on a
procedure for appointment of arbitrators, the Chief Justice of India, is case of an
'international commercial arbitration', amd the Chief Justice of the state Hight Court is
case of a 'domestic arbitration' would appoint the arbitrator.8
The chief justice may
nominate a person by name or ex-officio or an institution which is specialized in the
field of arbitration to act as an arbitrator. It is considered that specialized institutions
will be entrusted with this function/
6 Section 6 of the Act
8 Section 11 of the Act, intel alia
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ARBITRATION DEFINED
An arbitration may be defined 'as the settlement of disputes and differences relating to
civil matters (e.g. money or property or breach of contract) between one party and
another in a judicial manner, by the decision of one or more persons, called arbitrators
appointed by the contending parties, without having a recourse to the court of law'.
The essence of arbitration, therefore, is that it is the arbitrator(s) who decides the case
out of the court, though court may have to intervene to regulate the arbitration
proceeding.
The practice of referring matters to a Panch or settling disputes by arbitration has
always been a widely used method of deciding many a dispute in our country. The
corresponding words 'arbitrator' and 'arbitration' i.e. Panch and Panchayats are
probably as old as Indian history. The word Panchayat suggests a proceedings before
a specified number of persons (generally five person as Panch Parmeshwar), who act
as the sole and final judges of the matter referred to them by the contesting parties for
the decision.
The method of setting disputes through arbitration possesses certain merits as
compared to a suit in a regular court of law. It is less costly. It saves time and irritation
arising from delays in court proceedings. It ha much more simple in procedure.
Moreover, the 'award' of the arbitrator is final and binding upon the parties in the
same manner as if it were a decree of the court. Hence, commercial contracts contains
arbitration clause of compulsory arbitration is cases on any dispute relating to the
contract.
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ARBITRATION AGREEMENT
Arbitration agreement is “an agreemen by the parties to submit to arbitration all or
certain disputes which have been arisen or which arise between them in respect of a
defined legal relationship whether contractual or not.”9
There can be arbitration claus
in the agreement or there can be altogether different arbitration agreement but it must
be in writing only. It should be signed by the parties to the contract. Any exchange of
letters, telex, fascimile, or other methods of telecommunication can be considered as
an agreement.
ESSENTIALS OF VALID ARBITRATION AGREEMENT
Followings are the essentials of the valid arbitration agreement:
1. The agreement must be in writing.
2. The agreement should be to refer either a present or future disputes to
arbitration.
3. It is not necessary that an arbitrator should be named in the arbitration
clause / an agreement.
EFFECTS OF AN ARBITRATION AGREEMENT
If arbitration agreement is present and if one of the party files suit in the court of law
and disregards arbitration agreement, then the other party automatically gets the right
to make an application to the court to stall / stay the suit10
, so that matter could be
adjudicated by arbitration only. Thus if the arbitration clause is present in the
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agreement then the judicial authority before which such action is brought shall refer
the said application for compulsory arbitration. The application before the judicial
authority for staying the suit which could have been dealt by arbitration only, shall be
accompanied by original arbitration agreement. Even if the dispute is pending before
any court, arbitration can be commenced and arbitral award can be made.
REFERENCE OF DISPUTE FOR ARBITRATION
Followings are capable of submitting the dispute for arbitration:
1) Natural or legal guardian of the minor or lunatic can refer disputes to arbitration
on his behalf, provided he acts in good faith and for the benefit of minor or lunatic.
2) In the case of partnership, a partner may refer the dispute for arbitration on
behalf of firm, only if the other partner(s) of the partnership firm agrees and authorize
in writing.
3) A joint stock company can refer the case for arbitration if any restrictions are
not available in Memorandum of Association and / or Article of Association.
4) The Karta of a joint Hindy family may refer the case for arbitration.
5) An agent may refer the case for arbitration if authorized by the principle.
6) An attorney or solicitor enegaged in the case may refer the case for arbitration
if authorized for that purpose in writing by way of vakalatnama.
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7) An official Assignee or a Received may refer the case for arbitration if not
prohibited otherwise.
The death of any party to an arbitration agreement shall not affect the arbitration and
shall be enforceable by or against his / her legal representative. But if any party dies
while arbitration is in process and award is not declared then the legal representatives
can not be brought as a party unless they approve and all the records and happenings
are provided to them.
MATTERS WHICH CAN BE REFERRED TO ARBITRATION
Below matters can be referred to arbitration:
1) Matters of civil nature, e.g. Disputes about property or money, disputes about
the amounts of damages payable for breach of contract, questions of law.
2) Matters relating to personal rights between the parties. For example a question
of validity of marriage or maintenance payable to wife, terms of separations of
husband and wife.
3) Dignity and respect related disputes.
4) Time – barred claims.
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MATTERS WHICH CAN NOT BE REFERRED TO ARBITRATION
Below matters can't be referred to arbitration:
1) Disputes connected with matrimonial relations like divorce suit or
restitution of conjugal rights11
.
2) Testamentary matters like will.
3) Insolvency matters.
4) Public charities and charitable trusts questions.
5) Matters related to the quardianship of minor or lunatic.
6) Criminal matters and disputes as it will become an agreement stiffling
criminal prosecution.
11 Section 9 of The HMA.
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6.3 – ARBITRAL TRIBUNAL
ARBITRATOR: A person who is appointed by the parties themselves by their mutual
consent to act as a judge to decide their dispute out of court is called an 'arbitrator'.
The person who is appointed must also give his consent to act as an arbitrator. The
powers and duties on an arbitrator will be governed by the arbitration arrangement
provided the same not contrary to any provisions of the law. Some of the powers and
duties are also stipulated by law and case laws.
There is no prescribed qualifications for the arbitrator. Parties can appoint any person
who is major and is having sound mind. Parties may appoint unfit or incompetent
person an an arbitrator. Corporate bodies and associations can also be appointed as an
arbitrator. The interested person or friend of the paries may also be appointed as an
arbitrator, provided his interest is well know to the parties before they sign the
submission before such person. Undisclosed relationship with the party or parties as
the case may be which is discovered later on shall affect the validity of the award.12
Anybody can become authorized arbitrator by registering with the Indian Council
Arbitrator, New Delhi by paying the appropriate fees in the category of Individual,
Associate and Lifetime membership. Law students or legal professionals can and may
enroll them in the Law category or arbitrator and many retired judges have become
arbitrator and are registered with ICA.
APPOINTMENT OF AN ARBITRATORS: The number of arbitrators in the
arbitral bench can be decided by the parties provided such number shall be odd
12 Trusteed of the firm of Motaram Daulatram v. Firm of Mayadas Daultaram.
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number (1, 3, 5, 7 and 11 and so on) so that there is no hung decision. Sole arbitrator
is also acceptable by the law.
The procedural guidelines for appointment of an arbitrator(s) is provided in the act13
.
Some sailient features of the provisions are as under:
1. Person of any nationality can be appointed as an arbitrator.
2. Parties can decide the procedure of arbitrator by mutual consent. Arbitrator can
be appointed by some third person for and on behalf of the disputing parties.
3. If parties fail to appoint an arbitrator, then below provisions shall apply.
(a) 3 Member: Each party shall appoint an arbitrator of their choice and
these two arbitrators shall appoint the third arbitrator as arbitrator in
chief but s/he shall not have extra powers and all the three arbitrators
shall have the equal powers.
(b) No Decision: If any party fails to appoint arbitrator(s) after receiving
the written request from the other disputing party within 30 days, or if
arbitrators of both the parties fail to appoint arbitrator is chief as
described in above clause 3(a), then the appointment of arbitrator shall
be made by Chief Justice of any other person nominated by him.
(c) Sole arbitrator: If the party does not agree to sole arbitrator after
receiving the written request from the other disputing party within 30
days, then the appointment of arbitrator shall be made by Chief Justice
of any other person nominated by him.
13 Section 11 of the Act.
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GROUNDS FOR CHALLENGING THE APPOINTMENT14
If there exists some circumstances that give rise to justifiable doubts as to
independence or impartialiy or if the qualifications of the arbitrator is not sufficient
then the appointment of the arbitrator can be challneged and parties are free to decide
the procedure for challenging the appointment of the arbitrator15
EFFECT OF DEATH OR INSOLVENCY OF A PARTY TO ARBITRATION
The arbitration agreement shall not be discharged by the death of any of the parties
but shall be enforceable by and against the legal representative of the deceased.
Similarly, the appointment of an arbitrator shall not be revoked by the death of the
any of the party by whom he was appointed. 16
REMOVAL OF ARBITRATOR
If the arbitrator is unable to perform his assigned duties, or fails to act without undue
delay due to some other reasons, he can be removed. If the arbitrator himself resigns
then the then the mandate of an appointment of an arbitrator is also terminated. In
case of any controversy, application for removal of an arbitrator can also be made the
the Court.17
A substitute arbitrator can be appointed if mandate of member of the
arbitral bench is terminated. 18
17 Section 14 (2) of the Act.
18 Section 15 the Act
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POWERS OF ARBITRATORS
Parties of an arbitration agreement can define the rights, powers and duties of the
arbitrator, provided they are not contrary to the legal principles and provisions of the
law. Followings are the some powers of the arbitrators.
(i) To provide and undertake oath of the parties.
(ii) Make reference to the court on questions of law.
(iii) Correct the clerical mistakes and errors caused by accidental omission.
(iv) Provide necessaries interrogatories to party or parties.
The other authorities of an arbitrator is as under:
(i) To award interest upto the date of the award.
(ii) To decide by and to whom the cost of shall be paid.
(iii) Allow payment in installments.
(iv) Making of an interim award.
(v) Passing order for the specific performance of the contract.
(vi) Appointing experts for his guidance in scientific or technical matters.
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DUTIES OF AN ARBITRATOR
Followings are the duties of an arbitrator
(i) To record all the references and documents and make an award within reasonable
prescribed time.
(ii) To act impartially as he is holding quassi-judicial position.
(iii) To observe the rules of evidence based on principles of natural justice. Parties
must be heard after providing reasonable opportunity.
(iv) Do not perform any act of misconduct like acceptance of bribe.
(v) Act within the scope of his authority mentioned in the arbitration agreement.
(vi) If he has any interest in the subject matter, then he should disclose the same
before accepting the arbitration assignment.
(vii) No sub-delegating.
(viii) Not to use personal knowledge.
(ix) To be present in the every proceedings.
(x) To provide final award, affix his signature on the award and provide to the
parties.
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6.3 – ARBITRATION PROCEEDINGS
EQUAL TREATMENT OF PARTIES: It is a duty of the arbitral tribunal to treat all
the parties equally and to give full opportunity to each party to present his case. No
discrimination can be made on the basis of race, colour, geographical barriers. Parties
can appoint advocates to represent the case.19
PROCEDURE FOR ARBITRATION:
The arbitral tribunal is neither bound by the Code of Civil Procedure, 1908 nor by the
Indian Evidence Act, 1872. Therefore, the arbitral tribunal is not bound to follow the
rules and procedure followed by the Court20
. But the procedure of the arbitral tribunal
shall be according to the principles of natural justice and fair play.
Parties are free to decide the procedure for the purposes of appointments of the
arbitrators, conducting of the proceedings, filing of memorials and pleadings,
presenting the evidence, hearing and granting of award.
Global institutional arbitration agencies have prescribed their own rules and
procedure for the conduct of the arbitration proceeding and hence parties to the
dispute can adhere to the impartial rules made thereby and concentrate more on
merits. Indian Council of Arbitration (ICA) too have prescribed rules of the
proceedings which shall be binding on the parties. On the Global Scenario,
arbitration agencies have displayed the fees of arbitration at various levels and
depending upon the type of dispute and disputed amount claim. That helps disputing
parties to choose the arbitration firm of their choice and size of the pocket.
20 Section 19(1) of the Act.
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PLACE & COMMENCEMENT OF ARBITRATION
Parties are free to decide the place of arbitration. Where place is undecided, arbitral
tribunal can decide the place and convenience of the parties shall be looked into21
.
The arbitral tribunal can meet at any place and such place can be changed for other
hearings.
Parties are free to decide the date of commencement of the arbitration proceedings. If
there is no unanimity then the arbitration proceedings shall be deemed to have started
on the date of delivery of the intimation to the respondent that the matter has been
referred to for the arbitration.
Parties are free to decide the language of the arbitration proceedings and if there is no
agreement then arbitral tribunal shall decide the language of the proceedings.
Generally, the language of the arbitration shall be English. Language of international
arbitration can be English unless some other language is agreed by the parties and
arbitral tribunal. Tribunal might require and may demand English translation of the
documents and materials presented before it.
ARBITRATION PROCEDURE
Once the arbitrator is appointed, the petitioner (claimant along with the statement of
claim) shall serve a notice to the respondent about the commencement of the arbitral
proceedings, parties can exchange the claims, counterclaims, rejoinders, documents,
etc. on which they shall rely and as per the directives of the arbitrator or arbitral
tribunal.
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Statement of claim and defence:
Provisions related to statement of claim and defence is provided as under.22
a) Within the time limits determined by the parties or stipulated by the arbitral
tribunal.
b) They can submit documents partly and make reference to other documents at a later
time.
c) Parties may amend or supplement the claim or defense.
Hearing and writeen proceedings:
Below are the provisions.23
1. Arbitral tribunal shall decide oral hearing or presentation of evidence.
2. Sufficient notice of hearing shall be given to parties.
3. All the documents must be properly exchanged by / to the parties.
Section 25 of the Act deals with the effect of default of a party wherein claim of the
claimant can be rejected, proceedings can be continued ex-parte, and ex-parte award
can also be made. But ex-parte proceeding shall not be valid in the eyes of the law if
there is reasonable excuse for non-attendance of a party and this has been held in
Juggilal Kamlapat v. General Fibre Dealers Ltd24
.
Section 27 deals with taking assistance of court in taking the evidence, wherein the
party or the tribunal can make an application to the court and court can summon the
witness to appear before the tribunal.
24 AIR, (1995) Cal. 354
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Decision making by the arbitral tribunal
Arbitral tribunal shall make the decisions by majority if the tribunal is multi-arbitrator
arrangement. Questions of the procedure are determined by the Presiding Arbitrator25
ARBITRALAWARD
The final decision or judgment may be referred as 'arbitral award' or 'award'. The
arbitral award is required to be made on stamp paper of requisite value otherwise it
shall not be considered as witness. The award must be compulsorily registered it is
related to the matters of immovable property of the value of Rs. 100 and more26
. If
there is any defect in the award, the claimant's claim shall not be defeated27
. Once the
award is made, the authority of the arbitration tribunal comes to end and the arbitral
tribunal can not make the second award28
.
Certain important features of the Arbitral Award are as under:
1) It must be in writing and oral award is no award.
2) It should be signed by the members of the arbitral tribunal.
3) Award must be speaking order. However, if the arbitration agreement has a
condition that that no reasons should be given or if the parties reached the settlement
under section 30 of the Act then award shall come in the form of settlement.
4) Interim award can be made.
5) Shall mention date and place of arbitration.
26 Sher Bahadur v. Ram Narain
27 Hindustan Steel Ltd. v. Ram Narain
28 Section 32(1) of the Act
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6) Award for money shall also bear manner of payment and interest thereon and
directing future interest. If such things are not made in writing then interest at the rate
of 18 percent per annum shall be applicable from the date of the award to the date of
payment.
7) After the award, signed copy should must be delivered to each of the party.
Arbitral award shall be final and binding and there is no requirement of approaching
the courts for its enforceability. The award shall be enforceable as if a decree of the
court, upon expiry of the time given to challenge the award29
or upon court's refusal to
set aside the award30
.
If the parties have not determined the costs of an arbitration shall be determined by
the arbitral tribunal. The tribunal shall mention (a) Party entitled to the cost (b) which
party shall pay the costs (c) amount of costs or method of deriving the amount (d) the
manner in which costs shall be paid. The terms costs includes the meaning related to
(i) the fees and expenses of the arbitrators and witnesses (ii) legal fees and expenses
(iii) administration fee of the institution supervising the arbitration (iv) any other
expenses. Arbitral tribunal may ask the parties to deposit advance and if any of party
fails to pay advance or remaining amount then the other party can pay those
amounts31
. If the parties fails to deposit the amounts, then arbitration proceedings can
be suspended and advance deposits may be refunded after deducting the expenses till
the the date of termination. Arbitral tribunal may have lien on the arbitral award for
any unpaid cost of arbitral proceedings. If the tribunal refuses to deliver the award
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without payment of costs demanded by it, a party can make application to court for
deciding reasonable some of costs of arbitration32
.
On an application within 30 days, tribunal may correct the award for any computation
errors and / or clerical or typographical error or any other errors. Party may apply to
tribunal to give interpretation of the award within 30 days with the notice to the other
party or within such time period as may be decided by the parties. Interpretation shall
be given within 30 days and tribunal of its own can correct the incorrectness or error
but tribunal can extend interpretation request reply within extended period.
Additional award request for any omission can be made within 30 days with the
notice to the other party33
and if such request is justified then additional award shall
be provided within 60 days or extended days time limits.
Aggrieved party may apply to the Court for setting aside the order 34
within 3 months
of receiving the arbitral award on below grounds and awards can be appealed too:
1) Incapacity of a party
2) Invalidity of arbitration agreement.
3) Proper notice of appointment of arbitrator(s) / proceddings was not given.
4) The award deals with dispute not referred in the petition.
5) Composition of tribunal defective.
6) Subject matter is not capable of determination by arbitration.
7) Arbitral award is in contravention to public policy.
33 Section 33(4) (5) and (6) of the Act
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6.4 – ENFORCEMENT OF CERTAIN FOREIGN AWARDS
Definition
Foreign award means an arbitral award on differences between persons arising out of
legal relationship, whether contractual or not, considered as commercial under the law
in force in India, made on or after 11th
October 1960 ....>>
(a) in persuance of any agreement in writing for arbitration to which the Convention
set forth in the “First Schedule” applies, and
(b) in one of such territories as the Central Government, on the basis of reciprocity,
may declare to the territories to which the said convention applies.
* The First Schedule -
CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN
ARBITRAL AWARD. It has XVI articles.
* The Second Schedule -
PROTOCOL ON ARBITRATION CLAUSES. It has 8 clauses.
* The Third Schedule -
CONVENTION ON THE EXECUTION OF FOREIGN ARBITRAL AWARDS
Judicial authority when seized of any matter discoveres that the disputing parties had
an arbitration agreement or if any party makes the reference to arbitration then the
judicial authority is duty bound to refer that matter for arbitration unless the
arbitration clause is null and void35
.
Any foreign award shall be treated as binding on all the parties36
and there needs to be
evidences to rely on the foreign award for enforcing the same in India37
and hence if
any party with to enforce the foreign award, then at the time of application to the
court it shall provide followings along with the application.
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(a) Duly authenticated copy of the original foreign award along with the law of the
country is which it was made.
(b) The original agreement of arbitration and its certified copy.
(c) Any other evidence that may be necessary for satisfying the court.
If the awards and agreement is issued in any other language other than the English
Language, then the applicant shall produce the translated copy along with certificate
from the diplomatic or consular agent that it is true and correct translation.
Foreign Awards can be refused and conditions that satisfy its refusal are as
under38
.
(1) Incapacity of the parties or invalid arbitration agreement.
(2) The respondent was not given proper notice of appointment of arbitrator and /
or of the arbitration proceedings.
(3) The award contains decisions on matters beyond the scope of the submission.
But if partly applicable then that part shall only be enforceable.
(4) Composition of the arbitral tribunal or the procedure adopted was not in
accordance with the agreement of arbitration or if there was no agreement then
the composition of the arbitral tribunal or the procedure adopted was not in
accordance of the laws of the country where arbitration took place.
(5) The award is not binding as it has been set aside by the competent court.
(6) The subject matter of the dispute could not be decided by the arbitration.
(7) Enforcement of the award shall be in contravention to the public policy of India
or was obtained by fraud or corruption.
Thus if the award matter is sub-judice, the enforcement shall be adjourned.
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PUBLIC POLICY and SUPREME COURT
While deciding number of cases, Hon. S.C. has defined and revisited public policy.
This has been done in number of cases which are discussed below.
The definition of public policy means:
i. Fundamental policy of Indian law
ii. The interest of India
iii. Justice or morality, or
iv. Patent illegality
IMPORTANT CASES HON S.C.:
1) Associate Builder vs. Delhi Development Authority (Nov 2014) –
Supreme Court has set aside the order of Delhi High Court for overstepping the
judicial authority and determined scope of public policy and setting aside arbitral
award.
2) BALCO CASE (Sep 2012)-
Damage done Bhatia International case and criticism of judgment of Supreme Court
of judicial outreach has been corrected in the BALCO by excluding the jurisdiction of
Indian Courts if arbitral seat and seal is outside India. This principle pertaining to
applicability of Part I of the Act shall only apply to agreements entered into after the
BALCO case i.e. September 2012. Prior agreements shall continue to be governed by
the law prescribed in Bhatia International.
3) Reliance Industries Limited v. ONGC / Union of India (Sep 2015)
Parties have decided to have London as seat of Arbitration and Arbitration Proceeding
to be governed by English London Laws and hence Part I of the Act shall not apply to
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the case, otherwise Bhatia International law shall supersede as agreement prior to
BALCO.
4) Harmony Innovation Shipping Limited v. Gupta Coal India Ltd. (March 2015)
Bhatia International was applied and Supreme Court has held that jurisdction of
Indian Courts can not be excluded and law can not put one party in an advantageous
position.
5) Shri Lal Mahal Ltd. Vs Progetto Grano Spa (2014) -
Supreme Court held that Foreign Award are enforceable in India and the case has
already been decided in Board of Appeal at London and uphelded the order of Delhi
High Court and refused to entertain the plea at the enforcement stage.
6) NHPC Limited v. Hindustan Construction Company Ltd (May 2015) -
Bhatia International and Venture Global are not subject to the prospective declaration
of law but BALCO is.
7) Venture Global Engineering vs Satyam Computer Services Ltd & Anr on 11
August, 2010
Bhatia Law was upheld
8) State of West Bengal v. Associated Contractors (CIVIL APPEAL 2013)
Question of COURT was raised and appeal was dismissed and the authority of High
Court as COURT within the meaning of various sections of the Arbitration Act was
held.
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GENEVA CONVENTION AWARDS
Definition
Chapter II (Section 53-60), “foreign award” means an arbitral award on differences
relating to commercial matters under the law in force in India made after 28th
July,
1924 -
(a) In pursuance of an agreement for arbitration to which the Protocol set forth in the
“Second Schedule” applies.
(b) Between persons of whom one is subject to the jurisdiction of some on of such
powers as the Central Government, on the basis of reciprocity, may declare to be
parties to the Convention set forth in the “Third Schedule”, and of whom the order is
the subject to the jurisdiction of some other of the Powers aforesaid, and
(c) In one of such territories as the Central Government, on the basis of reciprocity,
may declare to be territories to which the said Convention applies, and for the
purposes of this Chapter and award shall not be deemed to be final if any proceedings
for the purpose of contesting the validity of the award are pending in the country in
which it was made.
Section 54 deals with the power of the Judicial Authority and any application by
either of the a party or any person on behalf of the arbitrator made to the Judicial
Authority shall not prejudice the competence of the judicial authority in case the
agreement or the arbitration can not proceed or becomes inoperative.
Any foreign award which would be enforceble shall be treated as binding for all
purposes on the parties39
.
Evidence Required for Enforcement of Foreign Award40
(a) The original award or its copy duly authenticated in accordance with the law of the
country in which it was made.
(b) The evidence of finality of the award.
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(c) Any other evidence to satisfy the Court.
Conditions For Enforcement of Foreign Award41
(a) The award has been made in congruence to the submission to arbitration under the
valid law.
(b) Subject matter is capable of arbitration under the law of India.
(c) The arbitral award has been made as per aribtration agreement and procedure and
incoformity with the law governing arbitration procedure.
(d) The award becomes final in the coutry in which it was made.
(e) Not contrary to public policy of India.
(f) The award has not been annulled in the country in which it was made.
(g) The respondent party was not given notice of appointment of arbitration or of
arbitration proceedings.
(h) The award is outside the scope of the submissions of arbitration.
(i) The respondent provides valid reason to the satisfaction of the Court which are
reasons other than the reasons above, then court may take just and appropriate action
like refusal or enforcement, adjounment and annullation by given the other party
appropriate notices.
ENFORCEMENT OF FOREIGN AWARDS
When the court is fully satisfied that the foreign award is enforceable, it shall
pronounce judgment in terms of the award and the award shall be deemed to be
decree of the Court and no appeal shall lie on such decree. Appeal shall lie in
competent courts only and no second appeal shall be allowed but right to approach
Supreme Court can not be barred.
41 Section 57 of theAct
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ONLINE ARBITRATION – A SPECIAL REPORT
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6.5 – ONLINE ARBITRATION – A SPECIAL REPORT
Gone are the days of Brick and Mortar model of business i.e. the traditional shops
where customer goes and demands specific products and pay for it. Then came the
wave of Big Retail Shops and Shopping malls where customers can have a feel of
product, touch it and compare and buy including impulse buying. We witnessed
week-end shopping concepts and various marketing gimmicks were used to lure the
customers with co-marketing offers, loyalty points, home delivery and there was a
huge debate over Foreign Direct Investment in retail sector till Hon. Supreme Court
opined is FDI in retail a myth! Slowly, this retail bubble too have seen the bursting
stage. BigBazar, More, Pantaloon, Reliance Fresh, Reliance Digital, Reliance Mart,
Pyramid, KK Bazar, Vishal Mega Mart, Mega Mart, Star Bazar, Central Mall,
Subhikha are (or were) few Indian players and TESCO, Amazon were international
giants ready to roar in Indian markets – a large consumer products market. But, today,
they are downsizing and many outlets are closing. Companies like RPG made a quick
exit and Subhiksha was a disaster. Then came the shining era of Online Shopping and
E-Commerce.
In today's era, brick and mortar model (traditional shop) needs to be augmented by
click and mortal model (online shop) or have a hybrid model. Now right from
stationery to cars, clothes to shoes, lenses to cosmetics, electronics to furnitures,
everything is getting sold online. While companies like Borosil and Lenovo may have
dedicated selling portal, they are selling on other portals too. Then came the concept
of business aggrravators and companies and their respective portals like amazon,
shopclues, tradeindia, alibaba, surekha, asklaila, payTM, redbus, makemytrip are
making the mullah. Government agencies like IRCTC, passports, driving licenses,
academic examinations are also in the online race.
۞ Page 60

At times, these online companies are fly-by-night operators which means they
disapper whenver they wish.
Other disadvantages and issues in this business models can be outlined as under:-
a) No licensing and anybody can sell online including a minor or young persons.
b) At times, the sellers do not have physical store.
c) Single transaction may involve multiple links. For example – Kent water
purifier is sold and marketed by their marketing arm and manufacturer disowns
any responsibility of defects or warranty. Then the marketing arm sells through
its distribution chain. The distributor is not restricted to sell online and also
sells at amazon. Now if the buyer buy from amazon, amazon points fingers at
Kent and Kent does not recognize online sale made by amazon and customer
oscillate from one end to another.
d) Mischief / Fraud cases
e) Misuse of financial transaction including electronic cards details
f) Non-Delivery, Late Delivery, Refusal to Delivery
g) Non-refund or frustratingly delayed refund
h) Top management is not bothered about deficiency and other issues.
۞ Page 61

i) Misuse of payment gateway and / or multiple use of single payment gateway by
multiple companies. For example ResellerClub is an incorporated company.
BigRock is anothe company and different legal entity. Both are connected and
claim that they are sister concerns and having a banking account with ICICI
bank. Recently ResellerClub started using payment gateway of BigRock so
charge on credit card statement appears as BigRock although the transaction is
done on ResellerClub and the payee has no business with BigRock.
Surprisingly, both the companies are selling similar products.
j) Foreign Incorporate Companies – In cases of refunds from foreign incorporate
companies, getting refund is Herculean task as at times the refund is issued
from the country where they are incorporated. For example, GoDaddy.
k) Transaction charges from 2 to 5 percentage, although there is no distinct
guideline and/ or restriction by Reserve Bank of India (RBI). At times, sellers
levy charges on the amount of transaction and at times sellers levy fixed
charges and there is no consistently in these matters. At times sellers waive the
transaction charges.
l) Loyalty points / cashback a myth – Points earned by the card holders were
earlier credited cash in the linked account, but now some loyalty management
companies are taking bank customers for ride. In my opinion bank and the
bank's customer are in fidicuary relationship and the details of transactions
should not be shared with money mongers.
۞ Page 62

m) Ignorance of buyers – The most important area where buyers are ignorant about
the safety of websites and terms and conditions of the website. Once the T&C
are accepted, the buyers are left with little legal remedies. AND SO ON.
These are the few reasons and cause of action for the dispute. Most e-commerce
vendors may have published dispute settlement policy and issue toll free numbers or
call back option or email id. The agents managing toll free numbers are from
outsourced companies who do not understand what relationship stands for. They are
more concerned about what the computer screens tells them. The data and relationship
is inversely proportional yet companies are running behind the data and on screen
information. Call back option too has its own demerits. The number from which you
get a call, can't be dialled and the incoming calls are blocked. You need to be
resourceful and ready to dedicate time to locate that numbers. Email replies are so
evasive and the agents are either less qualified or are trained to evade technical
questions and just affect sales.
CASE STUDY:
When a customer buy a car from the car dealer, car dealer offers and pressurize him to
purchase car insurance policy from the dealer alone to have smooth claim
processings. In fact the main reason for such pressure is the commission that car
dealer gets from the insurance company or the broker they employ. M/s Aditya Birla
Insurance Brokers Pvt. Limited is one such broker. When the insurance is bought
from the dealer, the insurance company or the broker as the case may be makes
telephone call to confirm the details of the vehicle, name of insured person, nominee,
address, IDV – Insurance Declared Value of the vehicle and ask a confirmation from
the customer. They claim that the verbal telephonic contract (which is valid contract
۞ Page 63

in the eyes of the law) that the details of the talk between the caller and the called one
is being recorded at there end and the record of the audio file / transcript shall be
provided by them. When asked about who will provide and by when it shall be
provided, the caller on behalf of M/s Aditya Birla Insurance Brokers Pvt. Limited
was ignorant of the process. They claimed that they were not trained on this. When
probed further, the next caller claimed that the CD shall be issued in 24 working
hours. But the reality is M/s Aditya Birla Insurance Brokers Pvt. Limited took 105
days to provide the audio files.
This case study proves, how technology based companies are becoming money
mongers as this term would be most appropriate with reference to M/s Aditya Birla
Insurance Brokers Pvt. Limited, as their Human Resources Manager choose to not
to respond to emails. And when the car dealer demanded the audio files it took them
approval from 10 business heads.
Conclusion of this case study: The buyers must be vigilant and should not buy the
verbal proposals in the online world. They must ask the callers, to send the
information on email only.
۞ Page 64

Another case study of Insurance Company Max Bupa
Suddenly a online friend called the researcher and offers to buy money policy. Certain
benefits were offered on telephone conversation i.e. From the mobile of the agent to
the customer. Note that the telephonic conversation between the agent and the
customer is never binding on the company. The verbal and personal discussion
between the agent and the customer is also not binding on the company. What binds
the customer with the company is the contract where the buyer affix his signature.
When the researcher asked all the forms and procedure and formats and internal claim
settlement cycle and all other details, they refused to share that they can't be shared as
confidential information. The documents where they obtain and ask the signature of
the customer can not be confidential and all what was needed by the researcher was
templates and blank forms and not glossy brochures and they refused to share. They
said we can demonstrate at a personal meeting the documents of the other customers.
The documents of the other customers were not confidential to them and the forms
where they wanted signature (along with cheque) was confidential.
They refused to provide and provided xerox copies of the offers and benefits as if they
were coming from photocopy shop without the name of the company, date, place and
signature of the authorized person. When asked will there CEO or authorized person,
shall sign on the paper which is shown as company document, they refused.
Conclusion of this case study from the insurance sector, particularly health insurance:
Never buy a policy on the promise of the agents and including their superior
managers on their oral words but you may bur after reading legal wordings (text /
script)
۞ Page 65

HOW A WEBSITE CAN BE TRACED -
Online frauds and various other cyber crimes is happening like jaywalking on the
roads. Most buyers forget to fight and establish their rights after being cheated. Some
vent their anger on the social media and start a new day.
NO, websites are governed by certain contacts, authorities and control. ICANN –
International Convention on Assigned Names and Numbers is the final authority over
the domain names and Internet disputes, where disputes are settled by Arbitration.
Every domain name is assigned an Internet Protocol Address commonly named as I.P
Address.
IP address comes in four compartments on maximum 3 numbers in one
compartments.
So, below could be the examples of the I.P. Address.
1) 202.201.203.204
2) 205. 12. 1. 12
3) 12.10.1.323 and so on.
Each domain name has following records and commonly they are called as RABT
records.
R – Registrant
A – Administrative Contact
B – Billing Contact
T – Technical Contact
۞ Page 66

RABT Contact of any domain name can be found on the open directory on Internet on
the websites like www.who.is and / or www.whois.net etc.
For example who.is records of New Law College, Bharati Vidyapeeth having domain
name nlcpune.bharatividyapeeth.edu is as under. The top domain name is
bharatividyapeeth.edu and nlcpune.bharatividyapeeth.edu is subdomain of
bharatividyapeeth.edu
Registrant: Bharati Vidyapeeth University, Bharati Vidyapeeth Bhavan,
Lal, Bahadur Shastri Marg, Pune, Maharashtra 411030, INDIA
Administrative Contact: Satyajit Hange, Director Technology,
Bharati Vidyapeeth Deemed University, Registrar, Bharati Vidyapeeth,
Bharati Vidyapeeth Bhavan, Lal Bahadur Shastri Marg, Pune, MS
411030, INDIA, 91-20-4335701, Email bharati@vsnl.com
Technical Contact: Pradeep Natarajan, Riva Logic Technologies Pvt.
Ltd. Office No. 504, Pentagon 4, Magarpatta City, Pune, MH 411013,
INDIA, 020-66052520, Email: pradeep@rivalogic.com
Domain Purchase Date: 16-March 1999
Domain Expiry Date: 31-Jul-2016
Thus, in the event of any issues, the domain name owner or RABT contacts can be
traced for initiating the dispute redressal .
۞ Page 67

One more example is provided and that is from e-commerce sector –
SNAPDEAL.COM
Domain Name: SNAPDEAL.COM
Registrar : Godaddy.com
Purchase Date: 25 Sep 2002
Expiry Date: 25 Sep 2017
Registrar Abuse Contact Email: abuse@godaddy.com
Registrant Name: Jasper Infotech Pvt Ltd.
Building 246, 1st Floor, Okhla Phase III
New Delhi, 110020, Phone: +91.1149146666
Email: prasad.vootla@snapdeal.com
RABT are same as above.
Name Server: PDNS69.ULTRADNS.COM
Name Server: BDNS1.ULTRADNS.NET
Name Server: BDNS2.ULTRADNS.NET
DNSSEC: unsigned*
* Means additional care has not been taken at a little cost.
۞ Page 68

There can be various types of disputes in the online world. Domain names are booked
on first come first serve basis. Various domain name crimes and disputes includes
Cybersquatting and booking the domain names for profit which is quite a big issue
and also a big money.
In India NIXI i.e National Internet Exchange of India under the Ministry of
Communication and Technology is the sole authority for second level domain names
and TLD i.e Third Level Domain Names like dot in and dot co in and other. ICANN
is the sole authority for dot com domains.
NIXI has made operational online dispute resolution for domain name disputes and
has appointed certain number or arbitrators. Who can become an arbitrator?
1) A person having studied law and has four years of experience and a Indian citizen.
2) He must have sound knowledge about the arbitration cases.
3) He must have arbitrated 3-4 domain name disputes.
NIXI has more than 20 arbitrators in its fold including Mr. Deepak Parmar who is
known to the researched. NIXI has prescribed the Code of Ethical Conduct for the
empanelled arbitrators and the complainat is required to pay the fees of arbitration.
۞ Page 69

PROCEDURE OF ONLINE DISPUTE RESOLUTION
For enacting the Information Technology Act 2000, we have amended The Bankers
Double Book Keeping Practices and law and Evidence Act and have also
implemented digital signature certificates. Thus the contracts made online, email
exchanges, digitally signed documents, e-receipts are perfect evidence in the Court of
Law and has been upheld by the Supreme Court in Shakti Bhog42
and Trimax43
case
laws.
In the case of disputed domain name DELLLAPTOPSERVICE.in Mr. Deepak G.
Parmar was appointed as sole arbitrator and decision and award was given in favor of
the complainant in the order dated February 11, 201644
.
42 Shakti Bhog Foods Ltd. v. Kola Shipping Ltd (2009)
43 Trimex International FZE Ltd. v. Vedanta Aluminium Ltd. (2010)
44 Order Copy is attached in the Annexures
۞ Page 70

ISSUES IN THE ODR
Followings are the issues in the ODR.
1) If the issue is domestic and both the parties are part of the same jurisdiction and
procedural law the matter becomes simple.
2) Arbitrators give normally 10-20 days to file the first reply and if no reply is
received then ex-parte order can be given, which again can not be based on the
principles of the natural justice as email communication sent and email
communication received and email communication read and email communication
understood are different things.
3) In an International Arbitration if the arbitral bench consists of arbitrators of
various countries including India, then what shall be seat of Arbitration is the issue.
4) Enforcement of orders passed by Indian Arbitrator outside the India is again a
costly, tedious and next to impossible job if the said order is challenged in the foreign
country or if the order is served to the national of the country which is not bound by
the UNICITRAL regime.
5) At times the domain names are booked under the fake name and fake email id
or incorrect email id which may cause unnecessary trouble to the owner of the email
id. Owner of the email id may disown his own email.
6) Online arbitration and dispute resolution of domain names under IND is OK
but when it comes to other extensions, dispute resolution is a long way.
۞ Page 71

INTERVIEWS & EXPERT OPINIONS
۞ Page 72

7. INTERVIEWS & EXPERT OPINIONS
Seth E. Lipner
• Law Professor - Zicklin School of Business,
Baruch College, CUNY.
• Member of Deutsch & Lipner, a Law Firm
• Member of the Forbes.com Investor Team.
ow much does arbitration cost? It depends on the case. But most
securities cases would cost investors a lot more if they went to
court–more in attorney’s fees, that is.H
Anoop Awasthi
• Member Legal Rights Society, India
• Member of PDLSA - Pune District Legal Services
Authority.
• Social Activist
ff course it reduces load on judiciary. It is mandatory for the
advocates to provide notice to the parties before initiating any suit.
Hon. Supreme Court, Hon. High Courts has uplhed and directed
the alternative dispute resolution in many cases.
O
ut there should be literate judges for the procedure to be
transparent and speedy. There should be permanent ADR benches
and in including in matters of criminal cases like DomesticB
۞ Page 73

Violence cases. We are organizing Lok Adalats in Pune and results are
encouraging. But lawyers are oppossing due to their commercial interests.
There is need to educate lawyers. The Magistrate should advise parties to
settle their disputes amicably by arbitration and there should be minimum
intereference by the courts in arbitration procedure. At the same time I do not
recommend resettlement of old retired judges and officials as an arbitrators.
They run a extortion rocket as can be found in Reliance V. ONGC45
case. The
arbitrator or arbitration bench should have people of eminence from social
and technical background rather than retired ones.
Adv. Sameer Bhunde
Kale Law Firm Pune
• Advocate with 3-5 years of Legal Practice
• Legal associate – Kale Law Firm Pune
ctually it helps to save time and cost. I personally have not
handled any arbitration matters but our office has meddlled in
some of the cases of arbitration with the assistance of Retd. Justice
Choudhary who is now mentoring our firm. But, I wish to delay the dispute, I
will challenge the award and matter will go the courts again.
A
45 Dispute was in India and seat of Arbitration was in England
۞ Page 74

Adv. Arun Saxena
Mumbai
• Senior advocate with 20 plus years of experience.
• Practising in Consumer Forum and State
Commission, Mumbai
• President International Consumer Rights
Protection Council
actually deal with consumer cases more and arbitration is of no use in
consumer courts and state commission Mumbai. I know that the judge
Mr. Rane who was working as President of State Commission Mumbai
is retired now and is arbitrator now. Basically he finds the cases, wherein he
can be arbitrate the cases referred to him by the courts. In my opinion,
arbitration does not work and is just to divert the issue. In certain arbitrations
even illegal things have been arbitrated by the mutual consent on the parties.
For example, a dispute with the top builder of Mumbai was arbitrated and
even illegality was deliberated and resolved which can not happen in the
courts, where we take proper recourse.
I
.What is your opinion about institutional arbitration? (Like FICCI
and Chambers of Business Associations, and other statutory bodies)
Can we trust them?
Q
.They are the most managed people. Government organizations
and public servants are easily managed as they know that arbitral
awards can further be challenged. Arbitrator is a person who
already knows you or you know him and it is likely that he gives the decision
in your favor or party influencing him and the party which is defeated again
drags you to the court and at times I have experienced abuse of law.
A
۞ Page 75

Adv. Kolage
• Advocate with 10 plus years of experience.
• Working as Human Resources and Industrial
Relations Manager with a Manufacturing major in
Pune, Bharat Forge
• Student of LLM 2 years course 2015-17 of NLC
Pune
actually have not dealt with commercial arbitration but are regularly
dealing with conciliation part. Normally, post enquiry (domestic
enquiry) in labour matters, workers go to the court and bring stay orders
and hence we file caveat before the court before actual service of report of the
domestic enquiry. Normally in routine matters, we fine the workers for
misconduct or other prohibited acts. But in matters of worst cases, where
trade union interefer is involved we approach the Assistant Labour
Commissioner or Labour Court at Swargate Pune. Because Assistant Labour
Commissioner has to give his verdict within 45 days of receipt of
representation.
I
.But do you conduct conciliation and follow procedure and maintain
confidentialy as prescribed in the Section 75 of the Act? How is your
practical experience, please share.
Q
.Yes! Normally, we follow procedure of conciliation and efforts
are being made to bring the employee to the discussion table and
educate him about the importance of company rules, etc. But
when such things are done, we prepare the Memorandum of Understanding
(MoU) with the concerned worker(s) and / or the trade union immediately and
file the copy with the Assistant Labour Commissioner.
A
۞ Page 76

.How is your experince in conciliation of tripartite nature, especially
in the matters of wage settlement, after the expiry of the earlier
settlement?
Q
.After the expiry of the old settlement and even before its actual
expiry, union submits us Charter of Demands to the management
in writing and management in turn replies to the union with
Charter of Expectations from the workers. We deliberate on various issues and
try to settle in an amicable manner but do tell them that certain demands shall
never be met and can not be discussed and we persuade them to drop those
demands so that the balance of Charter of Demands and Chater of
Expectations i.e. Management expectations are balanced. If the issues are not
settled at the local level then conciliation officers deliberate and conciliation
officers of the Government do take a call on that in the interest of the
Industrial Harmony, Peace and Productivity.
A
Dr. Avinash Vagha
• Consultant Surgeon, Pune
• Trainer
• Certified Psychologist
.How is your experince Lok Adalat? Have you ever participated in Lok
Adalats Coducted in Pune?
Q
.I have summoned in Lok Adalat Pune on a plea of Tata
Telephones on a case wherein they apologized in the Lok Adalat
that I was called under incorrect reference.A
۞ Page 77

.Do you have recent experince about Lok Adalat? Having being
called twice, would you like to comment something on Lok Adalat
and its functioning at Pune.
Q
.They the Lok Adalats send us the notice on a complaint of
companies of Public Utilities and Banks and others. The notice is
one page notice mentioning date and time of appearance and two
lines gist of the complaint filed by the applcant. The respondent has no idea of
the case and common man just approach the court with fear of courts. The
petitioners themselves are not aware of the facts of the case. Recently, I was
summoned by Lok Adalat of Pune and copy of the notice is provided by me to
you for assistance. This was on a complaint filed by Standard Chartered Bank
for credit card outstanding. When I approached the bank before the date of the
Lok Adalat, the claim made in complaint and original dues were ten times less
and the Bank was not having the proper statement. Hence Lok Adalat was not
attended and the issue is being settlement otherwise. So, in my opinion, a
common man will cough out the amounts out of fear courts and financial
institutions and other are doing arm-twisting with the assistance of such Lok
Adalats. So, they should provide complete details of the complaint or should
ask the complainant to provide extra copies to the respondent before the
dispute is instituted or the case is referred to the Lok Adalat.
A
۞ Page 78

.Have you heard of arbitration in Medical, Health and your
profession? Do disputes arise in the your profession and how do
Doctors cope with those disputes?
Q
.Negligence or any act of comission and / or omission are the
prime reasons, because of which Doctors are dragged in to the
Court of Law, Consumer Courts, State Commission and National
Commission and this is an arrangement by and of the Law. I would say lack of
communication with patient and / or relatives by the doctor and hospital is the
prime reason for such discord and it creates misunderstanding. Complaints
due to notoriety is rampant in intentional arena. Actions against the doctors
are brought with incorrect and incomplete information. We have created Legal
Cell at local Medical Association level, State level and National level where
doctors who have studied Law help the fellow doctor. We have also created
support team in cases of attacks on doctor's premises and / or clinics and
hospital. I reiterate that communication is the issue. Doctors must
communicate with patients and relatives and must inform the complications
and consequences in surgical and other matters too. Probably, this
communication does not happen because of factors like non-availability of
time, advise is not taken seriously by the relatives, there is a fear and the
patient / relatives may not be able to understand the medical advise of the
doctor. For example, in 3% of Angiography cases, death may happen. There
are incidences where doctors waive off the fees or reduce the fees in cases of
death of the patient to avoid any untoward incidence. But how much money
can satisfy the losss is the question. There should be possibility of re-
establishing the trust between doctors and the patients / relatives. Beccause
trust can not be sold or trust can not be purchased. But at times, doctors are
tortured and ill treated because of motivated reasons. It is exactly happening
A
۞ Page 79

on the parallel lines of marital discord and 498A cases. To my personal
information, every big hospital has cases pending against them and now-a-
days hospital do engage the services of the lawyers. Doctors too try to avoid
the lengthy procedures in the Court and at times try to arrive at amicable
solution to the grievances. Medical Associations do conduct concilations in
the cases of H2H (hospital to hospital) disputes. When the patient in serious
condition is transfered from one hospital to another and if the patient dies in
the later hospital and if the relatives files case against the later hospital, the
hospital against whom the case is slapped demands that the hospital(s) where
the patient was treated earlier should also be made party to the dispute. This
happens rampantly in G2G (Government to Government) hospital cases,
wherein the patients are transferred due to lack of medical expertise or lack if
infrastrure.
. Sir, India is becoming a hub for Medical Tourism and have you ever
heard of any International Dispute involving Indian Doctor / Hospital
and the foreign state or foreign national?
Q
. When patients who are foreign nationals are travelling to India,
there is already a sence of compromise. They are coming to India
because cost is less in India and doctors are better in India. To my
knowledge there is no such case of International Dispute or dispute involving
patient who is foreign national. On the contrary, they, the patients become the
brand ambassadors of India and Indian doctors as we Indian doctors do
provide more and cautious care to those category of patients. Finally I would
say the relationship between the patient and the doctor should be based on
mutual trust and communication is the only thing that could build this
TRUST!
A
۞ Page 80

Adv. Shriram Deoras
• Senior Advocate at Nagpur
• Member on Legal Services at Nagpur
In fact, I find Arbitration as very useful remedy. We at Nagpur are helping
many disputing parties without approaching the Court but there are matters
which can not be put to arbitration, conciliation, negotiation and mediation.
By and large matters related to public utility services like telephones and
matters of banking complaints are easily arbitrated. We are sending notices at
our own costs. The party receiving the notice can approach us and get the set
of complaint documents and should must plea for next date as documents are
never sent with the notice as they are bulky in nature.
Matters related to property, partition of the property within the family are
settled amicably where one brother refuse to patition and other brother is fully
prepared to fight in court, we bring all brothers to table and explain them how
time consuming it is to fight in the court and obtain mutual consent for
partition in the family and / or family assets.
Matters related to marital discord are also settled by us. And males are more
among the applicants for settlement as they know that if the matter go to 498A
or claim of maintenance, then it shall be costly affair for them and hence they
apply for arbitration and we basically explain them the legal provisions, the
legal recourse and the legal consequences. We are happy that we have settled
few matters of marital discord also.
۞ Page 81

The Arbitration and Conciliation (Amendment) Bill, 2015
Below are the notable amendments to the Arbitration and Conciliation Act, 1996.
(a) The question of law and definition of the Court has been emphasized and
Court means a principal civil court or high court with original jurisdiction.
(b) For cases of international arbitration, the Court means High Court only.
(c) Part I of the Act shall be applicable in matters where the place of arbitration
was India.
(d) If the agreement exists, judicial authority shall refer the matter to
arbitration.
(e) Interim order could be passed by the Court before the arbitration is
complete.
(f) In cases of interim order before the commencement of proceedings, the
proceedings must commence within 90 days from the date of the order, or
within a time specified by the Court.
(g) Public Policy Redefined: Court can set aside the awards contrary to public
policy of India including matters of fraud or corruption and cases where
violation of confidentiality and admissibility of evidence is affected.
(h) No long arbitration: Arbitral tribunal must pass award within twelve
months which can be further extended to a six month period. Deduction in
arbitrators fee is also included if the award is not passed as stipulated.
(i) Courts to dispose matter before it within 1 year.
(j) Parties to fasttrack the cases within 6 months.
۞ Page 82

CONCLUSION & REMARKS
۞ Page 83

8. CONCLUSION & REMARKS
The original act of 1940 was amended by the act of 1996 Act which is in conformity
to UNICITRAL stipulated MAL. India and Supreme Court has held various
International Orders and enforced them. In India arbitration is divided in pre BALCO
and post BALCO. Pre BALCO BHATIA International law is the case law and post
BALCO, BALCO is recognized as the law where Indian Court has accepted
jurisdiction, procedural law and laws of the International Comity.
Amendments to the act 1996 by way of bill of 2015 shall certainly make arbitration
fast, efficient and a cost effective measure. By way of new amendments arbitration
process and arbitrators are made more accountable and transparent and it is hoped that
they shall function in an independent and impartial manner.
The Courts should also be transparent in appointing arbitrators which are of more
moral values and preference should be given to young qualified people who are not
motivated by money alone. The practise of appointing old horses as a measure of re-
settlement of old age retired babus or judges should be written off.
Online arbitration in e-commerce has long way to go. As the complainant is required
to pay the fees of arbitrators, the decision is more likely in favour of complainant and
principles of natural justice shall be weighed by corporate who are ready to pay any
amount and bully the other party. But it has some loopholes in the procedure and law
is not sufficient to deal with various current practices in the present market or
conditions. We need to deal with it.
۞ Page 84

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