Arbitration Final

8/3/2019 Arbitration Final

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Arbitration

Group 8Parul Gupta (17)

Ankush Patodi (19)

Rimsha Shaikh (20)

Vivek Prasad (41)Sufiyan Shaikh (43)

Deepak Choubey (45)

Vinith Nair (47)


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"Arbitration" means any arbitration whether or not administered by

permanent arbitral institution;

"Arbitration agreement" means an agreement referred t o i n section7;

"Arbitral award" includes an interim award;

"Arbitral tribunal" means a sole arbitrator or a panel ofarbitrators;

General Definition


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"Court" means the principal Civil Court of original jurisdiction in a

district, and includes the High Court in exercise of its ordinary

original civil jurisdiction, having jurisdiction to decide the questions

forming the subject-matter of the arbitration if the same had been

the subject-matter ofa suit, but does not include any civil court ofagrade inferior to such principal Civil Court, or any Court of Small

Causes;

General Definition


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"international commercial arbitration" means an arbitration relating

to disputes arising out of legal relationships, whether contractual or

not, considered as commercial under the law in force in India and

where at least one ofthe parties is

An individual who is a national of, or habitually resident in, any

country other than India; or

A body corporate which is incorporated in any country other

than India; or

A company or an association or a body of individuals whosecentral management and control is exercised in any country

other than India; or

The Government ofa foreign country;

General Definition


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"legal representative" means a person who in law represents the

estate of a deceased person, and includes any person who

intermeddles with the estate of the deceased, and, where a party

acts in a representative character, the person on whom the estate

devolves on the death ofthe party so acting;

"Party" means a party to an arbitration agreement.

General Definition


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Arbitration

Definition:

Arbitration is the process of bringing a business dispute before

a disinterested third party for resolution. The third party, an

arbitrator, hears the evidence brought by both sides and makes

a decision. Sometimes that decision is binding on the parties.


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The Arbitration Act, 1940

dealt with only domestic arbitration

intervention of the court was required in all the three stages of

arbitration i.e.

prior to the reference ofthe dispute to the arbitral tribunal

in the duration of the proceedings before the arbitral

tribunal

after the award was passed by the arbitral tribunal

Governing law ofArbitration


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The Arbitration and Conciliation Act, 1996

The 1996 Act has two significant parts

Part 1: provides for any arbitration conducted in India and

enforcement ofawards thereunder. Part II provides for enforcement of foreign awards. Any

arbitration conducted in India or enforcement of award

thereunder (whether domestic or international) is governed

by Part I, while enforcement of any foreign award to which

the New York Convention or the Geneva Convention applies,is governed by Part II ofthe 1996 Act.



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The Arbitration and Conciliation Act, 1996

The 1996 Act contains two unusual features that differed from

the UNCITRAL Model Law.

First, while the UNICITRAL Model Law was designed to apply

only to international commercial arbitrations, the 1996 Act

applies both to international and domestic arbitrations.

Second, the 1996 Act goes beyond the UNICITRAL Model

Law in the area of minimizing judicial intervention.



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Arbitration agreement

"arbitration agreement" means an agreement by the parties to

submit to arbitration all or certain disputes which have arisen or

which may arise between them in respect of a defined legal

relationship, whether contractual or not.

An arbitration agreement may be in the form of an arbitration

clause in a contract or in the form ofa separate agreement.

An arbitration agreement shall be in writing.


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An arbitration agreement is in writing ifit is contained in-

A document signed by the parties;

An exchange of letters, telex, telegrams or other means of

telecommunication which provide a record ofthe agreement; or

An exchange of statements of claim and defense in which the

existence of the agreement is alleged by one party and not

denied by the other.

Arbitration agreement


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1. Domestic Arbitration

Arbitration which takes place in India, when the subject matter

ofthe contract, the merits of the dispute and the procedure for

arbitration are all governed by Indian law or

When the cause of action for the dispute has arisen wholly in

India or where the parties are otherwise subject to Indian

jurisdiction

2. International Arbitration

Arbitration becomes International when at least one of theparties involved is resident or domiciled, outside India or the

subject matter ofthe dispute is abroad.

The law applicable to an arbitration proceedings may be the Indian

law or a foreign law, depending on the terms of the contract in

this regard and the rules of conflict oflaws

Types ofArbitration


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3. Foreign Arbitration

An arbitration conducted in a place outside India, where the

resulting award is sought to be enforced as a foreign award &

quot;

4. Ad Hoc Arbitration

Arbitration agreed to and arranged by the parties themselves

without recourse to an Institution.

The proceedings are conducted by the arbitrator (s) as per the

agreement between the parties & apos; or with concurrence ofthe parties

It can be domestic, international or foreign arbitration

Types ofArbitration


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5. Institutional arbitration

An institutional arbitration is one in which a specialized institution

with a permanent character intervenes and assumes the functions

of aiding and administering the arbitral process, as provided by the

rules ofthat institution

Types ofArbitration


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Amount in Dispute Arbitrator's Fee (in INR) Administrative Fee (in

INR)

Up to INR 0.5million 30,000 15,000

From INR 0.5million one

to INR 2.5million

30, 000 plus 1, 500 per one

hundred thousand or part

thereofsubject to a ceiling of

60, 000

15, 000 plus 750 per one


thereofsubject to a ceiling

of30, 000

From INR 2.5million one

to INR 10 million

60, 000 plus 1, 200 per one


thereofsubject to a ceiling of

150, 000

30, 000 plus 600 per one


thereofsubject to a ceiling

of75, 000

From INR 10 million one to

INR 50 million

150, 000 plus 22, 500 per ten

million or part thereof

subject to a ceiling of240,000

75, 000 plus 11, 250 per one


thereofsubject to a ceilingof1 20, 000

From INR 50 million one to

INR 100 million

240, 000 plus 15, 000 per ten


subject to a ceiling of315,

000

120, 000 plus 8000 per ten


subject to a ceiling of160,

000

Over INR 100 million 315, 000 plus 12, 000 per ten


315, 000 plus 12, 000 per

ten million or part thereof

Arbitrator and Administration Fees

(Indian Council ofArbitration)


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MATTERS THAT CAN BE REFERRED TO Sec 9 of CPC, 1908, inter alia,

provides that all matters in ARBITRATION dispute between parties

relating to private rights or obligations, which civil courts may take,

cognizance of may be referred to arbitration

Example - Property ,Insurance ,Contract (including employment

contracts) ,Business / partnership disputes ,Family disputes (except

divorce matters), Construction ,Commercial recoveries

Exception - Any matter, which is forbidden by any law or is against

public policy, shall not be referred to arbitration

Disputes that may be referred


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(1 )Aperson ofany nationality may be an arbitrator

(2) Subject to sub-section (6), the parties are free to agree on a

procedure for appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an

arbitration with three arbitrators, each party shall appoint onearbitrator, and the two appointed arbitrators shall appoint the third

arbitrator who shall act as the presiding arbitrator.

(4) Ifthe appointment procedure in sub-section (3) applies and

(a) A party fails to appoint an arbitrator within thirty days from the

receipt ofa request to do so from the other party; or

(b) The two appointed arbitrators fail to agree on the third

arbitrator within thirty days from the date oftheir appointment,

The appointment shall be made, upon request of a party, by the Chief

Justi

ceor any p

erson or institution d

esignat

ed by hi

m.

Appointment ofArbitrators


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(5) Failing any agreement referred to in sub-section (2), in anarbitration with a sole arbitrator, if the parties fail to agree on thearbitrator within thirty days from receipt of a request by one partyfrom the other party to so agree the appointment shall be made,upon request of a party, by the Chief Justice or any person orinstitution designated by him

(6) Where, under an appointment procedure agreed upon by theparties,-

(a) A party fails to act a s required under that procedure; or

(b) The parties, or the two appointed arbitrators, fail to reach anagreement expected ofthem under that procedure; or

(c) A person, including an institution, fails to perform any function

entrusted to him or it under that procedure,

A party may request the Chief Justice or any person or institutiondesignated by him to take the necessary measure, unless theagreement on the appointment procedure provides other meansfor securing the appointment.



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(7) A decision on a matter entrusted by sub-section (4) or sub-section(5) or sub-section (6) to theChiefJustice or the person or institution

designated by him is final.

(8) TheChiefJustice or the person or institution designated by him, in

appointing an arbitrator, shall have due regard to-

(a) Any qualifications required ofthe arbitrator by the agreement of

the parties; and

(b) Other considerations as are likely to secure the appointment of

an independent and impartial arbitrator.

(9) In thecase ofappointment ofsole or third arbitrator in aninternational commercial arbitration, theChiefJustice ofIndia or

the person or institution designated by himmay appoint an

arbitrator ofa nationality other than the nationalities ofthe parties

where the parties belong to different nationalities.



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(10) TheChiefJusticemay make such scheme as hemay deemappropriatefor dealing with matters entrusted by sub-section (4) or

sub-section (5) or sub-section (6) to him.

(11) Wheremore than one request has been made under sub-section

(4) or sub-section (5) or sub-section (6) to theChiefJustices of

different High Courts or their designates, theChiefJustice or his

designate to whom the request has been first made under the

relevant sub-section shall alone becompetent to decide on the

request.

(12) (a) Where thematters referred to in sub-sections (4), (5), (6), (7),

(8) and (10) arise in an international commercial arbitration the

reference to "ChiefJustice" in those sub-sections shall beconstrued

as a reference to the"ChiefJustice ofIndia".



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(b) Where thematters referred to in sub-sections (4), (5), (6), (7), (8)

and (10) arise in any other arbitration, the reference to "Chief

Justice" in those sub-section shall beconstrued as a reference to,

theChiefJustice oftheHigh Court within whose local limits the

principal Civil Court referred to in clause (e) ofsub-section (1) ofsection 2 is situate and, where theHigh Court itselfis the"Court

referred to in that clause, to theChiefJustice ofthat High Court



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Section 35 of the Arbitration and Conciliation Act 1996 states thatan arbitral award shall be final and binding on the parties and

persons claiming under them. Thus an arbitral award becomes

immediately enforceable unless challenged under Section 34

Sec.36 Enforcement :

Where the time for making an application to set aside the arbitral

award under section 34 has expired, or such application having

been made, ithas been refused, the award shall be enforced under

the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as

it were a decree of the court

When the period for filing objections has expired or objections have

been rejected, the award can be enforced under the Civil Procedure

Code (CPC) in the same manner as if it were a decree passed by a

court of law. Section 36 declares that an arbitral award has the

force ofthe decree, though in fact i t i s n o t a decree

Arbitral Award


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A)Whether the Award is a valid Award ?

An Award has to be valid before it is to be enforced

An Award has to be made as provided u/s.3

1 ofthe Arbitration andConciliation Act, 1996

The Award should state the reasons upon which the Award is based

The Award has to state the date and place and is to be delivered to

the parties

Check list beforeenforcement of

Arbitral Award


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B) Whether the time period of challenge ofthe Award is over?

Section 34 provides for the manner of challenge of the arbitral

Award. The time period for the challenge is the expiry of3 Months

from the date of receipt of the Award (and a further period of 30

days on sufficient cause being shown for condo nation of delay ) If

that period expires the award holder can apply for enforcement of

the Award as a decree of the Court. But as long as this period has

not elapsed, enforcement is not possible.


Arbitral Award


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C) What happens when there is a challenge under Sec.34 ofthe Act

The award can be enforced as a decree only when the application

under Sec. 34 of the Act challenging the award has been disposed

off


Arbitral Award


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ARBITRATION

Arbitration has become recognized as the dispute settlement

mechanism in the construction industry.

It is seen as the final mode of dispute resolution which is beyond

the usual attractions ofarbitration, such as privacy, speed, flexibility

and choice ofthe arbitrator.

In the construction industry, arbitration is the norm because,

The prevalence ofarbitration clauses in standard forms of contract

The technical content of disputes, leading to the use of arbitrators

skilled i n technical disciplines

The need in many disputes for the arbitrator be empowered to

open up, review and revise decisions or certificates, arising from

the architects or engineers judgment in administering the

contract.

Arbitration in construction


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Need ofarbitration:Because ofthe distinctive nature oftheconstruction contracts that

contribute to the higher occurrence ofdisputes in the industry which

require a conflict resolution mechanism like arbitration to resolving

them.

Reasons for distinctive nature:

Delivery procedure

Site specificity

Late revelation ofdefects

Payment and time

Execution ofwork and delay

Weather conditions

Arbitration in construction


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Case: Khurda to Bhubaneswar 2 lanecarriageway road project

Name ofthe project:

Widening to 4/6 lanes and strengthening ofexisting 2 lanecarriageway ofNH-5 in the state ofOrissa from km387.700 to 414.000 (Khurda to

Bhubaneswar)

Claimant: GAMMON ATLANTA (Joint Venture)

Respondent: NATIONAL HIGHWAYS AUTHORITY OF INDIA

Total Project Cost:700.90 cr.

Starting date: 15.01.2005

Case ofArbitration


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Breaches ofcontract conditions committed by the respondent,

Delay in appointment ofindependent engineer

Delay in handing over the possession ofthe site ofwork:

Delay in payment ofwork done Delay in giving decision: use ofCRMB 60 in BC virtual suspension

ofBC work for several months

Failure to sanction adequateextension oftimefrom time to time

Failure to constitute dispute review board

Case ofArbitration


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Thank You!!!

Questions please

Arbitration Final

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