a beginners' guide to arbitration
TRANSCRIPT
A simple, fast and inexpensive compliance management tool designed for small and medium business
Arbitration is a method of settlement of disputes by way of an alternative to the normal judicial method (Alternative Dispute Resolution)
Arbitration, Conciliation, Mediation and negotiation are the different forms of Alternate dispute resolution (ADR).
Amongst different modes of ADR, arbitration is the preferred one as it is considered to be at par with a court’s decree.
Arbitration and Conciliation Act of 1996 is the law of the land (India). It is based on the United Nations Commission on International Trade LAW (UNICITRAL).
Part I - Procedural aspect of Arbitration
Part II - Enforcement of Foreign Awards
Introduction to Arbitration
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Parties have to reach an agreement to refer the dispute.
Written communication, clause in a contract shall be an arbitration agreement.
Arbitration is a preferred mechanism for resolving commercial disputes.
A quasi judicial process.
Essentials of an Arbitration Agreement
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Regular Litigation Arbitration
• Inadequate court procedures and rules
• Pendency in the courts• Outdated laws particularly relating
to the business environment• Lack of expertise to handle
technical and commercial matters• Bureaucratic hassle in
appointment of judges resulting to vacancies in the judicial positions.
• Arbitration is less time consuming• Element of confidentiality• Flexibility in choosing the place of
arbitration• Foreseeable cost involved
(Arbitrator’s fees)• Appointment of arbitrator as per
the nature of dispute• Time frame within which
arbitration process should be concluded, failing of which, the arbitrator can be penalized.
Why Arbitration ?
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Bengal Regulations in 1772
Indian Arbitration Act, 1899
The Arbitration Act, 1940
The convention on the Execution of Foreign Arbitral Awards (the Geneva Convention)
The Foreign Awards (Recognition & Enforcement) Act, 1961
The Arbitration and Conciliation Act, 1996
The Arbitration and Conciliation (Amendment) Act, 2015
Chronology of events
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Arbitration agreement –
exchange of letter, telex, document
signed by parties, clause in a contract
Written communication to start the process
Selection of the arbitrator
Hearings and written
proceedings
Interim measures allowed during the proceeding
Fees of the arbitrator
Part I of the Arbitration Act, 1996
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Awards to be made within 12 months [2015 amendment]
Fast Track arbitration procedure [2015 amendment]
Recourse to a Court against arbitral award
Arbitration award to be treated as a Court decree.
An appeal to an award shall not be on the merit of case
Part I of the Arbitration Act, 1996
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Incapacity of one of the party.
Issues with appointment of arbitrator.
Award not within the scope of arbitration.
Dispute not capable of settlement by arbitration under the laws of India.
The award is contrary to the public policy of India. i. Fundamental policy of Indian law ii. Contravention of the basic notions of morality
and justice.
A
B
C
D
E
Condition for enforcement
of foreign award
Part II of the Arbitration Act, 1996
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Part II of the Arbitration Act, 1996
A foreign award becomes a decree upon the Court being satisfied with the award.
An appeal is allowed if the award is not passed by the Court. No 2nd appeal is allowed but the party affected, can directly appeal at the Hon’ble Supreme Court of India.
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ONGC vs. Saw Pipes Ltd. (2003) – Expanding the scope of setting aside an arbitral award
Venture Global Engineering vs. Satyam Computers Services (2008) - Part I (procedural) of the act will be applicable to Part II (enforcement of
foreign awards)
Bharat Aluminium Co. vs. Kaiser Aluminium Teachnical Services, Inc. (2012) – Part I is applicable only to arbitrations which takes place within the territory of India.
Enforcement of foreign awards in India – case laws
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Features of the 2015 AmendmentArbitration proceeding to be completed within 12 months and further extension of maximum 6 months can be granted . [Section 29 A]
Fast Track arbitration introduced. Award to be given within 6 months. [Section 29 B]
Arbitral proceeding to commence within 90 days from the date of any interim order by the Court
High Court to be the forum for appeals for International Commercial Arbitration.
Fees of the arbitrator fixed.
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Ad Hoc - more flexible, cost and time effective. It is more tailor made as per the requirement of the parties.
Institutional - established procedural rules, fixed fees, cherry pick arbitrator from the expert panel, process driven. Examples: Indian Council of Arbitration, Federation of Indian Chambers of Commerce and Industry (FICCI), Mumbai Centre for International Arbitration (MCIA)
Ad hoc and Institutional Arbitration
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Mumbai Centre for International Arbitration (MCIA)
In sync with the Make in India initiative
Maharashtra trying to be the domestic venue for arbitration.
The Rules for MCIA was announced on June 15, 2016
The MCIA Rules provide for the scrutiny of draft awards by the Registrar before they are released to the parties.
Convenient forum to Indian M&A players and also helps in attracting global investments.
International Court of Arbitration, Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA)
Gujarat International Financial Tec-City (GIFT) signs MOU with SIAC.
Development of Institutional Arbitration in India
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Indian arbitration scenario has come a long way.
Fixed time lines for concluding an arbitration process.
Foreseeable cost
Clarity on implementation of International arbitration awards.
As a practice, Dispute resolution clause (arbitration) a must now a days in commercial contracts.
Conclusion
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