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International Commercial Arbitration - India and Global Perspective

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International Commercial Arbitration - India and Global Perspective

  1. 1. 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 ۞ Page
  2. 2. 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 “INTERNATIONAL COMMERCIAL ARBITRATION : INDIA & 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) ۞ Page
  3. 3. DECLARATION I hereby declare that the entire work embodied in the reasearch paper titled “INTERNATIONAL COMMERCIAL ARBITRATION : INDIA & 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. Place:- Pune Signature Date:- 18/05/2016 AVINASH MURKUTE LL.M (One Year Program) ۞ Page
  4. 4. 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. Place:- Pune Signature Date:- 18/05/2016 (AVINASH MURKUTE) LL.M (One Year Program) ۞ Page
  5. 5. 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 ۞ Page
  6. 6. INTRODUCTION - IMPORTANCE OF RESEARCH ۞ Page 1
  7. 7. 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 ۞ Page 2
  8. 8. 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. ۞ Page 3
  9. 9. STATEMENT OF PURPOSE- SCOPE OF RESEARCH ۞ Page 4
  10. 10. 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. ۞ Page 5
  11. 11. HYPOTHESIS ۞ Page 6
  12. 12. 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. ۞ Page 7
  13. 13. RESEARCH METHODOLOGY ۞ Page 8
  14. 14. 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. ۞ Page 9
  15. 15. SOURCES OF DATA COLLECTION ۞ Page 10
  16. 16. 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. ۞ Page 11
  17. 17. CONTENT – CHAPTERISATION ۞ Page 12
  18. 18. 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. ۞ Page 13
  19. 19. 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 ۞ Page 14
  20. 20. 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 ۞ Page 15
  21. 21. 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 ۞ Page 16
  22. 22. 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 ۞ Page 17
  23. 23. 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 ۞ Page 18
  24. 24. 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 ۞ Page 19
  25. 25. 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 ۞ Page 20
  26. 26. 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 ۞ Page 21
  27. 27. (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 ۞ Page 22
  28. 28. 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. ۞ Page 23
  29. 29. 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. ۞ Page 24
  30. 30. 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. ۞ Page 25
  31. 31. 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. ۞ Page 26
  32. 32. 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. ۞ Page 27
  33. 33. 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 ۞ Page 28
  34. 34. 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. ۞ Page 29
  35. 35. 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 ۞ Page 30
  36. 36. GENERAL PROVISIONS OF ARBITRATION ۞ Page 31
  37. 37. 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 ۞ Page 32
  38. 38. 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 ۞ Page 33
  39. 39. 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 ۞ Page 34
  40. 40. 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 7 Section 11 of the Act 8 Section 11 of the Act, intel alia ۞ Page 35
  41. 41. 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. ۞ Page 36
  42. 42. 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 9 Section 7 of the Act 10 Section 8 of the Act ۞ Page 37
  43. 43. 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. ۞ Page 38
  44. 44. 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. ۞ Page 39
  45. 45. 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. ۞ Page 40
  46. 46. ARBITRAL TRIBUNAL ۞ Page 41
  47. 47. 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. ۞ Page 42
  48. 48. 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. ۞ Page 43
  49. 49. 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 14 Section 12 of the Act 15 Section 13 of the Act 16 Section 40 of the Act 17 Section 14 (2) of the Act. 18 Section 15 the Act ۞ Page 44
  50. 50. 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. ۞ Page 45
  51. 51. 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. ۞ Page 46
  52. 52. 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. 19 Section 18 of the Act. 20 Section 19(1) of the Act. ۞ Page 47
  53. 53. 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. 21 Section 20 of the Act. ۞ Page 48
  54. 54. 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. 22 Section 23 of the Act. 23 Section 24 of the Act 24 AIR, (1995) Cal. 354 ۞ Page 49
  55. 55. 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. 25 Section 29 of the Act 26 Sher Bahadur v. Ram Narain 27 Hindustan Steel Ltd. v. Ram Narain 28 Section 32(1) of the Act ۞ Page 50
  56. 56. 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 29 Section 34 of the Act 30 Section 36 of the Act 31 Section 38 of the Act ۞ Page 51
  57. 57. 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. 32 Section 39 of the Act 33 Section 33(4) (5) and (6) of the Act 34 Section 34 of the Act ۞ Page 52
  58. 58. 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. 35 Section 45 of the Act. 36 Section 46 of the Act 37 Section 47 of the Act ۞ Page 53
  59. 59. (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. 38 Section 48 of the Act ۞ Page 54
  60. 60. 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 ۞ Page 55
  61. 61. 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. ۞ Page 56
  62. 62. 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. 39 Section 55 of the Act 40 Section 56 of the Act ۞ Page 57
  63. 63. (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 ۞ Page 58
  64. 64. ONLINE ARBITRATION – A SPECIAL REPORT ۞ Page 59
  65. 65. 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
  66. 66. 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
  67. 67. 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
  68. 68. 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
  69. 69. 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
  70. 70. 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
  71. 71. 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
  72. 72. 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
  73. 73. 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
  74. 74. 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
  75. 75. 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
  76. 76. 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
  77. 77. INTERVIEWS & EXPERT OPINIONS ۞ Page 72
  78. 78. 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
  79. 79. 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
  80. 80. 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
  81. 81. 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
  82. 82. .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
  83. 83. .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
  84. 84. .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
  85. 85. 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
  86. 86. 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
  87. 87. 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
  88. 88. CONCLUSION & REMARKS ۞ Page 83
  89. 89. 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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