Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods that can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System. Arbitration is a procedure in which parties submit present or future disputes, to one or more arbitrators (arbitral tribunal) who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award. In this article, we shall study International Commercial Arbitration in detail.

Different kinds of arbitrations are as follows:

• Domestic Arbitration: Domestic arbitration is that type of arbitration, which happens in India, wherein both parties must be Indians and the conflict has to be decided in accordance with the substantive law of India. 
• International Arbitration: When arbitration happens within India or outside India containing elements which are foreign in origin in relation to the parties or the subject of the dispute, and the dispute is decided in accordance with substantive law in India or any other country, then it is called as International Arbitration. 
• Institutional Arbitration: When an arbitral Institution conducts arbitration in accordance with the prescribed rules of such institution, it is called Institutional Arbitration.
• Ad-hoc Arbitration: If the parties agree among themselves and arrange for arbitration, it is called Ad-hoc Arbitration without having an institutional proceeding. It can either be domestic, international, or foreign arbitration.
• Statutory Arbitration: It is mandatory arbitration, which is imposed on parties by the operation of law. There are many central and State Acts which make arbitration mandatory.
• Fast Track Arbitration: Fast track arbitration is a method, which is time-dependent in the provision of the arbitration and conciliation act. Its procedure is established in a way that it has abandoned all the methods, which consume time.

International Arbitration:

Arbitration is an alternative to litigation. Arbitration is a procedure in which parties submit present or future disputes, to one or more arbitrators (arbitral tribunal) who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award.

Domestic arbitration is that type of arbitration, which happens in a particular country (say India), wherein both parties must be of the same country (say Indians) and the conflict has to be decided in accordance with the substantive law of that country only (say India). 

When arbitration happens within a particular country or outside the country containing elements which are foreign in origin in relation to the parties or the subject of the dispute, and the dispute is decided in accordance with substantive law in that country or any other country, then it is called as International Arbitration.

‘international arbitration’ is often taken to mean ‘international commercial arbitration’. Companies frequently include international arbitration agreements in their commercial contracts with other businesses, so that if a dispute arises with respect to the agreement they are obligated to arbitrate rather than to pursue traditional court litigation.

‘International arbitration’ has been defined by the UNCITRAL Model Law in Article 1(3) as follows:

An arbitration is international if:

(a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or

(b) one of the following places is situated outside the State in which the parties have their places of business:

(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;

 (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or

 (c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country.

The UNCITRAL Model Law has defined the term ‘commercial’ in footnote to the Article 1 as follows:

“The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing”

Section 2(f) of the Arbitration and Conciliation Act, “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in for in India and where at least one of the parties is-

1. an individual who is a national of, or habitually resident in, any country other than India; or
2. a body corporate which is incorporated in any country other than India; or
3. a company or ail association or a body of individuals whose central management and control is exercised in any country other than India; or
4. the Government of a foreign country;

International Arbitration Rules:

Most international arbitration institutions provide rules which govern the resolution of disputes to be resolved via arbitration. The best-known rules of arbitration include those of

• the International Chamber of Commerce (“ICC”),
• the London Court of International Arbitration (“LCIA”),
• the International Centre for Dispute Resolution of the American Arbitration Association (“ICDR”),
• the rules of the Singapore International Arbitration Centre (“SIAC”) and
• the Hong Kong International Arbitration Centre (“HKIAC”).

Investment Arbitration:

A relatively recent phenomenon, “investment arbitration” is one of the types of arbitration that is growing the most rapidly. It concerns the institution of arbitration proceedings by foreign investors against States on the basis of bilateral or multilateral investment treaties, or domestic laws providing consent to arbitration by the State. It may be the only recourse in response to the expropriation of private investments by a State.

Investment arbitrations are often resolved under the rules of the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) or the United Nations Commission on International Trade Law (“UNCITRAL”) rules. Many arbitrations involving Russian businesses take place under the rules of the Stockholm Chamber of Commerce (“SCC”).

Enforcement of International Arbitration Awards:

International arbitration awards can be enforced in most countries under the New York Convention, which entered into force on 7 June 1959. Over 168 countries have ratified the New York Convention today, meaning that arbitration awards can be enforced in all major countries in the world.

Case Laws:

Conclusion:

International arbitration has grown in importance in the last few decades, in tandem with globalization. It is primarily used to resolve disputes arising from commercial contracts, especially contracts with an international element. The primary laws on the basis of which international arbitration lawyers argue a case are the governing law of a contract, or the law of tort relating to a contract, the arbitration laws of the seat of arbitration, and the New York and Washington convention (alternatively known as the ICSID Convention).

This process provides a way of dispute resolution for the parties of different culture, languages, and legal rules under one common procedure which is a binding on the disputed parties.

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Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods that can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System. Arbitration is a procedure in which parties submit present or future disputes, to one or more arbitrators (arbitral tribunal) who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award. In this article, we shall study statutory arbitration in detail.

Different kinds of arbitrations are as follows:

• Domestic Arbitration: Domestic arbitration is that type of arbitration, which happens in India, wherein both parties must be Indians and the conflict has to be decided in accordance with the substantive law of India. 
• International Arbitration: When arbitration happens within India or outside India containing elements which are foreign in origin in relation to the parties or the subject of the dispute, and the dispute is decided in accordance with substantive law in India or any other country, then it is called as International Arbitration. 
• Institutional Arbitration: When an arbitral Institution conducts arbitration in accordance with the prescribed rules of such institution, it is called Institutional Arbitration.
• Ad-hoc Arbitration: If the parties agree among themselves and arrange for arbitration, it is called Ad-hoc Arbitration without having an institutional proceeding. It can either be domestic, international, or foreign arbitration.
• Statutory Arbitration: It is mandatory arbitration, which is imposed on parties by the operation of law. There are many central and State Acts which make arbitration mandatory.
• Fast Track Arbitration: Fast track arbitration is a method, which is time-dependent in the provision of the arbitration and conciliation act. Its procedure is established in a way that it has abandoned all the methods, which consume time.

Statutory Arbitration:

Generally, arbitration flows from an arbitration clause or arbitration agreement entered by two or more parties. Thus, arbitration is an act of parties. Parties decide themselves the arbitral tribunal, the procedure, the place, the language of procedure, etc. Thus, the process of arbitration is voluntary and solely depends on the existence of the arbitration clause or the arbitration agreement. But there are certain statutes, which provide statutory arbitration which is compulsory or mandatory under those statutes. The Electricity Supply Act, 1948, for example, provides for disposal by arbitration the disputes that may arise about its provisions.

“Statutory Arbitrations” are arbitrations conducted in accordance with the provisions of certain special Acts which provide for arbitration in respect of disputes arising on matters covered by those Acts.

Section 2(4) of the Arbitration and Conciliation Act, 1996, lays down that Part I of the Act except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.

Government contracts generally provide for compulsory arbitration in respect of disputes arising thereunder and usually the arbitrator appointed to decide such disputes are senior government officials. A large number of public sector undertakings also follow a similar procedure. There is also the Government of India’s Scheme, evolved on the directions of the Supreme Court, with regard to the settlement of disputes between one Government Department and another and one Government Department and a public enterprise and between public enterprises themselves. This Scheme provides for the constitution of a standing committee of senior officers who ensure that no litigation involving such disputes is taken up in a court or tribunal without the matter having been having first examined by the said committee and the committee’s clearance on litigation is obtained. The Ministries concerned in specific cases are also represented in the said committee. The committee assesses the reasonableness of the rival stands before it decides. This procedure has helped in an amicable settlement of a large number of disputes which would have otherwise ended in litigation.

There is also permanent machinery of arbitrators constituted by the Government of India to settle all current and future commercial disputes between public sector undertakings inter se as well as between a public sector undertaking and a Government Department. The award of the arbitration in such a dispute is binding on the parties to the dispute. Any party aggrieved by the award may make a reference for setting aside or revision of the award to the secretary, Minister of Law, Justice and Company Affairs, Government of India, whose decision binds the parties finally and conclusively.

Some acts which provide for statutory arbitration or conciliation are as follows:

• The Industrial Disputes Act, 1947 (Ss. 4, 5, and 12)
• The Bombay Industrial Relations Act, 1946 (Ss. 6 and 7(1))
• The Hindu Marriage Act, 1955 (S. 23(2))
• The Family Courts Act, 1984 (S. 9)
• The Code of Civil Procedure, 1908 (O. 23 r. 3, O. 27 r. 5b, Ss. 80, 89(1) and 107(2))
• The Land acquisition Act, 1894 (Ss. 11, 12, 18 and 26)
• The Presidency Towns Insolvency Act, 1907 (S. 68(h))
• The Indian Trusts Act, 1882 (S. 48)
• The Indian Electricity Act, 1910 (S. 52)
• The Indian Railways Act, 1890 (Ss. 46 and 48)

Distinction Between Ordinary Arbitration and Statutory Arbitration:

Conclusion:

Strictly speaking, statutory arbitrations are not arbitrations, but they arise out of some provisions of the statutes. These provisions direct the parties to refer to the matter to arbitration. Thus this direction can be called as a statutory reference and the proceeding itself is a statutory arbitration. Provisions of the Arbitration and Conciliation Act, 1996 are applicable to this arbitration.

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Arbitration is a procedure in which parties submit present or future disputes, to one or more arbitrators (arbitral tribunal) who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an arbitration award. In this article, we shall study setting aside of arbitration award.

An arbitration award is an instrument embodying the decision of the arbitral tribunal, given after determination in a quasi-judicial manner of matters in dispute between two or more contending parties, referred in pursuance of a valid written arbitration agreement between them providing for such reference giving arbitrators the power to decide and imposing a duty which makes it incumbent upon the parties to obey the decision arising from the submission.

Essentials of Arbitration Award:

• The award must be in writing. (Section 31(1))
• It must be signed by all or majority members of the arbitral tribunal. Reasons for the non-signing of defaulting members should be mentioned in the award. (Section 31(2))
• It must reasonable, legal and possible. (Section 31(3))
• It must have a date and place of arbitration (Section 31(4))
• It must talk about the cost of the arbitration (Section 31(5))
• It must be certain. If it is uncertain, it cannot be enforced.
• It must follow the agreement and not purport to decide matters, not within the agreement. An award outside the agreement is void, and the void award cannot be severed from the rest of the award, the whole award is void.
• It must be final.
• It must dispose-off all the differences submitted to arbitration.
• The award must be reasoned in the circumstances earlier.

Setting Aside of Arbitration Award:

Section 34 of the Arbitration and Conciliation Act 1996 deals with the setting aside of the arbitral award. In order to set aside an arbitral award, individual needs to file an application in court. The court in general accepts an application of challenge only if it comes under the ambit of Sec. 34 only. Prior to filing an application in the court to set aside the award, the party filing the application has to hand over a notice of such filing to the opposite party. Application for setting aside award to the Court as defined in the Act (Principal Civil Court of Original Jurisdiction) should be made within 3 months from the date of receipt of the final award of arbitration. Extension of further 30 days can be given at the discretion of the Court. Section 20 and Section 44 of CPC are applicable. The effect of the order setting aside the arbitral award is that where only a part of the reward is set aside, the rest of the award is final and binding on parties and can be enforced under the Code of Civil Procedure.

Grounds of Setting Aside of Arbitration Award:

The following are the grounds on which an award can be set aside:

• Incapacity of a party.
• Unlawful agreement.
• No notice to the other party.
• Subject matter extent to the scope of the arbitration agreement.
• Formation of Tribunal not as per the agreement.
• Subject matter not under the arbitration law.
• Award in conflict with the public policy of India.

Incapacity of the parties

In case any of the parties is of unsound mind or is minor, then such persons are not bound to act in harmony with any agreement or contract. Therefore, the agreement itself becomes null and void and passing any award in such case can be set aside by the court.

Unlawful agreement

If the contract is unlawful, then the arbitration agreement will also be held to be invalid. All the essential elements of a contract have to accomplish in order for it to become enforceable.

No notice to the other party

A prior notice must be sent to the other party regarding the commencement of the proceedings or of invocation of the arbitral clause of the agreement.

Subject matter extent to the scope of Arbitration Agreement

While formulating an agreement, the parties describe as to what all can be enclosed in the subject matter and what are the disputes that are enclosed under the arbitration agreement. Consequently, only those subject matters can be referred to an arbitral tribunal to resolve the dispute, not any other. If the tribunal acts ultra vires to the agreement, the party affected may file an application in the court and challenge such award.

Formation of the Tribunal not as per the Agreement

In case the Arbitrator is not appointed as per the agreed terms of the agreement or by the parties which has not been followed or any other bureaucratic aspect that was decided earlier in the agreement by the parties has not been followed all the way through, then such affected party may challenge the award in the court to set aside the award.

Subject matter not under the ambit of Arbitration law

There are certain types of matters that are not arbitral in nature like criminal, insolvency or any other public matters. These matters have been unambiguously barred under the purview of arbitration.

Award in conflict with the Public Policy of India

This ground has additional three more explanations, which was added in the 2015 amendment. 

• Award through deception or dishonesty.
• In contravention to the fundamental policy of India.
• In disagreement with ethics or integrity.

If a party challenges the award of an arbitral tribunal (under section 34 of the Arbitration Act) by filing an application for the same in the court, just because he has applied would not set aside the arbitral award. The award will be set aside only when the court orders so. The court may put a stay on the arbitral award if it is satisfied that the award is against the principles of justice. The court shall record its reason for doing so.

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Arbitration is a procedure in which parties submit present or future disputes, to one or more arbitrators (arbitral tribunal) who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an arbitration award.

Ex aequo et bono:

Ex aequo et bono is a legal concept that confers on arbitrators the power to decide a dispute in accordance with their sense of fairness and good conscience, instead of rigorously applying terms of a specific body of law. The principle has been unpopular in contemporary arbitration practice because there has been a tacit understanding among arbitration lawyers that to apply ex aequo et bono is to ruin arbitral procedure.

The flexibility inherent in ex aequo et bono has potential to improve the practice of international commercial arbitration, by redressing excessive formalisation in arbitral procedures. The primary aim in applying the principle is to give them the authority to make decisions flexibly to deliver effectively on the arbitrators’ mandate to decide the dispute as granted by the parties. By agreeing to ex aequo et bono proceedings, at least for some types of disputes, the parties permit arbitrators to act robustly to provide efficient dispute resolution. 

Passing Award When Arbitrators Differ in Opinion:

Section 29 of the Arbitration and Conciliation Act, 1996 deals with this situation.

1. If the parties have not agreed otherwise, in arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal should be made by majority of all its members.
2. Notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.

Fast Track Arbitration:

The Arbitration and Conciliation Amendment Act 2015 introduced Fast Track Arbitration in India to speed up the arbitration process in India and is not regulated by ordinary rules and regulations.  In India, the concept of fast-track arbitration means that the proceedings are to be concluded within 6 months, and there is no provision for oral proceedings, rather than written pleadings. Rule 44 of the Indian Council of Arbitration describes the fast track arbitration procedure.

Essential Features of Fast Track Arbitration:

1. It is largely governed by strict time-limit policies that both the arbitrators and the parties must comply with. This simply means speeding up the arbitral process and settling the matter in the shortest practicable timeframe.
2. When the time limit is not reached then the arbitrator’s order will be revoked unless the court has extended the time limit. Unless, when extending the time, the Court determines that the delay was induced for valid reasons, then there is a reduction in the arbitrator’s fees for each month of the delay by not reaching five percent. Section 15 of the Act specified this penalty method.
3. It does not include a fixed collection of elements or procedures to be followed as per ordinary arbitral proceedings, listed in the heading below, any activity that helps to resolve the issue as soon as possible is approved under fast-track arbitration.
4. Often in Fast Track Arbitration Procedures, no oral hearings are necessary and depend only on written submissions.
5. The parties will select a single arbitrator, and the submissions must be written in large part.
6. It protects the expense, speed, and time without violating any law and often it also prevents procedures such as interviewing a witness.

Arbitration Award:

An arbitration award is an instrument embodying the decision of the arbitral tribunal, given after determination in a quasi-judicial manner of matters in dispute between two or more contending parties, referred in pursuance of valid written arbitration agreement between them providing for such reference giving arbitrators the power to decide and imposing a duty which makes it incumbent upon the parties to obey the decision arising from the submission.

Essentials of Arbitration Award:

• The award must be in writing. (Section 31(1))
• It must be signed by all or majority members of the arbitral tribunal. Reasons for the non-signing of defaulting members should be mentioned in the award. (Section 31(2))
• It must reasonable, legal and possible. (Section 31(3))
• It must have a date and place of arbitration (Section 31(4))
• It must talk about the cost of the arbitration (Section 31(5))
• It must be certain. If it is uncertain, it cannot be enforced.
• It must follow the agreement and not purport to decide matters, not within the agreement. An award outside the agreement is void, and the void award cannot be severed from the rest of the award, the whole award is void.
• It must be final.
• It must dispose-off all the differences submitted to arbitration.
• The award must be reasoned in the circumstances earlier.

Tribunal is not required to give reason in following situations.

1. Where the parties agree that the reasons need not be recorded.
2. When the tribunal is dispensed from giving reasons.
3. If parties have settled their dispute without involving in the arbitration process with mutual agreement.

Types of Awards:

Interim Award:

Under Section 31(6) of the Act, the Tribunal if required can pass an interim arbitral award any time during arbitral proceedings.  This is a temporary award until the tribunal has given its final decision. A provisional award can only be made if the parties have agreed that “the tribunal may have the power to order on a provisional basis any relief which it would have power to grant in a final award” (s.39 Arbitration Act 1996). This includes;

• making a provisional order for the payment of money or the disposition of property as between the parties; or
• an order to make an interim payment on account of the costs of the arbitration.

The distinction between interim and final award lies in the fact that the final award is complete on all matters of dispute referred to arbitration, whereas an interim award is complete on only some of the matters and requires to be completed by further piece of award.

Final Award:

The final award is an award which is complete on all matters of dispute referred to arbitration. This should usually be in writing and signed by all the arbitrators. The award must contain reasons and state where the arbitration took place. It must also be dated (this is important for calculating interest on payments). Once the final award is made this ends proceedings.

Consent Award:

Section 30 of the Act provides for settlement after invocation of arbitration clause. Consent Awards are settlement agreements recorded between the parties after the parties have invoked arbitration to settle disputes. The consent award is different from a normal arbitration awards as the dispute is not considered on the merits, but reflects the mutually agreed settlement terms of the parties. Settlement of disputes through consent awards ensures that the disputes end in amicable terms leaving each party satisfied. The consent award will have the same status and effect as arbitral award provided on merits. The consent award, including form and contents, is similar, to any other arbitral award and has same effect of any other arbitral award. Termination of arbitral proceedings does not necessarily result in consent award. The parties may prefer not to obtain approval from the tribunal and can settle the dispute by entering into an agreement under Section 73.

Default Award or Ex-Parte Award:

Section 25 of the Act deals with default award. It provides that subject to any agreement between the parties, if the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23 of the Act and fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant and make the arbitral award on the basis of evidence produced before it. This type of award is also called ex-parte award.

Award on Agreed Terms or Settlement Award:

If the parties settle dispute during the arbitral proceedings, an award can be made on the agreed terms. This award is also known as settlement award. In a settlement award, the arbitral tribunal is not required to give a reasoned award. The arbitral tribunal may simply record the settlement arrived between the parties in the form of an arbitral award on agreed terms.

Partial Award:

Some elements of the parties’ claim have been determined but other issues remain and need to be resolved before the final award is made. Parties can continue arbitrating the remaining issues.

Draft Award:

This is not binding on the parties until it has been confirmed by the tribunal.

Additional Award:

Usually once the final award it made, the tribunal has no further authority. However, the parties can request an additional award be made on an undecided issue still in dispute.

Award of Interest:

Section 31(7) of the Act deals with the award of interest. As per Section 31(7) unless otherwise agreed by the parties, where an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen percent per annum from the date of the award to the date of payment. Unless and until there is a mention of compound interest in arbitration agreement, simple interest should be charged.

Place of Award:

In domestic arbitration, the place of arbitration does not pose any problem. It can be anywhere in India according to the agreement of the parties. If arbitration is under the rules of an institution, it is generally conducted at the place where the institution is located, subject to agreement to the contrary.

In international arbitrations, parties generally specify the place of arbitration in their arbitration agreement. If it is not so specified, Indian parties usually make use of, as far as possible, a joint arbitration clause, which deals, inter-alia, with the determination of the place of arbitration. Such clauses are recommended for adoption by arbitral organisations which provide international arbitration facilities and which have entered into arbitration service agreements with their counterparts in other countries. In arbitration service agreements concluded by arbitral institutions in different countries, the place of arbitration usually specified is the country where the respondent resides.

Termination of Arbitral Process:

Section 32 of the Act deals with the termination of proceedings of arbitration. Section 32(1) of the Act unequivocally provides that only ‘final award’ shall terminate the arbitral proceedings.  In Kifayatullah Haji Gulam Rasool Vs Bilkish Ismail Mehsania (2001) case, the Court held that arbitration proceedings shall automatically stand terminated only after making of final award, which decides or completes decision of claims which are presented.

Under Section 32(2) of the Act arbitral proceedings can also be terminated by an order of the Tribunal, which order can only be passed

• when the claimant withdraws the claim or
• when the parties agree on the termination of the proceedings or
• when the Tribunal finds that continuation of proceedings has become unnecessary or impossible.

Subject to section 33 and subsection (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of arbitral proceedings.

Correction and Interpretation of Award and Additional Award.

Section 33 of the Arbitration & Conciliation Act talks about the correction of an arbitral award after having been pronounced. Mistakes that may be made due to a slip of the natural course of things or an omission are allowed to be corrected, under this provision. The error that has to be corrected cannot be related to the merits of the case or an error with regards to the substance of the matter.

In cases where any of the parties require correction of clerical mistakes, typographical errors, or such other mistakes; or seek an interpretation from an issue of the award, they are allowed to do so. They may approach the arbitral tribunal to seek clarification and corrections on the above-mentioned points.

If the parties do not recognize the clerical errors but the tribunal themselves do, then they can suo moto correct the award for the same. The arbitral tribunal, within thirty days, can correct the clerical errors by themselves and send fresh copies of the award, highlighting the corrected portions, to the parties. However, the tribunal does not have the authority to provide interpretation or issue an additional award, by themselves.

The procedure is as follows:

1. The parties are allowed to approach the tribunal within a period of 30 days starting from the receipt of the award.
2. The party must notify the other party when he decides to seek clarification.
3. The application for correction should only request the tribunal to correct any computation errors, any clerical or any typographical errors, or any other errors of similar nature.
4. The party moving the application may request the tribunal to give an interpretation of a specific point, issue, or part of the award only if so, agreed by the other party. The consent of the other party is essential in this case.
5. The party may request for an additional award on the claims presented in the proceedings but omitted from the arbitral award within a period of thirty days from the receipt of the award. The application for an additional award should be first consented to by the other party.
6. If the arbitral tribunal considers and accepts the request, then they may pronounce an additional award within sixty days of the application. The additional award, so provided, shall form a part of the final award.

Setting Aside of Award:

Section 34 of the Arbitration and Conciliation Act 1996 deals with the setting aside of the arbitral award. In order to set aside an arbitral award, individual needs to file an application in the court. The court in general accepts an application of challenge only if it comes under ambit of Sec. 34 only. Prior to filing an application in the court to set aside the award, the party filing the application has to hand over a notice of such filing to the opposite party. Application for setting aside award to the Court as defined in the Act (Principal Civil Court of Original Jurisdiction) should be made within 3 months from the date of receipt of final award of arbitration. Extension of further 30 days can be given at discretion of the Court. Section 20 and Section 44 of CPC are applicable. The effect of order setting aside the arbitral award is that where only a part of reward is set aside, the rest of the award is final and binding on parties and can be enforced under the Code of Civil Procedure.

The following are the grounds on which an award can be set aside:

• Incapacity of a party.
• Unlawful agreement.
• No notice to the other party.
• Subject matter extent to the scope of the arbitration agreement.
• Formation of Tribunal not as per the agreement.
• Subject matter not under the arbitration law.
• Award in conflict with the public policy of India.

Finality of Arbitral Award:

It is provided under section 35 of the Arbitration and Conciliation Act, 1996 that the award after an arbitration proceeding shall be binding on the parties to the proceedings. When an arbitral award is made it is in totality concerning all the dimensions and implies that no more steps can be further taken by the arbitral tribunal. The award has a binding effect on the parties. An award by an arbitral tribunal is final when:

• The Period that is provided to make an appeal challenging the award in the court expires;
• And in circumstances when a party has filed an application in the court challenging the award and the same gets rejected.

Enforcement of Arbitral Award:

Section 36 of the Arbitration and Conciliation Act, 1996 after the 2015 Amendment Act, provides that when the time period that is provided for making an application in the court for setting aside an arbitral award has expired the award of the arbitral tribunal will have an effect of a decree of a court and shall be enforced in the same way. (As per the provisions of Code of Civil Procedure of 1908).

If a party challenges the award of an arbitral tribunal (under section 34 of the Arbitration Act) by filing an application for the same in the court, just because he has applied would not set aside the arbitral award. The award will be set aside only when the court orders so. The court may put a stay on the arbitral award if it is satisfied that the award is against the principles of justice. The court shall record its reason for doing so.

Appeals Under the Arbitration and Conciliation Act:

Section 37 of the Act exhaustively enlists orders against which an appeal can be preferred by parties under the Act. A party can prefer an appeal under Section 37, inter alia, against an order of the court refusing to refer the parties to arbitration under Section 8. However, parties cannot prefer an appeal under Section 37 against an order of the court under Section 11.

Appeals under this section is divided intop two categories:

Appeal against orders by Court:

• Refusing to refer the parties to arbitration under Section 8
• granting or refusing to grant any measure under section 9;
• setting aside or refusing to set aside an arbitral award under section 34.

Appeals against orders of Tribunals:

• accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
• granting or refusing to grant an interim measure under section 17.

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Alternative Dispute Resolution or ADR refers to an assortment of dispute resolution procedures that primarily serve as alternatives to litigation and are generally conducted with the assistance of a neutral and independent third party. In this article, we shall introduce ourselves with Arbitration. ADR processes are conducted with the assistance of an ADR neutral, who is an unbiased, independent, and impartial third party not connected with the dispute, and helps the disputant parties to resolve their disputes by the use of the well-established dispute resolution processes. Arbitration, Conciliation, Mediation, Negotiation, and Lok Adalats are different methods of ADR. In this article, we shall study arbitration and arbitration tribunal.

Arbitration:

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award. In India, the procedure of arbitration is regulated by the Arbitration and Conciliation Act, 1996.

Arbitration Tribunal:

Chapter III of the Arbitration and Conciliation Act, 1996 lays down the arrangements for the Composition of an Arbitral Tribunal. 

Number of Arbitrators:

Section 10(1) of the Arbitration and Conciliation Act, 1996 gives provision for the number of arbitrators in the arbitration tribunal. The parties to the dispute are allowed to mutually choose the number of arbitrators that shall establish the arbitral tribunal to adjudicate the dispute. It is, in any case, necessary that the number of arbitrators appointed shall be an odd number and not an even. This provision guarantees that there are no ties.

According to Section 10(2) of the Arbitration and Conciliation Act, 1996, if the parties to the dispute are unable to choose the number of arbitrators, in that case, just a single arbitrator shall be appointed.

Nationality of Arbitrator:

Section 11(1) of the Arbitration and Conciliation Act, 1996, a person of any nationality may be an arbitrator unless otherwise agreed by the parties.

Procedure to Appoint Arbitrator:

According to Section 11(2) of the Arbitration and Conciliation Act, 1996, the parties are free to agree on the procedure of appointment of the arbitrator or arbitrators.

According to Section 11(2) of the Arbitration and Conciliation Act, 1996, if parties fail to appoint arbitrator as specified in Section 10 clause 2, then each party shall appoint one arbitrator and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

Rule 22 of the Rules of Arbitration gives that if the value of the claim made under arbitration is One Crore or less, a solitary arbitrator can resolve the dispute if the parties agree to it. In cases where the claim to the dispute surpasses one Crore, the arbitral tribunal shall be made out of three arbitrators with the agreement of the parties.

Challenge to the Appointment of Arbitrator:

Section 12 of the Arbitration and Conciliation Act, 1996 deals with the circumstances in which the appointment of an arbitrator can be challenged.

1. Circumstances exist that give rise to justifiable doubts as to independence or impartiality on account of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kinds, or
2. He has no time due to his present or future assignments which is likely to affect his ability to devote sufficient time to the arbitration and in particular their ability to complete the entire arbitration within a period of twelve months.
3. He does not possess the qualifications agreed to by the parties.
4. The arbitrator falls in a category mentioned in the Seventh Schedule of the Act
5. The fifth schedule to the Act gives grounds that give justifiable doubts as to the independence or impartiality of the arbitrator.

The arbitrator has to inform parties about the circumstances mentioned above from time to time throughout the proceeding. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Requisite Qualifications of Arbitrator:

• The arbitrator must have requisite qualifications and none of the disqualifications prescribed in the arbitration agreement.
• The arbitrator should possess all the required capacity by law to assume the office of the arbitrator.
• H must be a person of the general reputation of fairness, integrity, and capable of applying objectivity in arriving at settlement in the dispute.
• The arbitrator should be free from any bias
• The arbitrator must be free from any connection with parties and the subject matter.

Reasons for Termination of Mandate of Arbitrator:

Section 14 of the Arbitration and Conciliation Act, 1996, governs the situation of termination of the mandate of the arbitrator because of his failure to act. The grounds for termination of the mandate under Section 14 are as follows:

• The arbitrator becomes de jure or de facto unable to perform his function.
• For some other reasons fails to act without undue delay
• The arbitrator withdraws from office.
• The parties agree to the termination of his authority as an arbitrator.

The arbitrator becomes de jure or de facto unable to perform his function:

De Jure refers to an arbitrator’s legal incapacity to perform his functions under the law and relates to circumstances under which the arbitrator by law is barred from continuing in office. For example: if an arbitrator becomes bankrupt or convicted for a criminal offence, then he becomes de jure unable to adjudicate the case. De Facto refers to factual inability. It relates to a factual happening during the process of arbitration. For example: if the arbitrator falls seriously ill or has some physical incapacity, then he becomes de facto unable to perform his function.

For some other reasons fails to act without undue delay:

In situations where the arbitrator is taking too long to adjudicate the dispute, this provision shall apply. If the arbitrator takes too long to even conduct the first hearing, let alone adjudication of the case; the parties can resort to this provision to terminate the mandate of the arbitrator.

The arbitrator withdraws from office:

For the reasons suitable to the arbitrator, if he withdraws from office, then automatically his mandate is terminated. This can happen because of various reasons and the arbitrator is not bound to give a detailed explanation of the same.

The parties agree to the termination of his authority as an arbitrator

If one of the parties wants removal of the arbitrator, then they must approach the court for the same. However, if both the parties agree to remove the arbitrator, then they can do so pursuant to making an agreement under section 15(1)(b) and terminate the mandate of the arbitrator. A party singularly does not have the power to revoke the authority of the arbitrator. But both/all parties in the agreement can do the same and do not need to approach the court to enforce the termination.

Procedure of Termination of Mandate of Arbitrator:

An arbitrator’s mandate can be terminated:

• by the arbitrator (by recusing themselves from the arbitral tribunal);
• by the parties;
• by the arbitral tribunal;
• by a court order;
• on the death of the arbitrator; or
• because of the arbitrator’s physical incapacity to proceed with the mandate.

If the situation falls within any of the grounds mentioned under section 14, then the party willing to terminate the mandate must approach the Court. An application for removing the arbitrator may be made to the court in whose jurisdiction the contract was executed, or subject matter of the work was performed, or within whose jurisdiction the office of the arbitrator was situated. The power to remove an arbitrator by the court is discretionary in nature. Every application to the court under section 14 is not supposed to be ruled in the affirmative. There might be situations where the court does not feel the need to remove the arbitrator. If the conditions mentioned under section 14 are satisfied, then it is imperative for the court to remove the arbitrator.

However, if both the parties agree to remove the arbitrator, then they can do so pursuant to making an agreement under section 15(1)(b) and terminate the mandate of the arbitrator. A party singularly does not have the power to revoke the authority of the arbitrator. But both/all parties in the agreement can do the same and do not need to approach the court to enforce the termination.

Substitution of Arbitrator:

If termination of mandate of Arbitrator is done under Section 13 or 14 of the Act, he shall be substituted. The procedure of substitution is laid down in Section 15 of the Act. Section 15(2) of the 1996 act allows for arbitrators to be substituted if their mandate has been terminated.

Where the mandate of arbitrator terminates, a substitute shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

Unless otherwise agreed by the parties, where the arbitrator is replaced under subsection 2, any hearing previously held may be repeated at the discretion of arbitral tribunal.

Unless otherwise agreed by the parties, an order of ruling of the arbitral tribunal made prior to the replacement of an arbitrator under section shall not be invalid solely because there is a change in the composition of arbitral tribunal.

Jurisdiction of Arbitral Tribunal:

Chapter IV of the Act contains Sections 16 and 17 that deal with the jurisdiction of an arbitration tribunal. Section 16 of the Act deals with the Competence of arbitral tribunal to rule on its own jurisdiction and conveys that the arbitral tribunal has the independence of choosing its own jurisdiction and freedom from the interference of courts regarding any matter related to arbitration.

Section 16– Competence of arbitral tribunal to rule on its jurisdiction:

The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement and for this purpose,

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract when it’s validity is challenged before the tribunal.

(b) a decision by the arbitral tribunal that the contract is null and void shall not mean that the arbitration clause invalid.

If there is a plea that the arbitral tribunal does not have jurisdiction, it cannot be raised after the submission of the statement of defence. Even an arbitrator may raise such a plea. However, if there is any delay and if such a delay is justified, the arbitral tribunal may admit a later plea according to sub section 4 of section 16 of the Act.

A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal shall decide on a plea referred to above and, where the arbitral tribunal takes a decision rejecting the plea, it shall continue with the arbitral proceedings and make an arbitral award. A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34 of the Act which deals with ‘Application for setting aside arbitral award’.

Power of Arbitration Tribunal to Order Interim Measures:

Section 17 of the Act deals with arbitral tribunal’ power to order interim measures.

A party may, during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced apply to the arbitral tribunal for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings or as an interim measure of protection in any of the following matters;

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient.

The arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.

Powers of Arbitral Tribunal:

• The arbitrator has a power to administer an oath to the parties. It is necessary for him to act as a quasi-judicial authority
• Power to take interim measures
• According to section 25, an arbitrator has an power to proceed to ex-parte
• Power to appoint an expert
• Power to make awards

Duties of Arbitral Tribunal:

• To fix a time and place for arbitration, which is convenient to the parties
• Duty to disclose
• Duty to efficiently resolve the dispute
• Duty to determine the rules for the procedure

Reasons to Terminate Mandate of Arbitral Panel:

1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.
2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.
3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties.
4. The arbitrator is a lawyer in the same law firm which is representing one of the parties.
5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.
6. The arbitrator’s law firm had a previous but terminated involvement in the case without the arbitrator being involved himself or herself.

Distinguishing Between Section 9 and 17 of the Act.

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There is a famous proverb “where there are two minds there will be three opinions”. Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods which can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System.

Arbitration:

Arbitration is an ADR procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award. In India, the procedure of arbitration is regulated by the Arbitration and Conciliation Act, 1996.

Advantages of Arbitration:

• Liberty to Choose Arbitrator: The parties to the dispute usually agree on the arbitrator, so the arbitrator will be someone that both sides have confidence will be impartial and fair.
• Expert Arbitrator: Unlike in a court trial, where the judge or jury may know very little about the subject matter of the dispute, the parties to the arbitration have the ability to select an arbitrator with expertise in a certain area, which may lead to a more equitable and informed decision.
• Flexibility: There are lesser formalities in arbitration than in the traditional judicial system.
• Speed: As the parties have been given the freedom to determine the procedure, time, and place for the settlement of the dispute, it saves a lot of time compared to traditional courts.
•  Less cost: Traditional Court system is strictly procedural, hence expensive. Arbitration saves a lot of money and cost.
• Privacy and Confidentiality: In arbitration, the process of dispute resolution is within four walls and only in presence of parties and experts.
• Finality: There is a very limited avenue for appeals.  In the case of arbitration because the grounds for challenging an arbitrator’s decision are severely limited by the Arbitration Act.
• Enforceability: The arbitral awards are enforceable which makes arbitration a binding process. Such awards are generally easier to enforce as compared to court verdicts.

Disadvantages of Arbitration:

• Inability to Appeal: There is a very limited avenue for appeals. As a general and practical rule, the arbitrator’s decision cannot be appealed.
• Lack of Formal Evidence: There is a lack of a formal evidence process. The parties have to rely on the skill and experience of the arbitrator to sort out the evidence, rather than a judge or jury.
• Mandatory Arbitration Contracts: Arbitration agreements are sometimes contained in ancillary agreements, or in small print in other agreements, and consumers and employees sometimes do not know in advance that they have agreed to mandatory binding pre-dispute arbitration by purchasing a product or taking a job.
• Possibility of Bias: Arbitrator is presumed to be neutral, impartial. It is also assumed that he has no personal interest in the subject matter before him. But considering human nature we can say that arbitrators may not be unbiased.
• No Interlocutory orders: The process does not provide for the grant of interlocutory measures against a party, making it easier for a party to take steps to avoid enforcement of an award, such as the relocation of assets offshore.
• Execution of Award: Arbitration awards are not directly enforceable; they are executable subject to judicial sanction. A party seeking to enforce an award must resort to judicial remedies.

Conciliation:

Conciliation is a process of persuading parties to reach settlement in existing and ongoing conflict with the help of third impartial party called conciliator with the to preserve the relationship they have with each other. There is no need of pre-agreement for starting the process of conciliation but acceptance to the process by both parties is necessary.

Advantages of Conciliation:

• It offers a more flexible alternative, for a wide variety of disputes, small as well as large;
• It obviates the parties from seeking recourse to the court system;
• No prior agreement is required.
• It reserves the freedom of the parties to withdraw from conciliation without prejudice to their legal position inter se at any stage of the proceedings;
• It is committed to maintenance of confidentiality throughout the proceedings and thereafter, of the dispute, the information exchanged, the offers and counter offers of solutions made and the settlement arrived at.
• It is cost-effective and produces quicker resolution of dispute.
• f) It facilitates the maintenance of continued relationship between the parties even after the settlement.
• There is no scope for corruption or bias.

Disadvantages of Conciliation:

• The process is not binding upon the parties to the dispute.
• There is no avenue for appeal.
• The parties may not achieve a settlement to their conflict.
• Parties may use it as a delay tactics

Mediation:

Mediation is a mode of dispute resolution, where an amicable decision arises with the help of a third party known as a ‘mediator,’ without recourse to the court of law.

Advantages of Mediation:

• Parties have complete control over the settlement.
• Less stress as compared to litigation and arbitration.
• The relationship between the parties isn’t overly damaged.
• Mediation proceedings are confidential.
• The process resolves the dispute quickly.

Disadvantages of Mediation:

• Since the decision is at the discretion of the parties, there is the possibility that a settlement between the parties may not arise.
• It lacks the support of any judicial authority in its conduct.
• The absence of formality- Mediation proceedings are lacking in any procedural formality since they are not based on any legal principle.
• The truth of an issue may not be revealed.
• There is lack of expertise in the issue of the dispute.

Negotiation:

Negotiation is a method of dispute resolution whereby a dispute between two individuals or groups is settled amicably by an impartial third person called as a negotiator, using different techniques. The negotiator, in this form of resolution, uses various communication methods to bring the parties of the dispute to a settlement.

Advantages of Negotiation:

• Flexibility: since negotiation is an informal process, it is relatively flexible.
• Quick resolutions as compared to litigation.
• It facilitates in maintaining a healthy relationship between the disputing parties.
• Takes place in a private environment

Disadvantages of Negotiation:

• The parties to the dispute may not come to a settlement.
• Lack of legal protection of the parties to the conflict.
• Imbalance of power between the parties is possible in negotiation.

Distinguishing Between Arbitration and Conciliation:

Distinguishing Between Mediation and Conciliation:

Conclusion:

ADR has distinct advantages and it offers a comparatively speedier and inexpensive mode of dispute resolution than conventional litigation. It offers a system with procedural flexibility, a broad range of remedial options, and a focus on individualized justice. The flexibility is available not only in terms of the procedure but also in terms of the solutions to the dispute. ADR, in contradistinction to a judicial adjudication, can provide creative solutions – novel ways of resolving disputes. ADR may not produce the result in each case but it will definitely be helpful in reducing the disputes. Therefore in a country like India, wherein, courts are overburdened with thousands of cases there is a strong case for enhanced use of ADR mechanism for resolution of some disputes.

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The Arbitration and Conciliation Act, 1996 proceeds on the basis of the UN Model Law so as to make our law in accordance with the United Nations Commission on International Trade Law (UNCITRAL). This Act consolidated the law of arbitration in three enactments previously in force – viz, the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Act itself is a self-contained code and a complete answer for all matters relating to arbitration. It excludes the applicability of general law procedure, and is a complete code for designing, consolidating, and amending the law related to domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards.

With a view to a recommendation by the Law Commission and to implement the recommendation of the General assembly of the United Nations. it was considered desirable to implement UNCITRAL Model Law, the UNICITRAL Arbitration Rules and the UNICITRAL Conciliation Rules, the Arbitration and Conciliation Bill, 1995, consolidating and amending the law related to domestic arbitration, international commercial arbitration, enforcement of foreign awards and to define the law of conciliation, was introduced in Rajya Sabha on 16 May 1995.

The Arbitration and Conciliation Bill, 1995, was passed by both the Houses of the Parliament in August 1996 and received the assent of the President on 16 August 1996, which became the Arbitration and Conciliation Act, 1996. However, it is deemed to have commenced from 25 January 1996. Therefore, the provisions of this Act will only be application on arbitrations commenced post 25 January 1996. It extends to the whole of India.

Objects of the Arbitration and Conciliation Act, 1996:

The preamble of the Act reads as follows: “An Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto”.

The main object of the Act is to consolidate and amend the law relating to:

1. domestic arbitration;
2. international commercial and business arbitration;
3. enforcement and implementation of foreign arbitral awards; and
4. to define the laws relating to conciliation and matters that are connected therewith or incidental thereto.

Some of the other objects, as provided in the Statement of Objects and Reasons for the Arbitration and Conciliation Bill, 1995 are as follows:

• To ensure that rules are laid down for international as well as domestic arbitration and conciliation;
• To ensure that arbitration proceedings are just, fair, effective, and capable of meeting the needs of specific arbitration;
• To ensure that the arbitral tribunal gives reasons for its award given;
• To ensure that the arbitral tribunal remains within the limits of its jurisdiction;
• To minimize the supervisory role of courts in the arbitral process;
• To permit the arbitral tribunal to use methods such as mediation and conciliation during the procedure of arbitration to encourage settlement of disputes;
• To ensure that every final arbitral award is enforceable as a decree of the court of law;
• To ensure that the settlement agreement reached by parties as a result of conciliation proceedings may be treated as arbitral awards on agreed terms on the substance of the dispute rendered by an Arbitral Tribunal;
• To treat awards given in a foreign country to which any one of the two international conventions to which India is a party.

Salient Features of the Arbitration and Conciliation Act, 1996:

Following are some of the key features of the Arbitration and Conciliation Act, 1996:

1. Replacement of three old statutes: The Act is a consolidation of three laws of arbitration previously in force – viz, the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961 into one enactment. Though the three Acts have been consolidated the provisions regarding each of the acts have been kept distinct within the 1996 Act.
2. Necessity of Arbitration Agreement: The Act emphasizes the importance of the Arbitration agreement without which arbitration proceedings cannot be instituted. The arbitration agreement is a clause in a contract or an agreement between parties stating that any dispute will be referred to arbitration proceedings. The Act mentions that the arbitration agreement or arbitration clause must contain the following information – the subject matter of dispute, the timing of dispute (past/present/future), number of arbitrators, qualifications of arbitrators, jurisdiction, and composition of the tribunal.
3. Application to Domestic and International Arbitration: The Act provides the procedure not only for domestic arbitration but also includes International Commercial Arbitration. The 1996 Act is a law that relates to the enforcement of foreign Arbitration awards and ensures greater autonomy in the process of arbitration and puts a limit on the intervention of the judiciary.
4. Procedural Advantage:  Arbitral Tribunal has full powers to decide the procedure to be followed unless parties agree on the procedure to be followed. The Tribunal also has powers to determine the admissibility, relevance, materiality, and weight of any evidence. The place of arbitration will be decided by mutual agreement. However, if the parties do not agree to the place, the same will be decided by a tribunal. Similarly, language to be used in arbitral proceedings can be mutually agreed upon. Otherwise, Arbitral Tribunal can decide. The Act allows parties to choose the substantive law to be applied by the arbitration tribunal and this must also be mentioned in the arbitration agreement.
5. Party Autonomy: The concept of party autonomy is the central theme of the Act. The expressions used in the Act – ‘unless otherwise agreed by the parties’, ‘with the agreement of parties’, `if the parties in dispute have expressly authorized’ etc., strengthens the idea of party autonomy.
6. Minimal Interference by Judiciary: One of the major defects of earlier arbitration law was that the party could access court almost at every stage of arbitration – right from the appointment of an arbitrator to implementation of the final award. Thus, the defending party could approach the court at various stages and stall the proceedings. Now, the approach to court has been drastically curtailed. In some cases, if an objection is raised by the party, the decision on that objection can be given by Arbitral Tribunal itself. After the decision, the arbitration proceedings are continued and the aggrieved party can approach Court only after Arbitral Award is made.
7. Arbitral Award: Decision of Arbitral Tribunal is termed as ‘Arbitral Award’. The arbitrator can decide the dispute ex aequo et bono (In justice and in good faith) if both the parties expressly authorized him to do so.  The decision of the Arbitral Tribunal will be by majority. The arbitral award shall be in writing and signed by the members of the tribunal. The award should be dated and the place, where it is made, should be mentioned. Copy of award should be given to each party.
8. Reasoned Award: The award must be in writing and signed by the members of the Arbitral Tribunal. It must state the reasons for the award unless the parties have agreed that no reason for the award is to be given. Previous to this Act reasoning of the award by the arbitrator was not mandatory.
9. Enforceability of Award: Under this Act, every final arbitral award is enforceable as a decree of the court of law and not required to be made a “rule of court”.
10. Over-Riding Effect of the Act: Section 5 of the Act clarifies that notwithstanding anything contained in any other law for the time being in force, in matters governed by the Act, the judicial authority can intervene only as provided in this Act and not under any other Act.
11. Applicability of the Limitation Act: For this purpose, the date on which the aggrieved party requests another party to refer the matter to arbitration shall be considered. If on that date, the claim is barred under Limitation Act, the arbitration cannot continue. If the Arbitration award is set aside by Court, time spent in arbitration will be excluded for purpose of the Limitation Act. 
12. Aligning Procedure with the UNCITRAL Model Law: The Act has been enacted taking into account the United Nation’s Commission on International Trade Law (UNCITRAL) Model Law and UNCITRAL Conciliation Rules. This promotes unification and harmonization of International Tarde Law by harmonizing concepts of Arbitration and Conciliation of the legal system of the world.
13. Clear Distinction Between Arbitration and Conciliation: The provisions that relate to the process of Arbitration are contained in Part I which includes Chapters I to IX, while the provisions that relate to the process of Conciliation are dealt with in Part III that includes section 61 to 81.
14. Conciliation: Conciliation is the amicable settlement of disputes between the parties, with the help of a conciliator. Part III of the Act makes provision for conciliation proceedings. In conciliation proceedings, there is no agreement for arbitration. In fact, conciliation can be done even if there is an arbitration agreement. The conciliator only brings parties together and tries to solve the dispute using his good offices. The conciliator has no authority to give an award. He only helps parties in arriving at a mutually acceptable settlement. After such an agreement, they may draw and sign a written settlement agreement. However after the settlement agreement is signed by both the parties and the conciliator, it has the same status and effect as if it is an arbitral award.

In Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., (2006) 11 SCC 245 case, the Court gave beneficial features of the Arbitration and Conciliation Act as follows:

• fair resolution of a dispute by an impartial tribunal without any unnecessary delay or expense;
• party autonomy is paramount subject only to such safeguards as are necessary in public interest; and
• the Arbitral Tribunal is enjoined with a duty to act fairly and impartially.

In the same case Court also gave the shortcomings of the Act as follows:

• no provision is made for expediting awards or the subsequent proceedings in the courts where applications are filed for setting aside awards;
• an aggrieved party has to start again from the District Court for challenging the award.

In Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 case, the Court observed that the object of the Act is to provide a speedy and alternative solution to the dispute and avoid protraction of litigation. The provisions of the Act have to be interpreted accordingly.

The Arbitration and Conciliation Act, 1996 is Self-Contained Code:

In Girnar Traders v. State of Maharashtra (2011) 3 SCC 1 case, the apex code held that for an Act to be a self-contained code, it must be shown that the special statute is a complete legislation for the purpose for which it was enacted, or under which the applicability of any other statute is barred by specific language, or by necessary implication.

The Arbitration and Conciliation Act, 1996 excludes the applicability of general law procedure, and is a complete code for designing, consolidating, and amending the law relating to domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards.

In Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 case, the Court held that where a special Act sets out self-contained code, the applicability of general law procedure would be impliedly excluded. Since the 1940 Act was held to be a self-contained code from its inception till 2004, the 1996 Act, which aimed at consolidating, amending, and designing the law relating to Arbitration, must be held to be more so. The 1996 Act carries with it, “ a negative import that only such acts as are mentioned in the Act are permissible to be done, and acts or things not mentioned therein are not permissible to be done”.

Thus, the Arbitration and Conciliation Act, 1996 is a self-contained code and exhaustive in nature.

Conclusion:

The Arbitration and Conciliation Act, 1986 is the consolidation of three previous statutes. It takes into consideration all the essential ingredients necessary for providing an easy and unambiguous procedure for dispute resolution. It makes the procedure provided by it in line with the Model Law. The Act tries to make the procedure smooth by minimizing the interference by Courts. The reasoned award makes the procedure transparent.

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