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Arbitration Process in India

Author

Alankar Narula

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In India, the process of arbitration typically involves several stages from the appointment of an arbitrator to the enforcement of the arbitral award. Here are the key stages of arbitration in India:

  • Appointment of Arbitrator: The process begins with the appointment of an arbitrator or a panel of arbitrators. In accordance with Section 11 of the Indian Arbitration and Conciliation Act, 1996, if the parties fail to agree on the appointment, either party may request the court to make the appointment. The court may appoint a sole arbitrator or a panel based on the agreement of the parties or the applicable arbitration rules. Example: If the arbitration agreement designates a specific arbitral institution, such as the Mumbai Centre for International Arbitration, the appointment may be made through that institution's designated procedure.
  • Preliminary Meeting and Terms of Reference: After the arbitrator(s) is appointed, a preliminary meeting is held to discuss procedural matters. This meeting also involves the preparation of the Terms of Reference, which is a document that outlines the scope of the dispute and the procedural rules that will govern the arbitration proceedings (Section 23 of the Act). Example: The preliminary meeting may include discussions on the timeline for the submission of pleadings, the exchange of evidence, and the date and location of the hearing.
  • Fact-Finding and Discovery: During this stage, the parties gather and exchange relevant evidence to support their respective positions. Section 27 of the Act allows the parties to request the arbitrator(s) to order the production of specific documents or the examination of witnesses. Example: The claimant may request the arbitrator(s) to order the respondent to produce certain financial records, while the respondent may request the production of specific emails or other electronic communications.
  • Hearing: The hearing stage provides an opportunity for the parties to present their case and arguments before the arbitrator(s). The hearing may include the examination and cross-examination of witnesses, oral submissions, and the presentation of evidence (Section 24 of the Act). Example: During the hearing, the claimant may present expert testimony to support their claim, while the respondent may cross-examine the expert and present their own witnesses to challenge the claimant's evidence.
  • Post-Hearing Submissions: Following the hearing, the parties may be given the chance to submit post-hearing written arguments or submissions to further support their positions or address additional points raised during the hearing. Example: The parties may submit written briefs summarizing the key arguments made during the hearing, addressing any new evidence or legal precedents that have emerged.
  • Deliberation and Award: The arbitrator(s) deliberates on the evidence and arguments presented before rendering an arbitral award. Section 31 of the Act sets out the requirements for an arbitral award, including the need for a reasoned decision and the determination of costs. Example: The arbitrator(s) may take into account the pleadings, evidence, witness testimonies, and legal arguments presented during the hearing in order to arrive at a well-reasoned decision on the merits of the dispute.
  • Award Enforcement: Once the arbitral award is issued, the successful party may seek its enforcement through the courts. Section 36 of the Act provides for the enforcement of domestic arbitral awards in a manner similar to a court decree. Example: If the unsuccessful party fails to comply with the arbitral award voluntarily, the successful party may file an application in the appropriate court to enforce the award, leading to its recognition and potential execution.
  • Objections and Setting Aside of the Award: After the issuance of the arbitral award, Section 34 of the Act allows a party to challenge the award by filing an application to set it aside. The grounds for setting aside an award include the incapacity of a party, invalidity of the arbitration agreement, lack of proper notice or opportunity to present a case, or if the award is in conflict with public policy. Example: If a party believes that the arbitrator(s) exceeded their authority or that the award is in violation of public policy, they may file an application in the relevant court to set aside the award.
  • Challenge in the High Court: The party seeking to set aside the arbitral award can file an application before the relevant High Court as per Section 34 of the Act. The High Court will review the grounds raised in the application and may hear arguments from both parties before deciding whether to uphold or set aside the award. Example: If the arbitration was conducted in Mumbai, the party would file an application in the Bombay High Court challenging the award and presenting their objections.
  • Appeal to the Supreme Court: If a party is dissatisfied with the decision of the High Court on the application to set aside the arbitral award, they can further appeal to the Supreme Court of India. The Supreme Court has the jurisdiction to hear appeals from the High Courts in arbitration matters (Section 37 of the Act).

In both the High Court and the Supreme Court, the reviewing authority will examine the grounds for objection raised by the party seeking to set aside the award and make a determination based on the provisions of the Act, applicable case law, and the facts of the case.

It’s important to note that the objection process under Section 34, as well as the subsequent procedures in the High Court and Supreme Court, provide a mechanism for reviewing and challenging arbitral awards in order to ensure fairness and uphold the integrity of the arbitration process.

It’s important to note that the precise stages and procedures may vary depending on the chosen arbitration rules, the agreement of the parties, and any specific instructions or powers granted to the arbitrator(s).

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Arbitration