Comparative Guides
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Results: 4 Answers
International Arbitration
5.
The parties
5.1
Are there any restrictions on who can be a party to an arbitration agreement?
 
India
Section 2(1)(h) of the Arbitration Act states that a ‘party’ is a party to an arbitration agreement. The Arbitration Act imposes no restrictions on who can be a party to an arbitration agreement.

However, as arbitration agreements come under the purview of the Indian Contract Act, 1872, the parties (including the juristic persons) must be competent to contract under Section 11 of that act. Accordingly, such parties must:

  • be of the age of majority according to the law to which they are subject;
  • be of sound mind; and
  • not be disqualified from contracting by any law to which they are subject.
For more information about this answer please contact: Manoj Singh from Singh & Associates
5.2
Are the parties under any duties in relation to the arbitration?
 
India
The Arbitration Act does not expressly impose any duties on the parties. However, the duties of the parties in relation to arbitration include the following:

  • to state their claim or defence within the timeframe agreed upon by the parties or determined by the tribunal (Section 23);
  • to communicate to the other party all statements, documents or other information supplied to, or applications made to the tribunal by, one party (Section 24);
  • to appear at oral hearings or produce evidence; and
  • to pay the fees of the tribunal.
For more information about this answer please contact: Manoj Singh from Singh & Associates
5.3
Are there any provisions of law which deal with multi-party disputes?
 
India
Section 35 of the Arbitration Act provides that the arbitral award shall be binding on the parties and persons claiming under them respectively. Sections 46 and 55 of the Arbitration Act state that any foreign award (as defined in the respective chapters) enforceable under the respective chapter of the Arbitration Act shall be treated as binding for all purposes on the persons as between which it was made, and not third parties.

Further, in its judgment in Chloro Controls (I) P Ltd v Severn Trent Water Purification Inc ( JT 2012 (10) SC 187), the Supreme Court of India held that the phrase ‘persons claiming through or under’ used in Section 45 of the Arbitration Act covers within its ambit multiple and multi-party agreements, though in exceptional cases. It further held that arbitration is possible between a signatory to an arbitration agreement and a third party; however, a heavy onus lies on the third party to show that, both in fact and in law, it is claiming ‘through’ or ‘under’ the signatory party, as contemplated under Section 45 of the Arbitration Act.

In addition, in domestic arbitrations, Section 8 of the Arbitration Act was amended in 2015 to include the words ‘or any person claiming through or under’, to bring it in pari materia with Section 45 of the Arbitration Act - although the scope of Section 8 is still limited as compared to Section 45.

Therefore, in the authors’ view, Sections 8 and 45 of the Arbitration Act deal with multi-party disputes. However, whether a multi-party dispute will be referred to arbitration will depend on the facts of the case and the nature of the relationship between the parties. In M/s Duro Felguera SA v M/s Gangavaram Port Limited (GPL) (AIR 2017 SC 5070) the Supreme Court of India was called upon to decide whether, in a dispute involving multiple contracts between both foreign and domestic parties, a ‘composite reference’ could be made to the tribunal. The Supreme Court held that a composite reference would not be proper as both domestic and international arbitrations were involved. Accordingly, six separate tribunals were constituted to adjudicate the disputes involved.

For more information about this answer please contact: Manoj Singh from Singh & Associates