1 Legal framework
1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
Various states have also enacted legislation for the arbitration of specific disputes. For example, the state government of Madhya Pradesh has enacted the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 for arbitration relating to works contracts and claims over a specific value where the state government of Madhya Pradesh or any of its bodies are involved. Similar acts exist in Chhattisgarh, Gujarat and Bihar pertaining to works contracts dealt by the state governments and their departments. These acts have their own dispute resolution setup and exclude the jurisdiction of the Arbitration Act.
For a dispute to be resolved through arbitration, it must be arbitrable. The general principle of arbitrability is that rights in rem are not arbitrable, whereas rights in personam are arbitrable. While the Arbitration Act itself is silent on the issue of arbitrability, the Supreme Court has clarified the same. In its landmark judgment in Booz-Allen & Hamilton Inc v Sbi Home Finance Ltd ((2011) 5 SCC 532), the Supreme Court held that: "Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of the Arbitral Tribunals is excluded either expressly or by necessary implication."
The court further identified the following as well-recognised examples of non-arbitrable disputes:
- disputes relating to rights and liabilities which give rise to or arise from criminal offences;
- matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights or child custody;
- guardianship matters;
- insolvency and winding-up matters;
- testamentary matters (grant of probate, letters of administration and succession certificate); and
- eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts have jurisdiction to order eviction or hear the dispute.
The Supreme Court added disputes arising from trust deeds and the Trust Act, 1882 to the above list in its decision in Shri Vimal Kishor Shah v Mr Jayesh Dinesh Shah 2016 (8) Scale 116. Further, in A Ayyasamy v A Paramasivam ((2016) 10 SCC 386), the Supreme Court also held that disputes concerning the following are non-arbitrable:
- patents, trademarks and copyright;
- antitrust/competition laws;
- bribery/corruption laws;
- criminal matters; and
There is also a limitation on the scope of the Arbitration Act, insofar as it does not govern oral arbitration agreements, as Section 7(3) clearly states that the arbitration agreement must be in writing. Additionally, in Ramchandra Ram Nag Ram Rice & Oil Mills Ltd v Howrah Oil Mills Ltd (AIR 1958 Cal 620) the Calcutta High Court held that only an arbitration agreement in writing is recognised by the Arbitration Act.
1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
The Arbitration Act clearly distinguishes between domestic arbitration and international commercial arbitration. Part I of the Arbitration Act (ie, Sections 1 to 43) applies to domestic arbitration and Part II (ie, Sections 44 to 60, also including Sections 9, 27, and 37(1)(a)) apply to foreign awards and international commercial arbitration.
As per Section 2(1)(f) of the Arbitration Act, ‘international commercial arbitration' is arbitration relating to disputes arising from legal relationships, whether contractual or not, which are considered as commercial under Indian law and where at least one of the parties is:
- an individual who is a national of, or habitually resident in, any country other than India;
- a body corporate which is incorporated in any country other than India;
- an association or body of individuals whose central management and control is exercised in any country other than India; or
- a foreign government.
‘Domestic arbitration' is not defined under the Arbitration Act; however, Section 2(2) of the Arbitration Act provides that Part I applies where the place of arbitration is India; while Section 2(7) provides that an arbitral award made under Part I of the Act is considered as a domestic award. Read together, these sections provide that ‘domestic arbitration' is arbitration held in India whose outcome is an arbitral award under Part I of the Arbitration Act.
1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
The preamble to the Arbitration Act states that the UNICTRAL Model Law on International Commercial Arbitration, 1985 and the UNICTRAL Conciliation Rules, 1980 were taken into account in its enactment by the Parliament of India.
Further, in its judgment in Chloro Controls (I) P Ltd v Severn Trent Water Purification Inc ((2012) 9 SCALE 595), the Supreme Court observed that the legislative intent of the Arbitration Act is to harmonise domestic and international commercial arbitration with the UNCITRAL Model Law, the New York Convention and the Geneva Convention.
1.4 Are all provisions of the legislation in your jurisdiction mandatory?
Certain provisions of the Arbitration Act have mandatory application; the rest are directory. The key mandatory provisions are as follows:
- Under Section 7, the arbitration agreement must be in writing.
- Under Section 8, it is mandatory for a judicial authority to refer parties to arbitration if the dispute is the subject of an arbitration agreement.
- Section 10 sets out mandatory provisions on the number of arbitrators.
- Disclosure of arbitration under Section 12 is mandatory in the form specified in Schedule VI, so that a determination regarding the independence and impartiality of the arbitrator can be made in accordance with Schedule V and Schedule VII.
- Section 16 sets out mandatory provisions on the tribunal's competence to decide on its own jurisdiction when a challenge is made.
- Section 18 requires that the parties be treated equally and given full opportunity to present their respective cases.
- Under Section 28(3), the tribunal must in all cases take into account the terms of the contract and trade customs applicable to the transaction.
- Under Section 28(1(a), in arbitrations other than international commercial arbitrations, the tribunal must mandatorily decide the dispute in accordance with the substantive law in force in India.
- Section 29-A provides that the time limit for issuing an arbitral award is 12 months from the date on which the tribunal enters the reference. The parties may extend this period by mutual consent by a further six months.
- Section 31 contains mandatory provisions on the form and content of awards.
- Section 34 sets out mandatory provisions on applications to set aside awards.
Further, in Alupro Buildings Systems Pvt Ltd v Ozone Overseas Pvt Ltd (OMP 3/2015 (Delhi HC)), the Delhi High Court held that Section 21 (commencement of arbitration proceedings) has mandatory application, making clear that notice under Section 21 of the Arbitration Act is required for the commencement of arbitration proceedings.
In its recent judgment in The State of Bihar v Bihar Rajya Bhumi Vikas Bank Samiti ((Civil Appeal 7314 of 2018, arising out of SLP (Civil) 4475 of 2017) (MANU/SC/0826/2018)), the Supreme Court held that the prior notice requirement under Section 34(5) is not mandatory.
1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?
The Arbitration Act was amended by the Arbitration and Conciliation (Amendment) Act, 2015 (ie, Act 3 of 2016), with retrospective effect from 23 October 2015, in order to make the arbitration process more user friendly and cost effective, and to ensure the swift disposal of arbitration proceedings and the neutrality of arbitrators.
Thereafter, to give a boost to institutional arbitration over ad hoc arbitration, to remove some practical difficulties in the application of the Arbitration and Conciliation (Amendment) Act, 2015, and to help India become a preferred centre for alternative dispute resolution (ADR), a high-level committee was constituted under the chairmanship of retired Supreme Court judge Justice BH Srikrishna. The Union Cabinet has approved the Arbitration and Conciliation (Amendment) Bill, 2018 for introduction in Parliament; this was passed by the Lok Sabha on 10 August 2018.
The key amendments approved in the bill are as follows:
- Arbitration Council of India: The Arbitration Council of India will be established as an independent body responsible for the formal evaluation and accreditation of arbitrators. The council will frame norms for ADR and develop professional guidelines. This is a positive step to ensure the quality of arbitral institutions.
- Appointment of arbitrators: Section 11 of the Arbitration Act is to be amended so that instead of approaching the Supreme Court or high court to appoint an arbitrator, the court may designate specific arbitral institutions that will make the relevant appointments. This obviates the need to file a formal application for appointment in court, thus speeding up the process.
- Time limit for pleadings: The bill proposes the insertion of a new Section 23(4) which provides that the statement of claim and defence shall be completed within six months of the date on which the arbitrator or arbitrators receive written notice of their appointment.
- Duration of arbitral proceedings: The proposed amendment provides that the timeline set out in Section 29A of the Arbitration Act should exclude international commercial arbitrations and state that the 12-month period begins to run following the completion of pleadings (under the newly inserted Section 23(4)).
- Confidentiality: The bill proposes to insert a new Section 42A to the Arbitration Act which provides that the arbitrator, the arbitral institution and the parties to the arbitration agreement shall keep the proceedings confidential, except the award where disclosure is necessary for the purpose of implementation and enforcement of award.
- Arbitrator's immunity: The bill proposes to insert a new Section 42B which provides that no lawsuit or other legal proceedings may be brought against an arbitrator for anything which is in good faith done or intended to be done under the Arbitration Act or the rules or regulations thereunder.
Application of Arbitration and Conciliation (Amendment) Act, 2015: The bill also clarifies that unless the parties agree otherwise, the amendments made to the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2015 will apply only to arbitration proceedings commenced on or after the entry into force of the Arbitration and Conciliation (Amendment) Act, 2015 (ie, 23 October 2015) and to court proceedings arising out of or in relation to such arbitration proceedings. The Arbitration and Conciliation (Amendment) Act, 2015 will not apply to:
- arbitration proceedings commenced before the entry into force of the Arbitration and Conciliation (Amendment) Act, 2015; or
- court proceedings arising from or in relation to such arbitration proceedings, irrespective of whether such court proceedings are commenced prior to or after the entry into force of the Arbitration and Conciliation (Amendment) Act, 2015.
1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
India is a party to the New York Convention. Part II, Chapter I of the Arbitration Act (ie, Sections 44 to 52) is applicable to New York Convention awards.
India has made two reservations to the New York Conventions:
- India will apply the convention only to the recognition and enforcement of awards made in the territory of another contracting state; and
- India will apply the convention only to disputes arising from legal relationships, whether contractual or not, that are considered commercial under national law.
1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?
India is also a signatory to the Geneva Convention and Part II, Chapter II of the Arbitration Act (ie, Sections 53 to 60) is applicable to Geneva Convention awards.
2 Arbitrability and restrictions on arbitration
2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?
The arbitrability of disputes is determined by the courts of law in India. In its judgment in Booz-Allen and Hamilton Inc v SBI Home Finance Ltd ((2011) 5 SCC 532) the Supreme Court of India set out the following examples of non-arbitrable disputes:
- disputes relating to rights and liabilities which give rise to or arise from criminal offences;
- matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights or child custody;
- guardianship matters;
- insolvency and winding-up matters;
- matters relating to grant of probate, letters of administration and succession certificates;
- matters relating to the eviction of tenants, where the tenant enjoys statutory protection against eviction under special statutes; and
- enforcement of a mortgage which has been held to be a right in rem.
In addition, in A Ayyasamy v A Paramasivam ((2016) 10 SCC 386) the Supreme Court of India further held that disputes involving the following are non-arbitrable:
- patents, trademarks and copyright;
- antitrust/competition laws;
- bribery/corruption laws;
- criminal matters; and
- fraud. Previously, there were conflicting decisions on whether disputes involving fraud were arbitrable in India. However, in this judgment the Supreme Court of India clarified that a mere allegation of fraud simpliciter is not a ground to find a dispute non-arbitrable; only in cases involving very serious allegations of fraud will the dispute be deemed non-arbitrable.
Further, as per the judgment of the Supreme Court of India in Punjab State Electricity Board v Guru Nanak Cold Storage and Ice Factory ((1996) 5 SCC 411), disputes for which a special forum must be constituted by statute - such as recovery of debts by banks, disputes under the Electricity Act and disputes relating to service law, labour law and military law - are also non-arbitrable.
2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?
No; as per Section 20(1) of the Arbitration Act, the parties are free to agree on the place of arbitration. In Bharat Aluminium Co v Kaiser Aluminium Technical Services Inc ((2012) 9 SCC 552) the Supreme Court of India highlighted that there are no restrictions on the freedom of the parties to agree upon the place or seat of arbitration within India when the juridical place of arbitration is located in India.
Further, in GMR Energy Limited v Doosan Power Systems India Private Limited (2017(6)ArbLR447(Delhi)) the Delhi High Court also clarified that two Indian parties are free to choose a foreign seat; if they do so, this will considered an international arbitration under the Arbitration Act.
3 Arbitration agreement
3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?
Section 7(1) of the Arbitration Act, defines an ‘arbitration agreement' as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. As per Section 7(2) of the Arbitration Act, an arbitration agreement may be in the form of an arbitration clause in a contract or a separate agreement.
Further, as per Section 7(3) of the Arbitration Act, an arbitration agreement must be in writing. As per Section 7(4) of the Arbitration Act, an arbitration agreement is in writing if it is contained in:
- a document signed by the parties;
- an exchange of letters, telex, telegrams or other means of telecommunication, including communication through electronic means, which provides a record of the agreement; or
- an exchange of statement of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.
In addition, in order for an arbitration agreement to be valid, it must satisfy the conditions specified in Section 10 of the Indian Contract Act, 1872, which lays down the following requirements, among others:
- It must be made by the free consent of the parties;
- The parties must be competent to contract;
- It must be for a lawful consideration and with a lawful object; and
- It must not be expressly declared void under the Indian Contract Act.
3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
The doctrine of separability states that the arbitration clause is an agreement separate and independent from the other terms of the contract in which it appears. The doctrine of separability has varied acceptance. The courts will recognise the doctrine of separability and allow the arbitrator to decide an issue so long as the arbitration clause is valid and the issue is arbitrable.
Section 16 of the Arbitration Act concerns the separability of arbitration agreements. As per Section 16(1)(a), an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. Further, Section 16(1)(b) provides that a decision by the tribunal that the contract is null and void shall not entail, ipso jure, the invalidity of the arbitration clause.
The Supreme Court of India has also recognised the application of the doctrine of separability in its judgments in Enercon (India) ltd v Enercon Gmbh (Civil Appeal 2086 of 2014, arising out of SLP (C) 10924 of 2013)) and Reliance Industries Limited v Union of India ((2014) 7 SCC 603)).
3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
As per Section 20(2) of the Arbitration Act, in the absence of an agreement between the parties regarding the place of arbitration, the place of arbitration is determined by the tribunal, having regard to the circumstances of the case, including the convenience of the parties.
Further, as per Section 22(2), in the absence of an agreement between the parties regarding the language of the arbitration, the tribunal shall determine the language or languages to be used in the proceedings.
4 Objections to jurisdiction
4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
As per Section 16(2) of the Arbitration Act, a plea that the tribunal does not have jurisdiction must be raised no later than submission of the statement of defence. Also, as per Section 16(3), a plea that the tribunal has exceeded 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 proceedings. However, under Section 16(4), the tribunal has the power to admit a later plea if it considers the delay justified.
An objection to the jurisdiction of the tribunal can be raised by making an application to the tribunal under Section 16 of the Arbitration Act. In M/s MSP Infrastructure Ltd v MP Road Development Corporation Ltd (Civil Appeal 10778 of 2014), the Supreme Court of India elaborated on the scope of Section 16 of the Arbitration Act and held that all objections to the tribunal's jurisdiction must be made by no later than submission of the statement of defence.
4.2 Can a tribunal rule on its own jurisdiction?
Yes, under Section 16 of the Arbitration Act, the tribunal has the power to rule on its own jurisdiction. Section 16 gives effect to the principle of competence-competence, whereby the tribunal must exercise jurisdiction over the dispute under the arbitration agreement. A challenge as to the existence or validity of the arbitration agreement will not prevent the tribunal from proceeding with the arbitration and ruling on its jurisdiction.
The competence-competence principle has two aspects:
- The tribunal may decide on its jurisdiction; and
- The courts cannot determine this issue before the tribunal has decided thereon.
4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
If a challenge is made to the jurisdiction of the tribunal under Sections 16(2) and 16(3), the tribunal will decide on its jurisdiction under Section 16(5).
If the tribunal rejects the challenge under Section 16(5) and continues with the proceedings and makes an arbitral award, a party can apply to the courts for a ruling on the jurisdiction of the tribunal while challenging the award under Section 34 of the Arbitration Act.
Conversely, if the tribunal concludes that it does not have jurisdiction, then it is open to the aggrieved party to go on appeal to the relevant court under Section 37(2)(a).
The Supreme Court of India explained this in NTPC v Siemens (AIR 2007 SC 1491) as follows:
It is in the context of the various sub-sections of Section 16 that one has to understand the content of the expression 'jurisdiction' and the scope of the appeal provision. In a case where the Arbitral Tribunal proceeds to pass an award after overruling the objection relating to jurisdiction, it is clear from Sub-section (6) of Section16 that the parties have to resort to Section 34 of the Act to get rid of that award, if possible. But, if the Tribunal declines jurisdiction or declines to pass an award and dismisses the arbitral proceedings, the party aggrieved is not without a remedy. Section 37(2) deals with such a situation. Where the plea of absence of jurisdiction or a claim being in excess of jurisdiction is accepted by the Arbitral Tribunal and it refuses to go into the merits of the claim by declining jurisdiction, a direct appeal is provided.
5 The parties
5.1 Are there any restrictions on who can be a party to an arbitration agreement?
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.
5.2 Are the parties under any duties in relation to the arbitration?
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.
5.3 Are there any provisions of law which deal with multi-party disputes?
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.
6 Applicable law issues
6.1 How is the law of the arbitration agreement determined in your jurisdiction?
Indian law gives importance to the principle of territoriality. Therefore, the law of the arbitration agreement is determined on the basis of the seat of the arbitration.
In addition, Section 28 (Rules Applicable to Substance of Dispute) of the Arbitration Act provides that where the place of arbitration is in India, the following rules shall apply:
- In an arbitration other than an international commercial arbitration, the tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law in force in India;
In the case of international commercial arbitration:
- the tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;
- any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules; and
- in the absence of agreement by the parties, the tribunal shall apply the rules of law it considers to be appropriate given all the circumstances.
Section 28 (as amended in 2015) further requires the tribunal to take into account the terms of contract and trade customs applicable to the transaction when deciding and making an award.
6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
As per Section 28(1) of the Arbitration Act, the tribunal shall uphold a party agreement to the substantive law of dispute only in case of an international commercial arbitration where the place of arbitration is situated in India (as mentioned in Section 28(1)(b)(i)). Further as per Section 28(1)(a), in an arbitration other than an international commercial arbitration where the place of arbitration is situated in India, the tribunal shall mandatorily decide the dispute in accordance with the substantive law in force in India.
If the substantive law is unclear in an international commercial arbitration where the place of arbitration is situated in India, as per Section 28(1)(b)(iii) of the Arbitration Act, the tribunal shall apply the rules of law it considers to be appropriate given all circumstances surrounding the dispute. Further, as per Section 28(2), the tribunal shall decide ex aequo et bono or as amiable compositeur if the parties have authorised it to do so and taking into account the terms of the contract and trade customs applicable to the transaction.
7 Consolidation and third parties
7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
There is no provision in the Arbitration Act relating to the consolidation of arbitration proceedings under one or more contracts; however, as per the judgment of the Supreme Court of India in PR Shah, Shares and Stock Brokers Private Limited v BHH Securities Private Limited ((2012) 1 SCC 594), multiplicity of proceedings, conflicting decisions and a likelihood of injustice are sufficient grounds for consolidation of proceedings. Accordingly, in such cases the tribunal may consolidate separate proceedings upon application by the parties.
Similarly, in Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc ((2013) 1 SCC 641) the Indian counterpart filed suit and sought an injunction against two non-signatories. The Supreme Court of India held that the shareholders' agreement is the parent agreement, that all other agreements are to facilitate implementation of the parent agreement and that multiple agreements are part of one composite transaction. Further, the court - while observing that in this case the signatories to multiple agreements were all related companies and their interests were not averse to the interest of the joint venture company - held that even a non-signatory party can be referred to arbitration, subject to proving that it is claiming through or under a signatory to the arbitration.
However, whether consolidation is allowed 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.
7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
The courts and the tribunal have no powers under the Arbitration Act to order third parties to participate in arbitration proceedings. However, in the authors' view, a third party may, in any event, be joined in arbitration proceedings with the consent of all parties (including the third party), but not otherwise.
Similarly, in Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc ((2013) 1 SCC 641), the Indian counterpart filed suit and sought an injunction against two non-signatories. The Supreme Court of India held that a shareholders' agreement is the parent agreement and all other agreements are to facilitate implementation of the parent agreement, and that multiple agreements are part of one composite transaction. Further, the court - while observing that in this case the signatories to the multiple agreements were all related companies and their interests were not averse to the interests of the joint venture company - held that even a non-signatory party can be referred to arbitration, subject to proving that it is claiming through or under a signatory to the arbitration.
7.3 Does an arbitration agreement bind assignees or other third parties?
There is no express provision in the Arbitration Act which bars an arbitration agreement from binding assignees or non-signatories. In Kotak Mahindra Prime Ltd v Sanjeev (2009 (1) Bom CR 130) it was held that no law prohibits the assignment of an arbitration agreement, provided that the subject matter is capable of being assigned and such assignment is regulated under the law of assignment of contractual rights and obligations. The validity of assignment of the arbitration agreement shall depend on the facts. On the issue of binding non-signatories to the arbitration agreement, similarly there is no express bar which prevents non-signatories from being made party to the arbitration agreement. In its recent decision in Ameet Lalchand Shah v Rishab Enterprises (Civil Appeal 4690 of 2018, arising out of SLP(C) 16789 of 2017, decided on 3 May 2018), the Supreme Court of India held that in cases where the agreements are interconnected and several parties are involved in a single commercial project, through several agreements, all the parties can be made amenable to arbitration.
8 The tribunal
8.1 How is the tribunal appointed?
The Arbitration Act grants full liberty to the parties to appoint the arbitrators mutually, subject to compliance with Section 12(5), Schedule V and Schedule VII of the Arbitration Act. Section 10(1) provides that the parties are free to determine the number of arbitrators, provided that this number is odd. This section also provides that if the parties fail to agree on the number of arbitrators, the tribunal shall consist of a sole arbitrator.
The procedure in relation to the appointment of the tribunal is set out in Section 11 of the Arbitration Act. As per Section 11(2), the parties are free to agree on a procedure for appointing the tribunal, subject to the requirements set out in Section 11(6). If the parties fail to agree on a procedure for appointing the tribunal, then as per Section 11(3):
- in an arbitration with three arbitrators, each party shall appoint one arbitrator and the two appointed arbitrators shall appoint the third arbitrator, who shall act as the presiding arbitrator; and
- in an arbitration with a sole arbitrator, depending on the nature of agreement, the parties can mutually appoint the arbitrator.
Furthermore, if the parties, by mutual consent, have agreed on institutional arbitration, the appointment will also be governed by the rules of that particular institution.
Before the tribunal is appointed, the court - or a person or institution designated by such court - is required to seek a disclosure in writing from the prospective arbitrators in terms of Section 12(1) of the Arbitration Act. Under this section, each prospective arbitrator is obliged to make an express disclosure on:
- any circumstances which are likely to give rise to justifiable doubts regarding his or her independence or impartiality; or
- any grounds which may affect his or her ability to complete the arbitration within 12 months.
The purpose of this provision is to secure the appointment of an unbiased and impartial arbitrator. Schedule V to the Arbitration Act contains a list of grounds giving rise to justifiable doubts as to the independence or impartiality of an arbitrator. Schedule VII lays out the grounds which make a person ipso facto ineligible for appointment as an arbitrator.
In addition, the Supreme Court of India (in the case of international commercial arbitration) and the high courts (in any other arbitration) are empowered to appoint arbitrators under Sections 11(4), 11(5) and 11(6) of the Arbitration Act.
8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
The requirements as to the number of the arbitrators are set out under Section 10 of the Arbitration Act. Pursuant to this section, the parties are free to determine the number of arbitrators, provided that this is odd. If the parties fail to determine the number of arbitrators, the tribunal shall consist of a sole arbitrator.
Further, under the act, there is no requirement as to the qualifications of arbitrators. The parties are free to decide upon the qualifications and nationality of the arbitrators as per the arbitration agreement. In this regard, Section 11(1) of the Arbitration Act provides that persons of any nationality may serve as arbitrators, unless otherwise agreed by the parties.
8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
The duty to adjudicate disputes independently and impartially is the cornerstone on which a successful arbitration is based. This requirement has become increasingly relevant in today's complex arbitrations. It is in view of this that Section 12 of the Arbitration Act was amended along with the insertion of Schedules V, VI and VII. As per Section 12(3), an arbitrator may be challenged only if:
- circumstances exist that give rise to justifiable doubts as to his or her independence or impartiality, as per Schedules V of the Act; or
- he or she does not possess the qualifications agreed by the parties.
As per Section 12(4), a party may challenge an arbitrator it has appointed, or in whose appointment it has participated, only for reasons of which it becomes aware after the appointment has been made.
Section 12(5) provides that, notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel, or with the subject matter of the dispute, falls under any of the categories specified in Schedule VII shall be ineligible for appointment as an arbitrator. At the same time, the statute has also empowered the parties to waive this condition by an express agreement in writing. The parties are free to agree on a procedure for challenging an arbitrator under Section 13 of the Arbitration Act.
The circumstances that can give rise to justifiable doubts are set out in Schedule V. Schedule VII lays down a list of circumstances which are more serious. If a person falls under any of the provisions in Schedule VII, he or she shall be disqualified from the position of arbitrator. This is in contrast to Schedule V, as a person who falls under the provisions of this schedule will not necessarily be disqualified from the position of arbitrator.
The interpretation of these schedules and the procedure for challenging an arbitrator, as mentioned in Sections 12, 13 and 14 of the Arbitration Act, were presented before the Supreme Court of India in HRD Corporation v GAIL (India) Limited (SLP (C) 20679 of 2017). In West Haryana Highways Project Private Limited v NHAI (OMP (T) (COMM) 28/2017, decided on 15 May 2017), while adjudicating a petition filed under Section 14 of the Arbitration Act, 1996, the Delhi High Court terminated the mandate of one arbitrator nominated by NHAI, applying the principles of Schedule VII, as that person was advising NHAI on other projects.
Further, in view of Sections 14 and 15 of the act, the courts have the power to terminate the mandate of an arbitrator if he or she becomes de jure or de facto unable to perform his or her duties, and to appoint a replacement arbitrator accordingly.
8.4 If a challenge is successful, how is the arbitrator replaced?
The process for replacing an arbitrator after a successful challenge is set out in Section 15 of the Arbitration Act. If the challenge is successful, a replacement arbitrator can be appointed by either of the parties through an application under Section 15 of the Arbitration Act. Section 15(2) clarifies the procedure, stating that a replacement arbitrator shall be appointed according to the rules that applied to the appointment of his or her predecessor.
This was reiterated by the Supreme Court of India in Shailesh Dhairyawan v Mohan Balkrishna Lulla (2016) 3 SCC 619), in which it held that the replacement arbitrator shall be appointed according to the provisions of Section 15(2) of the Arbitration Act, and that the word ‘rules' as used in this section is not limited to statutory rules, but also includes the terms of the agreement between the parties. The court further observed that Section 15(2) must be given a liberal interpretation which encompasses all possible circumstances under which an arbitrator's mandate may be terminated.
8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?
As per the Arbitration Act, a tribunal has the following duties:
- to disclose circumstances that could give rise to justifiable doubts as to an arbitrator's independence and impartiality (Section 12(1));
- to act within its jurisdiction (Section 16);
- to treat the parties equally (Section 18);
- to act judicially and follow the rules of justice, equity and good conscience (Section 28);
- to take into account the terms of the contract and trade customs while making an award (Section 28(3));
- to encourage settlement of the dispute (Section 30);
- to issue the arbitral award in writing and sign the award (Section 31(1));
- to hear arbitrable disputes only (Section 34(2)(a)(iv));
- to follow the provisions of the Arbitration Act (Section 34(2)(a)(v)); and
- to render accounts (Section 38).
In addition, an arbitrator has the following duties:
- to observe public policy;
- to deliver the award in a timely manner;
- to provide a reasoned award in accordance with the act;
- to follow the principles of natural justice;
- not to act beyond his or her jurisdiction;
- not to commit fraud or misconduct;
- to act together with his or her fellow arbitrators;
- not to accept hospitality; and
- a duty of finality and reasonableness
8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
(a) Procedure, including evidence?
Insofar as the procedure pertaining to the recording of evidence is concerned, as per Section 19 of the Arbitration Act, the tribunal is not bound by the rules of the Indian Evidence Act, 1872 and the Code of Civil Procedure, 1908, and the parties are free to agree on the procedure, failing which the tribunal is empowered to determine the procedure. Further, Section 19(4) provides that the power of the tribunal includes the power to determine the admissibility, relevance, materiality and weight of evidence. This does not prohibit the tribunal from drawing sustenance from the fundamental principles underlying the Code of Civil Procedure or the Indian Evidence Act, but frees the tribunal from being bound, as would a civil court. However, it is settled law that the broad principles of the Indian Evidence Act and the Code of Civil Procedure, will be applicable in arbitration. Further, the tribunal may seek assistance from the court in obtaining evidence under Section 27 of the Arbitration Act. Under Section 27(5) of the Arbitration Act, the tribunal can also refer to the court to penalise or put to such disadvantage anyone who fails to attend or refuse to give evidence or makes any other default or is guilty of any contempt to the tribunal during the conduct of arbitration proceedings.
(b) Interim relief?
Under the amended Section 17 of the Arbitration Act, the tribunal has powers to grant interim measures which are similar to those of a court. An order passed by the tribunal under Section 17 is deemed to be an order of a court for all purposes and is enforceable under the Code of Civil Procedure, 1908 in the same manner as if it were an order of a court. The tribunal has the power to grant the following interim measures under Section 17:
- appoint a guardian for a minor or a person of unsound mind for the purpose of the arbitration;
- grant interim measures for the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement;
- grant interim measures to secure the amount in dispute in the arbitration;
- grant interim measures to detain, preserve or inspect any property or thing which is the subject matter of the dispute in arbitration;
- grant interim injunctions or appoint a receiver; and
- grant such other interim measures as may appear to be just and convenient.
(c) Parties which do not comply with its orders?
Orders of a tribunal are enforceable under Section 17(2) of the Arbitration Act as if they were an order of a court under the Code of Civil Procedure, 1908. In Alka Chandewar v Shamshul Ishrar Khan (Civil Appeal 8720/2017), the court held that the tribunal in an arbitration is empowered to make a representation to the appropriate court for any action of the parties amounting to contempt, to be tried under the Contempt of Courts Act, 1971, if the parties violate its orders, including any interim orders passed during the course of the proceedings under Section 27(5) of the Arbitration and Conciliation Act, 1996.
In Jindal ITF Limited v NTPC Limited (OMP [ENF][COMM] 55 of 2018), the Delhi High Court for the first time enforced an interim order passed by a tribunal under Section 17 and accordingly directed the other party to pay the sum ordered by the tribunal as interim relief.
However, a tribunal does not have the power to enforce its own orders or any other powers similar to those of a court under Order 39, Rule 2A of the Code of Civil Procedure in case of disobedience.
(d) Issuing partial final awards?
The Arbitration Act uses the phrase ‘interim award' rather than ‘partial award'; however, in practice, it has the same meaning. Section 2(1)(c) provides that an ‘award' includes an interim award. Further, under Section 31(6), the tribunal has the power to make an interim award at any time during the proceedings regarding any subject matter for which it is competent to make a final arbitral award.
Further, in Mcdormett International Inc v Burn Standard Co Ltd ((2006) 2 Arb 498) the Supreme Court of India held that the Arbitration Act uses the terms ‘interim award' and ‘final award' rather than ‘partial award'. An interim award is not one in respect of which a final award can be made; although it may be a final award on the matters covered therein, but made at an interim stage.
(e) The remedies it can grant in a final award?
The tribunal may grant such relief as is not in the exclusive domain of a public forum such as a court. For instance, it may award compensation or a buy-out or sell-out in a shareholder dispute, but cannot order the winding up of the company or appoint independent directors to the board. The tribunal can order:
- specific performance and damages;
- costs; and
Section 31(7)(a) of the Arbitration Act provides that, unless otherwise agreed by the parties, the tribunal may provide in an arbitral award for the payment of interest at such rate it deems reasonable, on the whole or any part of the moneys awarded, for the whole or any part of the period from the date on which the cause of action arose until the date of the award. Further, as per Section 31(7)(b), unless the tribunal directs otherwise, any sums directed to be paid by the tribunal shall carry interest at a rate that is 2% higher than the current rate prevailing as on the date of the award, from the date of award until payment. In Union of India v M/s Ambica Constructions (Special Leave Petitions (C) 11114 and 17219/2009) the Supreme Court of India held that if a contract expressly bars the award of interest pendente lite, the same cannot be awarded by the arbitrator.
8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
The tribunal has the power to proceed ex parte if any party fails to participate. As per Section 25(b) of the Arbitration Act, if the respondent fails to communicate its statement of defence in accordance with Section 23(1), the tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant, and has discretion to treat the right of the respondent to file such statement of defence as having been forfeited.
Further, Section 25(c) provides that where, without showing sufficient cause, a party fails to appear at an oral hearing or to produce documentary evidence, the tribunal may continue the proceedings and make the award on the evidence before it. However, Section 25 is not mandatory and the parties are free to agree otherwise.
8.8 Are arbitrators immune from liability?
No section of the Arbitration Act provides any kind of immunity to the arbitrators. Rather, under Section 29A, an arbitrator's fees may be reduced by up to 5% per month of delay for failure to make an award within 12 months of the tribunal entering the reference. Further, as per Section 13(6), if an award is set aside on the grounds of challenge to the appointment of an arbitrator, the courts are empowered to decide whether the arbitrator in question is entitled to any fees. However, the Arbitration and Conciliation (Amendment) Bill, 2018 proposes to insert a new Section 42B in the Arbitration Act which provides that no suit or other legal proceedings may be brought against the arbitrator for anything which was done or intended to be done in good faith under the act or the rules or regulations made thereunder.
9 The role of the court during an arbitration
9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
Under Sections 8, 45, and 54 of the Arbitration Act, if a dispute is arbitrable and relates to a matter covered by a valid arbitration agreement, and a party nonetheless approaches the court, then the court is mandated to refer the parties to arbitration. Further, as observed by the Supreme Court of India in P Anand Gajapathi Raju v PVG Raju (Dead) (2000 (4) SCC 539), the language of Section 8 is peremptory in nature; and in cases where there is an arbitration agreement, it is obligatory for the court to refer the parties to arbitration - nothing remains to be decided in the original action after such an application is made, except to refer the dispute to an arbitrator.
However, it is only when one party exercises the right to arbitrate that the court will make the parties abide by their contract and refer them to arbitration. The failure of a party to exercise this right will lead to the inference of an agreement to supersede or abandon the terms of the agreement. The court will then adjudicate upon the dispute. It does not enjoy suo moto power of reference to arbitration. If the court does not have jurisdiction over the dispute, notwithstanding the agreement to arbitrate, it is still bound to refer the parties to arbitration and cannot direct the plaintiff to approach the appropriate authority.
9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
As per the Arbitration Act, the courts have the following limited powers in relation to arbitration proceedings seated in India:
- to refer the parties to arbitration under Section 8;
- to pass interim orders under Section 9;
- to appoint arbitrators under Section 11;
- to terminate the mandate of an arbitrator and replace the arbitrator, in certain cases;
- to assist the tribunal in the taking of evidence under Section 27;
- to set aside an award on the limited grounds provided under Section 34;
- to enforce awards under Section 36; and
- to hear appeals under Section 37 against orders passed under Sections 8, 9, 16, 17, and 34.
In addition, in the case of foreign awards, the courts have the following limited powers under the act:
- to refer the parties to arbitration under Sections 45 and 54;
- to pass interim orders under Section 9, in the absence of agreement to the contrary;
- to appoint arbitrators under Section 11;
- to assist as per Section 27, in the absence of agreement to the contrary;
- to hear appeals as per Section 37(1)(a) and Section 37(3), in the absence of agreement to the contrary;
- to refuse enforcement of a foreign award under Sections 48 and 57;
- to enforce a foreign award under Sections 49 and 58; and
- to hear appeals under Sections 50 and 59 against orders passed under Sections 45, 48, 54 and 57.
9.3 Can the parties exclude the court's powers by agreement?
It is settled law that a contract that is contrary to the statute is void. However, in the case of arbitration, the parties have a supreme power with respect to certain issues and can thus restrict the powers of the court in this regard (eg, Section 2(2) of the Arbitration Act).
10.1 How will the tribunal approach the issue of costs?
Section 31(8) of the Arbitration Act provides that the costs of arbitration shall be fixed by the tribunal in accordance with Section 31A.
As per Section 31A, a court or tribunal has discretion to determine:
- whether costs are payable by one party to another;
- the amount of such costs; and
- when such costs are to be paid.
In addition, Section 31A defines ‘costs' to mean reasonable costs relating to the following:
- the fees and expenses of the arbitrators, courts and witnesses;
- legal fees and expenses;
- any administration fees of the institution supervising the arbitration; and
- any other expenses incurred in connection with the arbitration or court proceedings and the award.
Further, as per Section 31A (2) of the Arbitration Act, if the court or the tribunal decides to make an order as to payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party; or the court or tribunal may make a different order for reasons to be recorded in writing.
Additionally, Section 31A(3) provides that in determining costs, the court or tribunal shall have regard to all circumstances, including:
- the conduct of the parties;
- whether a party has succeeded in the case;
- whether the party had made a frivolous counterclaim leading to delay in the disposal of the proceedings; and
- whether any reasonable offer to settle the dispute has been made by one party and refused by the other party.
10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
As per Section 31A(5) of the Arbitration Act, an agreement which has the effect that one party is to pay all or part of the costs of the arbitration in any event is valid only if it is made after the dispute in question has arisen.
11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?
Currently, there are no provisions on third-party funding in India. However, recently, the Supreme Court in Bar Council of India vs. A.K. Balaji and Ors. (MANU/SC/0239/2018) observed that ‘there appears to be no restriction on third parties (non-lawyers) funding the litigation and getting repaid after the outcome of the litigation.' However, there is a complete bar on the lawyers to be the third party to fund the litigation.
12.1 What procedural and substantive requirements must be met by an award?
The legal requirements for recognition of an arbitral award are provided under Section 31 of the Arbitration Act, as follows:
- An arbitral award shall be made in writing and shall be signed by the members of the tribunal. In proceedings with more than one arbitrator, the signatures of the majority of the members of the tribunal shall suffice if the reasons for the omitted signatures are mentioned;
- Unless the award is on agreed terms or the parties have waived the requirement for the tribunal to give reasons, the award must state the reasons upon which it is based; and
- The award shall state the date of award and place of arbitration.
12.2 Must the award be produced within a certain timeframe?
As per Section 29A(1) of the Arbitration Act, the award must be made within 12 months of the date on which the arbitrators receive written notice of their appointment. However, this timeframe may be extended for a further six months by mutual consent of the parties under Section 29A(3). The timeframe may be further extended by the court upon application by the parties, but only for sufficient cause and on such terms and conditions as are imposed by the court.
13 Enforcement of awards
13.1 Are awards enforced in your jurisdiction? Under what procedure?
As per the Arbitration Act, domestic awards (ie, awards made under Part I of the act) are enforced under Section 36 in accordance with the Code of Civil Procedure, 1908 in the same manner as a decree of the court. However, a party cannot apply to enforce the award until 90 days after its receipt.
Further, foreign awards under Part II, Chapters I and II of the Arbitration Act can be enforced by a court under Section 49 in the same manner as a decree of the court. A foreign award is enforceable only if it was issued in a country which is a signatory to the New York Convention or the Geneva Convention, and if that country has been notified by India as a convention country. In the case of a foreign award, the court will determine whether it was made in accordance with requirements of the Arbitration Act; if it is found to be enforceable, it may be enforced in the same manner as a decree of the court.
In Sundaram Finance v Abdul Samad ( 143 CLA 1 (SC)) a two-judge bench of the Supreme Court of India clarified the anomaly with regard to the appropriate jurisdiction for enforcement of an arbitral award. The court held that an application for enforcement of an arbitral award under the Arbitration Act may be filed in any jurisdiction in the country where such decree is capable of being executed, and there is no requirement to seek a transfer of the decree from the court which has jurisdiction over the arbitration proceedings.
14 Grounds for challenging an award
14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
Under Section 34 of the Arbitration Act, a party may challenge an arbitral award on the following grounds:
- A party was under some incapacity;
- The arbitration agreement was not valid under the law;
- A party was not given proper notice of the appointment of an arbitrator;
- The award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;
- The composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties;
- The subject matter of the dispute is not capable of settlement by arbitration under the law in force;
The award conflicts with Indian public policy. An arbitral award will conflict with Indian public policy only if:
- the making of the award was induced or affected by fraud or corruption, or was in violation of Section 75 or Section 81 of the act;
- the award contravenes the fundamental policy of Indian law (the test for determining this shall not involve a review of the merits of the dispute); or
- the award is against the basic notions of morality and justice; or
- The award (other than in international commercial arbitrations) is vitiated by patent illegality on the face of the award. However, an award shall not be set aside merely on the grounds of an erroneous application of the law or a review of the evidence.
Further, under Sections 48 and 57, foreign awards under Part II, Chapters I and II are enforceable only if the following conditions are satisfied:
- The parties to the agreement referred to in Section 44 of the Arbitration Act were under some incapacity under the law applicable to them, or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under the law of the country in which the award was made;
- The party against which the award is invoked was not given proper notice of the appointment of the arbitrator or of the proceedings, or was otherwise unable to present its case;
- The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. However, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced;
- The composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place;
- The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made;
- The subject matter of the dispute is not capable of settlement by arbitration under the law of India; or
Enforcement of the award would be contrary to the public policy of India. An award is in conflict with the public policy of India only if:
- the making of the award was induced or affected by fraud or corruption, or was in violation of Section 75 or Section 81 of the Arbitration Act;
- the award contravenes the fundamental policy of Indian law (the test for determining this shall not entail a review on the merits of the dispute; or
- the award conflicts with basic notions of morality or justice.
14.2 Are there are any time limits and/or other requirements to bring a challenge?
As per Section 34(3) of the Arbitration Act, an application to set aside an arbitral award must be made within three months of receipt of the award or, if a request has been made for correction or interpretation of the award, from the date on which that request is disposed of by the tribunal. This three-month period may be extended by a further 30 days if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the stipulated timeframe.
14.3 Are parties permitted to exclude any rights of challenge or appeal?
The Arbitration Act specifically provides for appeal against an arbitral award. Further, as per settled law, any agreement that is contrary to the statute is void. Therefore, the parties cannot exclude rights of challenge or appeal.
15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
The Arbitration Act imposes no obligations of confidentiality insofar as arbitration proceedings are concerned. However, the parties are free to impose such obligations in the arbitration agreement. The Arbitration and Conciliation (Amendment) Bill 2018 has proposed the insertion of a new Section 42A in the act to maintain the confidentiality of the arbitration proceedings (except the award).
15.2 Are there any exceptions to confidentiality?
The Arbitration and Conciliation (Amendment) Bill, 2018 expressly provides one exception to the proposed duty of confidentiality: the details of an award may be disclosed where this is necessary for the purpose of implementation and enforcement of the award. There are multiple other situations in which a party may be required to disclose the award or the details of the proceedings, such as when:
- challenging an award;
- seeking interim relief from the court;
- appealing an interim order of the tribunal, the appointment of arbitrators by the court or the termination of an arbitrator's mandate; or
- seeking the court's assistance in taking evidence.
Further, there may be statutory mandates requiring a party to disclose details pertaining to the arbitration, such as under the regulations of the Securities and Exchange Board of India. These are more straightforward circumstances in which it may be argued that disclosure is permitted, given that there are provisions in law entitling a party to exercise such rights and the confidentiality provision is not intended to take away rights expressly granted under law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.