Introduction
The Arbitration and Conciliation Act 1996 (ACA) is a law that applies to the resolution of disputes through arbitration or conciliation in India. The ACA applies to any dispute that the parties have agreed to resolve through arbitration or conciliation, either through a written agreement or by implication from the conduct of the parties.
Which cases fall under Arbitration and Conciliation Act 1996
Some examples of cases that may fall under the ACA include:
Commercial disputes between businesses, such as disputes over the terms of a contract or the performance of a contract.
Employment disputes, such as disputes over the terms of an employment contract or allegations of wrongful termination.
Construction disputes, such as disputes over the quality or timeliness of construction work.
Intellectual property disputes, such as disputes over the ownership or use of patents, trademarks, or copyrights.
Consumer disputes, such as disputes over defective products or services.
It is important to note that the ACA applies to a wide range of disputes, and the specific types of cases that fall under the ACA will depend on the specific terms of the arbitration or conciliation agreement and the applicable laws and regulations.
Under what circumstances can a party be bound by Arbitration?
A party can be bound by arbitration in a number of circumstances. Some examples include:
If the parties have entered into a written arbitration agreement, either as part of a contract or as a standalone agreement. In this case, the parties have agreed to resolve any disputes that may arise through arbitration instead of going to court.
If the parties have not entered into a written arbitration agreement, but the dispute arises out of a contract that contains an arbitration clause. In this case, the arbitration clause may provide that any disputes arising out of the contract must be resolved through arbitration.
If the parties have not entered into a written arbitration agreement, but the dispute arises out of a contract that does not contain an arbitration clause. In this case, the parties may still be able to agree to resolve the dispute through arbitration by entering into a separate arbitration agreement.
Initiation of Arbitration proceedings
There are several ways that arbitration proceedings can be initiated in India. Some examples include:
One party can send a notice of arbitration (under Section 21) to the other party, stating their intention to initiate arbitration proceedings and setting out the specific issues that need to be resolved.
The parties can jointly request the appointment of an arbitrator or arbitration panel to resolve the dispute.
If the parties have entered into a contract that contains an arbitration clause, one party can file a petition with the court to enforce the arbitration clause and appoint an arbitrator or arbitration panel.
If the parties have not entered into a contract, but have agreed to resolve the dispute through arbitration, one party can file a petition with the court to enforce the arbitration agreement and appoint an arbitrator or arbitration panel
Appointment of an Arbitrator
There are several ways that an arbitrator or arbitration panel can be appointed to resolve a dispute through arbitration (Section 11). Some examples include:
If the parties have entered into a written arbitration agreement, they may have agreed to a specific process for appointing an arbitrator or arbitration panel. This process may involve the appointment of a single arbitrator, a panel of arbitrators, or the use of an arbitration institution to appoint the arbitrators.
If the parties have not agreed on a specific process for appointing an arbitrator or arbitration panel, they may be able to agree on a mutually acceptable arbitrator or panel.
If the parties are unable to agree on an arbitrator or panel, either party can request the appointment of an arbitrator or panel through the court. The court will typically appoint an arbitrator or panel based on the specific terms of the arbitration agreement and the applicable laws and regulations.
Can an appointment of an Arbitrator be challenged?
Yes, in some circumstances, the appointment of an arbitrator or arbitration panel can be challenged in India. The specific grounds for challenging the appointment of an arbitrator or panel will depend on the applicable laws and regulations and the specific terms of the arbitration agreement.
Some examples of grounds for challenging the appointment of an arbitrator or panel may include:
A lack of independence or impartiality on the part of the arbitrator or panel.
A conflict of interest on the part of the arbitrator or panel.
A lack of qualifications or experience on the part of the arbitrator or panel.
A failure to follow the proper procedure for appointing the arbitrator or panel.
If an arbitration appointment is challenged, the court will typically consider the specific grounds for the challenge and decide whether the appointment should be upheld or set aside.
Fees of an Arbitrator
In general, arbitrators and arbitration panels are paid by the parties to the arbitration proceedings. The fees may be paid on an hourly basis, a fixed fee basis, or a combination of both. The parties may also agree to pay the arbitrator or panel a percentage of the amount in dispute as their fee.
Sum in Dispute | Model fee |
|---|---|
Up to Rs. 5,00,000 | Rs. 45,000 |
Above Rs. 5,00,000 and upto Rs. 20,00,000 | Rs. 45,000 plus 3.5 per cent of the claim amount over and above Rs. 5,00,000 |
Above Rs. 20,00,000 and upto Rs. 1,00,00,000 | Rs. 97,500 plus 3 percent of the claim amount and above Rs. 20,00,000 |
Above Rs. 1,00,00,000 and upto Rs. 10,00,00,000 | Rs. 3,37,500 plus 1 percent of the claim amount over and above Rs. 1,00,00,000 |
Above Rs. 10,00,00,000 and upto Rs. 20,00,00,000 | Rs. 12,37,500 plus 0.75 per cent of the claim amount over and above Rs. 1,00,00,000 |
Above Rs. 20,00,00,000 | Rs. 19,87,500 plus 0.5 per cent of the claim amount over and above Rs. 20,00,00,000 with a ceiling of Rs. 30,00,000 |
Note: In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five per cent. On the fee payable as per the table set out above.
Grounds for challenge of Arbitral award
An arbitral award is a legally binding decision issued by an arbitrator or arbitration panel in the resolution of a dispute through arbitration. In India, an arbitral award can be challenged on certain grounds, as provided for under the Arbitration and Conciliation Act 1996 (ACA).
Some examples of grounds for challenging an arbitral award in India may include:
A lack of jurisdiction on the part of the arbitrator or panel. This means that the arbitrator or panel did not have the authority to decide the dispute because it did not involve a valid arbitration agreement or the parties were not bound by an arbitration agreement.
A violation of natural justice. This means that the arbitrator or panel did not follow the principles of fairness and impartiality in the arbitration proceedings.
An incorrect application of the law. This means that the arbitrator or panel made a mistake in interpreting or applying the relevant law to the dispute.
An excess of power or authority. This means that the arbitrator or panel exceeded its authority or made a decision that was outside the scope of the arbitration agreement.