Unit 1

Alternative Dispute Resolution is a method of resolving conflicts that offers an alternative to

courtroom litigation. ADR can lessen the amount of litigation that the courts must handle. This helps
the disputing parties come to a settlement outside of court or through litigation. These tactics
frequently include the aid of a third party in problem-solving.
Alternative Dispute Resolution Meaning-
A way of settling disputes and disagreements between parties via negotiation and discussion is known
as alternative dispute resolution (ADR). It is an effort to develop a system that is distinct from the
customary methods of dispute resolution. The objective of the alternative dispute resolution
mechanism is to aid in the settlement of commercial disputes and other conflicts where no attempt has
been made to engage in constructive dialogue or reach a mutually agreeable conclusion.
Alternative Dispute Resolution is protected by the Indian Constitution’s Articles 21 (Right to life and
personal liberty) and 14 (Equality before the law). The Directive Principles of State Policy (DPSP) of
equal justice and free legal aid, which are enshrined in Article 39-A of the Indian Constitution, can
also be accomplished through ADR. It can assist courts in lightening a load of litigation while giving
the parties concerned a satisfying and well-rounded experience
Need of ADR in India
The policy of dispersing justice in India has come under tremendous concern for various rationales
mainly because of the massive pendency of lawsuits in courts. In India, the volume of cases cataloged
in the courts has indicated an incredible improvement in recent years deriving in pendency and
uncertainties emphasizing the requirement for alternative dispute resolution techniques. It is in this
context that a Resolution was approved by the Chief Ministers and the Chief Justices of States in a
meeting held in New Delhi on 4th December 1993 under the chairmanship of the then Prime Minister
and governed by the Chief Justice of India.
It said: “The Chief Ministers and Chief Justices were of the opinion that Courts were not in a position
to bear the entire burden of justice system and that a number of disputes lent themselves to resolution
by alternative modes such as arbitration, mediation and negotiation. They emphasized the desirability
of disputants taking advantage of alternative dispute resolution which provided procedural flexibility,
saved valuable time and money and avoided the stress of a conventional trial”.
Importance of ADR in India
To deal with the circumstance of pendency of cases in courts of India, ADR dabbles a substantial role
in India by its diverse methods. Alternative Dispute Resolution mechanism procures scientifically
advanced procedures to Indian bench which enables in curtailing the pressure on the courts. ADR
furnishes numerous aspects of settlement including, arbitration, conciliation, mediation, negotiation
and Lok Adalat. Here, negotiation means self-counseling between the parties to unravel their conflict
but it doesn’t have any statutory commendation in India.
ADR is also established on such important rights, article 14 and 21 which deals with equality before
law and right to life and personal liberty respectively. ADR’s motive is to furnish social-economic and
political justice and maintain honesty in the community enshrined in the preamble. ADR also seek to
accomplish equal justice and free legal aid delivered under article 39-A referring to Directive
Principle of State Policy (DPSP).

Types
Alternative Dispute Resolution Types
Alternative Dispute Resolution is typically categorized as follows:
1. Arbitration
It is in accordance with this form of alternative dispute resolution process. The person who will hear
their argument and reach a consensus on a resolution is chosen by both parties. An arbitral tribunal
hears the dispute and issues a decision that is largely binding on the parties. Compared to a trial, it is
less formal, and the testifying requirements are typically relaxed.
There is typically no right to appeal an arbitrator’s decision. With the exception of some interim
proceedings, the scope for judicial intervention in the arbitration process is rather restricted. The
Arbitration and Conciliation (Amendment) Bill 2021 seeks to improve the arbitration process by
making it more appropriate for speedy case settlement, cost-effective for investors, and investor-
friendly.
The First International Peace Conference, which took place in The Hague, Netherlands, in 1899,
established the Permanent Court of Arbitration (PCA). “To facilitate the arbitration of international
disputes” is the goal”.
2. Conciliation
It is a non-binding process where the parties to a dispute are helped by a neutral third party, the
Conciliator, to resolve the conflict in a way that is acceptable to both parties. In order to obtain an
amicable conclusion, the Conciliator actively participates in discussions and negotiations throughout
the conciliation process. The conciliator’s recommendations are up for acceptance or rejection by the
parties. However, the conciliator’s settlement proposal will only be final and enforceable if both
parties accept it.
3. Mediation
In order to try to reach a mutually acceptable resolution of the dispute through mediation, a third party
known as a “mediator” works with the parties. The third party acts as a facilitator who helps the
parties interact more effectively; it does not make any decisions on their behalf. In mediation, the
parties maintain control over the result.
4. Negotiations
It is the alternative conflict resolution strategy that is most frequently used. It is a non-binding process
in which the parties engage in direct dialogue with one another in order to reach a mutually agreeable
resolution of the conflict.
A range of contexts, including business, nonprofit organisations, governmental bodies, court cases,
international relations, and personal situations including marriage, divorce, parenthood, and daily
living, involve negotiation.
Judicial Settlements Inclusive Of Lok Adalats
The Lok Adalat system of dispute resolution was created in order to expedite the procedure and was
made possible by the Legal Services Authorities Act of 1987. At Lok Adalat, disagreements might be
settled without going to court. It is a part of the Alternative Dispute Resolution (ADR) system, which
offers quick, inexpensive, and informal justice to the general population.
Alternative Dispute Resolution Advantages
The fact that dispute resolution is typically conducted in private aids in maintaining secrecy. It is more
practical, economical, and effective. The stress of a traditional trial is reduced while time and money
are saved via procedural flexibility. The technique typically produces original thoughts, lasting effects,
more enjoyment, and improved relationships.
It provides the ability to have neutral advisers, arbitrators, mediators, conciliators, or other
professionals with specialized knowledge available on the tribunal. Additionally, it offers more direct
control over the result. Relationships with people personally could be spared.
Unbiased procedure – No party enjoys an undue advantage because of the fact that the parties are free
to decide the relevant venue, language, and the applicable law.
Confidential procedure – Any disclosure made by the parties in the proceedings and when the
arbitration award is given is to be kept confidential.
Cost-effective procedure – No exorbitant cost is charged from the parties making it common for
parties to prefer arbitration over the traditional form of litigation.
Unbiased procedure – No party enjoys an undue advantage because of the fact that the parties are free
to decide the relevant venue, language, and the applicable law.
Confidential procedure – Any disclosure made by the parties in the proceedings and when the
arbitration award is given is to be kept confidential.
Cost-effective procedure – No exorbitant cost is charged from the parties making it common for
parties to prefer arbitration over the traditional form of litigation.
Alternative Dispute Resolution in India
With the use of new conflict resolution techniques like Alternative Dispute Resolution (ADR), parties
can settle their differences more cheaply and effectively. These techniques also have the advantage of
allowing parties to reduce antagonism, regain control, win acceptance of the judgment, settle disputes
amicably, and achieve a greater feeling of fairness in each case.
The Legal Services Authorities Act and the new Arbitration and Conciliation Act were both passed in
an effort to promote out-of-court settlements. The Code of Criminal Procedure included a system for
plea negotiations in 2005. A “pre-trial settlement between the accused and the prosecution in which
the accused offers to plead guilty in exchange for specific concessions from the prosecution” is known
as a “plea bargaining arrangement.”
Lok Adalat, or “people’s court,” is a relaxed setting that promotes conversations in the presence of a
judge and enables problems to be solved without heavily emphasizing legalese. The decision of the
Lok-decision Adalat is final, enforceable against the parties, and cannot be contested in court.
Alternative Dispute Resolution Limitation-
The appeals process for awards is constrained or nonexistent. There is no way to contest or change the
prize if it is flawed. Selecting from the many rules and organizations that provide arbitration services
might be difficult. It is challenging to identify how international arbitration regulations should be
applied because domestic and international arbitration are governed by distinct statutes.
It is challenging to bridge the gap and arrive at a shared solution because the two regions have
different languages and cultures. Many people still like the old method of appearing in court, and
many are also uninformed of these options and the procedure.
LSA-
The Legal Services Authority Act of 1987, an enduring piece of law in the Indian setting, emerges as a
crucial force for change in the area of legal services and conflict settlement. It is a legislative
cornerstone that has not only changed the Indian legal landscape but has also redefined the idea of
access to justice and fairness. In a world where Alternative Dispute Resolution (ADR) is gaining
popularity as a more efficient and user-centric approach to conflict resolution, this Act offers as a solid
foundation for ADR approaches to flourish. Within its numerous provisions is a strong dedication to
breaking down obstacles to justice, transforming it from a privilege of the privileged to an
indisputable right conferred upon every person
The Legal Services Authorities Act of 1987, enacted by the Indian Central Government in accordance
with Article 39-A of the Indian Constitution and recommendations from various committees, went
into effect on November 9, 1995, following the 1994 Amendment Act, which made significant
changes.
HISTORICAL BACKGROUND
The Legal Services Authorities Act, 1987 (LSA Act) arose from the aspirational objectives inherent in
the Indian Constitution. The inspiration for the establishment of this transformative legislation was
Article 39-A of the Indian Constitution, a directive principle of state policy. The LSA Act’s
constitutional foundation was built by this article, which emphasises equal justice and the provision of
free legal assistance as vital elements of a just and fair society. While the constitutional command
supplied the logical framework, different committees and recommendations provided the practical
drive. Notably, the Committee for Implementing Legal Aid Schemes’ 1971 report (the “Khosla
Committee”) emphasised the critical necessity for a legal aid mechanism to bridge the justice gap and
make justice accessible to all, particularly the marginalised and economically disadvantaged. This
report sparked the creation of legal aid programmes in India. The LSA Act, however, was not
officially approved by the Central Government until 1987. This act was more than just a statutory
provision; it was a watershed moment in Indian legal history. It turned the Constitution’s abstract
goals into a solid legal framework, giving substance to the practical concerns of providing legal aid
and fostering equal access to justice. In short, the LSA Act is a confluence of constitutional objectives,
expert committee recommendations, and the Indian government’s legislative resolve, all converged to
create a legal landscape in which justice recognises no economic or social borders.
PROVISIONS OF LEGAL FRAMEWORK UNDER LEGAL SERVICES AUTHORITIES ACT,1987
The Legal Services Authorities Act, 1987, is a comprehensive legislative framework that aims to
ensure equal access to justice for all citizens, particularly those who are economically disadvantaged
and marginalized. The Act establishes a robust system for the provision of legal aid and the promotion
of alternative dispute resolution mechanisms.
Section 3: Establishment of National Legal Services Authority (NALSA)
Section 3 of the Legal Services Authorities Act, 1987, deals with the establishment of the National
Legal Services Authority (NALSA). NALSA is the apex body responsible for overseeing and
coordinating the implementation of legal aid programs and services at the national level. NALSA
consists of the Chief Justice of India (or a judge nominated by the Chief Justice of India) as its Patron-
in-Chief. It also includes other members, both judicial and non-judicial, as determined by the Central
Government. The primary objective of NALSA is to formulate and implement effective policies and
programs for providing legal aid and promoting legal awareness. It works towards ensuring that
justice reaches every corner of the country and is accessible to all, especially to the marginalized and
underprivileged sections of society. NALSA plays a pivotal role in coordinating and monitoring the
activities of State Legal Services Authorities (SLSAs) and District Legal Services Authorities
(DLSAs). It provides guidance and financial assistance to these lower-tier authorities, ensuring the
effective implementation of legal aid programs.
Section 4: Constitution of Other Legal Services Authorities
Section 4 of the LSA Act deals with the establishment of legal services authorities at the state and
district levels. These authorities are responsible for implementing legal aid programs within their
respective jurisdictions. Here’s a breakdown:
✓ State Legal Services Authority (SLSA): At the state level, the Act mandates the establishment
of the State Legal Services Authority. Each SLSA comprises the Chief Justice of the High
Court as its Patron-in-Chief, along with other members, both judicial and non-judicial, as
determined by the state government.
✓ District Legal Services Authority (DLSA): At the district level, the District Legal Services
Authority is established. This authority is chaired by the District Judge and includes other
members, judicial and non-judicial, appointed by the state government.
The primary functions of SLSAs and DLSAs include providing free legal services to eligible
individuals, organizing legal aid clinics, promoting awareness about legal rights, and coordinating
with other agencies involved in the delivery of legal services. SLSAs coordinate and oversee the
functioning of DLSAs within their respective states, ensuring that legal aid reaches those in need at
the grassroots level. These authorities are instrumental in ensuring that legal services are accessible to
economically weaker sections, socially disadvantaged groups, women, children, and other
marginalized communities, as per the eligibility criteria defined in the Act. Sections 3 and 4 of the
Legal Services Authorities Act, 1987, establish a hierarchical structure of legal services authorities,
with NALSA at the national level and SLSAs and DLSAs at the state and district levels, respectively.
These authorities play a pivotal role in the administration of legal aid and the promotion of legal
awareness, thus contributing significantly to the realization of equal access to justice for all citizens.
In this historic case of (NALSA) v. Union of India and Others [1]the Supreme Court of India
recognized the rights of transgender individuals and established critical guidelines for their protection
and inclusion. While the case primarily revolved around transgender rights, it also reaffirmed the
significance of the National Legal Services Authority (NALSA) in implementing legal aid programs
and promoting access to justice for marginalized communities. The judgment underscored the need
for NALSA to proactively address the legal issues faced by transgender individuals and ensure their
full participation in society. It emphasized NALSA’s role in providing legal aid and awareness to
protect the rights and dignity of marginalized and vulnerable groups, aligning with the overarching
principles of the Legal Services Authorities Act, 1987.
Section 6: Composition of National Legal Services Authority (NALSA):
Section 6 of the LSA Act outlines the composition of the National Legal Services Authority
(NALSA), which is the apex body responsible for overseeing and coordinating the implementation of
legal aid programs and services at the national level. Here are the key details:
✓ Patron-in-Chief: NALSA is headed by the Chief Justice of India, or in their absence, by a
judge nominated by the Chief Justice of India, who serves as the Patron-in-Chief of NALSA.
This judicial leadership at the highest level ensures the authority’s credibility and impartiality.
✓ Other Members: In addition to the Patron-in-Chief, NALSA includes other members, both
judicial and non-judicial, as determined by the Central Government. The inclusion of non-
judicial members brings diverse expertise and perspectives to the authority’s decision-making
processes.
 ✓ Balanced Representation: The composition of NALSA aims to strike a balance between
judicial and non-judicial members, emphasizing the need for a holistic approach to legal aid
and access to justice.
Section 7: Composition of State Legal Services Authority (SLSA):
Section 7 of the Act addresses the composition of the State Legal Services Authority (SLSA), which
operates at the state level and is responsible for overseeing legal aid programs within the respective
state.

• Patron-in-Chief: Each SLSA is chaired by the Chief Justice of the respective High Court or a
judge nominated by them, who serves as the Patron-in-Chief of the SLSA.
• Other Members: Similar to NALSA, SLSAs include other members, both judicial and non-
judicial, as appointed by the state government. This diverse composition ensures that the
authority can effectively cater to the legal needs of the state’s population.
• Balanced Representation: The Act emphasizes balanced representation, ensuring that the
authority reflects the expertise and perspectives of both the legal and non-legal community.
Section 8: Composition of District Legal Services Authority (DLSA):
Section 8 of the Act pertains to the composition of the District Legal Services Authority (DLSA),
which operates at the district level and plays a critical role in the implementation of legal aid
programs. Here are the key details:
✓ Chairperson: The DLSA is headed by the District Judge of the respective district, who serves
as the chairperson of the authority. This judicial leadership at the district level is essential for
effective coordination and administration of legal aid.
✓ Other Members: DLSAs include other members, both judicial and non-judicial, as appointed
by the state government. The inclusion of non-judicial members ensures a more
comprehensive approach to addressing legal aid needs at the local level.
✓ Local Representation: DLSAs are deeply rooted in the districts they serve, allowing for a
more localized and community-centric approach to providing legal services.
PROVISIONS OF LEGAL AID UNDER LEGAL SERVICES AUTHORITY ACT ,1987
The committee, led by Justice PN Bhagwati, had a comprehensive agenda, including determining the
eligibility criteria for individuals to qualify for free legal aid—a matter also addressed in the Code of
Criminal Procedure, 1973, specifically under Section 304. This provision emphasizes the state’s
responsibility to provide free and competent legal assistance to marginalized members of society. This
principle was firmly established in the landmark case of Hussainara Khatoon v. State of Bihar
(1979[2]), where it was affirmed that legal aid should be furnished at the state’s expense for
marginalized groups. In a similar vein, the Supreme Court’s ruling in Suk Das v. Union Territory of
Arunachal Pradesh (1986) [3]held that a conviction may be set aside on socio-economic grounds if the
accused cannot afford legal aid.
Section 12 of the Legal Services Authorities Act, 1987, outlines specific categories of people eligible
for free legal aid. This includes members of Scheduled Castes or Scheduled Tribes, victims of human
trafficking or beggars as referenced in Article 23 of the Constitution, women, children, individuals
with disabilities as defined in the Persons with Disabilities Act, 1995, and those facing circumstances
of extreme deprivation, such as victims of mass disasters, ethnic violence, or industrial disasters.
Additionally, individuals in custody, including those in protective homes, juvenile homes, or
psychiatric institutions, are eligible for free legal aid. Finally, those with an annual income below
specified thresholds, as determined by the State or Central Government depending on the court
involved, also qualify for such assistance.
PROVISIONS OF LOK AADALTS UNDER LEGAL SERVICES AUTHORITY ACT,1987
The Legal Services Authorities Act, 1987, provides for the establishment of Lok Adalats, which are a
unique and vital alternative dispute resolution mechanism in India. Lok Adalats aim to provide speedy
and cost-effective justice to litigants while promoting the amicable resolution of disputes. Here, we
explore the key provisions of Lok Adalats under this Act, along with relevant case laws that have
helped shape their functioning.
1. Composition and Jurisdiction (Section 19): Lok Adalats are composed of serving or retired judicial
officers, social workers, and other experts. They are presided over by a sitting or retired judicial
officer. Lok Adalats can adjudicate and settle civil, criminal, and compoundable cases. Importantly,
their decisions have the same legal standing as a decree of a civil court.
2. Nature and Functioning (Section 19A):
Lok Adalats primarily operate as conciliation forums. They encourage parties to settle their disputes
amicably through negotiations, without the adversarial proceedings of regular courts. They have the
authority to summon witnesses, take evidence, and make binding decisions if parties arrive at a
settlement.
3. Compromise and Award (Section 20): If parties reach a compromise in a Lok Adalat, it is reduced
to writing and signed by both parties. This compromise is final and binding on the parties involved.
In cases where no compromise is reached, the matter is referred back to the appropriate court for
adjudication.
4. Cost-Free Proceedings (Section 20A):
Proceedings in Lok Adalats are cost-free, meaning litigants do not incur court fees or charges during
the resolution process. This provision significantly reduces the financial burden on parties and
promotes access to justice.
5. Statutory Backing (Section 22B): The decisions of Lok Adalats are deemed to be decrees of a civil
court and are enforceable as such. This statutory backing ensures the enforceability and legal validity
of settlements reached in Lok Adalats.
In the case of P.N.B. v. Laxmichand Rai,[4] the Court ruled that the decision rendered by a Lok Adalat
under the Legal Services Authorities Act, 1987, is conclusive and cannot be challenged through an
appeal in any judicial forum

Salient Features of ADR-

Introduction
In the present time, the arbitration is governed by the law of arbitration which is provided under the
Arbitration and Conciliation Act, 1996. Earlier to this Act, there were 3 Acts that governed the law of
arbitration in India that are as follows:

• The Arbitration (Protocol and Convention) Act, 1937.

• The Arbitration Act, 1940.
• The Foreign Awards (Recognition and Enforcement) Act 1961.
These Acts were repealed by the Arbitration and Conciliation Act 1996. However, the Model Law also
contributed in drafting and implementing the provisions of the Arbitration and Conciliation Act, 1996.
the Model Law was adopted by the United Nations General Assembly on the recommendation of the
United Nations Commission on International Trade Law (UNCITRAL).

Therefore, The Arbitration and Conciliation Act, 1996 came in order to consolidate and amend the
already existing laws relating to domestic arbitration. The Act came into force on 25 January, 1996.
There are total 86 sections in this Act and it is divided into 4 parts, in which Part I deals with General
provisions on arbitration, Part II deals with the Enforcement of certain foreign awards, Part III deals
with conciliation and Part IV deals with the Supplementary provisions.
Main objective of Arbitration and Conciliation Act, 1996

• It aims to comprehensively(completely) cover international commercial arbitration and

conciliation as well as domestic arbitration and conciliation.
• To make provision for an arbitral procedure which is fair, efficient and capable of meeting the
needs of the specific arbitration.
• It provides that the arbitral tribunal has to give reasons for its arbitral award.
• 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 an arbitral tribunal to use Mediation, Conciliation or other procedures during the
arbitral proceedings to encourage settlement of disputes.
• To provide that every final arbitral award is enforced in the same manner as if it were a decree
of the court.
• To provide that a settlement agreement reached by the parties as a result of conciliation
proceedings, it will have the same status and effect as an arbitral award.
• To provide that for the purpose of enforcement of foreign awards, every arbitral award made
in a country which is one of the parties to the international conventions i.e. the New York
Convention and the Geneva Convention will be treated as a foreign award.
Note: the foreign award should be made in another country except India.

Some of the important salient features of Act are as follows –

1. A more comprehensive statute: The Arbitration and Conciliation Act, 1996 is more
comprehensive than the earlier Act of 1940. It consists of 86 sections divided into 4 parts.
2. Arbitral award treated at per with a decree: Another notable feature of the Act of 1996 is
that the arbitral award and settlement arrived at during conciliation proceedings have at
per with the decree of the court. In other words the arbitral award is enforceable in the
same manner as a decree of a law court.
3. Curtailment of the courts process: The power of the court under the Act of 1996 has been
considerably curtailed as compared with the earlier Arbitration Act of 1940. The arbitrator
has been endowed with absolute powers and he is completely immune from the court’s
control during the arbitration proceedings.
4. Abolition of the Umpire system: Another important feature of the Act of 1996 is the
abolition of the umpire system. The earlier Act of 1940 provided that where an even
number of arbitrators were appointed and such arbitrator failed to make an award within
the specified time, or where there was difference of opinion between two arbitrators, the
umpire should enter on the reference instead of the arbitrators.
But now under the new Act of 1996, the number of arbitrators to determine the dispute
has been left to the parties, the only limitation being that an even number of arbitrators
 shall not be appointed. The arbitrators so appointed shall appoint a third arbitrator called
the Presiding Arbitrator(umpire).

5. Qualification of the arbitrator: There were no qualifications for appointment as an

arbitrator as prescribed in the earlier Arbitration Act of 1940. But now the Act of 1996
provides for qualification of the arbitrator. Since nowadays a large number of disputes
arising between the parties are of technical nature, therefore such disputes can properly be
decided only by the arbitrators who are competent and well versed in such matters.
6. Assistance of court in certain matters: the Act of 1996 provides for taking assistance from
the court only in certain specific matters, the Arbitral tribunal or a party may seek
assistance from the court in taking evidence. The court may therefore order the witness to
provide evidence to the arbitral tribunal directly. But the act does not confer any power on
the Arbitral tribunal to summon witnesses. Therefore, the Arbitral tribunal or a party with
the approval of the arbitral tribunal may apply to the court for assistance in taking
evidence.
7. Empower to pass interim orders: another notable feature of the Act of 1996 is the
provision relating to the interim measures, which empower the arbitrator or arbitral
tribunal to pass interim orders in respect of the subject matter of the dispute at the request
of the party.
8. Arbitral award in conflict with public policy is void: the new Act of 1996 provides that an
Arbitral award which is in conflict with the public policy in India shall not be valid in law
being null and void and can be set aside by the court.
9. International Commercial Arbitration defined: The Act of 1996 specifically defines the
term “International Commercial Arbitration” under Section 2(1)(f), it means an arbitration
relating to disputes arising out of legal relationship whether contractual or not, considered
as commercial under the law in force in India and where at least one of the parties
whether an individual, body corporate or a company is having business or residing abroad
and in case of Government, the government is of a foreign country.
Note: the other party to the dispute mentioned above should be a foreigner, foreign
company, or foreign government.
10. Scope of conciliation more wide: Part III of the Act of 1996 deals with a new
international approach to conciliation and explains its application scope. Thus making the
scope of conciliation more wide.
11. Arbitrator to give reasons for the award: The Act 1996 under sub-section 3 of section 31
provides that an arbitral tribunal must state reasons for its award. However, where the
parties themselves have agreed in writing that no reasons are to be given or where the
award is in terms of a settlement reached between the parties, the requirement of a
reasoned award may be waived off.
12. Enforcement of foreign awards: The Act of 1996 provides for enforcement of certain
foreign awards made under the New York Convention and Geneva Convention
respectively as contained in Part II of the said Act as a decree of the court. The countries
which have neither adopted the New York convention nor the Geneva convention are
outside the scope of Part II of the Act and therefore their awards are not enforceable as
foreign awards in India.

Arbitration-
In India, arbitration came to be known and given recognition when the Arbitration Act 1899 was
enacted but its applicability only extended to Bombay, Madras and Calcutta. The provisions were
given an extension to the remaining areas in Section 89 as well as Schedule II of the Code of Civil
Procedure, 1908. However, it was observed that arbitration did not reap the expected benefits to the
public at large and to meet the economic reforms in the country, the Arbitration Act was enacted in
1940. The previous Act along with the provisions in the Code of Civil Procedure were repealed.
Alternative Dispute Resolution which is also referred to as appropriate or amicable dispute resolution
is another way of resolving disputes between parties without taking them to the courts. While courts
decide the outcome in a case, ADR resolves the dispute effectively, efficiently, and amicably.
Arbitration is one of the prominent forms of ADR.
Kinds of Arbitration
In arbitration a dispute is submitted to the arbitral tribunal and not to a regular civil court or otherwise.
The arbitral tribunal must give a decision on the dispute and this decision is thus binding on the
parties in the dispute since they have no grounds to appeal.
When contrasted with the traditional approach of a judicial proceeding which ordinarily happens in a
Court; and has to go through a lengthy process, and which usually leaves one party or both parties
exhausted financially. An arbitration proceeding is not formal and does not involve judicial
proceeding which can save a lot of time for the parties.
A few types of Arbitrations in India on the basis of Jurisdiction
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 ofIndia. The term
€˜domestic arbitration€™ has not been defined in the Arbitrationand Conciliation Act of 1996.
However when reading Section 2 (2) (7) of theAct 1996 together, it is implied that €˜domestic
arbitration€™ means an arbitration in which thearbitral proceedings must necessarily be held in India,
and according to Indian substantive andprocedural law, and the cause of action for the dispute has
completely arisen in India, orin the event that the parties are subject to Indian jurisdiction.
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, it is called as International Arbitration.
The law applicable can be Indian or foreign depending upon the facts and circumstances of the case
and the contract in this regard between the respective parties. To fulfill the definition of International
Arbitration it is sufficient if any one of the parties to the dispute is domiciled outside India or if the
subject matter of dispute is abroad.
International Commercial Arbitration
International Commercial Arbitration is defined as the substitution of many burning questions for a
smouldering one. NaniPalkhiwala has stated that International Commercial Arbitration is a 1987
Honda car, which will take you to the same destination with far greater speed, higher efficiency and
dramatically less fuel consumption[ii] International Arbitration is considered to becommercial if it
related to disputes arising out of a legal relationships irrespective of their contractual nature and are
considered as commercial under the law in force in India and where at least one of the parties is-

• A national of, or habitual resident in, any country other than India or
• A body corporate which has to be incorporated in any foreign country, or
 • An association or a body of individuals whose core management and control in a country
which is not India or
• the government of a country other an India. In International Commercial Arbitration the
arbitral tribunal is bound to decide the conflict according to the rules of law chosen 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 can be interpreted, unless it has been expressed otherwise,
one which directly refers to the substantive law of that country and does not refer to its
conflict of laws rules.
Types of arbitrations that are primarily recognized in India on the basis of procedure and rules:
1. Institutional arbitration
2. Ad hoc arbitration
3. Fast track arbitration
Institutional arbitration
When an arbitral Institution conducts arbitration, it is called Institutional Arbitration. The parties have
the choice of specifying, in the arbitration agreement, to refer the differences to be determined in
accordance with the rules of as elected arbitral Institution. One or more arbitrators can be appointed
from a pre-selected panel by the governing body of the institution or the disputants themselves can
select their panel but it has to be restricted to the limited panel. Arbitration and Conciliation Act 1996
provides that where in Part I except section 28, the parties are free to determine a certain issue, that
liberty encompasses the right the parties have to authorize any person including an institution, to
determine that issue. The Act also explicitly provides that where Part I €˜refers to the fact that the
parties have agreed or that they may agree, or in any other way refers to an agreement of the parties,
that agreement shall include any arbitration rules referred to in that agreement.
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. Russell on Arbitration says that, The expression Ad Hoc, as in Ad Hoc Arbitrationor Ad
Hoc Submission is used in two quite different senses:
An agreement to refer an existing dispute, and/or an agreement to refer either future or existing
disputes to arbitration without an arbitration institution being specified to supervise the proceedings,
or at least to supply the procedural rules for the arbitration. This second sense is more common in
international arbitration.
Ad Hoc Arbitration means that the arbitration should not be conducted according to the rules of an
arbitral institution. Since, parties do not have an obligation to submit their arbitration to the rules of an
arbitral institution; they are free to state their own rules of procedure. The geographical juridiction of
Ad hoc Arbitration is of essence, since most of the issues concerning arbitration will be resolved in
accordance with the national law of the seat of arbitration.
Fast track arbitration
Even the other processes of arbitration can be lengthy and tedious and thus this process of arbitration
works like a remedy to the issue of time. 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, and uphold the simplicity which is the originally the
prime purpose of such arbitration.
Difference to court-
Alternative Dispute Resolution (ADR) and litigation are two distinct approaches to resolving conflicts
and disputes within the legal system. Here are the key differences between them:
Nature of the Process:
ADR: ADR methods, such as mediation, arbitration, negotiation, and collaborative law, are generally
consensual and focus on resolving disputes through cooperation and compromise. Parties voluntarily
participate and work together to find a mutually acceptable solution.
Litigation: Litigation involves an adversarial process where parties take their disputes to court. It is an
inherently confrontational approach, with each side presenting its case to a judge or jury, and a
decision is rendered based on the applicable laws and legal procedures.
Decision-Making Authority:
ADR: In ADR, the parties themselves, with the assistance of a neutral third party (mediator or
arbitrator), make decisions regarding the outcome of the dispute. The control and responsibility for the
resolution remain with the parties.
Litigation: In litigation, a judge or jury makes the final decision after considering the arguments,
evidence, and legal principles presented by the parties. The outcome is determined by the court, not
the parties.
Timeframe:
ADR: ADR processes are typically quicker than litigation. Parties have more flexibility in scheduling
and can often resolve their disputes within weeks or months, depending on complexity.
Litigation: Litigation can be a lengthy process, often taking months or even years to reach a final
judgment, due to court dockets, legal procedures, and the potential for appeals.
Costs:
ADR: ADR is generally more cost-effective than litigation. It involves fewer legal fees, reduced
discovery costs, and shorter timelines, making it a preferable option for those concerned about
expenses.
Litigation: Litigation can be expensive due to attorney fees, court fees, expert witness costs, and other
related expenses. The longer the case goes on, the higher the costs tend to be.

Formality and Rules of Evidence:

ADR: ADR processes are less formal than litigation. While there are rules and procedures to follow,
they are generally more flexible, allowing for open discussions and creative solutions. The strict rules
of evidence do not always apply.
Litigation: Litigation adheres to formal court procedures and rules of evidence. The process is highly
structured, with strict adherence to legal standards.
Confidentiality:
ADR: Many ADR processes, such as mediation, are confidential. This means that discussions and
information exchanged during the ADR process typically cannot be used in subsequent legal
proceedings.
Litigation: Court proceedings are generally public, and information disclosed during litigation is part
of the public record, though some cases may involve protective orders to restrict access to sensitive
information.
Finality and Appeal:
ADR: The decisions reached in alternative dispute resolution processes, such as mediated settlements
or arbitral awards, are often final and binding on the parties. The ability to appeal is limited.
Litigation: Court decisions can be appealed to higher courts, adding another layer of complexity and
potential cost to the process.

Arbitration agreement-
As per Section 7 of The Arbitration and Conciliation Act, 1996, an “arbitration agreement” means a
promise by parties to settle any disputes between them about a specific legal relationship using
arbitration. This applies whether the disputes are mentioned in a contract or not. This type of
agreement is also called a submission agreement.
Usually, an arbitration agreement explains the terms for taking disputes to arbitration. It might cover
things like the types of disputes that can be addressed, the rules for the arbitration process, how the
arbitrator(s) will be chosen, where the arbitration will happen and any other important things the
parties agree on.
Essentials of an Arbitration Agreement
An arbitration agreement involves several key conditions that must be met for it to be valid and
effective. These conditions ensure that the agreement serves its intended purpose and guides the
arbitration process fairly.
Presence of a Dispute
For an arbitration agreement to hold weight, a dispute between the involved parties must exist. This is
a fundamental requirement for the agreement to come into effect. If no dispute is present, the
arbitration clause cannot be used to challenge a settlement that has already been reached by the
parties.
Written Agreement
An arbitration agreement must always be documented in writing. It can take various forms to qualify
as a written agreement:

• Document with Signatures: The agreement is valid when it’s a signed document by both
parties.
• Written Communications: Communications such as telex, letters or telegrams that record the
agreement for arbitration also suffice.
• Exchange of Statements: When parties exchange statements outlining their claims and
defences and one party acknowledges the existence of an arbitration agreement while the
other party doesn’t dispute it, the agreement is considered valid.
The intention of the Parties
The intention of the parties involved is a pivotal aspect of the agreement. While specific terms like
“arbitrator” or “arbitration” need not be explicitly stated, the intention of both parties to abide by the
terms of the arbitration agreement is crucial. The agreement’s validity is based on the shared intention
to utilise arbitration for dispute resolution.
Signatures of the Parties
The signatures of the parties play a crucial role in forming a valid arbitration agreement. There are
two scenarios:

• Mutual Signatures: The agreement can be a document signed by both parties, outlining all
terms and conditions.
• Unilateral Signature: Alternatively, one party can sign the document containing the terms and
the other party can express acceptance. In this case, the agreement becomes valid upon the
acceptance.
Attributes of Arbitration Agreement
In the notable legal case of K.K. Modi v. K.N. Modi and Ors. (1998) 3 SCC 573, the Hon’ble
Supreme Court highlighted several crucial attributes that must be present in an arbitration agreement:

• Binding Decision: The agreement should explicitly state that the tribunal’s decision will be
legally binding on both parties involved.
• Jurisdictional Consent: Both parties must mutually agree on the tribunal’s jurisdiction to
arbitrate the matters concerning their rights. This consent can either arise from a consensual
decision or from a court order directing that the proceedings proceed through arbitration.
• Fair and Impartial Determination: The tribunal holds the responsibility to impartially
determine the rights of the parties, ensuring a fair judgment.
• Legally Enforceable: The agreement’s terms, which outline the parties’ commitment to
arbitration, must adhere to the legal framework and be enforceable by law.
• Timely Formulation: The agreement should specify that any decisions rendered by the
tribunal on the dispute must be formulated prior to the commencement of the arbitration
process.
Constituents of Arbitration Agreement
While not deemed essential, certain essential elements can be included in an arbitration agreement
based on the parties’ preferences. These elements provide further clarity and structure to the
arbitration process. Here are some common optional components:
Seat of Arbitration-
The “seat” refers to the location where the arbitration proceedings are based. Specifying the seat is
particularly crucial in international commercial arbitration. It determines the procedural laws
governing the arbitration. Notably, the seat need not coincide with the hearing location; it’s where the
arbitration process is administered.
Procedure for Appointing Arbitrators-
The procedure for selecting arbitrators follows guidelines outlined in the Arbitration Act. Generally,
any qualified person, regardless of nationality, can be appointed as an arbitrator unless the parties
agree otherwise. Parties can also mutually decide on the arbitrator’s appointment.
Language-
Language plays a vital role in an agreement. The chosen language should be understood by all parties
involved to prevent misinterpretations. Clarity is essential to ensure both parties comprehend each
clause. Opting for a mutually understood language can reduce translation costs.
Number and Qualifications of Arbitrators-
The Arbitration Act permits parties to determine the number of arbitrators. However, an odd number
is required to prevent deadlock. This allows decisions to be reached even in the presence of
disagreements among arbitrators.
Interim Relief
Sections 9 and 17 of the Act address interim relief orders related to arbitration. Section 9 permits
relief petitions if there’s prima facie evidence of an arbitration agreement. Parties can approach the
Court before or after arbitration proceedings start, but before award enforcement (as per Section 36).
Section 17 empowers the tribunal to grant interim measures upon party request.
Appeal
Section 37 provides avenues for appeal if parties are dissatisfied with arbitrator decisions. Appeals can
be made against orders under Section 9 (granting/refusing interim measures), setting aside or refusing
to set aside an award and decisions on pleas referred to in Section 16. However, no appeal is permitted
against arbitrator appointments under Section 11.

Composition of an Arbitral Tribunal

Whenever a commercial dispute arises between two or parties, and they decide to resolve the dispute
through arbitration, an arbitral tribunal is to be set up. It consists of one or more arbitrators that
adjudicate and resolve the dispute and provide an arbitral award.
The Indian Council of Arbitration has provided a set of rules known as the ‘Rules of Arbitration’ that
are to be abided by the parties undergoing the arbitration process as well as the arbitrators. Rule 2 of
these regulations defines Arbitral Tribunal as “an arbitrator or arbitrators appointed for determining a
particular dispute or difference”[1] Section 2(d) of the Arbitration and Conciliation Act, 1996 also
defines an arbitral tribunal as a sole arbitrator or panel of arbitrators.
Composition of an Arbitration Tribunal
Chapter III of the Arbitration and Conciliation Act, 1996 (herein referred to as the ‘Act’) lays down
the provisions for the Composition of an Arbitral Tribunal. Also, Rule 22 of the Rules of Arbitration
laid down by the Indian Council of Arbitration states that when an application for arbitration
procedure is received, the Council takes necessary steps for the constitution of an arbitral tribunal to
adjudicate the disputes or differences between parties. Several provisions concerning the composition
of an arbitral tribunal are as follows:

Number of arbitrators in an Arbitration Tribunal

Section 10 of the Act mentions the number of arbitrators that shall be a part of the arbitral tribunal.
According to clause (1) of the Section, the parties to the dispute are free to mutually decide the
number of arbitrators that shall constitute the arbitral tribunal to adjudicate the dispute. It is, however,
necessary that the number of arbitrators appointed shall be an odd number and not an even one ensure
that there are no ties. Furthermore, Section 10 also states that if the parties to the dispute are unable to
decide the number of arbitrators, in that case, only one arbitrator shall be appointed.
Rule 22 of the Rules of Arbitration provides that if the value of the claim made under arbitration is
One Crore or less, a single arbitrator can resolve the dispute if the parties agree to it. In cases where
the claim to the dispute exceeds one Crore, the arbitral tribunal shall be composed of three arbitrators
with the agreement of the parties.
In Narayan Prasad Lohia vs, Nikunj Kumar Lohia,[2] the Supreme Court observed that if two
arbitrators are appointed for an Arbitral Tribunal instead of three, and they give an award through
common opinion, there will be no frustration of proceedings.
What is the Procedure for appointment of arbitrators?
The procedure and appointment of arbitrators under the arbitral tribunal is specified under Section 11
of the Arbitration and Conciliation Act. It states the following:
1. Nationality- The parties to the dispute may, on agreement, appoint an arbitrator belonging
to any nationality.
2. Appointment by Parties- The procedure to appoint one or more arbitrators can be decided
by the parties. If the parties fail to do so, they may individually appoint an arbitrator each,
and the two arbitrators, mutually decide the third one.
3. Appointment by Court- if the parties do not appoint an arbitrator within 30 days from the
receipt of the request, the Supreme Court, the High Court, or any other official designated
by the Court may appoint an arbitrator.
In Golden Chariot Recreations Pvt. Ltd. v Mukesh Panika & Anr.,[3] the Supreme Court held that a
party to the dispute can file an application for the appointment of an arbitrator by the Court only after
the expiry of 30 days.
4. Payment of fees- the High Court has the authority to frame rules concerning the
determination of fees of the arbitral tribunal and the manner of its payment.
The Rules of Arbitration also provide the manner of the appointment of a sole arbitrator or three
arbitrators under Rule 23. According to this rule, on receipt of the application, the Registrar of the
Arbitration Committee may ask the parties to the dispute to select an arbitrator from among the Panel
of Arbitrators within 30 days. In case of failure, the Registrar himself appoints a sole arbitrator to
resolve the dispute between parties. Similarly, the Registrar can also appoint three arbitrators if the
parties to the dispute do not arrive at an agreement.
In Oriental Insurance Company v M/S Narbheram Power and Steel Pvt,[4] it was held that the
arbitration clause under an agreement is to be strictly interpreted. It expresses the intention of the
parties to appoint an arbitrator for the settlement of any dispute. This clause cannot be waived off in
normal circumstances.

What are the grounds for challenging the appointment of arbitrators and its procedure?
1[(1) When a person is approached in connection with his possible appointment as an arbitrator, he
shall disclose in writing any circumstances,—
(a) such as the existence either direct or indirect, 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 kind, which is likely to give rise to justifiable doubts as to his independence or
impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his
ability to complete the entire arbitration within a period of twelve months.
Explanation 1.—The grounds stated in the Fifth Schedule shall guide in determining whether
circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an
arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form specified in the Sixth
Schedule.]
(3) An arbitrator may be challenged only if—
(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or
(b) he does not possess the qualifications agreed to by the parties.
(4) 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.
2[(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the
parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the
Seventh Schedule shall be ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes having arisen between them, waive the applicability
of this sub-section by an express agreement in writing.]
The appointment of an arbitrator can be challenged in accordance with the procedure mentioned in
Section 13 of the Arbitration and Conciliation Act, 1996. Either party can challenge the appointment
within 15 days after receiving the knowledge of the constitution of the arbitral tribunal or after the
knowledge of circumstances mentioned above. The authority to decide on the challenge is vested in
the hands of the arbitral tribunal.
In Antrix Corp. Ltd. v Devas Multimedia Pvt. Ltd,[5] the Court held that if any party to the dispute
disagrees or is dissatisfied with the composition of the arbitral tribunal, it can approach the Court to
challenge the appointment of the arbitrator by way of application.
How can an arbitrator be terminated?
Not only the appointment of the arbitrator can be challenged but also his mandate can be terminated
under Section 14 and 15 of the Act in the following cases:

• If the arbitrator is unable to carry out his functions in an effective manner or there is an undue
delay in the performance of his duties.
• If the arbitrator himself withdraws from his office or the parties agree to his termination.
Rule 27 of the Rules of Arbitration also states that an arbitrator can be terminated from his mandate
on account of his resignation or death, if he is negligent in performing his duties or fails to act in an
expeditious manner, and does not declare the arbitral award within a prescribed time.
In National Highways Authority of India vs Gammon Engineers and Contract[6], the Delhi High
Court held that the Arbitral Tribunal is bound by the Arbitration agreement between parties. The
Arbitration agreement cannot be rewritten and neither can the tribunal accept an appointment in part.
Substitution of an arbitrator
If an arbitrator is terminated from his mandate, another arbitrator may be appointed as a substitute by
following the appointment procedure. In such a case, the arbitral hearings can be repeated at the
discretion of the arbitral tribunal. The provisions related to the substitution of an arbitrator are
mentioned under Section 15 of the Arbitration and Conciliation Act, 1996.
Power and Functions of Arbitrator
The arbitrator is a professional who helps the parties in the dispute to arrive at the final harmonious
agreement or settlement. The arbitrator is also referred to as an ‘Umpire’ or ‘referee’.
Appointment of the arbitrator (Section 10 and Section 11)
Section 10 of this Act provides that parties have the power to decide the number of arbitrators but
such numbers shall not be an even number. However according to Section 11, the parties are free to
decide the procedure of appointment of arbitrator or arbitrators in the arbitration agreement but when
no such procedure is determined, then each party is required to appoint one arbitrator and the two
arbitrators so appointed must have to appoint the third one. If the parties fail to appoint the arbitrator
according to the above procedure within 30 days from the date of request made or the arbitrators
appointed fail to agree on one person, any party may request the Chief Justice to nominate an
arbitrator to them. However, if the parties have not agreed on the procedure of appointing one
arbitrator or fails to agree on one person within 30 days from the receipt of a request made by another
party, the nomination shall be made by the Chief Justice on the request of one of the parties. However,
where an appointment procedure has been agreed upon by the parties, but the parties fail to act as
required, a party may request the Chief Justice to nominate an arbitrator and then the decision of
Chief Justice is final.
The arbitrator is the one who will give the arbitral award, therefore, The Arbitration and Conciliation
Act, 1996 provides several powers to him in order to decide the award.
Power to administer an oath to the parties and witnesses
The arbitrator has the power to administer the oath to the parties and witnesses. He also could issue
interrogatories to the parties if he thought it necessary to do so. There is no express provision relating
to that power being given under The Arbitration and Conciliation Act, 1966. However, it is implicitly
applied to the fact that he acts like a quasi-judicial authority in arbitration.
Power to take interim measures
According to Section 17 of this Act, when any party during the arbitration proceeding or at any time
after making of the arbitral award, may seek the interim measure before the arbitration tribunal. The
arbitration tribunal has the power to take an interim measure relating to:

• Appointment of guardian for minor or person of unsound mind;

• For the protection of:-
1. Interim custody and sale of goods which are subjected to the arbitration agreement;
2. Securing amount which is disputed in the arbitration;
3. Detention, prevention or inspection of any property or thing which is subjected to
arbitration;
4. Appointment of receiver;
5. Such other interim measure is necessary for the eyes of the Court.
Power to proceed to ex-parte
In any arbitration proceeding, the arbitrator has the power to proceed to ex-parte i.e in the favor of one
party if another party contravenes any provision of this Act. According to Section 25, there are three
conditions under which the court may pass an ex- parte award:
1. When the claimant fails to communicate his statement of claim in accordance with
Section 23(1) of the Act.
 2. When the respondent fails to communicate his statement of claim in accordance with
Section 23(1) of the Act.
3. When any party fails to appear at an oral hearing or to produce the document or to
produce documentary evidence.
The court, however, doesn’t proceed ex-parte against any party without giving him the notice
regarding the court’s intention to proceed ex parte on a specific date, time and place.
Power to appoint an expert
According to Section 26 of the Act, the arbitrator has the power to appoint one or more experts to
report to him on a specific issue, if he finds it necessary in any case. The arbitrator also has the power
to give the expert any relevant information or documents or property for the purpose of his inspection.
If necessary the arbitrator also has the power to appoint the expert as a participant in a hearing but in
order to appoint an expert, the expert must have to show the parties that he has expertise in matters
related to this case.
Power to make awards
Power to make awards is the most important power as well as the duty of arbitrators which is given
under The Arbitration and Conciliation Act, 1996. However, the rules applicable in an arbitration
proceeding is:

• In matters related to international commercial arbitration, the arbitral dispute shall be decided
according to the rules of proceeding which is decided by the parties but if they fail to decide
it, then the arbitrator himself decides the rules which are applicable.
• In other matters, the arbitral tribunal shall have to decide the rule which is in accordance with
the substantive law.
However, with such aforesaid power, at the time of making such an award, the arbitrator also has the
duty to consider the following necessary aspects:
✓ The party who is entitled to costs;
✓ The party who pays the cost;
✓ The amount and method of determining those costs;
✓ The manner in which the costs shall be payable;
✓ The cost of the arbitration proceeding or any other expenses fixed by the arbitration tribunal
If the number of arbitrators is more than one, then the decision must be signed either by all the
arbitrators or by the majority of them.
Duties of an arbitrator in an arbitration
In arbitration, the parties may impose specific duties on the arbitrator at the time of appointment. The
general duties which the arbitrator has to fulfill in all kinds of arbitration are-

Duties to be independent and impartial

Section 12 and Section 18 of The Arbitration and Conciliation Act, 1996 imposed an important duty
on the arbitrator that in any arbitration proceeding that he must have to be independent and impartial.
By being independent it means that there is no such personal or professional relationship between the
arbitrator or parties which may affect the final judgment, however, by impartial, it means that the
arbitrator should neither favor nor oppose any party and should give equal treatment to both parties.
Duty to determine time and place of arbitration
According to Section 20 of this Act, it is the duty of the arbitrator to appoint the time and place of
arbitration if the parties have failed to decide it amongst themselves. But at the time of determination,
the arbitrator must keep in mind the circumstances including the convenience of the parties. The
arbitrator unless otherwise agreed by the parties, also has the power to decide other places to hear the
witness or expert or to an inspection of documents, goods, and other property.
Duty to disclosure
According to Section 12 of this Act, there is an obligation on an arbitrator to disclose all the relevant
facts which are required to be known by both parties at the time of his first encounter with them.
In the case of Steel Authority of India v. British Marine 2016, the Court said that the arbitrator must
have to disclose all such facts which are likely to affect impartiality or which might create an
appearance of partiality or bias.
Duty to effectively resolve the dispute
The arbitrator should have to make effective decisions without doing any misconduct. However, there
is no guideline of misconduct that is given under the Act, its scope is to develop by case to case. The
acts which are generally considered as misconduct on the parts of the arbitrator are:
1. Fails to comply with terms, that is expressly or impliedly given;
2. Making awards that oppose public policy;
3. To be bribed or corrupted;
4. Breach the rule of natural justice.
Duty to determine the rule of procedure
According to Section 19, the arbitration procedure is not bound by any code of procedure. Earlier
parties are free to agree on the procedure that may be followed by the arbitration tribunal, It always
depends upon the will of the parties but if they do not have any prior agreement on this, then the
arbitrator has all the power to decide the procedure for such a case. this power includes the power to
determine the admissibility, relevance, materiality or weight of any evidence.
Duty to interpret or correct the award
According to Section 33 of this Act, it is a duty of the arbitrator to correct or interpret the award
passed by himself within 30 days from the date of receipt:
1. A party with notice to another party may request arbitration tribunal to correct any
error like any typographical, computation, clerical, or any other error of similar
nature;
2. A party with a notice to another party may request to interpret any specific part or
parts of the award.