ARBITRATION & CONCILIATION FOR SPEEDY DISPUTE RESOLUTION

A BLOG BY

GAURAV RAJ BHAGAT
ADVOCATE
HIGH COURT M.P

Dispute resolution through alternative dispute resolution mechanism

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THE BLOG IS PREPARED WITH INPUTS FROM INTELLISOL LEGAL CONSULTANTS

LEADING LEGAL ADVISORY & ARBITRATION FIRM OF CENTRAL INDIA

Due to the cumbersome nature of the court proceedings including unnecessary delay and redtapism at the various courts, young entrepreneurs find it feasible to get instant solution to the disputes through ADR mechanism.

The most effective among which is arbitration and conciliation

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   Where: "ARBITRATION" means any arbitration whether or not administered by permanent arbitral institution;

"ARBITRATION AGREEMENT" means agreement referred to in section 7;  

"ARBITRAL AWARD" includes an interim award;  

"ARBITRAL TRIBUNAL" means a sole arbitrator or a panel of arbitrators;

"INTERNATIONAL COMMERCIAL ARBITRATION" means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is -

(i) An individual who is a national of, or habitually resident in, any country other than India; or

(ii) A body corporate which is incorporated in any country other than India; or

(iii) A company or association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv) The Government of a foreign country;

and 

"LEGAL REPRESENTATIVE" means a person who in law represents the estate of a deceased person, and includes any person who inter meddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting;

             RESORTING TO ARBITRATION AND CONCILIATION ACT

For the arbitration to take place, it is necessary to mention the Resorting to Arbitration and Conciliation Act in case of disputes under the business contract.

Under such a case section eight of the arbitration and conciliation act is applicable which states as under:

Power of Refer Parties to Arbitration where there is an Arbitration Agreement.

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.

For the purpose of initiation of the arbitration proceedings under the act, there must be received before 10 communication as per section three specified as under:

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Receipt of Written Communications

Section 3 states

(1) Unless otherwise agreed by the parties, -

(a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and

(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.

(2) The communication is deemed to have been received on the day it is so delivered.

(3) This section does not apply to written communications in respect of proceedings of any judicial authority.

Written communication in the form of statement of claim countered by statement of defense:

Statements of claim and defence—

1. Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

2. The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

3. Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

Under the arbitration agreement, there is a very simple procedure of appointment of experts as arbitrators which is governed and followed by the rules specified below

Expert appointment by arbitral tribunal—

The arbitral tribunal may—

1. appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and
2. require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

2. If a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

3. The expert shall, on the request of a party, make available to that party for examination all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.

 PLACE OF ARBITRATION

There is a reasonable degree of flexibility as to the decision on the place of arbitration:

1. The parties are free to agree on the place of arbitration.

2. The place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

3. The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

CONCILIATION

Conciliation is an alternative out-of-court dispute resolution instrument. Conciliation is a voluntary, flexible, confidential, and interest based process. The parties seek to reach an amicable dispute settlement with the assistance of the conciliator, who acts as a neutral third party.

Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings. These proceedings are rarely public. They are interest-based, as the conciliator will when proposing a settlement, not only take into account the parties' legal positions, but also their; commercial, financial and / or personal interests.

Commencement of Conciliation Proceedings

 Section 62

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.

(3) if the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

 APPOINTMENT OF CONCILIATORS.

(1) Subject to sub-section (2), -

(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator;(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.


(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular, -
(a) a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or
(b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person : Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Communication between Conciliator and Parties

(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.

Settlement Agreement

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Termination of Conciliation Proceedings

The conciliation proceedings shall be terminated –

(a) by the signing of the settlement agreement by the parties, on the date of the agreement; or

(b) by a written declaration of the conciliator, after consolation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.

Costs

                       (1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and

give written notice thereof to the parties.

      (2) For the purpose of sub-section (1), "costs" means reasonable costs relating to –

(a) the fee the expenses of the conciliator and witnesses requested by the conciliator, with the consent of the parties;

(b) any expert advice requested by the conciliator with the consent of the parties;

(c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68;

(d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.

(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.

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