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HomeContract ManagementArbitration and Conciliation Act, 1996: Description of Chapter I & Chapter II

Arbitration and Conciliation Act, 1996: Description of Chapter I & Chapter II

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The Arbitration and Reconciliation Act, 1996 is a significant legislative enactment that governs the resolution of disputes through arbitration and conciliation in India. It provides a comprehensive framework for the conduct of arbitration proceedings, recognition, and enforcement of arbitral awards, and promotes the amicable settlement of disputes through conciliation.

There are four parts of the Act. Part I, which is named ‘Arbitration’, consists of 10 Chapters, with Part IA having some additional provisions. Part II, which deals with Enforcement of Certain Foreign Awards has two Chapters. Part III of the Act deals with ‘Conciliation’ and Part IV is having ‘Supplementary Provisions’.

We are now starting a series of articles for description and easy explanation of all the chapters of the Arbitration and Conciliation Act, 1996. In this article we will learn about the Chapter I and Chapter II, Part I of the Act.

The following provisions are made in the chapter I of the Act:

  • Definitions
  • Receipt of written communications
  • Waiver of right to object
  • Extent of judicial intervention
  • Administrative Assistance

The Arbitration and Conciliation Act, 1996 is a significant piece of legislation in India governing arbitration proceedings and alternative dispute resolution mechanisms. Chapter I of the Act deals with preliminary matters, including the short title, extent, commencement, and definitions of key terms used throughout the Act.

Short Title, Extent, and Commencement: Section 1 of Chapter I specifies that the Act may be referred to as the Arbitration and Conciliation Act, 1996. It extends to the entire territory of India, with some provisions applicable to the State of Jammu and Kashmir only in relation to international commercial arbitration or conciliation. The Act came into force on a date appointed by the Central Government, which could vary for different provisions.

Definitions: Section 2 provides definitions for various terms used in the Act. These definitions are crucial for interpreting the provisions of the Act. Some key definitions include:

Arbitration: Refers to any arbitration process, whether or not administered by a permanent arbitral institution.

Arbitration Agreement: Defines an agreement between parties to submit their disputes to arbitration.

Arbitral Award: Encompasses both final and interim awards rendered by the arbitral tribunal.

Arbitral Tribunal: Refers to either a single arbitrator or a panel of arbitrators appointed to adjudicate the dispute.

Court: Refers to the judicial authority with jurisdiction over arbitration matters, which may include the principal Civil Court of original jurisdiction or the High Court.

International Commercial Arbitration: Describes arbitration proceedings involving disputes arising from commercial relationships with an international element.

Party: Refers to any party to an arbitration agreement.

Conciliation: Refers to the process of resolving disputes through the assistance of a conciliator.

Conciliation Agreement: Refers to an agreement between parties to submit their disputes to conciliation.

Conciliator: Describes the person appointed to facilitate the conciliation process.

Mediation: Refers to a process similar to conciliation but involving a mediator.

Mediation Agreement and Mediator: Similar to conciliation but specific to mediation processes.

These definitions lay the groundwork for understanding the subsequent chapters and sections of the Act, providing clarity on the terminology used and the scope of applicability of the Act.

Chapter II of the Act consists of the following topics:

  • Arbitration Agreement
  • Power to refer parties to arbitration where there is an arbitration agreement
  • Interim measures, etc. by Court

Chapter II of the Arbitration and Conciliation Act, 1996, is titled “Arbitration.” This chapter provides detailed provisions regarding the arbitration agreement, composition of the arbitral tribunal, jurisdiction of arbitral tribunals, and the conduct of arbitral proceedings.

Below is a summary of the provisions of Chapter II:

Arbitration Agreement (Sections 7-8)

Section 7: Definition and interpretation of arbitration agreement. It specifies that an arbitration agreement must be in writing and may be in the form of an arbitration clause in a contract or a separate agreement.

Section 8: Judicial intervention in arbitration proceedings. It states that if a party to an arbitration agreement approaches the court before or during arbitral proceedings, the court shall refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative, or incapable of being performed.

Composition of Arbitral Tribunal (Sections 9-11)

Section 9: Number of arbitrators. Parties are free to determine the number of arbitrators, but if they fail to agree, the default provision is for three arbitrators.

Section 10: Appointment of arbitrators. Parties are free to agree on a procedure for appointing arbitrators, and if they fail to agree, the appointment is made by the court.

Section 11: Appointment of arbitrators by the court. The court may appoint arbitrators if parties fail to do so, or if an arbitrator becomes unable or unwilling to perform his/her functions.

Jurisdiction of Arbitral Tribunal (Sections 16-20)

Section 16: Competence of arbitral tribunal to rule on its jurisdiction. The arbitral tribunal has the power to rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.

Section 17: Interim measures by arbitral tribunal. The arbitral tribunal may grant interim measures, such as injunctions or preservation of assets, to protect the rights of parties pending the final resolution of the dispute.

Section 18: Equal treatment of parties. The arbitral tribunal must treat the parties with equality and give each party a full opportunity to present its case.

Section 19: Determination of rules of procedure. Parties are free to agree on the procedure to be followed by the arbitral tribunal. If there is no agreement, the tribunal may conduct the proceedings in the manner it considers appropriate.

Section 20: Place of arbitration. Parties are free to agree on the place of arbitration, and if there is no agreement, the tribunal may determine the place of arbitration.

These provisions establish the framework for conducting arbitration proceedings, including the formation of the arbitral tribunal, determination of its jurisdiction, and the conduct of the arbitration process. They ensure that arbitration proceedings are conducted fairly and efficiently, with minimal judicial intervention unless necessary.

Chapter I of the Arbitration and Conciliation Act, 1996, serves as the introductory segment of the legislation, outlining essential preliminary matters and providing definitions of key terms used throughout the Act. This chapter is crucial for establishing the scope, applicability, and interpretation of the Act.

The chapter begins by stating the short title, extent, and commencement of the Act, providing clarity on its official name, jurisdiction, and effective date. It specifies that the Act extends to the whole of India, with certain provisions applying to the State of Jammu and Kashmir only concerning international commercial arbitration or conciliation.

Moreover, Chapter I includes definitions for various terms used in the Act, ensuring consistency and clarity in understanding its provisions. Definitions cover fundamental concepts such as arbitration, arbitration agreement, arbitral award, arbitral tribunal, court, party, conciliation, conciliation agreement, conciliator, mediation, mediation agreement, mediator, and more. These definitions lay the groundwork for interpreting subsequent chapters and sections of the Act and help stakeholders comprehend the legal framework governing arbitration and conciliation in India.

By addressing these preliminary matters and providing clear definitions, Chapter I establishes the legal framework and sets the stage for the detailed provisions regarding arbitration and conciliation proceedings contained in the subsequent chapters of the Act. It serves as a foundation for understanding the rights, obligations, and procedures involved in resolving disputes through arbitration and conciliation under the Arbitration and Conciliation Act, 1996.

Chapter II of the Arbitration and Conciliation Act, 1996, lays down the foundational principles and procedures for arbitration in India. It establishes the significance of arbitration agreements, the composition of the arbitral tribunal, and the jurisdiction and powers of the arbitral tribunal. These provisions emphasize party autonomy, procedural fairness, and the minimal role of courts in arbitration proceedings.

By requiring arbitration agreements to be in writing and providing for judicial intervention only in limited circumstances, such as when the arbitration agreement is found to be null and void, Chapter II fosters a pro-arbitration approach. It encourages parties to resolve their disputes through arbitration and promotes the efficiency and effectiveness of arbitration as an alternative dispute resolution mechanism.

Overall, Chapter II sets the stage for the conduct of arbitration proceedings under the Arbitration and Conciliation Act, 1996, by providing a clear legal framework that balances the interests of parties and ensures the integrity and enforceability of arbitral awards. It serves as a cornerstone of India’s arbitration law, facilitating the expeditious resolution of disputes and contributing to the ease of doing business in the country.

Also read: The Arbitration and Conciliation Act, 1996: Salient Features

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Rajesh Pant
Rajesh Panthttps://managemententhusiast.com
My name is Rajesh Pant. I am M. Tech. (Civil Engineering) and M. B. A. (Infrastructure Management). I have gained knowledge of contract management, procurement & project management while I handled various infrastructure projects as Executive Engineer/ Procurement & Contract Management Expert in Govt. Sector. I also have exposure of handling projects financed by multi-lateral organizations like the World Bank Projects. During my MBA studies I developed interest in management concepts.
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