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Arbitration and Conciliation Act 1996: Easy Explanation of Chapter V and Chapter VI

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In this article we will understand the clauses under Chapter V and Chapter VI of the Arbitration and Conciliation Act 1996. Chapter V mainly stipulates about conduct of arbitral proceedings while in the Chapter VI, provisions related to Making of Arbitral Award and Termination of Proceedings are stipulated. Let us know more about these provisions in detail.

This chapter governs the conduct of arbitral proceedings, ensuring fairness, efficiency, and effectiveness in the resolution of disputes through arbitration.

Section 18 – Equal Treatment of Parties

This section emphasizes the principle of equal treatment of parties and their right to be heard during the arbitration proceedings. It ensures that all parties have a fair opportunity to present their case and respond to the arguments made by the other party.

Section 19 – Determination of Rules of Procedure

Here, the Act allows parties to agree on the procedural rules governing the arbitration proceedings. These rules may cover various aspects such as evidence submission, witness examination, and timelines, providing flexibility tailored to the specific needs of the dispute.

Section 20 – Place of Arbitration

This section determines the physical or geographical location where the arbitration proceedings will take place. It can be agreed upon by the parties or determined by the arbitral tribunal, ensuring clarity and consistency in the conduct of the proceedings.

Section 21 – Commencement of Arbitral Proceedings

It specifies when the arbitral proceedings officially begin, typically upon receipt of a request for arbitration by the respondent. It marks the starting point of the formal dispute resolution process.

Section 22 – Language

This clause determines the language or languages to be used in the arbitration proceedings. It ensures that all parties understand the proceedings and can effectively participate in the process.

Section 23 – Statement of Claim and Defense

This section requires the claimant to submit a statement of claim, and the respondent to submit a statement of defense, outlining their respective positions on the dispute. This helps to clarify the issues in dispute and facilitates the resolution process.

Section 24 – Hearings and Written Proceedings

This clause outlines the procedure for conducting hearings during the arbitration process. It specifies that unless the parties have agreed otherwise, the arbitral tribunal shall decide whether to hold oral hearings or conduct the proceedings based on written submissions.

Section 25 – Default of a Party

This section addresses situations where a party fails to attend a hearing or submit evidence without sufficient cause. In such cases, the arbitral tribunal may proceed with the arbitration and make decisions based on the evidence and arguments presented by the attending party.

Section 26 – Expert Evidence

Here, the Act allows the arbitral tribunal to appoint experts to assist in technical or specialized matters relevant to the dispute. The tribunal may also require parties to provide relevant information or access to documents to facilitate the expert’s work.

Section 27 – Court Assistance in Taking Evidence

It allows the arbitral tribunal, with the assistance of the court, to take evidence or require the attendance of witnesses for the arbitration proceedings. This provision ensures that the tribunal has access to necessary evidence to make informed decisions.

This chapter deals with the making of arbitral awards and the termination of arbitral proceedings.

Section 28 – Rules Applicable to Substance of Dispute

This section specifies that the arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the parties. If the parties have not agreed on the applicable law, the tribunal shall apply the law it deems appropriate based on the circumstances of the case.

Section 29 – Decision Making by Panel of Arbitrators

In cases where the arbitral tribunal consists of three arbitrators, this section requires that decisions be made by a majority of the arbitrators. If there is no majority, the presiding arbitrator shall make the decision.

Section 30 – Settlement of Disputes

It encourages parties to settle their disputes amicably during the arbitration process. If the parties reach a settlement agreement, the tribunal may record the settlement as an arbitral award on agreed terms.

Section 31 – Form and Contents of Arbitral Award

This section specifies the requirements for the form and content of arbitral awards. An arbitral award must be in writing, signed by the arbitrators, and state the reasons upon which it is based, unless the parties have agreed otherwise.

Section 32 – Termination of Proceedings

It outlines the circumstances under which arbitral proceedings may be terminated, such as the withdrawal of the claim, settlement between the parties, or the closure of proceedings by the arbitral tribunal.

Section 33 – Correction and Interpretation of Award; Additional Award

This section allows parties to request the arbitral tribunal to correct any errors in the award or provide interpretations of specific points. It also empowers the tribunal to make additional awards to address matters not covered in the initial award.

Chapter V of the Arbitration and Conciliation Act, 1996, provides a comprehensive framework for the conduct of arbitral proceedings. It emphasizes the principles of equality, fairness, and efficiency, ensuring that all parties involved in arbitration are treated fairly and have the opportunity to present their case effectively. The chapter covers various aspects such as the determination of procedural rules, commencement of proceedings, language of arbitration, statement of claim and defense, conduct of hearings, handling of defaults by parties, use of expert evidence, and court assistance in taking evidence. By establishing clear guidelines for the conduct of arbitral proceedings, Chapter V promotes transparency, predictability, and effectiveness in the arbitration process, thereby facilitating the fair and expeditious resolution of disputes outside the traditional court system.

Chapter VI of the Arbitration and Conciliation Act, 1996, addresses the process of making arbitral awards and the termination of arbitral proceedings. It sets out the requirements for the form and content of arbitral awards, the rules applicable to the substance of the dispute, decision-making by the arbitral tribunal, settlement of disputes, correction and interpretation of awards, and enforcement of awards. The chapter ensures that arbitral awards are made in accordance with the agreed rules of law, are final and binding on the parties, and can be enforced as a decree of the court. By providing mechanisms for the settlement of disputes, correction of errors in awards, and enforcement of awards, Chapter VI promotes the efficacy and enforceability of arbitration as a means of dispute resolution, thereby contributing to the overall efficiency and effectiveness of the arbitration process.

Read more: Arbitration and Conciliation Act, 1996: Description of Chapter III and Chapter IV

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Rajesh Pant
Rajesh Pant
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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