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ARBITRATION

ARBITRATION; OUR EXPERIENCE

We here at C&S Law Offices specialize in Arbitration matters and aim to provide speedy remedy to all our clients. We are currently handling arbitrations of subject contract values and tenders which have gone up to the tune of Rs. 600 crores. These subject contractsrange from:

  • Construction Contracts between private parties
  • Commercial Contracts for provision of services between private parties
  • Commercial Contracts between private parties for delivery of any product or service
  • Tenders for Construction of Married Accommodations for Military Engineering Services and DGMAP
  • Tenders for provision of Electrical Services
  • Tenders for National Highways
  • Road Contracts etc.

The reason why we push all our esteemed clientele to inculcate an Arbitration Clause in their contract is that arbitration matters are required by law to be settled within a period of One Year. Corporate companies cannot be expected to waste 4 to 5 years in litigation to get their funds released. This is where Arbitration comes in and allows parties to get speedy remedy with greater flexibility.

Significant Benefits of Arbitration:

a) Period of One Year to pass an Award

As per Section 29A of the Arbitration and Conciliation Act, 1996 the award in matters other than International Commercial Arbitration shall be passed by the Arbitral Tribunal within a period of twelve months from the date of completion of pleadings.

This provision effectively means that the Arbitral Tribunal is obligated to complete the entire arbitration proceedings and pass an award within a period of twelve months from completion of pleadings. Further, if the arbitral tribunal fails to do the same, a formal request has to be made to the concerned High Court for extension of time.

Inclusion of such statutory provisions in the Arbitration Act ensures that the parties to the proceedings get a speedy remedy and their disputes get resolved expeditiously.

b) Interim Relief during pendency of Arbitration Proceedings

Once the Arbitration proceedings have commenced, parties still have the option of seeking interim relief if any, from the concerned High Court and Arbitral Tribunal. A lot of times arbitration proceedings of parties commence, and Bank Guarantees/ Retention Money gets stuck with the opposite party. Interim Measures of the following kind are also required:

– for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings or

– for an interim measure of protection in respect of any of the following matters, namely:

  • The preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
  • Securing the amount in dispute in the arbitration;
  • The detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
  • Interim injunction or the appointment of a receiver;
  • Such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.

In such cases, an application can be made to the Arbitral Tribunal under Section 17 and to the concerned High Court under Section 9 for grant of any kind of interim relief.

c) Arbitral Award to be enforced in the same manner as a decree of Court

One common query which parties have before incorporating an Arbitration clause is whether an arbitral award can be enforced in the Court of law like a normal decree. As per Section 36 of Arbitration and Conciliation Act, 1996 an arbitral award can be enforced in accordance with the provisions of The Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court once the period to set aside the award under Section 34 has expired.

d) 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.

e) 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.

f ) 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.

Conclusion

Arbitration as a dispute resolution mechanism is widely gaining importance and is becoming significant in the upcoming time because of the ease of procedure coupled with expeditious remedy.