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The procedure of arbitration in India can be discussed under the following heads :

INCORPORATING AN ARBITRATION CLAUSE :  when an agreeent is being drafted between th parties, there needs a clause stating the willingness of the parties to resort to arbitration in case a dispute arises between them.

SENDING AN ARBITRATION NOTICE : when an actual dispute has arisen between the parties, the party against whom the wrong has been committed needs to send an arbitration notice to the other party about his intention of invoking the arbitration clause in the agreement to initiate the arbitration proceedings

APPOINTMENT OF THE ARBITRATOR : once an arbitration notice has been intimated by one party to the other, an arbitrator needs to be appointed. The appointment of the arbitrator could either be done by the parties or by the court. 

STATEMENT OF CALIM : next step in an arbitration proceedure is to draft a statement of clai. A statement of claim normally consists of the matter of dispute between the parties, the events and circumstances which led to the dispute and the compensation claimed from the defaulting party. In he case of M/S Cinevistas vs. Prasar Bharti, O.M.P (COMM) 31/2017, which challenged the order of an arbitrator under section 34 of the Arbitration and Conciliation Act, 1996, the Delhi High Court held that the claims that have beenn raised in the notice of arbitration are not barred by limitation even if those claims are not a part of the statement of claim.

HEARING OF THE PARTIES : the hearing of the parties shall take place in front of the arbitral tribunal. The admission of evidence shall be done in accordance with the rules laid down under the Indian Oaths Act, 1969. The courts' assisstance could be sought for taking the eveidence, either by the arbitral tribunal or by the parties with the approval of the arbitral tribunal. The application should contain details like names and addressesof the parties as well as the arbitrators, the nature of the claim and the relief sought, the kind of evidence to be obtained whether a person needs to be heard as a witness or a particular document needs to be produced. The competent court in accordance with the rules on taking evidence may order the evidence to be produced directly to the tribunal.

ARBITRAL AWARD : the decision rendered by the tribunal is known  as the arbitral award and such award shall be binding on the parties. Generally there lies no right of appeal with the parties except in some cases where an appeal could be filed in the High Court. The exceptional cases are :

  1. the powers excercised by the arbitrator was far beyond than that mentioned in the arbitration clause
  2. some prejudicial mistake had been committed by the arbitrator
  3. the arbitration clause  is unenforceble because the contract, as a whole, is void.
  4. the party winning the case bended the case in their favour to suit their purposes by using fraud or corruption
  5. a mathematical error was made by the arbitrator when calculating the financial  award of the winning party.

EXECUTION OFTHE ARBITRAL AWARD : after the verdict has been passed by the arbitral tribunal, which has the same enforcement status as that of a decree passed by the court under section 36 of the Arbitration and Conciliation Act, 1996, the parties need to execute the order by filing an executon of award before a court by an arbitration lawyer. In Sundaram Finance Ltd. vs. Abdul Samad, the Supreme Court had noted that an enforcement award could be filed in any court of the country where the execution order could be obtained and there was no need of geeting a transfer decree from the court that would have jurisdiction over the arbitral proceedings. 

  • step wise breakdown of the arbitration procedure
  • relevant sections of the Arbitration and Conciliation Act, 1996
  • the cases of M/S Cinevistas Ltd. vs. M/S Prasar Bharti and Sundaram Finance Ltd. vs. Abdul Samad

BY : Mekhla Chakraborty

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