ARBITRATION

Traditional method of resolving disputes

-some communities still continue to
have the system

Conducted as per provisions of
Arbitration Act of 1996
&
Contract Act of 1872
ADVANTAGES
Experts in the field are chosen

Legal formalities are cut short & relatively saves time

Saves cost

Time, date & place of proceedings can be chosen

Hearing is private-privacy can be maintained

Award is final


POWER AND DUTIES OF
ARBITRAOTOR
To appoint presiding arbitrator in case of joint
arbitrators

To examine witness appearing on oath & hear
parties

To seek opinion of the court on law point

To decide on cost of award & proportion with which
parties have to bear

To correct clerical mistakes in the award
Contd.,



To decide upon measurements & valuation of work


To decide upon with-holding of certificate by the
architect



Came into effect on 25-1-1996
Extends to whole of the country except Jammu & Kashmir.
Supercedes the act of 1940
It consolidates the laws relating to
-Domestic arbitration
-International commercial arbitration
&
Enforcement of foreign arbitral awards.
-Conciliation which is an alternative
Method of resolving dispute

Arbitration &conciliation act
of 1996

This is based on un-model law adopted by
united nations commission on international trade
law (uncitral)
Main objectives are:
-To consolidate and amend the laws
relating to the above fields
-To make provision for fair and efficient
arbitral procedure


-To ensure that the arbitrators

give reasoned awards
Remain within jurisdiction
Use mediation, conciliation and other
means to resolve disputes

To reduce supervisory role of the
courts
To enforce arbitral award same as court
decree


Sole arbitration by architect on excepted (excluded from
arbitration) matters
-parties agree in the absence of
mistakes or fraud

EXCEPTED MATTERS (condition no. 55)

Drawings and specifications and their
interpretations
Architects instructions regarding variations
Contractors field organizations ,equipment, office
accommodation, tools and plants etc.

ARBITRATION UNDER IIA
CONDITIONS OFCONTRACT
Assignment or subletting

Intimation of architect not to employ
employees or sub contractor whom
architect or employer (owner) objects to

materials and workmanship to be of
relevant code of Bureau of Indian
Standards.



Permission for using equivalent material

Extension of time

Determination of contract by owner due to default of
contractor (bankruptcy of contractor or any malpractice)

SOLE OR JOINT ARBITRATORS ON OTHER
ISSUES



Refer all disputes to architect first

Within 28 days of decision, parties write to each other about areas
of
dispute
.
Either agree for sole or joint arbitrators

Even when matter is pending with arbitrator contractor to proceed
with the work and owner to make payment. Work should not be stopped.




ARBITRATION PROCEDURE
(CONDITION NO. 56)
QUALIFICATIONS OF AN
ARBITRATOR
Expert in the branch of profession to which
dispute relates

He must be honest, disinterested &
independent of parties

Un biased

He cannot be witness as well as arbitrator
Decision given in writing by arbitrator after careful
study and examining witness on matters referred to
them
Award must be reasoned

Ingredients of the awards
It must be in writing, self explanatory & un-
ambiguous
No need for stamping award of it is part of a suit
Due notice should be given to parties of declaration
of award


AWARD

Agreement to submit future or present disputes to
arbitrator.
Conditions to be satisfied are:
Parties must agree to abide by the decision of the
arbitrators
Parties must desire to settle disputes by arbitration
Disputes & differences must relate to present or future

ARBITRATION AGREEMENT
CLAIM
Monetary & or compensation which plaintiff
thinks that he is entitled under contract
COUNTER CLAIM/DEFENCE
Monetary & or compensation which respondent
thinks that he is entitled under contract


ORDER OF REFERENCE
It is an agreement drawn up between two contesting
parties referring the matter for the adjudication of
arbitrators after actual disputes/differences have
arisen. It contains name (s) of arbitrator (s), specific
disputes, time limit to declare the award.

PRESIDING ARBITRATOR
Each party appoints one arbitrator and the two
appointed arbitrators shall appoint the third
arbitrator who shall act as the presiding arbitrator.
He may determine the procedure for arbitration if
there is no concurrence.


A specific clause is incorporated in some contracts
for settlement of disputes by the designated
authority.
-Aggrieved party is required to approach
the designated authority to appoint an arbitrator

In some other contracts (iia) , provision is made for
direct resolution of disputes initially by the parties .
such of those disputes which are not resolved by
mutual discussions are submitted for arbitration


CONDUCT OF ARBITRATION
PROCEEDINGS
Parties are treated with equality and each shall be given
full opportunity to present his case
The parties are free to agree on the procedure to be
adopted by the arbitral tribunal
Experts may be appointed by arbitration tribunal to
report on specific issues
Assistance of the court may be sought for taking
evidence.
Decision is by majority of tribunal members.
If award amount is not paid, it carries an interest of
18% p. A. From the date of award to the date of
payment
Award is final and binding. It is enforced as if it were a
decree of a civil court
After appointing arbitrator preliminary meeting is
conducted to
1) discuss subject matter generally
2) directions are given about
A procedure to be followed
b documents to be relied upon
C to prepare & deliver statement
Of claim & defence
3) arbitrators fees is fixed
4) time, place & date of actual hearing is fixed
5) issues are framed if it is not referred by court
Formal document which sets the issues in a tabulated
form. With contentions of the opposing parties

Gives, at glance, what each party has to say on every
item

Very handy & saves lot of time

Area of dispute narrows down


SCOTTS CHEDULE

Prepare & submit (3 copies) to respondent for
defence / observation after filling in column of
plaintiff

Respondent sets out his defence in the column of
respondents as to why the claim cannot be settled

Claimant in brief remark gives counter observation
on respondents say

After claimant has completed,
copy filed to arbitrator
& Respondent
One copy retained by claimant

SCOTTS CHEDULE
- OPERATION

ACTUAL HEARING
I Claimant opens case & statement of claim & list
of documents on which he relies
Ii claimant examines his witness & then
respondent cross examines witnesses
Iii respondent replies & submits counter claims &
compilation of documents he relies
Iv respondent examines witnesses & claimant
cross examines witnesses
V claimant replies
Vi arbitrator gives reasoned award
REASONS FOR SETTING ASIDE
ARBITRAL AWARD
No proper notice to parties

Procedure adopted is not as per agreement

Award is against public policy

Agreement is not valid

Party was under some incapacity
COMPARISON BETWEEN OLD&NEW
ACTS
OLD ACT (1940)

Awards need to be
confirmed by courts
Awards are challenged
in the courts
Umpires decision is
final
International disputes
are not resolved faster

NEW ACT (1996)

Arbitral award itself a
decree

Courts intervention is
minimal

Majority decision prevails

These can be settled faster
in a third country

contd.,


COMPARISION.contd
No provision for
mediation or
conciliation
Arbitration award need
not be reasoned
The rate of interest on
amount of award on
delayed payment is
not fixed
There are enough
grounds for
conciliation

Arbitral award must be
reasoned award

It is fixed as 18%
however tribunal may
change