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Starting an arbitration proceeding
What is needed to commence arbitration?
Under the Arbitration and Conciliation Act, a party can commence arbitration by issuing a notice in writing to the other party of its intention to refer the dispute to arbitration. Unless otherwise agreed by the parties, arbitration proceedings are deemed to have commenced on the date on which the respondent receives such notice from the claimant.
Are there any limitation periods for the commencement of arbitration?
The Limitation Act 1963 applies to all proceedings under the Arbitration and Conciliation Act, just as it applies to proceedings in the Indian courts, except to the extent expressly excluded by the Arbitration and Conciliation Act. Any arbitration proceedings commenced after the limitation period (three years from the date on which the cause of action arose) will be time barred.
Are there any procedural rules that arbitrators must follow?
The parties can agree on the procedure for conducting the arbitration proceedings. If no such procedure is agreed by the parties, the tribunal is authorised to conduct the proceedings in such manner as it considers appropriate. The tribunal is expressly exempt from applying the provisions of the Civil Procedure Code 1908 and the Evidence Act 1872. If, under the arbitration agreement, the arbitration is to be administered by an arbitration institution, the rules of that institution become a part of the arbitration clause by implication.
The Arbitration and Conciliation (Amendment) Act inserted amendments into the Arbitration Act that require the tribunal to, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on a day-to-day basis, and not grant adjournments unless sufficient cause is provided. The tribunal may impose exemplary costs on the party seeking frivolous adjournments.
Are dissenting opinions permitted under the law of your jurisdiction?
Dissenting opinions are permitted under the Arbitration and Conciliation Act. The dissenting arbitrators have the option to prepare a separate award or to give their opinion in the same document which contains the award of the majority members of the tribunal. However, this dissenting opinion or award does not form part of the majority decision and is not enforceable.
Can local courts intervene in proceedings?
Local courts can intervene in domestic arbitration proceedings. This includes the power to issue interim orders, order evidence to be produced directly to the tribunal and appoint arbitrators.
Can the local courts assist in choosing arbitrators?
Courts can assist in selecting arbitrators if the parties are unable to agree on the appointment of a sole arbitrator or if the two party-appointed arbitrators fail to appoint a chairperson.
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
If a respondent fails to participate in arbitration without sufficient cause, the tribunal may proceed ex parte or adjourn the proceedings. If the respondent fails to communicate its statement of defence, the tribunal may treat the respondent’s right as being forfeited or continue the proceedings without considering such failure to be an admission of the claimant’s allegations.
While arbitrators cannot compel third parties to appear before them, the tribunal or a party, with the tribunal’s approval, may apply to the court for assistance in taking evidence. The court may make an order requiring third parties to provide evidence directly to the tribunal. If a person fails to attend in accordance with such order of the court, it is subject to the same penalties and punishments as it may have incurred during court proceedings.
In what instances can third parties be bound by an arbitration agreement or award?
The Arbitration and Conciliation Act grants no powers to a tribunal to enjoin a third party to pending arbitration proceedings. Non-signatories to the arbitration agreement can be bound by the arbitration agreement under the ‘groups of companies’ doctrine where a clear intent to bind such non-signatories can be established.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
The parties can agree on the language(s) and location to be used in the arbitration proceedings. In the absence of such agreement, the tribunal has the discretion to determine the language(s) and location.
How is evidence obtained by the tribunal?
The parties are free to agree on the rules of gathering and submitting evidence. If the parties do not agree on these matters, the tribunal has the discretion to determine how evidence may be gathered and submitted to it. The courts can assist the tribunal in taking evidence if such assistance is sought either by the tribunal or by one of the parties with prior approval of the tribunal. The tribunal is required to observe the fundamental principles of natural justice when considering evidence.
What kinds of evidence are acceptable?
The tribunal may take both documentary and oral evidence on record.
Is confidentiality ensured?
The Arbitration and Conciliation Act does not include specific provisions on the confidentiality of arbitration proceedings. As a result, there is no express obligation to treat an arbitration agreement, any proceedings arising therefrom or the award as confidential. Parties can address the issue of confidentiality in the arbitration agreement or by separate agreement. The act expressly provides only for confidentiality of all matters relating to conciliation proceedings, including the settlement agreement.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
Section 75 of the act provides for confidentiality in conciliation proceedings. The Supreme Court has found that the duty of confidentiality is implied in mediation proceedings.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
The Arbitration and Conciliation Act provides that arbitrators should be independent and impartial, treat each party equally and give each party an equal opportunity to present their case.
The Arbitration and Conciliation (Amendment) Act inserted three schedules dealing with arbitrator independence and impartiality. A prospective arbitrator must now disclose in writing (in the form set out in the Sixth Schedule):
- the existence of any relationships which would be likely to give rise to justifiable doubts about his or her independence or impartiality; and
- any circumstances that would affect the arbitrator’s ability to devote sufficient time to the arbitration and complete the arbitration within 12 months.
In line with the IBA Guidelines on Conflicts of Interest in International Arbitration, the Fifth Schedule lists the various grounds which will help to determine whether a circumstance gives rise to justifiable doubts as to the independence or impartiality of an arbitrator.
Also following the IBA Guidelines, the Seventh Schedule lists a number of situations which would render the prospective arbitrator ineligible for appointment, except where the parties have agreed to waive the applicability of this provision.
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