THE INDIAN ARBITRATION AND CONCILIATION ACT, 1996
The
Indian Arbitration and Conciliation Act, 1996 (No.26
of 1996)
[16th
August 1996]
An Act to consolidate and
amend the law relating to domestic arbitration, international
commercial arbitration and enforcement of foreign arbitral
awards as also to define the law relating to conciliation
and for matters connected therewith or incidental thereto.
Preamble
WHEREAS the United Nations
Commission on International Trade Law (UNCITRAL) has
adopted the UNCITRAL Model Law on International Commercial
Arbitration in 1985;
AND WHEREAS the General
Assembly of the United Nations has recommended that
all countries give due consideration to the said Model
Law, in view of the desirability of uniformity of the
law of arbitral procedures and the specific needs of
international commercial arbitration practice;
AND WHEREAS the UNCITRAL
has adopted the UNCITRAL Conciliation Rules in 1980;
AND WHEREAS the General
Assembly of the United Nations has recommended the use
of the said Rules in cases where a dispute arises in
the context of international commercial relations and
the parties seek an amicable settlement of that dispute
by recourse to conciliation;
AND WHEREAS the said Model
Law and Rules make significant contribution to the establishment
of a unified legal framework for the fair and efficient
settlement of disputes arising in international commercial
relations;
AND WHEREAS it is expedient
to make law respecting arbitration and conciliation,
taking into account the aforesaid Model Law and Rules;
Be it enacted by Parliament
in the forty seventh year of the Republic as follows:
Preliminary
Short title, extent and
commencement. (1) This Act may be called the Arbitration
and Conciliation Act, 1996.
It extends to the whole
of India:
Provided that Parts I,
III and IV shall extend to the State of Jammu and Kashmir
only in so far as they relate to international commercial
arbitration or, as the case may be, international commercial
conciliation.
Explanation - In this sub-section,
the expression “international commercial conciliation”
shall have the same meaning as the expression “international
commercial arbitration” in clause (f) of sub-section
(1) of section 2, subject to the modification that for
the word “arbitration” occurring therein, the word “conciliation”
shall be substituted.
It shall be deemed to have
come into force on the 25th day of January 1996.
Chapter 1: General Provisions
Definitions
In this Part, unless the
context otherwise requires,
“arbitration” means any
arbitration whether or not administered by permanent
arbitral institution;
“arbitration agreement”
means an agreement referred to in section 7;
“arbitral award” includes
an interim award;
“arbitral tribunal” means
a sole arbitrator or a panel of arbitrators;
“Court” means the principal
Civil Court of original jurisdiction in a district,
and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to
decide the questions forming the subject-matter of the
arbitration if the same had been the subject-matter
of a suit, but does not include any civil court of a
grade inferior to such principal Civil Court, or any
Court of Small Causes;
“international commercial
arbitration” means an arbitration relating to disputes
arising out of legal relationships, whether contractual
or not, considered as commercial under the law in force
in India and where at least one of the parties is -
an individual who is a
national of, or habitually resident in, any country
other than India; or
a body corporate which
is incorporated in any country other than India; or
a company or an association
or a body of individuals whose central management and
control is exercised in any country other than India;
or
the Government of a foreign
country;
“legal representative”
means a person who in law represents the estate of a
deceased person, and includes any person who intermeddles
with the estate of the deceased, and, where a party
acts in a representative character, the person on whom
the estate devolves on the death of the party so acting;
“party” means a party to
an arbitration agreement.
Scope
This Part shall apply where
the place of arbitration is in India.
This Part shall not affect
any other law for the time being in force by virtue
of which certain disputes may not be submitted to arbitration.
This Part except sub-section
(1) of section 40, sections 41 and 43 shall apply to
every arbitration under any other enactment for the
time being in force, as if the arbitration were pursuant
to an arbitration agreement and as if that other enactment
were an arbitration agreement, except in so far as the
provisions of this Part are inconsistent with that other
enactment or with any rules made thereunder.
Subject to the provisions
of sub-section (4), and save in so far as is otherwise
provided by any law for the time being in force or in
any agreement in force between India and any other country
or countries, this Part shall apply to all arbitrations
and to all proceedings relating thereto.
Construction
and References
Where this Part, except
section 28, leaves the parties free to determine a certain
issue, that freedom shall include the right of the parties
to authorise any person including an institution, to
determine that issue.
An arbitral award made
under this Part shall be considered as a domestic award.
Where this Part—
refers to the fact that
the parties have agreed or that they may agree, or
in any other way refers
to an agreement of the parties,
that agreement shall include
any arbitration rules referred to in that agreement.
Where this Part, other
than clause (a) of section 25 or clause (a) of sub-section
(2) of section 32, refers to a claim, it shall also
apply to a counter-claim, and where it refers to a defence,
it shall also apply to a defence to that counter-claim.
Receipt of written communications—
Unless otherwise agreed
by the parties,—
any written communication
is deemed to have been received if it is delivered to
the addressee personally or at his place of business,
habitual residence or mailing address, and
if none of the places referred
to in clause (a) can be found after making a reasonable
inquiry, a written communication is deemed to have been
received if it is sent to the addressee’s last known
place of business, habitual residence or mailing address
by registered letter or by any other means which provides
a record of the attempt to deliver it.
The communication is deemed
to have been received on the day it is so delivered.
This section does not apply
to written communications in respect of proceedings
of any judicial authority.
Waiver of right to object
- A party who knows that any provision of this Part
from which the parties may derogate, or any requirement
under the arbitration agreement, has not been complied
with and yet proceeds with the arbitration without stating
his objection to such non-compliance without undue delay
or, if a time limit is provided for stating that objection,
within that period of time, shall be deemed to have
waived his right to so object.
Extent of judicial intervention
- Notwithstanding anything contained in any other law
for the time being in force, in matters governed by
this Part, no judicial authority shall intervene except
where so provided in this Part.
Administrative Assistance
- In order to facilitate the conduct of the arbitral
proceedings, the parties, or the arbitral tribunal with
the consent of the parties, may arrange for administrative
assistance by a suitable institution or person.
Indian Supreme Court rules
that Appointment of Arbitrator by Chief Justice cannot
be challenged by a Special Leave Petition
The Supreme Court of India
has ruled that the orders passed by the Chief Justice
under Section 11(6) of the Arbitration and Conciliation
Act, 1996, cannot be challenged by a Special Leave Petition
(SLP) because such orders are administrative in nature.
(In the matter of Ador Samia Pvt. Ltd. Vs Peekay Holdings
Ltd.; AIR 1999 Supreme Court 3246).
In the above case, an SLP
under Article 136 of the Indian Constitution was moved
by the petitioner, challenging an order of the Chief
Justice of the Bombay High Court, passed under Section
11(6) of the Arbitration and Conciliation Act, 1996.
The Chief Justice, through his order, had appointed
an Arbitrator to resolve the dispute between the parties.
While deciding the issue,
the Court relied upon the decision of the Supreme Court
in the case of Indo China Steam Navigation Co. Ltd.
V. Jasjit Singh (reported in AIR 1964 SC 1140), wherein
it was observed:
"It is clear that
before an appeal can be entertained in this Court under
Article 136, two conditions have to be satisfied: The
order impugned must be an order of a judicial or quasi-judicial
character and it should not be purely an administrative
or executive order. Besides, the said order should have
been passed either by a Court or a Tribunal within the
territory of India."
Relying upon the above
decision of the Supreme Court, it was held that since
the order of the Chief Justice, appointing an arbitrator,
is an administrative order, being passed under Section
11(6) of the Act, the same cannot be challenged directly
under Article 136 of the Constitution of India.
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