Arbitration & ADR, India updates

Supreme Court rules that arbitrators' fee schedule fixed by parties overrides Fourth Schedule of Arbitration Act
Khaitan & Co
  • India
  • 08 August 2019

The division bench of the Supreme Court recently held that if the parties to an arbitration have agreed an arbitrators' fee schedule, the arbitrators must charge their fees in accordance with this agreed schedule and not in accordance with the Fourth Schedule of the amended Arbitration Act. While this decision gives credence to party autonomy and may thus be hailed as pro-arbitration, it specifies no limits and provides no other directions for parties to bear in mind when fixing a fee schedule.

Terminating arbitrator's mandate – can parties proceed with truncated tribunal?
Khaitan & Co
  • India
  • 25 July 2019

It is common knowledge that arbitration provides greater flexibility and party autonomy compared with traditional litigation before the courts. Corollary to this, the agreed terms for the appointment of an arbitrator or arbitral tribunal must be strictly followed while making such appointments if a dispute arises between the parties to an agreement. However, what happens when an arbitrator fails to or is prevented from acting specifically at the penultimate stage?

Award replacing contractual provisions with new terms "shocks the conscience" of Supreme Court
Khaitan & Co
  • India
  • 20 June 2019

The question of whether a contract can be amended retroactively was raised in the arbitration proceedings between Ssangyong and the National Highways Authority of India. The Supreme Court's ruling on the case is a welcome exposition on the contours of Section 34 of the Arbitration and Conciliation Act, especially in relation to challenges on grounds of violations of principles of natural justice.

Enforcement of foreign awards: does violation of legal provision equate to contravention of fundamental policy?
Khaitan & Co
  • India
  • 18 April 2019

In 2013 the Supreme Court held that the enforcement of a foreign arbitral award can be refused only if it is contrary to, among other things, the 'fundamental policy of Indian law'. This article focuses on the Indian courts' interpretation of this term and looks at a common question that arises in relation to this area of law – namely, whether a foreign arbitral award which is a mere violation of an Indian legal provision qualifies as a contravention of the fundamental policy of Indian law.

Arbitrability of consumer disputes: loophole in Booz Allen framework?
Khaitan & Co
  • India
  • 14 March 2019

The Supreme Court recently ruled that consumer disputes are incapable of being submitted to arbitration, placing them in the infamous category of 'non-arbitrable' subjects in India. However, the court also stated that where an elected consumer fails to file a consumer complaint, the parties are not barred from submitting the dispute to arbitration. This article analyses whether such a statement could have far-reaching implications for arbitrability as a ground for challenging an award.

Clarity in arbitral proceedings – legislation post-pronouncement of arbitral award
Khaitan & Co
  • India
  • 07 February 2019

The focus of India's rapidly evolving arbitration regime appears to be concentrated on factors such as ensuring that arbitrations are completed in a timely manner and appointed arbitrators are impartial. While these factors are significant, the importance of substantive and procedural clarity in terms of what happens after an award is passed is also crucial.

Revisiting Supreme Court Centrotrade decision and utility of two-tier arbitration clauses
Khaitan & Co
  • India
  • 13 December 2018

Two-tier arbitration clauses or appellate arbitration mechanisms were upheld by a three-judge bench of the Supreme Court in Centrotrade Minerals and Metal Inc v Hindustan Copper Limited. This article discusses the evolution of the jurisprudence surrounding two-tier arbitration in India and analyses both the utility of such a mechanism for the parties and its usefulness in certain situations.

Unsigned arbitration agreement does not bar arbitration
Khaitan & Co
  • India
  • 29 November 2018

The Supreme Court recently held that the only prerequisite for an arbitration agreement is that it be in writing. Through this decision, the court has adopted a pro-arbitration approach and, as such, may contribute positively to the existing jurisprudence on the Indian arbitration regime. By relying on the unsigned bill of lading, the court focused on the parties' conduct and intent, both of which indicated that there was an arbitration agreement between them.

Non-signatory to arbitration: right to appeal under Section 37
Khaitan & Co
  • India
  • 18 October 2018

The Bombay High Court recently issued a landmark ruling regarding third parties' right to challenge interim measures granted by an arbitral tribunal under the Arbitration and Conciliation Act. The ruling is a welcome reprieve for non-signatories to arbitration proceedings in situations where disputes between arbitrating parties have a bearing on their rights and interests, as well as a step towards balancing innocent parties' interests.

Analysis of Section 11(6A) – a conundrum
Khaitan & Co
  • India
  • 11 October 2018

Before its amendment in 2015, the Arbitration and Conciliation Act 1996 neither promoted institutional arbitration nor discouraged parties from considering it. The 2015 amendment was an attempt to reduce judiciary intervention in arbitration proceedings and promote a culture of institutional arbitration. One of the proposed changes was the amendment to Section 11 of the 1996 act, which provides for the appointment of arbitrators by the competent court.

Arbitration and Conciliation (Amendment) Bill 2018: coherence or chaos?
Khaitan & Co
  • India
  • 13 September 2018

Following the enforcement of the Arbitration and Conciliation (Amendment) Act 2015, the Arbitration and Conciliation (Amendment) Bill 2018 proposes to further amend the Arbitration and Conciliation Act 1996. The bill is another step by policymakers towards making India "a robust centre for international and domestic arbitration" and attempts to make it an investor-friendly jurisdiction and a preferred seat of arbitration for dispute resolution.

Bombay High Court upholds minimal judicial intervention in appointment of arbitrator
Khaitan & Co
  • India
  • 09 August 2018

The Bombay High Court recently held that in accordance with the 2015 amendment of Section 11 of the Arbitration and Conciliation Act 1996, the courts' responsibility to refer a dispute to arbitration is narrow and limited to examining the existence of an arbitration agreement. Further, the high court held that an unstamped document does not bar a dispute from arbitration.

Appropriate court in context of post-award of foreign-seated tribunal
Khaitan & Co
  • India
  • 24 May 2018

The Bombay High Court recently ruled that an application under Section 9 of the Arbitration and Conciliation Act 1996 which had been filed following an award passed by a foreign-seated arbitral tribunal had to be brought before a 'court' as defined in the explanation to Section 47 rather than Section 2(1)(e)(ii) of the act. The judgment has clarified, and to a large extent simplified, the procedure for a foreign award holder.

Enforcement of 'minority award': law or flaw?
Khaitan & Co
  • India
  • 22 March 2018

Section 34 of the Arbitration and Conciliation Act 1996 sets out the conditions for setting aside an arbitral award. In this context, the term 'arbitral award' has always been understood as an award rendered by the majority members of an arbitral tribunal. However, recent decisions of the Bombay High Court and the Delhi High Court, while setting aside the award of the arbitral tribunal, have upheld the so-called 'minority award', in variance with the act and established precedent.

Pre-arbitral steps: Indian law perspective
Khaitan & Co
  • India
  • 25 January 2018

Multi-tiered dispute resolution clauses prescribing pre-arbitral steps are common in commercial contracts in order to allow parties to resolve their disputes in a non-adversarial set up, preserve commercial relationships and save costs. Almost all contracts require performance of such pre-arbitral steps as a condition precedent to arbitration, but are they specifically enforceable? In other words, are pre-arbitral steps mandatory or directory in nature?

Challenging appointment of an arbitrator: legal position
Khaitan & Co
  • India
  • 09 November 2017

The Supreme Court recently set out the legal position regarding challenges to a person's possible appointment as an arbitrator. It held that since ineligibility goes to the root of the appointment, the Arbitration and Conciliation Act 1996 clarifies that if the arbitrator falls under any of the categories specified in the Seventh Schedule, he or she becomes ineligible to act as an arbitrator. However, if the circumstances fall under the Fifth Schedule, the person would not be de jure ineligible.

Interim orders in international commercial arbitrations – an Indian perspective
Khaitan & Co
  • India
  • 10 August 2017

By way of the Arbitration and Conciliation (Amendment) Act 2015, the government sought to reform the law in relation to international commercial arbitrations conducted in India and foreign-seated international commercial arbitrations. Following recent judgments from the Delhi High Court and the Bombay High Court, it is timely to analyse the amendment act with reference to the United Nations Commission on International Trade Law Model Law on international commercial arbitration.

Two-tier arbitration clauses
Khaitan & Co
  • India
  • 04 May 2017

The Supreme Court recently reaffirmed that Indian arbitration law does not specifically prohibit two-tier arbitration clauses which provide for appellate review of an arbitral award by a subsequent arbitration. This judgment is an important win for party autonomy in India and sends a pro-arbitration message.

Applicability of arbitration amendments
Khaitan & Co
  • India
  • 30 March 2017

The Delhi High Court recently clarified the scope and interpretation of Section 26 of the Arbitration and Conciliation (Amendment) Act 2015. The Delhi High Court held that if arbitration was commenced before October 23 2015, the amendment act does not apply to the court proceedings for setting aside an arbitral award rendered in relation to such proceedings.

Significance of independence and impartiality in constitution of arbitral tribunals – critical analysis
Khaitan & Co
  • India
  • 22 December 2016

The independence and impartiality of arbitral tribunals is significant in order to encourage faith and trust in litigants and ensure that disputes are independently, impartially and fairly adjudicated. Against this backdrop, the enforceability of contracts between private parties and government entities must be considered, as such entities often appoint arbitrators who act with such inflexibility as essentially to render arbitration agreements redundant and the required consent of the parties meaningless.

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