UNIT-4 Arbitration Dispute R

UNIT-4

Table of Contents

QUESTION-1- Define foreign ward under Geneva Convention Awards. Discuss the lower of judicial authority torefer parties to arbitrationUnder the Geneva Convention Awards

Foreign Awards under the Geneva Convention

A foreign award under the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927, refers to an arbitral award made in disputes between individuals or entities arising out of commercial or contractual relationships where:

  1. The award is made outside the territory of India.
  2. The award is rendered in a country that is a party to the Geneva Convention.

The Arbitration (Protocol and Convention) Act, 1937, which implemented the Geneva Convention in India, governed the enforcement of such foreign awards. It was later replaced by the Arbitration and Conciliation Act, 1996, aligning Indian law with the New York Convention, 1958, and Geneva Convention.

Conditions for Recognition and Enforcement of Foreign Awards under the Geneva Convention

Under the Geneva Convention, an award qualifies as a foreign award if it satisfies the following conditions:

  1. Agreement in Writing: There must be a valid arbitration agreement in writing between the parties.
  2. Dispute Arbitrable under Law: The dispute must be arbitrable under the law governing the arbitration agreement.
  3. Final and Binding Award: The award must be final and binding, and it should not have been annulled or suspended by a competent authority in the country where it was made.
  4. Conformity with Laws and Public Policy: The award must not conflict with the public policy or law of the country where enforcement is sought.

Judicial Authority’s Power to Refer Parties to Arbitration (Geneva Convention Awards)

The power of judicial authorities to refer parties to arbitration is pivotal under the Geneva Convention and subsequent Indian laws. Section 3 of the Arbitration (Protocol and Convention) Act, 1937, mandated courts to refer parties to arbitration in cases governed by the Geneva Convention. In modern Indian arbitration law, the Arbitration and Conciliation Act, 1996, under Section 45, provides for judicial referral to arbitration in disputes governed by foreign arbitration agreements.

Judicial Referral under Section 45 of the Arbitration and Conciliation Act, 1996

This provision is applicable to foreign arbitration agreements and awards under both the Geneva and New York Conventions. The key points are:

  1. Existence of a Valid Arbitration Agreement
    The court must be satisfied that a valid arbitration agreement exists between the parties.
  2. Dispute Covered by Arbitration Agreement
    The dispute in question must fall within the scope of the arbitration agreement.
  3. No Nullity or Inapplicability of Agreement
    The court must ensure that the arbitration agreement is not null, void, inoperative, or incapable of being performed.
  4. Mandatory Reference to Arbitration
    If the above conditions are met, the judicial authority has no discretion and must refer the parties to arbitration.

Grounds for Refusal to Refer Parties

Courts can refuse to refer parties to arbitration under the Geneva Convention in the following circumstances:

  1. Invalid Arbitration Agreement: If the agreement is not valid under the law governing it.
  2. Non-Arbitrable Dispute: If the dispute cannot be resolved through arbitration.
  3. Conflict with Public Policy: If the arbitration agreement or its enforcement conflicts with the public policy of India.

Case Law:

  • Renusagar Power Co. Ltd. v. General Electric Co. (1994): The Supreme Court held that public policy must be interpreted narrowly to prevent excessive judicial intervention in arbitration.
  • Bhatia International v. Bulk Trading SA (2002): The Court held that provisions of Part I of the Arbitration and Conciliation Act, 1996, apply to international arbitrations unless expressly excluded by the parties.

Transition to the New York Convention

With the enactment of the Arbitration and Conciliation Act, 1996, India aligned with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, superseding the Geneva Convention framework. The Geneva Convention, while a landmark for its time, was limited in scope compared to the more robust and widely adopted New York Convention.

Conclusion

The Geneva Convention Awards laid the groundwork for the recognition and enforcement of foreign arbitral awards in India. Judicial authorities play a crucial role in ensuring that arbitration agreements are upheld and disputes are referred to arbitration, subject to the constraints of public policy, arbitrability, and validity of agreements. Today, these principles continue under the New York Convention and the Arbitration and Conciliation Act, 1996, ensuring a more seamless and globally consistent approach to arbitration.

QUESTION-2- Define Conciliation? HOW conciliation proceedings commence under the Act and what kind of administrative assistance can be provided by the conciliator? Discuss.

Conciliation: Definition

Conciliation is a non-binding alternative dispute resolution (ADR) process where an impartial third party, known as the conciliator, facilitates communication between disputing parties to help them reach a mutually acceptable settlement. Unlike arbitration or litigation, conciliation is a voluntary process that focuses on collaboration rather than adjudication.

Under the Arbitration and Conciliation Act, 1996, conciliation is governed by Part III (Sections 61 to 81), which sets out the legal framework for conciliation in India.

Commencement of Conciliation Proceedings

Conciliation proceedings commence under the following provisions of the Arbitration and Conciliation Act, 1996:

  1. Initiation by Invitation (Section 62):
    • One party may invite the other party to engage in conciliation by sending a written request specifying the subject matter of the dispute.
    • The conciliation proceedings commence when the other party accepts the invitation in writing.
    • If the invitation is rejected, there can be no conciliation proceedings.
  2. Appointment of Conciliator (Section 64):
    • Parties may agree on the number and appointment of conciliators.
    • If they cannot agree, each party may appoint one conciliator, and the two conciliators may appoint a third conciliator to act as the presiding conciliator.
    • In cases involving institutions, conciliators may be appointed as per institutional rules.

Administrative Assistance Provided by the Conciliator

Section 68 of the Arbitration and Conciliation Act, 1996, empowers conciliators to seek administrative assistance for smooth proceedings. Key aspects of administrative assistance include:

  1. Support from Institutions:
    • Parties can agree to seek administrative assistance from institutions such as arbitral institutions or ADR centers.
    • Institutions may provide logistical support, including meeting rooms, document handling, and secretarial services.
  2. Facilitation of Communication:
    • The conciliator may coordinate meetings, manage documentation, and ensure clear communication between the parties.
  3. Drafting of Settlement Agreements:
    • The conciliator may assist the parties in drafting settlement agreements to ensure clarity and mutual understanding.
  4. Technical or Legal Advice:
    • In complex disputes, the conciliator can seek advice from experts (if agreed upon by the parties) or facilitate consultations to resolve technical aspects of the dispute.

Role of the Conciliator

The conciliator plays a vital role in ensuring effective resolution, as outlined in Section 67 of the Act:

  1. Neutral Facilitator: The conciliator acts impartially to ensure fair participation by all parties.
  2. Proposal Development: They may suggest options for settlement but cannot impose a solution.
  3. Confidentiality Maintenance: The conciliator ensures that all information disclosed during proceedings remains confidential (Section 75).
  4. Encouraging Cooperation: The conciliator fosters an environment conducive to collaboration and agreement.

Advantages of Conciliation

  • Flexible Process: Informal and adaptable to the needs of the parties.
  • Cost-Effective: Relatively inexpensive compared to litigation or arbitration.
  • Time-Saving: Quicker resolution compared to prolonged court cases.
  • Voluntary Nature: Both parties retain control over the outcome.
  • Preserves Relationships: Encourages cooperation, which can be beneficial in long-term relationships.

Conclusion

Conciliation under the Arbitration and Conciliation Act, 1996, provides a robust framework for amicable dispute resolution. By fostering collaboration and ensuring administrative support, it offers a viable alternative to adversarial methods like litigation or arbitration. The process begins with mutual agreement, and the conciliator’s assistance ensures efficiency and fairness, making conciliation a key ADR mechanism in India.

Geneva Convention Awards: Overview

The Geneva Convention on the Execution of Foreign Arbitral Awards, 1927, is one of the early international treaties aimed at recognizing and enforcing foreign arbitral awards. It laid the groundwork for international arbitration by providing a framework for the enforcement of arbitral awards rendered in a contracting state within another contracting state. The Geneva Convention was succeeded by the New York Convention of 1958, which is more widely adopted.

In India, the enforcement of foreign arbitral awards, including those under the Geneva Convention, is governed by the Arbitration and Conciliation Act, 1996. Specifically, Part II, Chapter II of the Act deals with Geneva Convention Awards.

Definition of a Geneva Convention Award

A Geneva Convention Award refers to an arbitral award rendered in a country that is a signatory to the Geneva Convention, meeting the following conditions:

  1. The award must arise out of a difference between parties regarding a defined legal relationship, whether contractual or not.
  2. The dispute must have been referred to arbitration as per a valid arbitration agreement.
  3. The arbitration proceedings and the award must comply with the laws of the country where the arbitration took place.

Conditions for Enforcement of Foreign Awards under the Geneva Convention

Under the Arbitration and Conciliation Act, 1996, the enforcement of foreign awards made under the Geneva Convention is subject to the following conditions:

1. Binding Nature of the Award (Section 57(1)(a)):

  • The award must be final and binding on the parties under the laws of the country where it was made.
  • Awards subject to appeal or other judicial remedies in the country of origin are not enforceable.

2. Valid Arbitration Agreement (Section 57(1)(b)):

  • There must be a valid arbitration agreement between the parties as per the laws of the country where the award was rendered.
  • The agreement must expressly provide for arbitration.

3. Procedural Compliance (Section 57(1)(c)):

  • The arbitration proceedings must comply with the rules and procedures agreed upon by the parties.
  • If the parties have not specified rules, the proceedings must adhere to the law of the country where the arbitration took place.

4. Subject Matter Arbitrability (Section 57(1)(d)):

  • The subject matter of the award must be arbitrable under the Indian legal system.
  • Awards dealing with disputes involving non-arbitrable matters, such as criminal or family disputes, cannot be enforced.

5. Public Policy (Section 57(1)(e)):

  • Enforcement of the award must not contravene Indian public policy.
  • Awards involving fraud, corruption, or contravention of the fundamental policy of Indian law are deemed unenforceable.

6. Reciprocity (Section 53):

  • The award must be rendered in a country that has ratified the Geneva Convention.
  • Reciprocity ensures that Indian arbitral awards are also enforceable in those countries.

7. Submission of Evidence (Section 58):

  • The party seeking enforcement must produce the following:
    • The original award or a certified copy.
    • The original arbitration agreement or a certified copy.
    • Evidence to establish that the award is final and binding.

Grounds for Refusing Enforcement

An award may be refused enforcement under the Geneva Convention if:

  1. The award was annulled or suspended by a competent authority in the country where it was made.
  2. The arbitration agreement is invalid under the law of the country where it was executed.
  3. The award exceeds the scope of the arbitration agreement or involves non-arbitrable matters.
  4. There was a procedural irregularity in the arbitration proceedings, such as lack of due process.

Judicial Authority to Refer Parties to Arbitration

Under Section 45 of the Arbitration and Conciliation Act, 1996, judicial authorities in India are empowered to refer disputes to arbitration if:

  1. There exists a valid arbitration agreement between the parties.
  2. The arbitration agreement is not null and void, inoperative, or incapable of being performed.

This ensures that parties adhere to their agreement and reinforces the principle of party autonomy in international arbitration.

Key Case Law

  1. Nirma Ltd. v. Lurgi Energie GmbH (2003):
    The court held that an arbitral award rendered under the Geneva Convention must comply with Indian public policy for enforcement.
  2. Renusagar Power Co. Ltd. v. General Electric Co. (1994):
    This case clarified the scope of “public policy” as grounds for refusing enforcement, limiting it to matters of fundamental policy, justice, and morality.

Conclusion

The Geneva Convention Awards remain significant in the evolution of international arbitration. While it has been largely supplanted by the New York Convention, the Geneva framework continues to influence arbitration law, including India’s approach under the Arbitration and Conciliation Act, 1996. By outlining clear conditions for enforcement and balancing party autonomy with public policy considerations, the Geneva Convention Awards provide a robust mechanism for cross-border dispute resolution.

Question-4-Who is Conciliator? Discuss the role of conciliator in conciliation proceeding.

Who is a Conciliator?

A Conciliator is a neutral third party appointed to assist disputing parties in resolving their conflicts amicably through the process of conciliation. Unlike an arbitrator or a judge, a conciliator does not impose a decision but facilitates communication, identifies issues, and helps parties arrive at a mutually acceptable settlement.

In India, the role of the conciliator is recognized under Part III of the Arbitration and Conciliation Act, 1996, which governs conciliation proceedings.

Role of a Conciliator in Conciliation Proceedings

The conciliator plays a pivotal role in ensuring the success of the conciliation process. Their functions include:

1. Facilitating Communication

  • The conciliator acts as a bridge between the parties, ensuring effective communication.
  • They clarify misunderstandings, remove obstacles to dialogue, and create an environment conducive to discussion.

2. Identifying Issues

  • They assist in identifying the root cause of the dispute and focus on the interests of the parties rather than their positions.
  • This helps in addressing the underlying issues rather than just the surface-level conflicts.

3. Proposing Solutions

  • Unlike mediators, conciliators can propose solutions or settlements after analyzing the situation.
  • They can offer suggestions that are fair, neutral, and acceptable to both parties.

4. Maintaining Neutrality

  • The conciliator must remain impartial and independent throughout the proceedings.
  • They ensure that no party is given an undue advantage, maintaining trust in the process.

5. Encouraging Agreement

  • The conciliator encourages the parties to reach a settlement voluntarily.
  • They may draft a settlement agreement, which, if accepted by the parties, becomes binding under Section 73 of the Act.

6. Managing Procedural Aspects

  • The conciliator decides the procedural rules in consultation with the parties, as provided under Section 62(4).
  • This includes the time, place, and manner of conducting the proceedings.

7. Confidentiality

  • Under Section 75, the conciliator is bound to keep all information disclosed during the proceedings confidential.
  • This encourages open and honest communication between the parties.
  1. Appointment of Conciliator (Section 64):
    • The parties may agree on a conciliator, or if they cannot agree, each party may appoint one conciliator.
    • In multi-party disputes, parties can appoint multiple conciliators.
  2. Role of Conciliator (Section 67):
    • The conciliator must assist parties independently and impartially.
    • They must aim to reach an amicable settlement.
  3. Settlement Agreement (Section 73):
    • If the conciliator successfully facilitates a settlement, they draft the settlement agreement.
    • Once signed, it has the same status as an arbitral award under Section 74.
  4. Termination of Proceedings (Section 76):
    • The conciliator declares the proceedings terminated if:
      • A settlement is reached.
      • One party withdraws from the process.
      • The conciliator feels further efforts are unnecessary.

Advantages of the Conciliation Process

  • Flexibility: The conciliator can adapt the process to suit the specific needs of the dispute.
  • Cost-Effective: Conciliation is generally less expensive than litigation or arbitration.
  • Confidentiality: The process is private, and the conciliator ensures that sensitive information is not disclosed.
  • Preserving Relationships: The conciliator fosters a cooperative environment, which helps preserve professional and personal relationships.
  • Time-Saving: The process is faster than traditional court proceedings.

Key Case Laws on the Role of the Conciliator

  1. Haresh Dayaram Thakur v. State of Maharashtra (2000):
    • The Supreme Court emphasized the conciliator’s role in ensuring voluntary settlement without coercion.
  2. Oil and Natural Gas Corporation v. Western Company of North America (1987):
    • The court held that conciliation proceedings must comply with principles of natural justice, and the conciliator must remain impartial.

Conclusion

The conciliator plays a vital role in resolving disputes amicably and efficiently, focusing on mutual interests rather than adversarial positions. By maintaining neutrality, facilitating dialogue, and proposing fair solutions, the conciliator ensures that the process remains collaborative and constructive. As a result, conciliation is an essential alternative dispute resolution mechanism in India, particularly for commercial and interpersonal conflicts.

Question-5- Explain the New York Convention Awards. Discuss ni detail the conditions for enforcement of foreign awards und the NewYork Convention.

New York Convention Awards

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), commonly referred to as the New York Convention, is an international treaty designed to provide a unified legal framework for the recognition and enforcement of foreign arbitral awards. It is one of the most significant instruments in international arbitration, aiming to ensure the finality and enforceability of arbitration awards across borders.

India ratified the New York Convention on July 13, 1960, and it is implemented domestically through the Arbitration and Conciliation Act, 1996.

Conditions for Enforcement of Foreign Awards under the New York Convention

The New York Convention stipulates certain conditions under which foreign arbitral awards can be recognized and enforced. These are incorporated into Part II, Chapter I of the Arbitration and Conciliation Act, 1996.

1. Definition of a Foreign Award

A “foreign award” is an arbitral award arising from a dispute considered as commercial under the law in force in India and made in a country that is a signatory to the New York Convention.

2. Pre-requisites for Enforcement (Section 44)

For an award to qualify as a “foreign award,” the following conditions must be satisfied:

  • The award must arise from an arbitration agreement as defined in Section 7.
  • The arbitration must be conducted in a country that is a signatory to the New York Convention.
  • The award must deal with disputes arising out of a legal relationship considered commercial under Indian law.

3. Application for Enforcement (Section 47)

The party seeking enforcement must produce:

  • The original award or a duly authenticated copy.
  • The original arbitration agreement or a duly certified copy.
  • Evidence to prove that the award falls under the New York Convention.

Grounds for Refusal of Enforcement

Under Article V of the New York Convention (mirrored in Section 48 of the Act), a foreign arbitral award may be refused enforcement if the opposing party proves the following:

A. Procedural Grounds

  1. Invalid Arbitration Agreement
    The agreement was not valid under the law to which the parties subjected it.
  2. Lack of Notice or Opportunity to Present Case
    The party against whom the award is invoked was not given proper notice or was otherwise unable to present their case.
  3. Award Beyond Scope of Arbitration Agreement
    The award deals with matters beyond the scope of the arbitration agreement.
  4. Improper Composition of Tribunal
    The arbitral tribunal or the procedure was not in accordance with the parties’ agreement or the law of the country where the arbitration took place.
  5. Award Not Yet Binding
    The award has not yet become binding or has been set aside by a competent authority.

B. Public Policy Grounds

  • The enforcement of the award would be contrary to the public policy of India.
    (Explanation to Section 48 clarifies that “public policy” includes fraud, corruption, or a violation of fundamental legal principles in India.)

Process of Enforcement in India

  1. Filing for Enforcement
    The party seeking enforcement must approach a competent court in India with the required documents under Section 47.
  2. Scrutiny by the Court
    The court examines the award to ensure compliance with the conditions under the New York Convention.
  3. Recognition and Execution
    If the court is satisfied, it recognizes the award as enforceable and it is executed as a decree of the court under Section 49.

Important Judicial Precedents

  1. Renusagar Power Co. Ltd. v. General Electric Co. (1994)
    • The Supreme Court held that enforcement of a foreign award can only be refused if it is contrary to the fundamental policy of Indian law, interests of India, or justice and morality.
  2. Venture Global Engineering v. Satyam Computer Services Ltd. (2008)
    • The court reaffirmed that foreign awards can only be refused on limited grounds specified under Section 48.
  3. Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd. (2005)
    • This case highlighted the minimal interference of Indian courts in the enforcement of foreign awards.

Significance of the New York Convention in India

  • Ease of Enforcement: Facilitates the smooth enforcement of foreign arbitral awards in India and abroad.
  • Cross-Border Trade: Promotes international trade and investment by providing legal certainty for arbitration agreements and awards.
  • Judicial Support: Courts in India have generally adopted a pro-arbitration stance, minimizing interference in the enforcement of foreign awards.

Conclusion

The New York Convention has significantly streamlined the process of enforcing foreign arbitral awards in India. By adopting the Convention through the Arbitration and Conciliation Act, 1996, India has aligned itself with global standards of arbitration, encouraging foreign investment and cross-border dispute resolution. However, challenges such as delays in enforcement proceedings and interpretations of “public policy” continue to require judicial and legislative attention to enhance its efficacy.

Question-6- What do you mean by Conciliation? Discuss the provisions relating to conciliation under Arbitration and Conciliation Act, 1996.

Conciliation under the Arbitration and Conciliation Act, 1996

Definition of Conciliation

Conciliation is an alternative dispute resolution (ADR) process where a neutral third party, known as the conciliator, helps parties in a dispute to reach an amicable settlement. Unlike arbitration, where a binding decision is imposed, conciliation focuses on facilitating dialogue to achieve mutual agreement.

Under the Arbitration and Conciliation Act, 1996, conciliation is governed by Part III (Sections 61 to 81). The Act adopts the UNCITRAL Model Law on International Commercial Conciliation, ensuring that Indian laws align with international standards.

Provisions Relating to Conciliation under the Act

1. Scope of Conciliation (Section 61)

  • The provisions of conciliation apply to disputes arising out of a legal relationship, whether contractual or not.
  • It includes domestic and international disputes.
  • However, disputes involving certain rights that cannot be settled by compromise, such as criminal offenses or public interest issues, are excluded.

2. Commencement of Conciliation (Section 62)

  • Initiation of Process:
    Conciliation begins when one party sends a written invitation to the other party to initiate conciliation proceedings.
  • Acceptance:
    The other party must accept the invitation in writing. If the invitation is not accepted within 30 days, the offer is deemed to have been rejected.

3. Number and Appointment of Conciliators (Section 63)

  • Number of Conciliators:
    One conciliator is usually appointed unless the parties agree to have two or three conciliators.
  • Appointment:
    • If there is one conciliator, the parties agree on the appointment.
    • If there are two or three conciliators, each party appoints one, and the appointed conciliators select the third.

4. Role of Conciliator (Section 67)

The conciliator’s role is to assist the parties in reaching a settlement. This includes:

  • Acting impartially and independently.
  • Facilitating communication between the parties.
  • Proposing solutions, but the conciliator cannot impose a binding decision.

5. Communication between the Parties and Conciliator (Section 69)

  • The conciliator may meet or communicate with the parties together or separately.
  • All proceedings are conducted confidentially.

6. Settlement Agreement (Section 73)

  • If a settlement is reached, the conciliator drafts a written settlement agreement.
  • The agreement is signed by both parties, making it binding and enforceable as if it were an arbitral award on agreed terms under Section 74.

7. Termination of Proceedings (Section 76)

Conciliation proceedings are terminated:

  • Upon signing the settlement agreement.
  • If the conciliator declares the proceedings terminated in writing.
  • If a party notifies the other that the proceedings are terminated.

8. Confidentiality (Section 75)

All information and discussions during conciliation are confidential and cannot be used in any other proceedings.

Advantages of Conciliation

  1. Voluntary Process: Both parties participate willingly and retain control over the outcome.
  2. Confidentiality: Ensures sensitive information remains private.
  3. Cost-Effective: Cheaper than litigation and arbitration.
  4. Flexible: The process is informal and allows for creative solutions.
  5. Time-Saving: Generally faster than court proceedings.

Judicial Precedents

  1. Haresh Dayaram Thakur v. State of Maharashtra (2000)
    The Supreme Court emphasized the conciliator’s role in facilitating mutual agreement without imposing decisions.
  2. Salem Advocate Bar Association v. Union of India (2005)
    The court highlighted the importance of ADR methods, including conciliation, to reduce the burden on courts.

Conclusion

Conciliation under the Arbitration and Conciliation Act, 1996, provides an efficient and amicable means to resolve disputes. Its non-adversarial nature and focus on mutual agreement make it an attractive alternative to traditional litigation, especially in commercial disputes. By ensuring confidentiality, flexibility, and enforceability of settlements, the Act facilitates swift and effective dispute resolution.

Question-7-explain the New York convention award .discuss in detail the conditions for enforcement of foreign awards under the conditions for enforcement of foreign awards under the New York Convention.

The New York Convention Award: An Overview

The New York Convention, formally known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), is a pivotal international treaty facilitating the recognition and enforcement of arbitral awards across different jurisdictions. India became a signatory to this Convention on July 10, 1958, and enacted it through the Arbitration and Conciliation Act, 1996.

Key Features of the New York Convention

  1. Recognition of Arbitral Awards: Awards made in any country that is a party to the Convention are recognized and enforceable in other member states.
  2. Uniform Standards: Provides a standardized legal framework for enforcement, reducing the legal complexities of cross-border arbitration.
  3. Limited Grounds for Refusal: The Convention enumerates specific conditions under which enforcement of awards can be refused.

Provisions for Enforcement under Indian Law

Part II, Chapter I of the Arbitration and Conciliation Act, 1996 governs the enforcement of foreign awards under the New York Convention.

Conditions for Enforcement of Foreign Awards

Under Section 44 to Section 50 of the Act, the following conditions must be met for the enforcement of a foreign award:

  1. Award from a Convention Country (Section 44):
    • The award must be made in a country that is a signatory to the New York Convention.
    • India must have a reciprocal arrangement with the country where the award was made.
  2. Filing of Application (Section 47): The party seeking enforcement must produce:
    • The original or certified copy of the arbitral award.
    • The original arbitration agreement or a certified copy.
    • Evidence proving the award is binding under the law of the country where it was made.
  3. Court Jurisdiction (Section 48): The party seeking enforcement must approach a High Court having jurisdiction over the subject matter of the award.

Grounds for Refusal of Enforcement (Section 48)

The enforcement of a foreign award can be refused under the following conditions:

1. Procedural Grounds:

  • The parties to the arbitration agreement were under some incapacity.
  • The arbitration agreement was not valid under the governing law.
  • Proper notice of arbitration was not given, or the party was unable to present their case.

2. Award Beyond Scope:

  • The award deals with matters beyond the scope of the arbitration agreement.

3. Non-Conformity with Arbitration Agreement:

  • The composition of the arbitral tribunal or the procedure was not in accordance with the agreement.

4. Award Not Binding:

  • The award is not yet binding or has been set aside by a competent authority in the country where it was made.

5. Violation of Public Policy:

  • The enforcement of the award would be contrary to the public policy of India.
  • The term “public policy” includes:
    • Fraud or corruption in obtaining the award.
    • Breach of principles of natural justice.
    • Conflict with the fundamental policy of Indian law.

Process for Enforcement

  1. Application to the High Court: A party seeking enforcement must file a petition with the relevant High Court under Section 47.
  2. Court’s Examination: The court examines whether the award fulfills the requirements under Section 48. If no grounds for refusal exist, the court enforces the award as a decree.
  3. Time Frame: While the Act does not specify a timeline, courts generally expedite enforcement proceedings.

Judicial Interpretation

  1. Renusagar Power Co. Ltd. v. General Electric Co. (1994): The Supreme Court clarified the scope of “public policy,” limiting it to the fundamental policies of Indian law, the interests of India, and justice or morality.
  2. Venture Global Engineering v. Satyam Computer Services Ltd. (2008): The court emphasized that enforcement could only be refused if specific grounds under Section 48 are met.
  3. Shri Lal Mahal Ltd. v. Progetto Grano Spa (2013): The court held that the term “public policy” for foreign awards is narrower in scope than for domestic awards.

Advantages of the New York Convention

  1. Global Recognition: Awards are enforceable in over 170 countries.
  2. Uniform Standards: Reduces ambiguity in cross-border arbitration enforcement.
  3. Efficient Dispute Resolution: Facilitates quicker resolution of international disputes.

Challenges in Enforcement

  1. Public Policy Exception: Broad interpretation of “public policy” can lead to inconsistent enforcement.
  2. Judicial Delays: Indian courts, despite efforts, can face delays in adjudicating enforcement matters.
  3. Capacity Issues: Parties often challenge the validity of the arbitration agreement, causing procedural delays.

Conclusion

The New York Convention plays a vital role in the global recognition and enforcement of foreign arbitral awards. Its incorporation into Indian law through the Arbitration and Conciliation Act, 1996, has enhanced India’s reputation as an arbitration-friendly jurisdiction. However, consistent judicial interpretation and efficient court processes are essential to address challenges and ensure seamless enforcement of foreign awards.

Question-8- What do you mean by settlement agreement under conciliation proceeding? Whatwould be the status and effect of this settlement agreement?

Settlement Agreement Under Conciliation Proceedings

A settlement agreement in the context of conciliation proceedings refers to a mutually agreed resolution of a dispute facilitated by a conciliator. It is the outcome of a non-adversarial process where the parties, with the conciliator’s assistance, negotiate and agree on the terms of settlement.

The Arbitration and Conciliation Act, 1996 governs conciliation proceedings in India, and provisions related to the settlement agreement are detailed under Sections 73 and 74 of the Act.

Key Features of a Settlement Agreement (Section 73)

  1. Written Form:
    • The settlement agreement must be in writing.
    • The agreement is prepared by the conciliator based on the terms agreed upon by the parties.
  2. Voluntary Nature:
    • Parties willingly enter into the settlement agreement.
    • The terms are agreed upon without coercion or undue influence.
  3. Signatures:
    • The agreement is signed by both parties.
    • The conciliator signs the agreement to authenticate it.
  4. Confidentiality:
    • The terms of the settlement agreement are confidential unless disclosure is required for enforcement or as mandated by law.
  5. Binding Nature:
    • Once signed, the settlement agreement has the same status and effect as an arbitral award on agreed terms.

Status and Effect of a Settlement Agreement (Section 74)

  1. Arbitral Award on Agreed Terms:
    • As per Section 74, the settlement agreement reached during conciliation has the same legal status as an arbitral award under Section 30 of the Act.
    • This means it is binding and enforceable as a decree of a court.
  2. Finality:
    • The agreement is final and not subject to appeal unless there are grounds for setting aside an arbitral award (e.g., fraud, misrepresentation).
  3. Judicial Enforcement:
    • The settlement agreement can be directly enforced in court as if it were a court decree.
  4. Non-Adversarial Resolution:
    • The agreement resolves the dispute amicably, avoiding the time, cost, and formalities of litigation or arbitration.

Process of Settlement Agreement Formation

  1. Proposals for Settlement:
    • The conciliator may suggest proposals for settlement after understanding the nature of the dispute and the parties’ interests.
  2. Negotiations:
    • The parties, with the conciliator’s assistance, negotiate and revise terms to arrive at a mutually acceptable solution.
  3. Drafting the Agreement:
    • The conciliator drafts the settlement agreement reflecting the agreed terms.
  4. Execution of the Agreement:
    • The agreement is signed by the parties and authenticated by the conciliator.

Advantages of a Settlement Agreement

  1. Time-Efficient:
    • Avoids prolonged litigation or arbitration proceedings.
  2. Cost-Effective:
    • Reduces legal costs compared to court trials or arbitration.
  3. Mutual Satisfaction:
    • Both parties actively participate in formulating the terms, ensuring mutual satisfaction.
  4. Confidentiality:
    • The process and the agreement’s terms remain confidential.
  5. Flexibility:
    • Parties have the flexibility to agree on terms that suit their specific needs, which may not be possible in litigation.

Challenges and Considerations

  1. Non-Compliance:
    • Enforcement depends on the parties’ willingness to adhere to the terms unless enforced as a court decree.
  2. Power Imbalance:
    • A weaker party may feel compelled to agree to terms due to unequal bargaining power.
  3. Limited Scope for Appeal:
    • Once finalized, the agreement has limited grounds for challenge, leaving little recourse if one party feels aggrieved later.

Judicial Precedents on Settlement Agreements

  1. Haresh Dayaram Thakur v. State of Maharashtra (2000):
    • The Supreme Court highlighted that a settlement agreement under conciliation proceedings has the same binding effect as an arbitral award on agreed terms.
  2. J.K. Jain v. Delhi Development Authority (2004):
    • The Delhi High Court upheld the enforceability of a settlement agreement as a decree under the Arbitration and Conciliation Act, 1996.

Conclusion

A settlement agreement under conciliation proceedings represents an amicable resolution mechanism fostering a win-win outcome for disputing parties. Its recognition as an arbitral award on agreed terms ensures enforceability and finality while promoting alternative dispute resolution methods. Proper adherence to statutory provisions under the Arbitration and Conciliation Act, 1996, and judicial safeguards ensures its effectiveness in delivering timely and just resolutions.

Question-9- Explain any one of the following:
(i) New York Convention Award
(il) Geneva Convention Award

New York Convention Award

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, commonly referred to as the New York Convention, is a foundational international treaty that provides a framework for the recognition and enforcement of foreign arbitral awards. It aims to facilitate the resolution of disputes in international commercial arbitration by ensuring that arbitral awards are recognized and enforced across different jurisdictions.

Key Features of the New York Convention

  1. Scope:
    • The Convention applies to awards arising out of disputes between parties from different countries.
    • It covers both commercial disputes and other matters deemed arbitrable under the laws of the enforcing country.
  2. Recognition and Enforcement:
    • Member states are required to recognize foreign arbitral awards as binding and enforce them in accordance with their domestic laws, subject to the provisions of the Convention.
  3. Reciprocity:
    • The Convention allows signatory states to apply it on a reciprocal basis, meaning they will recognize awards made in other signatory states.
  4. Minimal Grounds for Refusal:
    • The Convention limits the grounds on which recognition or enforcement of an award can be refused, promoting uniformity and predictability.

Conditions for Enforcement of Foreign Awards under the New York Convention

Article V of the Convention specifies the grounds on which enforcement may be refused:

  1. Incapacity or Invalid Agreement:
    • If the parties to the arbitration agreement were under some incapacity or the agreement itself is invalid under the applicable law.
  2. Improper Notice or Inability to Present Case:
    • If a party was not given proper notice of the appointment of the arbitrator or the arbitral proceedings, or if the party was otherwise unable to present their case.
  3. Excess of Authority:
    • If the award deals with matters not contemplated by or not falling within the scope of the arbitration agreement.
  4. Irregularity in Composition or Procedure:
    • If the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the laws of the country where the arbitration took place.
  5. Non-Binding or Set-Aside Awards:
    • If the award has not yet become binding on the parties or has been set aside or suspended by a competent authority in the country where it was made.
  6. Public Policy:
    • If enforcement of the award would be contrary to the public policy of the enforcing country.

Implementation in India

India is a signatory to the New York Convention, and its provisions are incorporated into the Arbitration and Conciliation Act, 1996, under Part II, Chapter I.

  1. Section 44:
    • Defines a foreign award under the New York Convention as an arbitral award arising out of commercial disputes in a territory that is a signatory to the Convention and has been notified as such by India.
  2. Sections 46-49:
    • Provide the framework for recognizing and enforcing foreign awards under the New York Convention.

Advantages of the New York Convention

  1. Global Acceptance:
    • With over 170 signatory countries, it is one of the most widely adopted treaties in international arbitration.
  2. Ease of Enforcement:
    • Establishes a streamlined process for enforcing foreign arbitral awards in member states.
  3. Certainty and Predictability:
    • Promotes confidence in international arbitration as an effective dispute resolution mechanism.
  4. Limited Grounds for Refusal:
    • Ensures consistency in enforcement by restricting the grounds on which recognition or enforcement can be denied.

Judicial Precedents in India

  1. Bhatia International v. Bulk Trading S.A. (2002):
    • The Supreme Court ruled that the principles of the New York Convention could apply even to domestic arbitration unless excluded by agreement.
  2. Renusagar Power Co. v. General Electric Co. (1994):
    • The Court held that foreign awards could only be challenged on grounds permissible under the Convention, including public policy, which should be construed narrowly.

Conclusion

The New York Convention Award plays a critical role in facilitating international trade and commerce by ensuring the enforceability of foreign arbitral awards. Its adoption in Indian law through the Arbitration and Conciliation Act, 1996, highlights India’s commitment to promoting arbitration as a reliable dispute resolution mechanism. By providing a uniform legal framework, the Convention reduces the uncertainties associated with cross-border enforcement, fostering confidence in international arbitration.

Question- 10-What’s the procedure of appointment of conciliator under the Arbitration and Conciliation Act, 1996 Discuss the role of conciliator in settlement of dispute

Procedure for Appointment of a Conciliator under the Arbitration and Conciliation Act, 1996

Conciliation is a voluntary dispute resolution process where an impartial third party, the conciliator, assists disputing parties in reaching a mutually agreeable solution. The Arbitration and Conciliation Act, 1996, governs the process in India under Part III, which is dedicated to conciliation.

Appointment of Conciliator

The process of appointing a conciliator is outlined under Section 64 of the Act.

  1. By Agreement of Parties:
    • The disputing parties are free to mutually agree on the appointment of one or more conciliators.
    • If there are multiple conciliators, they should act jointly unless otherwise agreed.
  2. Nomination by a Third Party:
    • If the parties cannot agree on a conciliator, they may approach a third party, such as an institution or an individual, to recommend or appoint one.
  3. Single or Multiple Conciliators:
    • Unless the parties agree otherwise, there can be only one conciliator.
    • However, if there are multiple conciliators, all conciliators must work together and act impartially.
  4. Neutral and Independent Appointment:
    • The conciliator must be impartial and independent. The parties may specify the required qualifications or expertise of the conciliator based on the nature of the dispute.

Role of Conciliator in the Settlement of Disputes

The conciliator plays a pivotal role in guiding parties towards an amicable resolution of their disputes. Their duties and functions are detailed in Sections 67 to 76 of the Act.

Key Responsibilities of the Conciliator

  1. Facilitation of Communication:
    • The conciliator facilitates communication between parties to ensure a clear understanding of issues and positions.
    • They help remove barriers to negotiation and encourage constructive dialogue.
  2. Exploration of Settlement Options:
    • As per Section 67(4), the conciliator actively suggests settlement options and encourages the parties to consider feasible solutions.
    • The conciliator can propose the terms of settlement at any stage.
  3. Maintaining Impartiality:
    • The conciliator must act impartially, fairly, and independently, avoiding any bias in favor of either party.
  4. Confidentiality:
    • Section 70 emphasizes confidentiality. Information shared by a party cannot be disclosed to the other without consent.
    • The conciliator ensures that all discussions and documents remain confidential to build trust in the process.
  5. Encouraging Cooperation:
    • The conciliator creates an environment of trust and mutual respect, ensuring both parties feel heard and valued.
  6. Drafting a Settlement Agreement:
    • If a settlement is reached, the conciliator assists in drafting a written agreement, ensuring it reflects the parties’ decisions clearly and accurately (Section 73).
  7. Termination of Proceedings:
    • If the parties fail to reach an agreement, the conciliator concludes the proceedings and informs the parties accordingly (Section 76).
  1. Section 67:
    • Outlines the duty of the conciliator to assist parties in an independent and impartial manner.
    • The conciliator must consider the rights and obligations of the parties and any applicable laws while guiding discussions.
  2. Section 68:
    • Grants the conciliator discretion in conducting proceedings, provided the parties have not agreed on specific rules.
  3. Section 73:
    • Specifies the process for recording a settlement. Once the agreement is signed, it has the same legal effect as an arbitral award.

Advantages of Conciliator’s Role

  1. Expert Guidance:
    • Conciliators often have subject-matter expertise, enabling them to provide informed suggestions.
  2. Flexibility:
    • Unlike litigation or arbitration, the conciliator can adopt flexible procedures tailored to the specific needs of the dispute.
  3. Time and Cost Efficiency:
    • The conciliator expedites the resolution process, reducing the time and expenses involved.
  4. Preserving Relationships:
    • Conciliators foster collaboration, making conciliation ideal for disputes requiring ongoing relationships, such as family or business disputes.

Judicial Precedents Highlighting the Role of Conciliators

  1. Haresh Dayaram Thakur v. State of Maharashtra (2000):
    The Supreme Court emphasized that conciliation proceedings must be conducted in a manner that respects the parties’ autonomy and promotes amicable resolution.
  2. Salem Bar Association v. Union of India (2005):
    The Court encouraged alternative dispute resolution mechanisms, including conciliation, to reduce the burden on courts and ensure timely justice.

Status and Effect of the Settlement Agreement

  1. Binding Nature:
    • A settlement agreement, once signed by the parties and authenticated by the conciliator, has the same effect as an arbitral award under Section 30. It is enforceable as a decree of a court.
  2. Legal Finality:
    • As per Section 73(3), the agreement is binding on all parties and cannot be challenged on substantive grounds unless fraud or coercion is involved.
  3. Termination of Dispute:
    • Once a settlement is reached, the dispute is considered resolved, and no further legal proceedings can be initiated on the same matter.

Conclusion

The conciliator plays a critical role in fostering amicable dispute resolution. By facilitating open communication, maintaining impartiality, and encouraging cooperation, the conciliator ensures that parties achieve a fair settlement. The Arbitration and Conciliation Act, 1996, provides a robust framework for conciliation, empowering conciliators to guide parties toward sustainable solutions while reducing the burden on traditional judicial systems.

Question-11- Discuss the salient features of convention on Execution of Foreign Arbitral Awards (Schedule-III) of Arbitration and Conciliation Act, 1996.

Salient Features of the Convention on the Execution of Foreign Arbitral Awards (Schedule III) of the Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 of India, which governs both domestic and international arbitration, incorporates several international conventions for the recognition and enforcement of foreign arbitral awards. Schedule III of the Act deals with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly referred to as the New York Convention, 1958.

The New York Convention is one of the most important international treaties in the field of arbitration and aims to provide a framework for the recognition and enforcement of foreign arbitral awards in member countries. India, as a signatory to this convention, incorporates its provisions in Schedule III of the Arbitration and Conciliation Act, 1996, which governs the enforcement of foreign arbitral awards.

Salient Features of the New York Convention as Incorporated in Schedule III

  1. International Scope and Recognition (Section 44 of the Act):
    • Schedule III of the Arbitration and Conciliation Act refers to Article I of the New York Convention, which provides the framework for the recognition and enforcement of foreign arbitral awards in any of the contracting states.
    • The awards made in any of the contracting countries (which include most major trading nations) are to be recognized and enforced in India, provided they meet the necessary conditions set out under the convention and the domestic law.
  2. Definition of Foreign Arbitral Award (Section 44):
    • A “foreign arbitral award” under the Act refers to an award made in a country that is a signatory to the New York Convention.
    • The arbitral award must be made in a foreign country, and the country where the award was made must be a party to the New York Convention. This allows awards made in other countries to be enforceable in India and vice versa.
  3. Conditions for Enforcement (Section 48):
    • Section 48 outlines the conditions under which a foreign arbitral award may be refused recognition and enforcement in India. These are:
      • Non-compliance with the agreement: If the arbitration agreement was not valid under the law applicable to it.
      • Lack of proper notice: If the party against whom the award is invoked was not given proper notice of the arbitration proceedings.
      • Excess of authority: If the award deals with a matter that was not within the scope of the arbitration agreement.
      • Contrary to public policy: If the recognition or enforcement of the award would be contrary to the public policy of India, such as if the award violates Indian laws or morality.
      • Award not binding: If the award is not yet binding on the parties or has been set aside by a competent authority in the country where the award was made.
  4. Reciprocity Requirement (Article I of the Convention):
    • The recognition and enforcement of foreign arbitral awards under the New York Convention are conditional upon the principle of reciprocity. In other words, if the foreign country has ratified the convention and provides the same treatment to Indian arbitral awards, then Indian courts will recognize and enforce awards from that country. This is a mutual arrangement between countries.
  5. Role of Indian Courts in Enforcement (Section 48):
    • Courts play a significant role in the enforcement process. When a foreign arbitral award is filed for recognition and enforcement in India, the Indian courts must examine whether the award meets the conditions specified in the Act and Schedule III.
    • The courts have limited grounds to refuse enforcement, which ensures that the process is streamlined and efficient. If the award meets the criteria, the court will issue an order for enforcement.
  6. Recognition of Foreign Arbitral Awards (Section 49):
    • Once a foreign award is recognized by the court, it can be enforced as a judgment of the court. This means that it can be executed in the same manner as any domestic court judgment.
    • Section 49 specifically allows the enforcement of a foreign arbitral award, providing that once an award is recognized, it is treated in the same way as a court decree.
  7. Limitations on Refusal of Enforcement:
    • The grounds for refusal outlined under Section 48 of the Arbitration and Conciliation Act are narrowly defined to ensure that foreign awards are enforced consistently, thus ensuring that the system of international commercial arbitration remains effective.
    • The conditions for refusal primarily focus on procedural issues (such as fairness of the arbitration) and public policy violations, and not on the merits of the award.
  8. Exclusivity of Judicial Review:
    • The scope of judicial review is limited, with courts having a restricted role in reviewing the merits of an arbitral award. The courts in India cannot revisit the merits of the case in the award. They can only look into issues such as compliance with the agreement, fairness, and public policy, which aligns with the New York Convention’s goal of minimizing judicial interference in arbitration.
  9. Public Policy Exception:
    • One of the most important exceptions to enforcement is that an award can be refused if it is contrary to public policy. This term is interpreted narrowly, meaning the award must directly contradict the core principles of Indian public policy.
    • Indian courts typically interpret public policy as violating the fundamental principles of justice, morality, or established law.

Impact of the New York Convention and Schedule III in India

  1. Boost to International Trade and Arbitration:
    • The incorporation of the New York Convention provisions in Schedule III of the Act has made India an attractive destination for international arbitration. Foreign businesses and individuals can have their arbitral awards recognized and enforced in India without the fear of prolonged litigation or refusal based on local laws.
  2. Predictability and Confidence:
    • By providing a clear legal framework for the enforcement of foreign arbitral awards, Schedule III gives confidence to international parties that their rights under arbitration agreements will be protected. This increases India’s standing in the global arbitration landscape.
  3. Encouragement for Commercial Disputes Resolution:
    • The provisions help in reducing the burden on Indian courts by encouraging alternative dispute resolution mechanisms like arbitration. It promotes a smoother, quicker, and more efficient settlement of commercial disputes.

Conclusion

The New York Convention, as incorporated in Schedule III of the Arbitration and Conciliation Act, 1996, provides an essential framework for the recognition and enforcement of foreign arbitral awards in India. Its provisions ensure that foreign arbitral awards, made in countries that are signatories to the convention, are recognized and enforceable in India under specific conditions. This boosts India’s position as a favorable hub for international arbitration and promotes the wider use of arbitration as an alternative to litigation in resolving international commercial disputes.

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