The Arbitration and
Conciliation Act, 1996
Promulgated by the President in Forty-sixth Year of the Republic
of India.
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 union 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
1.
Short title, extent and commencement. —
(1) This Ordinance may be called the Arbitration and
Conciliation Act, 1996.
(2) 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.
(3)
It shall come be deemed to have come into force on the 25th day
of January, 1996.
PART 1
ARBITRATION
CHAPTER I
GENERAL PROVISIONS
2.
Definitions. —
(1) In this Part, unless the context otherwise requires, —
(a)
“arbitration” means any arbitration whether or not administered
by permanent arbitral institution;
(b)
“arbitration agreement” means an agreement referred to in
Section 7;
(c)
“arbitral award” includes an interim award;
(d)
“arbitral tribunal” means a sole arbitrator or a panel of
arbitrators;
(e)
“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 has 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;
(f)
“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 —
(i) an
individual who is a national of, or habitually resident in, any
country other than India; or
(ii) a
body corporate which is incorporated in any country other than
India; or
(iii)
a company or an association or a body of individuals whose
central management and control is exercised in any country other
than India; or
(iv)
the Government of a foreign country;
(g)
“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;
(h)
“party” means a party to an arbitration agreement.
Scope
(2)
This Part shall apply where the place of arbitration is in
India.
(3)
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.
(4)
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.
(5)
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 of references
(6)
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.
(7)
An arbitral award made under this Part shall be considered as a
domestic award.
(8)
Where this Part —
(a)
refers to the fact that the parties have agreed or that they may
agree, or
(b) in
any other way refers to an agreement of the parties,
that
agreement shall include any arbitration rules referred to in
that agreement.
(9)
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 counterclaim, and where it refers to a
defence, it shall also apply to a defence to that counterclaim.
3.
Receipt of written communications. —
(1) Unless otherwise agreed by the parties, —
(a)
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
(b)
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.
(2)
The communication is deemed to have been received on the day it
is so delivered.
(3)
This Section does not apply to written communications in respect
of proceedings of any judicial authority.
4.
Waiver of right to object. —
A party who knows that —
(a)
any provision of this Part from which the parties may derogate,
or
(b)
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.
5.
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 intervence except where so provided in this Part
tribunal with the consent of the parties, may arrange for
administrative assistance by a suitable institution or person.
6.
Administrative assistance. —
In order to facilitate the conduct of the arbital proceedings,
the parties, or the arbital.
CHAPTER II
ARBITRATION AGREEMENT
7.
Arbitration agreement. —
(1) In this Part, “arbitration agreement” means an agreement by
the parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them in respect of
a defined legal relationship, whether contractual or not.
(2)
An arbitration agreement may be in the form of an arbitraiton
clause in a contract or in the form of a separate agreement.
(3)
An arbitration agreement shall be in writing.
(4)
An arbitration agreement is in writing if it is contained in —
(a) a
document signed by the parties;
(b) an
exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement; or
(c) an
exchange of statements of claim and defence in which the
existence of the agreement is alleged by one party and not
denied by the other.
(5)
The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the
contract is in writing and the reference is such as to make that
arbitration clause part of the contract.
8.
Power to refer parties to arbitration where there is an
arbitration agreement. —
(1) A judicial authority before which an action is brought in a
matter which is the subject of an arbitration agreement shall,
if a party so applies not later than when submitting his first
statement on the substance of the dispute, refer the parties to
arbitration.
(2)
The application referred to in sub-section (1) shall not be
entertained unless it is accompanied by the original arbitration
agreement or a duly certified copy thereof.
(3)
Notwithstanding that an application has been made under
sub-section (1) and that the issue is pending before the
judicial authority, an arbitration may be commenced or continued
and an arbitral award made.
9.
Interim measures by court. —
A party may, before or during arbitral proceedings or at any
time after the making of the arbitral award but before it
becomes decree of a court, apply to a court:
(i)
for the appointment of a guardian for a minor or a person of
unsound mind for the purposes of arbitral proceedings; or
(ii)
for an interim measures of protection in respect of any of the
following matters, namely:
(a)
the preservation, interim custody or sale of any goods which are
the subject-matter of the arbitration agreement;
(b)
securing the amount in dispute in the arbitration;
(c)
the detention, preservation or inspection of any property or
thing which is the subject-matter of the dispute in arbitration,
or as to which any question may arise therein and authorising
for any of the aforesaid purposes any person to enter upon any
land or building in the possession of any party, or authorising
any samples to be taken or any observation to be made, or
experiment to be tried, which may be necessary or expedient for
the purpose of obtaining full information or evidence;
(d)
interim injunction or the appointment of a receiver;
(e)
such other interim measures of protection as may appear to the
court to be just and convenient,
and
the Court shall have the same power for making orders as it has
for the purpose of, and in relation to, any proceedings before
it.
CHAPTER III
COMPOSITION OF ARBITRAL
TRIBUNAL
10.
Number of arbitrators. —
(1) The parties are free to determine the number of arbitrators,
provided that such number shall not be an even number.
(2)
Failing the determination referred to in sub-section (1), the
arbitral tribunal shall consist of a sole arbitrator.
11.
Appointment of arbitrators. —
(1) A person of any nationality may be an arbitrator, unless
otherwise agreed by the parties.
(2)
Subject to sub-section (6), the parties are free to agree on a
procedure for appointing the arbitrator or arbitrators.
(3)
Failing any agreement referred to in sub-section (2), in an
arbitration with three arbitrators, each party shall appoint one
arbitrator, and the two appointed arbitrators shall appoint the
third arbitrator who shall act as the presiding arbitrator.
(4) If
the appointment procedure in sub-section (3) applies and —
(a) a
party fails to appoint an arbitrator within thirty days from the
receipt of a request to do so from the other party; or
(b)
the two appointed arbitrators fail to agree on the third
arbitrator within thirty days from the date of their
appointment,
the
appointment shall be made, upon request of a party, by the Chief
Justice or any person or institution designated by him.
(5)
Failing any agreement referred to in sub-section (2), in an
arbitration with a sole arbitrator, if the parties fail to agree
on the arbitrator within thirty days from receipt of a request
by one party from the other party to so agree the appointment
shall be made, upon request of a party, by the Chief Justice or
any person or institution designated by him.
(6)
Where, under an appointment procedure agreed upon by the
parties, —
(a) a
party fails to act as require under that procedure; or
(b)
the parties, or the two appointed arbitrators, fail to reach an
agreement expected of them under that procedure; or
(c) a
person, including an institution, fails to perform any function
entrusted to him or it under that procedure,
a
party may request the Chief Justice or any person or institution
designed by him to take the necessary measure, unless the
agreement on the appointment procedure provides other means for
securing the appointment.
(7)
A decision on a matter entrusted by sub-section (4) or sub-
section (5) or sub-section (6) to the Chief Justice or the
person or institution designated by him is final.
(8)
The Chief Justice or the person or institution designated by
him, in appointing an arbitrator, shall have due regard to —
(a)
any qualifications required of the arbitrator by the agreement
of the parties; and
(b)
other considerations as are likely to secure the appointment of
an independent and impartial arbitrator.
(9)
In the case of appointment of sole or third arbitrator in an
international commercial arbitration, the Chief Justice of India
or the person or institution designated by him may appoint an
arbitrator of a nationality other than the nationalities of the
parties where the parties belong to different nationalities.
(10)
The Chief Justice may make such scheme as he may deem
appropriate for dealing with matters entrusted by sub-section
(4) or sub-section (5) or sub-section (6) to him.
(11)
Where more than one request has been made under sub-section (4)
or sub-section (5) or sub-section (6) to the Chief Justices of
different High Courts or their designates, the Chief Justice or
his designate to whom the request has been first made under the
relevant sub-section shall alone be competent to decide on the
request.
12
(a) Where the matters referred to in sub-sections (4), (5), (6),
(7), (8) and (10) arise in an international commercial
arbitration, the reference to “Chief Justice” in those
sub-sections shall be construed as a reference to the “Chief
Justice of India.”
(b)
Where the matters referred to in sub-sections (4, (5), (6), (7),
(8) and (10) arise in any other arbitration, the reference to
“Chief Justice” in those sub-sections shall be construed as a
reference to the Chief Justice of the High Court within whose
local limits the principal Civil Court referred to in clause (e)
of sub-section (1) of Section 2 is situate and, where the High
Court itself is the Court referred to in that clause, to the
Chief Justice of that High Court.
12.
Grounds for challenge. —
(1) When a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose in writing any
circumstances likely to give rise to justifiable doubts as to
his independence or impartiality.
(2)
An arbitrator, from the time of his appointment and throughout
the arbitral proceedings, shall, without delay, disclose to the
parties in writing any circumstances referred to in sub-section
(1) unless they have already been informed of them by him.
(3)
An arbitrator may be challenged only if —
(a)
circumstances exist that give rise to justifiable doubts as to
his independence or impartiality, or
(b) he
does not possess the qualifications agreed to by the parties.
(4) A
party may challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reasons of which he
becomes aware after the appointment has been made.
13.
Challenge procedure. —
(1) Subject to sub-section (4), the parties are free to agree on
a procedure for challenging an arbitrator.
(2)
Failing any agreement referred to in sub-section (1), a party
who intends to challenge an arbitrator shall, within fifteen
days after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstances referred
to in sub-section (3) of Section 12, send a written statement of
the reasons for the challenge to the arbitral tribunal.
(3)
Unless the arbitrator challenged under sub-section (2) withdraws
from his office or the other party agrees to the challenge, the
arbitral tribunal shall decide on the challenge.
(4)
If a challenge under any procedure agreed upon by the parties or
under the procedure under sub-section (2) is not successful, the
arbitral tribunal shall continue the arbitral proceedings and
make an arbitral award.
(5)
Where an arbitral award is made under sub-section (4), the party
challenging the arbitrator may make an application for setting
aside such an arbitral award in accordance with Section 34.
(6)
Where an arbitral award is set aside on an application made
under sub-section (5), the Court may decide as to whether the
arbitrator who is challenged is entitled to any fees.
14.
Failure or impossibility to act. —
(1) The mandate of an arbitrator shall terminate if —
(a) he
becomes de jure or de facto unable to perform his
functions or for other reasons fails to act without undue delay;
and
(b) he
withdraws from his office or the parties agree to the
termination of his mandate.
(2)
If a controversy remains concerning any of the grounds referred
to in clause (a) of sub-section (1), a party may, unless
otherwise agreed by the parties, apply to the Court to decide on
the termination of the mandate.
(3)
If, under this Section or sub-section (3) of Section 13, an
arbitrator withdraws from his officer or party agrees to the
termination of the mandate of an arbitrator, it shall not imply
acceptance of the validity of any ground referred to in this
Section or sub-section (3) of Section 12.
15.
Termination of mandate and substitution of arbitrator. —
(1) In addition to the circumstances referred to in Section 13
or Section 14, the mandate of an arbitrator shall terminate —
(a)
where he withdraws from office for any reason; or
(b) by
or pursuant to agreement of the parties.
(2)
Where the mandate of an arbitrator terminates, a substitute
arbitrator shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being replaced.
(3)
Unless otherwise agreed by the parties, where an arbitrator is
replaced under sub-section (2), any hearings previously held may
be repeated at the discretion of the arbitral tribunal.
(4)
Unless otherwise agreed by the parties, an order or ruling of
the arbitral tribunal made prior to the replacement of an
arbitrator under this Section shall not be invalid solely
because there has been a change in the composition of the
arbitral tribunal.
CHAPTER IV
JURISDICTION OF ARBITRAL
TRIBUNALS
16.
Competence of arbitral tribunal to rule on its jurisdiction. —
(1) The arbitral tribunal may rule on its own jurisdiction,
including ruling on any objections with respect to the existence
or validity of the arbitration agreement, and for that purpose,
—
(a)
an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the
contract; and
(b)
a decision by the arbitral tribunal that the contract is null
and void shall not entail ipso jure the invalidity of the
arbitration clause.
(2)
A plea that the arbitral tribunal does not have jurisdiction
shall be raised not later than the submission of the statement
of defence; however, a party shall not be precluded from raising
such a plea merely because that he has appointed, or
participated in the appointment of, an arbitrator.
(3)
A plea that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be
beyond the scope of its authority if raised during the arbitral
proceedings.
(4)
The arbitral tribunal may, in either of the cases referred to in
sub-section (2) or sub-section (3), admit a later plea if it
considers the delay justified.
(5)
The arbitral tribunal shall decide on a plea referred to in
sub-section (2) or sub-section (3) and, where the arbitral
tribunal takes a decision rejecting the plea, continue with the
arbitral proceedings and make an arbitral award.
(6)
A party aggrieved by such an arbitral award may make an
application for setting aside such an arbitral award in
accordance with Section 34.
17.
Interim measures ordered by arbitral tribunal. —
(1) Unless otherwise agreed by the parties, the arbitral
tribunal may, at the request of a party, order a party to take
any interim measures of protection as the arbitral tribunal may
consider necessary in respect of the subject-matter of the
dispute.
(2)
The arbitral tribunal may require a party to provide appropriate
security in connection with a measure ordered under sub-section
(1).
CHAPTER V
CONDUCT OF ARBITRAL
PROCEEDINGS
18.
Equal treatment of parties. —
The parties shall be treated with equality and each party shall
be given a full opportunity to present his case.
19.
Determination of rules of procedure. —
(1) The arbitral tribunal shall not be bound by the Code of
Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act,
1872 (1 of 1872).
(2)
Subject to this Part, the parties are free to agree on the
procedure to be followed by the arbitral tribunal in conducting
its proceedings.
(3)
Failing any agreement referred to in sub-section (2), the
arbitral tribunal may, subject to this Part, conduct the
proceedings in the manner it considers appropriate.
(4)
The power of the arbitral tribunal under sub-section (3)
includes the power to determine the admissibility, relevance,
materiality and weight of any evidence.
20.
Place of arbitration. —
(1) The parties are free to agree on the place of arbitration.
(2)
Failing any agreement referred to in sub-section (1), the place
of arbitration shall be determined by the arbitral tribunal
having regard to the circumstances of the case, including the
convenience of the parties.
(3)
Notwithstanding sub-section (1) or sub-section (2), the arbitral
tribunal may, unless otherwise agreed by the parties, meet at
any place it considers appropriate for consultation among its
members, for hearing witnesses, experts or the parties, or for
inspection of documents, goods or other property.
21.
Commencement of arbitral proceedings. —
Unless otherwise agreed by the parties, the arbitral proceedings
in respect of a particular dispute commence on the date on which
a request for that dispute to be referred to arbitration is
received by the respondent.
22.
Language. —
(1) The parties are free to agree upon the language or languages
to be used in the arbitral proceedings.
(2)
Failing any agreement referred to in sub-section (1), the
arbitral tribunal shall determine the language or languages to
be used in the arbitral proceedings.
(3)
The agreement or determination, unless otherwise specified,
shall apply to any written statement by a party, any hearing and
any arbitral award, decision or other communication by the
arbitral tribunal.
(4)
The arbitral tribunal may order that any documentary evidence
shall be accompanied by a translation into the language or
languages agreed upon by the parties or determined by the
arbitral tribunal.
23.
Statement of claim and defence. —
(1) Within the period of time agreed upon by the parties or
determined by the arbitral tribunal, the claimant shall state
the facts supporting his claim, the points at issue and the
relief or remedy sought, and the respondent shall state his
defence in respect of these particulars, unless the parties have
otherwise agreed as to the required elements of those
statements.
(2)
The parties may submit with their statements all documents they
consider to be relevant or may add a reference to the documents
or other evidence they will submit.
(3)
Unless otherwise agreed by the parties, either party may amend
or supplement his claim or defence during the course of the
arbitral proceedings, unless the arbitral tribunal considers it
inappropriate to allow the amendment or supplement having regard
to the delay in making it.
24.
Hearings and written proceedings. —
(1) Unless otherwise agreed by the parties, the arbitral
tribunal shall decide whether to hold oral hearings for the
presentation of evidence or for oral argument, or whether the
proceedings shall be conducted on the basis of documents and
other materials:
Provided that the arbitral tribunal shall hold oral hearings, at
an appropriate stage of the proceedings, on a request by a
party, unless the parties have agreed that no oral hearing shall
be held.
(2)
The parties shall be given sufficient advance notice of any
hearing and of any meeting of the arbitral tribunal for the
purposes of inspection of documents, goods or other property.
(3)
All statements, documents or other information supplied to, or
applications made to the arbitral tribunal by one party shall be
communicated to the other party, and any expert report or
evidentiary document on which the arbitral tribunal may rely in
making its decision shall be communicated to the parties.
25.
Default of a party. —
Unless otherwise agreed by the parties, where, without showing
sufficient cause, —
(a)
the claimant fails to communicate his statement of claim in
accordance with sub-section (1) of Section 23, the arbitral
tribunal shall terminate the proceedings;
(b)
the respondent fails to communicate his statement of defence in
accordance with sub-section (1) of Section 23, the arbitral
tribunal shall continue the proceedings without treating that
failure in itself as an admission of the allegations by the
claimant;
(c)
a party fails to appear at an oral hearing or to produce
documentary evidence, the arbitral tribunal may continue the
proceedings and make the arbitral award on the evidence before
it.
26.
Expert appointment by arbitral tribunal. —
(1) Unless otherwise agreed by the parties, the arbitral
tribunal may —
(a)
appoint one or more experts to report to it on specific issues
to be determined by the arbitral tribunal, and
(b)
require a party to give the expert any relevant information or
to produce, or to provide access to, any relevant documents,
goods or other property for his inspection.
(2)
Unless otherwise agreed by the parties, if a party so requests
or if the arbitral tribunal considers it necessary, the expert
shall, after delivery of his written or oral report, participate
in an oral hearing where the parties have the opportunity to put
questions to him and to present expert witnesses in order to
testify on the points at issue.
(3)
Unless otherwise agreed by the parties, the expert shall, on the
request of a party, make available to that party for examination
all documents, goods or other property in the possession of the
expert with which he was provided in order to prepare his
report.
27.
Court assistance in taking evidence. —
(1) The arbitral tribunal, or a party with the approval of the
arbitral tribunal, may apply to the Court for assistance in
taking evidence.
(2)
The application shall specify —
(a)
the names and addresses of the parties and the arbitrators;
(b)
the general nature of the claim and the relief sought;
(c)
the evidence to be obtained, in particular, —
(i)
the name and address of any person to be heard as witness or
expert witness and a statement of the subject-matter of the
testimony required;
(ii)
the description of any document to be produced or property to be
inspected.
(3)
The Court may, within its competence and according to its rules
on taking evidence, execute the request by ordering that the
evidence be provided directly to the arbitral tribunal.
(4)
The Court may, while making an order under sub-section (3),
issue the same processes to witnesses as it may issue in suits
tried before it.
(5)
Persons failing to attend in accordance with such process, or
making any other default, or refusing to give their evidence, or
guilty of any contempt to the arbitral tribunal during the
conduct of arbitral proceedings, shall be subject to the like
disadvantages, penalties and punishments by order of the Court
on the representation of the arbitral tribunal as they would
incur for the like offences in suits tried before the Court.
(6) In
this Section the expression “Processes” includes summonses and
commissions for the examination of witnesses and summonses to
produce documents.
CHAPTER VI
MAKING OF ARBITRAL AWARD AND
TERMINATION OF PROCEEDINGS
28.
Rules applicable to substance of dispute. —
(1) Where the place of arbitration is situate in India, —
(a) in
an arbitration other than an international commercial
arbitration, the arbitral tribunal shall decide the dispute
submitted to arbitration in accordance with the substantive law
for the time being in force in India;
(b) in
international commercial arbitration, —
(i)
the arbitral tribunal shall decide the dispute in accordance
with the rules of law designated by the parties as applicable to
the substance of the dispute;
(ii)
any designation by the parties of the law or legal system of a
given country shall be construed, unless otherwise expressed, as
directly referring to the substantive law of that country and
not to its conflict of laws rules;
(iii)
failing any designation of the law under sub-clause (ii) by the
parties, the arbitral tribunal shall apply the rules of law it
considers to be appropriate given all the circumstances
surrounding the dispute.
(2)
The arbitral tribunal shall decide ex aequo et bono or as
amiable compositeur only if the parties have expressly
authorised it to do so.
(3)
In all cases, the arbitral tribunal shall decide in accordance
with the terms of the contract and shall take into account the
usages of the trade applicable to the transaction.
29.
Decision making by panel of arbitrators. —
(1) Unless otherwise agreed by the parties, in arbitral
proceedings with more than one arbitrator, any decision of the
arbitral tribunal shall be made by a majority of all its
members.
(2)
Notwithstanding sub-section (1), if authorised by the parties or
all the members of the arbitral tribunal, questions of procedure
may be decided by the presiding arbitrator.
30.
Settlement. —
(1) It is not incompatible with an arbitration agreement for an
arbitral tribunal to encourage settlement of the dispute and,
with the agreement of the parties, the arbitral tribunal may use
mediation, conciliation or other procedures at any time during
the arbitral proceedings to encourage settlement.
(2)
If, during arbitral proceedings, the parties settle the dispute,
the arbitral tribunal shall terminate the proceedings and, if
requested by the parties and not objected to by the arbitral
tribunal, record the settlement in the form of an arbitral award
on agreed terms .
(3)
An arbitral award on agreed terms shall be made in accordance
with Section 31 and shall state that it is an arbitral award.
(4)
An arbitral award on agreed terms shall have the same status and
effect as any other arbitral award on the substance of the
dispute.
31.
Form and contents of arbitral award. —
(1) An arbitral award shall be made in writing and shall be
signed by the members of the arbitral tribunal.
(2)
For the purposes of sub-section (1), in arbitral proceedings
with more than one arbitrator, the signatures of the majority of
all the members of the arbitral tribunal shall be sufficient so
long as the reason for any omitted signature is stated.
(3)
The arbitral award shall state the reasons upon which it is
based, unless —
(a)
the parties have agreed that no reasons are to be given, or
(b)
the award is an arbitral award on agreed terms under Section 30.
(4)
The arbitral award shall state its date and the place of
arbitration as determined in accordance with Section 20 and the
award shall be deemed to have been made at that place.
(5)
After the arbitral award is made, a signed copy shall be
delivered to each party.
(6)
The arbitral tribunal may, at any time during the arbitral
proceedings, make an interim arbitral award on any matter with
respect to which it may make a final arbitral award.
(7)
(a) Unless otherwise agreed by the parties, where and in so far
as an arbitral award is for the payment of money, the arbitral
tribunal may include in the sum for which the award is made
interest, at such rate as it deems reasonable, on the whole or
any part of the money, for the whole or any part of the period
between the date on which the cause of action arose and the date
on which the award is made.
(b) A
sum directed to be paid by an arbitral award shall, unless the
award otherwise directs, carry interest at the rate of eighteen
per centum per annum from the date of the award to the date of
payment.
(8)
Unless otherwise agreed by the parties, —
(a)
the costs of an arbitration shall be fixed by the arbitral
tribunal;
(b)
the arbitral tribunal shall specify —
(i)
the party entitled to costs,
(ii)
the party who shall pay the costs,
(iii)
the amount of costs or method of determining that amount, and
(iv)
the manner in which the costs shall be paid.
Explanation.
— For the purpose of clause (a), “costs” means reasonable costs
relating to —
(i)
the fees and expenses of the arbitrators and witnesses,
(ii)
legal fees and expenses,
(iii) any administration fees of the institution supervising
the arbitration, and
(iv)
any other expenses incurred in connection with the arbitral
proceedings and the arbitral award.
32.
Termination of proceedings. —
(1) The arbitral proceedings shall be terminated by the final
arbitral award or by an order of the arbitral tribunal under
sub-section (2).
(2)
The arbitral tribunal shall issue an order for the termination
of the arbitral proceedings where —
(a)
the claimant withdraws his claim, unless the respondent objects
to the order and the arbitral tribunal recognises a legitimate
interest on his part in obtaining a final settlement of the
dispute,
(b)
the parties agree on the termination of the proceedings, or
(c)
the arbitral tribunal finds that the continuation of the
proceedings has for any other reason become unnecessary or
impossible.
(3)
Subject to Section 33 and sub-section (4) of Section 34, the
mandate of the arbitral tribunal shall terminate with the
termination of the arbitral proceedings.
33.
Correction and interpretation of award; additional award. —
(1) Within thirty days from the receipt of the arbitral award,
unless another period of time has been agreed upon by the
parties —
(a)
a party, with notice to the other party, may request the
arbitral tribunal to correct any computation errors, any
clerical or typographical errors or any other errors of a
similar nature occurring in the award;
(b)
if so agreed by the parties, a party, with notice to the other
party, may request the arbitral tribunal to give an
interpretation of a specific point or part of the award.
(2)
If the arbitral tribunal considers the request made under
sub-section (1) to be justified, it shall make the correction or
give the interpretation within thirty days from the receipt of
the request and the interpretation shall form part of the
arbitral award.
(3)
The arbitral tribunal may correct any error of the type referred
to in clause (a) of sub-section (1), on its own initiative,
within thirty days from the date of the arbitral award.
(4)
Unless otherwise agreed by the parties, a party with notice to
the other party, may request, within thirty days from the
receipt of the arbitral award, the arbitral tribunal to make an
additional arbitral award as to claims presented in the arbitral
proceedings but omitted from the arbitral award.
(5)
If the arbitral tribunal considers the request made under
sub-section (4) to be justified, it shall make the additional
arbitral award within sixty days from the receipt of such
request.
(6)
The arbitral tribunal may extend, if necessary, the period of
time within which it shall make a correction, give an
interpretation or make an additional arbitral award under
sub-section (2) or sub-section (5).
(7)
Section 31 shall apply to a correction or interpretation of the
arbitral award or to an additional arbitral award made under
this Section.
CHAPTER VII
RECOURSE AGAINST ARBITRAL
AWARD
34.
Application for setting aside arbitral award. —
(1) Recourse to a court against an arbitral award may be made
only by an application for setting aside such award in
accordance with sub-section (2) and sub-section(3).
(2) An
arbitral award may be set aside by the Court only if —
(a)
the party making the application furnishes proof that —
(i) a
party was under some incapacity, or
(ii)
the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication
thereon, under the law for the time being in force; or
(iii)
the party making the application was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings
or was otherwise unable to present his case; or
(iv)
the arbitral award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration,
or it contains decisions on matters beyond the scope of the
submission to arbitration: Provided that, if the decisions on
matters submitted to arbitration can be separated from those not
so submitted, only that part of the arbitral award which
contains decisions on matters not submitted to arbitration may
be set aside; or
(v)
the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a provision
of this Part from which the parties cannot derogate, or, failing
such agreement, was not in accordance with this Part; or
(b)
the court finds that —
(i)
the subject-matter of the dispute is not capable of settlement
by arbitration under the law for the time being in force, or
(ii)
the arbitral award is in conflict with the public policy of
India.
Explanation. — Without prejudice to the generality of
sub-clause (ii) of clause (b), it is hereby declared, for the
avoidance of any doubt, that an award is in conflict with the
public policy of India if the making of the award was induced or
affected by fraud or corruption or was in violation of Section
75 or Section 81.
(3)
An application for setting aside may not be made after three
months have elapsed from the date on which the party making that
application had received the arbitral award or, if a request had
been made under Section 33, from the date on which that request
had been disposed of by the arbitral tribunal:
Provided that if the court is satisfied that the applicant was
prevented by sufficient cause from making the application within
the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.
(4)
On receipt of an application under sub-section (1), the court
may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it
in order to give the arbitral tribunal an opportunity to resume
the arbitral proceedings or to take such other action as in the
opinion of arbitral tribunal will eliminate the grounds for
setting aside the arbitral award.
CHAPTER VIII
FINALITY AND ENFORCEMENT OF
ARBITRAL AWARDS
35.
Finality of arbitral awards. —
Subject to this Part an arbitral award shall be final and
binding on the parties and persons claiming under them
respectively.
36.
Enforcement. —
Where the time for making an application to set aside the
arbitral award under Section 34 has expired, or such application
having been made, it has been refused, the award shall be
enforced under the Code of Civil Procedure, 1908 (5 of 1908) in
the same manner as if it were a decree of the Court.
CHAPTER IX
APPEALS
37.
Appealable orders. —
(1) An appeal shall lie from the following orders (and from no
others) to the court authorised by law to hear appeals from
original decrees of the court passing the order, namely:
(a)
granting or refusing to grant any measure under Section 9;
(b)
setting aside or refusing to set aside an arbitral award under
Section 34.
(2) An
appeal shall also lie to a Court from an order of the arbitral
tribunal
(a)
accepting the plea referred to in sub-section (2) or sub-section
(3) or Section 16; or
(b)
granting or refusing to grant an interim measure under Section
17.
(3) No
second appeal shall lie from an order passed in appeal under
this Section, but nothing in this Section shall affect or take
away any right to appeal to the Supreme Court.
CHAPTER X
MISCELLANEOUS
38.
Deposits. —
(1) The arbitral tribunal may fix the amount of the deposit or
supplementary deposit, as the case may be, as an advance for the
costs referred to in sub-section (8) of Section 31, which it
expects will be incurred in respect of the claim submitted to
it:
Provided that where, apart from the claim, a counter-claim has
been submitted to the arbitral tribunal, it may fix separate
amount of deposit for the claim and counter-claim.
(2)
The deposit referred to in sub-section (1) shall be payable in
equal shares by the parties:
Provided that where one party fails to pay his share of the
deposit, the other party may pay that share:
Provided further that where the other party also does not pay
the aforesaid share in respect of the claim or the
counter-claim, the arbitral tribunal may suspend or terminate
the arbitral proceedings in respect of such claim or
counter-claim, as the case may be.
(3)
Upon termination of the arbitral proceedings, the arbitral
tribunal shall render an accounting to the parties of the
deposits received and shall return any unexpected balance to the
party or parties, as the case may be.
39.
Lien on arbitral award and deposits as to costs. —
(1) Subject to the provisions of sub-section (2) and to nay
provision to the contrary in the arbitration agreement, the
arbitral tribunal shall have a lien on the arbitral award for
any unpaid costs of the arbitration.
(2)
If in any case an arbitral tribunal refuses to deliver its award
except on payment of the costs demanded by it, the court may, on
an application in this behalf, order that the arbitral tribunal
shall deliver the arbitral award to the applicant on payment
into court by the applicant of the costs demanded, and shall,
after such inquiry, if any, as it thinks fit, further order that
out of the money so paid into court there shall be paid to the
arbitral tribunal by way of costs such sum as the court may
consider reasonable and that the balance of the money, if any,
shall be refunded to the applicant.
(3)
An application under sub-section (2) may be made by any party
unless the fees demanded have been fixed by written agreement
between him and the arbitral tribunal, and the arbitral tribunal
shall be entitled to appear and be heard on any such
application.
(4)
The court may make such orders as it thinks fit respecting the
costs of the arbitration where any question arises respecting
such costs and the arbitral award contains no sufficient
provision concerning them.
40.
Arbitration agreement not to be discharged by death of party
thereto. —
(1) An arbitration agreement shall not be discharged by the
death of any party thereof either as respects the deceased or as
respects any other party, but shall in such event be enforceable
by or against the legal representative of the deceased.
(2)
The mandate of an arbitrator shall not be terminated by the
death of any party by whom he was appointed.
(3)
Nothing in this section shall affect the operation of any law by
virtue of which any right of action is extinguished by the death
of a person.
41.
Provisions in case of insolvency. —
(1) Where it is provided by a term in a contract to which an
insolvent is a party that any dispute arising thereout or in
connection wherewith shall be submitted to arbitration, the said
term shall, if the receiver adopts the contract, be enforceable
by or against him so far as it relates to any such dispute.
(2)
Where a person who has been adjudged an insolvent had, before
the commencement of the insolvency proceedings, become a party
to an arbitration agreement, and any matter to which the
agreement applies is required to be determined in connection
with, or for the purposes of, the insolvency proceedings, then,
if the case is one to which sub-section (1) does not apply, any
other party or the receiver may apply to the judicial authority
having jurisdiction in the insolvency proceedings for an order
directing that the matter in question shall be submitted to
arbitration in accordance with the arbitration agreement, and
the judicial authority may, if it is of opinion that, having
regard to all the circumstances of the case, the matter ought to
be determined by arbitration, make an order accordingly.
(3)
In this section the expression “receiver” includes an Official
Assignee.
42.
Jurisdiction. —
Notwithstanding anything contained elsewhere in this Part or in
any other law for the time being in force, where with respect to
an arbitration agreement any application under this Part has
been made in a court, that court alone shall have jurisdiction
over the arbitral proceedings and all subsequent applications
arising out of that agreement and the arbitral proceedings shall
be made in that court and in no other court.
43.
Limitations. —
The Limitation Act, 1963 (36 of 1963), shall apply to
arbitrations as it applies to proceedings in court.
(2)
For the purposes of this section and the Limitation Act, 1963
(36 of 1963), an arbitration shall be deemed to have commenced
on the date referred in Section 21.
(3)
Where an arbitration agreement to submit future disputes to
arbitration provides that any claim to which the agreement
applies shall be barred unless some step to commence arbitral
proceedings is taken within a time fixed by the agreement, and a
dispute arises to which the agreement applies, the court, if it
is of opinion that in the circumstances of the case undue
hardship would otherwise be caused, and notwithstanding that the
time so fixed has expired, may on such terms, if any, as the
justice of the case may require, extend the time for such period
as it thinks proper.
(4)
Where the court orders that an arbitral award be set aside, the
period between the commencement of the arbitration and the date
of the order of the court shall be excluded in computing the
time prescribed by the Limitation Act, 1963 (36 of 1963), for
the commencement of the proceedings (including arbitration) with
respect to the dispute so submitted.
Comments
The
period of limitation for the commencement of arbitration runs
from the date on which cause of action accrued. The claim for
arbitration must be raised as soon as the cause for arbitration
arises as in the cause of action arises in a civil action. (State
of Orissa & Anr. v. Shri Damodar Das, JT 1995 (9) S.C. 419).
PART II
ENFORCEMENT OF CERTAIN FOREIGN
AWARDS
CHAPTER I
NEW YORK CONVENTION AWARDS
44.
Definition. —
In this Chapter, unless the context otherwise requires, “foreign
award” means an arbitral award on differences between persons
arising out of legal relationships, whether contractual or not,
considered as commercial under the law in force in India, made
on or after the 11th day of October, 1960 —
(a) in
pursuance of an agreement in writing for arbitration to which
the Convention set forth in the first Schedule applies, and
(b) in
one of such territories as the Central Government, being
satisfied that reciprocal provisions have been made may, by
notification in the Official Gazette, declare to be territories
to which the said Convention applies.
45.
Power of judicial authority to refer parties to arbitration. —
Notwithstanding anything contained in Part I or in the Code of
Civil Procedure, 1908 (5 of 1908), a judicial authority, when
seized of an action in a matter in respect of which the parties
have made an agreement referred to in Section 44, shall, at the
request of one of the parties or any person claiming through or
under him, refer the parties to arbitration, unless it finds
that the said agreement is null and void, inoperative or
incapable of being performed.
46.
When foreign award binding. —
Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all purposes on the persons as
between whom it was made, and may accordingly be relied on by
any of those persons by way of defence, set off or otherwise in
any legal proceedings in India and any references in this
Chapter to enforcing a foreign award shall be construed as
including references to relying on a award.
47.
Evidence. —
(1) The party applying for the enforcement of a foreign award
shall, at the time of the application, procedure before the
court —
(a)
The original award or a copy thereof, duly authenticated in the
manner required by the law of the country in which it was made;
(b)
the original agreement for arbitration or a duly certified copy
thereof; and
(c)
such evidence as may be necessary to prove that the award is a
foreign award.
(2) If
the award or agreement to be produced under sub-section (1) is
in a foreign language, the party seeking to enforce the award
shall produce a translation into English certified as correct by
a diplomatic or consular agent of the country to which that
party belongs or certified as correct in such other manner as
may be sufficient according to the law in force in India.
Explanation. — In this section and all the following
sections of this Chapter, “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 over the subject-matter of the
award 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.
48.
Conditions for enforcement of foreign awards. —
(1) Enforcement of a foreign award may be refused, at the
request of the party against whom it is invoked, only if that
party furnishes to the court proof that —
(a)
the parties to the agreement referred to in Section 44 were,
under the law applicable to them, under some incapacity, or the
said agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the
law of the country where the award was made; or
(b)
the party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(c)
the award deals with a difference not contemplated by or not
falling within the term of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission
to arbitration:
Provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, that
part of the award which contains decisions on matters submitted
to arbitration may be enforced; or
(d)
the composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the
parties, or, failing such agreement, was not in accordance with
the law of the country where the arbitration took place; or
(e)
the award has not yet become binding on the parties, or has been
set aside or suspended by a competent authority of the country
in which, or under the law of which, that award was made.
(2)
Enforcement of an arbitral award may also be refused if the
court finds that —
(a)
the subject-matter of the difference is not capable of
settlement by arbitration under the law of India; or
(b)
the enforcement of the award would be contrary to the public
policy of India.
Explanation. —
Without prejudice to the generality of clause (b) of this
section, it is hereby declared, for the avoidance of any doubt,
that an award is in conflict with the public policy of India if
the making of the award was induced or affected by fraud or
corruption.
(3) If
an application for the setting aside or suspension of the award
has been made to a competent authority referred to in clause (e)
of sub-section (1) the court may, if it considers a proper,
adjourn the decision on the enforcement of the award and may
also, on the application of the party claiming enforcement of
the award, order the other party to give suitable security.
49.
Enforcement of foreign awards. —
Where the court is satisfied that the foreign award is
enforceable under this Chapter, the award shall be deemed to be
a decree of that court.
50.
Appealable orders. —
(1) An appeal shall lie from the order refusing to —
(a)
refer the parties to arbitration under Section 45;
(b)
enforce a foreign award under Section 48,
to the
court authorised by law to hear appeals from such order.
(2) No
second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or take
away any right to appeal to the Supreme Court.
51.
Savings. —
Nothing in this Chapter shall prejudice any rights which any
person would have had of enforcing in India of any award or of
availing himself in India of any award if this Chapter had not
been enacted.
52.
Chapter II not to apply. —
Chapter II of this Part shall not apply in relation to foreign
awards to which this Chapter applies.
CHAPTER II
GENEVA CONVENTION AWARDS
53.
Interpretation. —
In this Chapter “foreign award” means an arbitral award on
differences relating to matters considered as commercial under
the law in force in India made after the 28th day of July, 1924,
—
(a)
in pursuance of an agreement for arbitration to which the
Protocol set forth in the Second Schedule applies, and
(b)
between persons of whom one is subject to the jurisdiction of
some one of such Powers as the Central Government, being
satisfied that reciprocal provisions have been made, may, by
notification in the Official Gazette, declare to be parties to
the Convention set forth in the Third Schedule, and of whom the
other is subject to the jurisdiction of some other of the Powers
aforesaid, and
(c)
in one of such territories as the Central Government, being
satisfied that reciprocal provisions have been made, may, by
like notification, declare to be territories to which the said
Convention applies,
and
for the purposes of this Chapter an award shall not be deemed to
be final if any proceedings for the purpose of contesting the
validity of the award are pending in the country in which it was
made.
54.
Power of judicial authority to refer parties to arbitration. —
Notwithstanding anything contained in Part I or in the Code of
Civil Procedure, 1908 (5 of 1908), a judicial authority, on
being seized of a dispute regarding a contract made between
persons to whom Section 53 applies and including an arbitration
agreement, whether referring to present or future differences,
which is valid under that section and capable of being carried
into effect, shall refer the parties on the application of
either of them or any person claiming through or under him to
the decision of the arbitrators and such reference shall not
prejudice the competence of the judicial authority in case the
agreement or the arbitration cannot proceed or become
inoperative.
55.
Foreign awards when binding. —
Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all purposes on the persons as
between whom it was made, and may accordingly be relied on by
any of those persons by way of defence, set off or otherwise in
any legal proceedings in India and any references in this
Chapter to enforcing a foreign award shall be construed as
including references to relying on an award.
56.
Evidence. —
(1) The party applying for the enforcement of a foreign award
shall, at the time of application, produce before the court —
(a)
the original award or a copy thereof duly authenticated in the
manner required by the law of the country in which it was made;
(b)
evidence proving that the award has become final; and
(c)
such evidence as may be necessary to prove that the conditions
mentioned in clauses (a) and (c) of sub-section (1) of Section
57 are satisfied.
(2)
Where any document requiring to be produced under sub-section
(1) is in a foreign language, the party seeking to enforce the
award shall produce a translation into English certified as
correct by a diplomatic or consular agent of the country to
which that party belongs or certified as correct in such other
manner as may be sufficient according to the law in force in
India.
Explanation. — In this section and all the following sections of
this Chapter, “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 over the subject-matter of the award 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.
57.
Conditions for enforcement of foreign awards. —
(1) In order that a foreign award may be enforceable under this
Chapter, it shall be necessary that —
(a)
the award has been made in pursuance of a submission to
arbitration which is valid under the law applicable thereto;
(b)
the subject-matter of the award is capable of settlement by
arbitration under the law of India;
(c)
the award has been made by the arbitral tribunal provided for in
the submission to arbitration or constituted in the manner
agreed upon by the parties and in conformity with the law
governing the arbitration procedure;
(d)
the award has become final in the country in which it has been
made, in the sense that it will not be considered as such if it
is open to opposition or appeal or if it is proved that any
proceedings for the purpose of contesting the validity of the
award are pending;
(e)
the enforcement of the award is not contrary to the public
policy or the law of India.
Explanation.
— Without prejudice to the generality of clause (e), it is
hereby declared, for the avoidance of any doubt, that an award
is in conflict with the public policy of India if the making of
the award was induced or affected by fraud or corruption.
(2)
Even if the conditions laid down in sub-section (1) are
fulfilled, enforcement of the award shall be refused if the
court is satisfied that —
(a)
the award has been annulled in the country in which it was made;
(b)
the party against whom it is sought to use the award was not
given notice of the arbitration proceedings in sufficient time
to enable him to present his case; or that, being under a legal
incapacity, he was not properly represented;
(c)
the award does not deal with the differences contemplated by or
falling within the terms of the submission to arbitration or
that it contains decisions on matters beyond the scope of the
submission to arbitration:
Provided that if the award has not covered all the differences
submitted to the arbitral tribunal, the court may, if it thinks
fit, postpone such enforcement or grant it subject to such
guarantee as the court may decide.
(3) If
the party against whom the award has been made proves that under
the law governing the arbitration procedure there is a ground,
other than the grounds referred to in clauses (a) and (c) of
sub-section (1) and clauses (b) and (c) of sub-section (2)
entitling him to contest the validity of the award, the court
may, if it thinks fit, either refuse enforcement of the award or
adjourn the consideration thereof, giving such party a
reasonable time within which to have the award annulled by the
competent tribunal.
58.
Enforcement of foreign awards. —
Where the court is satisfied that the foreign award is
enforceable under this Chapter, the award shall be deemed to be
a decree of the court.
59.
Appealable orders. —
(1) An appeal shall lie from the order refusing —
(a)
to refer the parties to arbitration under Section 54; and
(b)
to enforce a foreign award under Section 57,
to the
court authorised by law to hear appeals from such order.
(2) No
second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or take
away any right to appeal to the Supreme Court.
60.
Savings —
Nothing in this Chapter shall prejudice any rights which any
person would have had of enforcing in India of any award or of
availing himself in India of any award if this Chapter had not
been enacted.
PART III
CONCILIATION
61.
Application and scope. —
(1) Save as otherwise provided by any law for the time being in
force and unless the parties have otherwise agreed, this Part
shall apply to conciliation of disputes arising out of legal
relationship, whether contractual or not and to all proceedings
relating thereto.
(2)
This Part shall not apply where by virtue of any law for the
time being in force certain disputes may not be submitted to
conciliation.
62.
Commencement of conciliation proceedings. —
(1) The party initiating conciliation shall send to the other
party a written invitation to conciliate under this Part,
briefly identifying the subject of the dispute.
(2)
Conciliation proceedings shall commence when the other party
accepts in writing the invitation to conciliate.
(3)
If the other party rejects the invitation, there will be no
conciliation proceedings.
(4)
If the party initiating conciliation does not receive a reply
within thirty days from the date on which he sends the
invitation, or within such other period of time as specified in
the invitation, he may elect to treat this as a rejection of the
invitation to conciliate and if he so elects, he shall inform in
writing the other party accordingly.
63.
Number of conciliators. —
(1) There shall be one conciliator unless the parties agree that
there shall be two or three conciliators.
(2)
Where there is more than one conciliator, they ought, as a
general rule, to act jointly.
64.
Appointment of conciliators. —
(1) Subject to sub-section (2), —
(a)
in conciliation proceedings with one conciliator, the parties
may agree on the name of a sole conciliator;
(b)
in conciliation proceedings with two conciliators, each party
may appoint one conciliator;
(c)
in conciliation proceedings with three conciliators, each party
may appoint one conciliator and the parties may agree on the
name of the third conciliator who shall act as the presiding
conciliator.
(2)
Parties may enlist the assistance of a suitable institution or
person in connection with the appointment of conciliators, and
in particular, —
(a)
a party may request such an institution or person to recommend
the names of suitable individuals to act as conciliator; or
(b)
the parties may agree that the appointment of one or more
conciliators be made directly by such an institution or person:
Provided that in recommending or appointing individuals to act
as conciliator, the institution or person shall have regard to
such considerations as are likely to secure the appointment of
an independent and impartial conciliator and, with respect to
sole or third conciliator, shall take into account the
advisability of appointing a conciliator of a nationality other
than the nationalities of the parties.
65.
Submission of statements to conciliator. —
(1) The conciliator, upon his appointment, may request each
party to submit to him a brief written statement describing the
general nature of the dispute and the points at issue. Each
party shall send a copy of such statement to the other party.
(2)
The conciliator may request each party to submit to him a
further written statement of his position and the facts and
grounds in support thereof, supplemented by any documents and
other evidence that such party deems appropriate. The party
shall send a copy of such statement, documents and other
evidence to the other party.
(3)
At any stage of the conciliation proceedings, the conciliator
may request a party to submit to him such additional information
as he deems appropriate.
Explanation. — In this section and all the following
sections of this Part, the term “conciliator” applies to a sole
conciliator, two or three conciliators as the case may be.
66.
Conciliator not bound by certain enactments. —
The conciliator is not bound by the Code of Civil Procedure,
1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
67.
Role of conciliator. —
(1) The conciliator shall assist the parties in an independent
and impartial manner in their attempt to reach an amicable
settlement of their dispute.
(2)
The conciliator shall be guided by principles of objectivity,
fairness and justice, giving consideration to, among other
things, the rights and obligations of the parties, the usages of
the trade concerned and the circumstances surrounding the
dispute, including any previous business practices between the
parties.
(3)
The conciliator may conduct the conciliation proceedings in such
a manner as he considers appropriate, taking into account the
circumstances of the case, the wishes the parties may express,
including any request by a party that the conciliator hear oral
statements, and the need for a speedy settlement of the dispute.
(4)
The conciliator may, at any stage of the conciliation
proceedings, make proposals for a settlement of the dispute.
Such proposals need not be in writing and need not be
accompanied by a statement of the reasons therefor.
68.
Administrative assistance. —
In order to facilitate the conduct of the conciliation
proceedings, the parties, or the conciliator with the consent of
the parties, may arrange for administrative assistance by a
suitable institution or person.
69.
Communication between conciliator and parties. —
(1) The conciliator may invite the parties to meet him or may
communicate with them orally or in writing. He may meet or
communicate with the parties together or with each of them
separately.
(2)
Unless the parties have agreed upon the place where meetings
with the conciliator are to be held, such place shall be
determined by the conciliator, after consultation with the
parties, having regard to the circumstances of the conciliation
proceedings.
70.
Disclosure of information. —
When the conciliator receives factual information concerning the
dispute from a party, he shall disclose the substance of that
information to the other party in order that the other party may
have the opportunity to present any explanation which he
considers appropriate:
Provided that when a party gives any information to the
conciliator subject to a specific condition that it be kept
confidential, the conciliator shall not disclose that
information to the other party.
71.
Co-operation of parties with conciliator. —
The parties shall in good faith cooperate with the conciliator
and, in particular, shall endeavour to comply with requests by
the conciliator to submit written materials, provide evidence
and attend meetings.
72.
Suggestions by parties for settlement of dispute. —
Each party may, on his own initiative or at the invitation of
the conciliator, submit to the conciliator suggestions for the
settlement of the dispute.
73.
Settlement agreement. —
(1) When it appears to the conciliator that there exist elements
of a settlement which may be acceptable to the parties, he shall
formulate the terms of a possible settlement and submit them to
the parties for their observations. After receiving the
observations of the parties, the conciliator may reformulate the
terms of a possible settlement in the light of such
observations.
(2)
If the parties reach agreement on a settlement of the dispute,
they may draw up and sign a written settlement agreement. If
requested by the parties, the conciliator may draw up, or assist
the parties in drawing up, the settlement agreement.
(3)
When the parties sign the settlement agreement, it shall be find
and binding on the parties and persons claiming under them
respectively.
(4)
The conciliator shall authenticate the settlement agreement and
furnish a copy thereof to each of the parties.
74.
Status and effect of settlement agreement. —
The settlement agreement shall have the same status and effect
as if it is an arbitral award on agreed terms on the
75.
Confidentiality. —
Notwithstanding anything contained in any other law for the time
being in force, the conciliator and the parties shall keep
confidential all matters relating to the conciliation
proceedings. Confidentiality shall extend also to the settlement
agreement, except where its disclosure is necessary for purposes
of implementation and enforcement.
76.
Termination of conciliation proceedings. —
The conciliation proceedings shall be terminated —
(a) by
the signing of the settlement agreement by the parties on the
date of the agreement; or
(b) by
a written declaration of the conciliator, after consultation
with the parties, to the effect that further efforts at
conciliation are no longer justified, on the date of the
declaration; or
(c) by
a written declaration of the parties addressed to the
conciliator to the effect that the conciliation proceedings are
terminated, on the date of the declaration; or
(d) by
a written declaration of a party to the other party and the
conciliator, if appointed, to the effect that the conciliation
proceedings are terminated, on the date of the declaration.
77.
Resort to arbitral or judicial proceedings. —
The parties shall not initiate, during the conciliation
proceedings, any arbitral or judicial proceedings in respect of
a dispute that is the subject-matter of the conciliation
proceedings except that a party may initiate arbitral or
judicial proceedings where, in his opinion, such proceedings are
necessary for preserving his rights.
78.
Costs. —
(1) Upon termination of the conciliation proceedings, the
conciliator shall fix the costs of the conciliation and give
written notice thereof to the parties.
(2)
For the purpose of sub-section (1), “costs” means reasonable
costs relating to —
(a)
the fee and expenses of the conciliator and witnesses requested
by the conciliator with the consent of the parties;
(b)
any expert advice requested by the conciliator with the consent
of the parties;
(c)
any assistance provided pursuant to clause (b) of sub-section
(2) of Section 64 and Section 68;
(d)
any other expenses incurred in connection with the conciliation
proceedings and the settlement agreement.
(3)
The costs shall be borne by the parties unless the settlement
agreement provides for a different appointment. All other
expenses incurred by a party shall be borne by that party.
79.
Deposits. —
(1) The conciliator may direct each party to deposit an equal
amount as an advance for the costs referred to in sub-section
(2) of Section 78 which he expects will be incurred.
(2)
During the course of the conciliation proceedings, the
conciliator may direct supplementary deposits in an equal amount
from each party.
(3)
If the required deposits under sub-sections (1) and (2) are not
paid in full by both parties within thirty days, the conciliator
may suspend the proceedings or may make a written declaration of
temination of the proceedings to the parties, effective on the
date of that declaration.
(4)
Upon termination of the conciliation proceedings, the
conciliator shall render an accounting to the parties of the
deposits received and shall return any unexpended balance to the
parties.
80.
Role of conciliator in other proceedings. —
Unless otherwise agreed by the parties, —
(a)
the conciliator shall not act as an arbitrator or as a
representative or counsel of a party in any arbitral or judicial
proceeding in respect of a dispute that is the subject of the
conciliation proceedings;
(b)
the conciliator shall not be presented by the parties as a
witness in any arbitral or judicial proceedings.
81.
Admissibility of evidence in other proceedings. —
The parties shall not rely on or introduce as evidence in
arbitral or judicial proceedings, whether or not such
proceedings relate to the dispute that is the subject of the
conciliation proceedings, —
(a)
views expressed or suggestions made by the other party in
respect of a possible settlement of the dispute;
(b)
admissions made by the other party in the course of the
conciliation proceedings;
(c)
proposals made by the conciliator;
(d)
the fact that the other party had indicated his willingness to
accept a proposal for settlement made by the conciliator.
PART IV
SUPPLEMENTARY PROVISIONS
82.
Power of High Court to make rules. —
The High Court may make rules consistent with this Ordinance as
to all proceedings before the Court under this Act.
83.
Removal of difficulties. —
(1) If any difficulty arises in giving effect to the provisions
of this Act, the Central Government may, by order published in
the Official Gazette, make such provisions, not inconsistent
with the provisions of this Act as appear to it be necessary or
expedient for removing the difficulty:
Provided that no such order shall be made after the expirty of a
period of two years from the date of commencement of the Act.
(2)
Every order made under this Section shall, as soon as may be
after it is made, be laid before each House of Parliament.
84.
Power to make rules. —
(1) The Central Government may, by notification in the Official
Gazette, make rules for carrying out the provisions of this Act.
(2)
Every rule made by the Central Government under this Act shall
be laid, as soon as may be, after it is made before each House
of Parliament while it is in session, for a total period of
thirty days which may be comprised in the one session or in two
or more successive sessions, and if, before the expirty of the
session immediately following the session or the successive
session aforesaid, both Houses agree in making any modification
in the rule or both Houses agree that the rule should not be
made, the rule shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so,
however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done
under that rule.
85.
Repeal and saving. —
(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of
1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign
Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are
hereby repealed.
(2)
Notwithstanding such repeal, —
(a)
the provisions of the said enactments shall apply in relation to
arbitral proceedings which commenced before this Act came into
force unless otherwise agreed by the parties but this Acte shall
apply in relation to arbitral proceedings which commenced on or
after this Act comes into force;
(b)
all rules made and notifications published, under the said
enactments shall, to the extent to which they are not repugnant
to this Act, be deemed respectively to have been made or issued
under this Act.
86.
Repeal and saving. —
(1) The Arbitration and Conciliation (Third) Ordinance, 1996 (29
of 1996) is hereby repealed.
(2)
Notwithstanding such repeal, and order, rule, notification or
scheme made or anything done or any action taken in pursuance of
any provision of the said Ordinance shall be deemed to have been
made, done or taken under the corresponding provisions of this
Act.
THE FIRST SCHEDULE
(See Section 44)
CONVENTION ON THE RECOGNITION
AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
ARTICLE I
1.
This Convention shall apply to the recognition and enforcement
of arbitral awards made in the territory of a State other than
the State where the recognition and enforcement of such awards
are sought, and arising out of differences between persons,
whether physical or legal. It shall also apply to arbitral
awards not considered as domestic awards in the State where
their recognition and enforcement are sought.
2.
The term “arbitral awards” shall include not only awards made by
arbitrators appointed for each case but also those made by
permanent arbitral bodies to which the parties have submitted.
3.
When signing, ratifying or acceding to this Convention, or
notifying extension under article X hereof, any State may on the
basis of reciprocity declare that it will apply the Convention
to the recognition and enforcement of awards made only in the
territory of another Contracting State. It may also declare that
it will apply the Convention only to differences arising out of
legal relationships, whether contractual or not, which are
considered as commercial under the national law of the State
making such declaration.
ARTICLE II
1.
Each Contracting State shall recognise an agreement in writing
under which the parties undertake to submit to arbitration all
or any differences which have arisen or may arise between them
in respect of defined legal relationship, whether contractual or
not, concerning a subject-matter capable of settlement by
arbitration.
2.
The term “agreement in writing” shall include an arbitral clause
in a contract or an arbitration agreement, signed by the parties
or contained in an exchange of letters or telegrams.
3.
The Court of a Contracting State, when seized of an action in a
matter in respect of which the parties have made an agreement
within the meaning of this article, shall, at the request of one
of the parties, refer the parties to arbitration, unless it
finds that the said agreement is null and void, inoperative and
incapable of being performed.
ARTICLE III
Each
Contracting State shall recognize arbitral awards as binding and
enforce them in accordance with the rules of procedure of the
territory where the award is relied upon, under the conditions
laid down in the following articles. There shall not be imposed
substantially more onerous conditions or higher fees or charges
of the recognition or enforcement of arbitral awards to which
this Convention applies than are imposed on the recognition or
enforcement of domestic arbitral awards.
ARTICLE IV
1. To
obtain the recognition and enforcement mentioned in the
preceding article, the party applying for recognition and
enforcement shall, at the time of the application, supply:
(a)
the duly authenticated original award or a duly certified copy
thereof;
(b)
the original agreement referred to in article II or a duly
certified copy thereof.
2. If
the said award of agreement is not made in an official language
of the country in which the award is relied upon, the party
applying for recognition and enforcement of the award shall
produce a translation of these documents into such language. The
translation shall be certified by an official or sworn
translator or by a diplomatic or consular agent.
ARTICLE V
1.
Recognition and enforcement of the award may be refused, at the
request of the party against whom it is invoked, only if that
party furnishes to the competent authority where the recognition
and enforcement is sought, proof that —
(a)
the parties to the agreement referred to in article II were,
under the law applicable to them, under some incapacity, or the
said agreement is not valid under the law to which the parties
have subjected it or, falling any indication thereon, under the
law of the country where the award was made; or
(b)
the party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his
case; or
(c)
the award deals with a difference not contemplated by or not
falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission
to arbitration; provided that, if the decisions on matters
submitted to arbitration can be separated from those not so
submitted, that part of the award which contains decisions on
matters submitted to arbitration may be recognised and enforced;
or
(d)
the composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the
parties, or, failing such agreement, was not in accordance with
the law of the country where the arbitration took place; or
(e)
the award has not yet become binding on the parties, or has been
set aside or suspended by a competent authority of the country
in which, or under the law of which, that award was made.
2.
Recognition and enforcement of an arbitral award may also be
refused if the competent authority in the country where
recognition and enforcement is sought finds that —
(a)
the subject-matter of the difference is not capable of
settlement by arbitration under the law of that country; or
(b)
the recognition or enforcement of the award would be contrary to
the public policy of that country.
ARTICLE VI
If an
application of the setting aside or suspension of the award has
been made to a competent authority referred to in article
V(1)(e), the authority before which the award is sought to be
relied upon may, if it considers it proper, adjourn the decision
on the enforcement of the award and may also, on the application
of the party claiming enforcement of the award, order the other
party to give suitable security.
ARTICLE VII
1. The
provisions of the present Convention shall not affect the
validity of multilateral or bilateral agreements concerning the
recognition and enforcement of arbitral awards entered into by
the Contracting States nor deprive any interested party of any
right he may have to avail himself of an arbitral award in the
manner and to the extent allowed by the law or the treaties of
the country where such award is sought to be relied upon.
2. The
Geneva Protocol on Arbitration Clauses of 1923 and the Geneva
Convention on the Execution of Foreign Arbitral Awards of 1927
shall cease to have effect between Contracting States on their
becoming bound and to the extent that they become bound by this
Convention.
ARTICLE VIII
1.
This Convention shall be open until 31st December, 1958 for
signature on behalf of any Member of the United Nations and also
on behalf of any other State which is or hereafter becomes
member of any specialised agency of the United Nations, or which
is or hereafter becomes a party to the Statute of the
International Court of Justice, or any other State to which an
invitation has been addressed by the General Assembly of the
United Nations.
2.
This Convention shall be ratified and the instrument of
ratification shall be deposited with the Secretary-General of
the United Nations.
2.
This Convention shall be ratified and the instrument of
ratification shall be deposited with the Secretary-General of
the United Nations.
ARTICLE IX
1.
This Convention shall be open for accession to all States
referred to in article VIII.
2.
Accession shall be effected by the deposit of an instrument of
accession with the Secretary-General of the United Nations.
ARTICLE X
1. Any
State may, at the time of signature, ratification or accession,
declare that this Convention shall extend to all or any of the
territories for the international relations of which it is
responsible. Such a declaration shall take effect when the
Convention enters into force for the State concerned.
2. At
any time thereafter any such extension shall be made by
notification addressed to the Secretary-General of the United
Nations and shall take effect as from the ninetieth day after
the day of receipt by the Secretary-General of the United
Nations of this notification, or as from the date of entry into
force of the Convention for the State concerned, whichever is
the later.
3.
With respect to those territories to which this Convention is
not extended at the time of signature, ratification or
accession, each State concerned shall consider the possibility
of taking the necessary steps in order to extend the application
of this Convention to such territories, subject, where necessary
for constitutional reasons, to the consent of the Governments of
such territories.
ARTICLE XI
In the
case of a federal of non-unitary State, the following provisions
shall apply :
(a)
with respect of those articles of this Convention that come
within the legislative jurisdiction of the federal authority,
the obligations of the federal Government shall to this extent
be the same as those of Contracting States which are not federal
States;
(b)
with respect to those articles of this Convention that come
within the legislative jurisdiction of constituent States or
provinces which are not, under the constitutional system of the
federation, bound to take legislative action, the federal
Government shall bring such articles with a favourable
recommendation to the notice of the appropriate authorities of
constitutent States or provinces at the earliest possible
moment;
(c)
a federal State Party to this Convention shall, at the request
of any other Contracting State transmitted through the
Secretary-General of the United Nations, supply a statement of
the law and practice of the federation and its constitutent
units in regard to any particular provision of this Convention,
showing the extent to which effect has been given to that
provision by legislative or other action.
ARTICLE XII
1.
This Convention shall come into force on the ninetieth day
following the date of deposit of the third instrument of
ratification or accession.
2. For
each State ratifying or acceding to this Convention after the
deposit of the third instrument of ratification or accession,
this Convention shall enter into force on the ninetieth day
after deposit by such State of its instrument of ratification or
accession.
ARTICLE XIII
1. Any
Contracting State may denounce this Convention by a written
notification to the Secretary-General of the United Nations.
Denunciation shall take effect one year after the date of
receipt of the notification by the Secretary-General.
2. Any
State which has made a declaration or notification under article
X may, at any time thereafter, by notification to the
Secretary-General of the United Nations, declare that this
Convention shall cease to extend to the territory concerned one
year after the date of the receipt of the notification by the
Secretary-General.
3.
This Convention shall continue to be applicable to arbitral
awards in respect of which recognition or enforcement
proceedings have been instituted before the denunciation takes
effect.
ARTICLE XIV
A
Contracting State shall not be entitled to avail itself of the
present Convention against other Contracting States except to
the extent that it is itself bound to apply the Convention.
ARTICLE XV
The
Secretary-General of the United Nations shall notify the States
contemplated in article VIII of the following :
(a)
signatures and ratifications in accordance with article VIII;
(b)
accessions in accordance with article IX;
(c)
declarations and notifications under articles I, X and XI;
(d)
the date upon which this Convention enters into force in
accordance with article XII;
(e)
denunciations and notifications in accordance with article XIII.
ARTICLE XVI
1.
This Convention, of which the Chinese, English, French, Russian
and Spanish texts shall be equally authentic, shall be deposited
in the archives of the United Nations.
2.
The Secretary-General of the United Nations shall transmit a
certified copy of this Convention to the States contemplated in
article XIII.
THE SECOND SCHEDULE
(See Section 53)
PROTOCOL ON ARBITRATION
CLAUSES
The
undersigned, being duly authorised, declare that they accept, on
behalf of the countries which they represent, the following
provisions:
1.
Each of the Contracting States recognises the validity of an
agreement whether relating to existing or future differences
between parties subject respectively to the jurisdiction of
different Contracting States by which the parties to a contract
agree to submit to arbitration all or any differences that may
arise in connection with such contract relating to commercial
matters or to any other matter capable of settlement by
arbitration, whether or not the arbitration is to take place in
a country to whose jurisdiction none of the parties is subject.
Each Contracting States reserves the right to limit the
obligation mentioned above to contracts which are considered as
commercial under its national law. Any Contracting State which
avails itself of this right will notify the Secretary-General of
the League of Nations in order that the other Contracting States
may be so informed.
2. The
arbitral procedure, including the constitution of the Arbitral
Tribunal, shall be governed by the will of the parties and by
the law of the country in whose territory the arbitration takes
place. The Contracting States agree to facilitate all steps in
the procedure which require to be taken in their own
territories, in accordance with the provisions of their law
governing arbitral procedure applicable to existing differences.
3.
Each Contracting State undertakes to ensure the execution by its
authorities and in accordance with the provisions of its
national laws of arbitral awards made in its own territory under
the preceding articles.
4. The
Tribunals of the Contracting Parties, on being seized of a
dispute regarding a contract made between persons to whom
Article I applies and including an Arbitration Agreement whether
referring to present or future differences which is valid in
virtue of the said article and capable of being carried into
effect, shall refer the parties on the application of either of
them to the decision of the Arbitrators. Such reference shall
not prejudice the competence of the judicial tribunals in case
the agreement or the arbitration cannot proceed or becomes
inoperative.
5.
The present Protocol, which shall remain open for signature by
all States, shall be ratified. The ratification shall be
deposited as soon as possible with the Secretary-General of the
League of Nations, who shall notify such deposit to all the
Signatory States.
6. The
present Protocol will come into force as soon as two
ratifications have been deposited. Thereafter it will take
effect, in the case of each Contracting State, one month after
the notification by the Secretary-General of the deposit of its
ratification.
7. The
present Protocol may be denounced by any Contracting State on
giving one year's notice. Denunciation shall be effected by a
notification addressed to the Secretary-General of the League,
who will immediately transmit copies of such notification to all
the other Signatory States and inform them of the date on which
it was received. The denunciation shall take effect one year
after the date on which it was notified to the
Secretary-General, and shall operate only in respect of the
notifying State.
8. The
Contracting States may declare their acceptance of the present
Protocol does not include any or all of the under- mentioned
territories : that is to say, their colonies, overseas
possessions or territories, protectorates or the territories
over which they exercise a mandate. The said States may
subsequently adhere separately on behalf of any territory thus
excluded. The Secretary-General of the League of Nations shall
be informed as soon as possible of such adhesions. He shall
notify such adhesions to all Signatory States. They will take
effect one month after the notification by the Secretary-General
to all Signatory States. The Contracting States may also
denounce the Protocol separately on behalf of any of the
territories referred to above. Article 7 applies to such
denunciation.
THE THIRD SCHEDULE
(See Section 53)
CONVENTION OF THE EXECUTION OF
FOREIGN ARBITRAL AWARDS
Article 1. —
(1) In
the territories of any High Contracting Party to which the
present Convention applies, an arbitral award made in pursuance
of an agreement, whether relating to existing or future
differences (hereinafter called “a submission to arbitration”)
covered by the Protocol on Arbitration Clauses opened at Geneva
on September 24th, 1923, shall be recognised as binding and
shall be enforced in accordance with the rules of the procedure
of the territory where the award is relied upon, provided that
the said award has been made in a territory of one of the High
Contracting Parties to which the present Convention applies and
between persons who are subject to the jurisdiction of one of
the High Contracting Parties.
(2) To
obtain such recognition or enforcement, it shall, further, be
necessary :
(a)
that the award has been made in pursuance of a submission to
arbitration which is valid under the law applicable thereto;
(b)
that the subject-matter of the award is capable of settlement by
arbitration under the law of the country in which the award is
sought to be relied upon;
(c)
that the award has been made by the Arbitral Tribunal provided
for in the submission to arbitration or constituted in the
manner agreed upon by the parties and in conformity with the law
governing the arbitration procedure;
(d)
that the award has become final in the country in which it has
been made, in the sense that it will not be considered as such
if it is open to opposition, appeal or pourvoi en cassation (in
the countries where such forms of procedure exist) or if it is
proved that any proceedings for the purpose of contesting the
validity of the award are pending;
(e)
that the recognition or enforcement of the award is not contrary
to the public policy or to the principles of the law of the
country in which it is sought to be relied upon.
Article 2. — Even if the conditions laid down in Article I
hereof are fulfilled, recognition and enforcement of the award
shall be refused if the court is satisfied :
(a)
that the award has been annulled in the country in which it was
made;
(b)
that the party against whom it is sought to use the award was
not given notice of the arbitration proceedings in sufficient
time to enable him to present his case; or that, being under a
legal incapacity, he was not properly represented;
(c)
that the award does not deal with the differences contemplated
by or falling within the terms of the submission to arbitration
or that it contains decisions on matters beyond the scope of the
submission to arbitration.
If
the award has not covered all the questions submitted to the
arbitral tribunal, the competent authority of the country where
recognition or enforcement of the award is sought can, if it
thinks fit, postpone such recognition or enforcement or grant it
subject to such guarantee as that authority may decide.
Article 3. — If the party against whom the award has been
made proves that, under the law governing the arbitration
procedure, there is a ground, other than the grounds referred to
in Article 1(a) and (c), and Article 2(b) and (c), entitling him
to contest the validity of the award in a Court of Law, the
Court may, if it thinks fit, either refuse recognition or
enforcement of the award or adjourn the consideration thereof,
giving such party a reasonable time within which to have the
award annulled by the competent tribunal.
Article
4. — The party relying upon an award or claiming its
enforcement must supply, in particular:
(1)
the original award or a copy thereof duly authenticatea,
according to the requirements of the law of the country in which
it was made;
(2)
documentary or other evidence to prove that the award has become
final, in the sense defined in Article 1(d), in the country in
which it was made;
(3)
when necessary, documentary or other evidence to prove that the
conditions laid down in Article 1, paragraph (1) and paragraph
(2)(a) and (c), have been fulfilled.
A
translation of the award and of the other documents mentioned in
this Article into the official language of the country where the
award is sought to be relied upon may be demanded. Such
translations must be certified correct by a diplomatic or
consular agent of the country to which the party who seeks to
rely upon the award belongs or by a sworn translator of the
country where the award is sought to be relied upon.
Article 5. — The provisions of the above Articles shall not
deprive any interested party of the right of availing himself of
an arbitral award in the manner and to the extent allowed by the
law or the treaties of the country where such award is sought to
be relied upon.
Article 6. — The present Convention applies only to arbitral
awards made after the coming into force of the Protocol on
Arbitration Clauses opened at Geneva on September 24th, 1923.
Article 7. — The present Convention, which will remain open
to the signature of all the signatories of the Protocol of 1923
on Arbitration Clauses, shall be ratified.
It
may be ratified only on behalf of those Members of the League of
Nations and Non-Member States on whose behalf the Protocol of
1923 shall have been ratified.
Ratification shall be deposited as soon as possible with the
Secretary-General of the League of Nations, who will notify such
deposit to all the signatories.
Article 8.
— The present Convention shall come into force three months
after it shall have been ratified on behalf of two High
Contracting Parties. Thereafter, it shall take effect, in the
case of each High Contracting Party, three months after the
deposit of the ratification on its behalf with the
Secretary-General of the League of Nations.
Article 9.
— The present Convention may be denounced on behalf of any
Member of the League or Non-Member State. Denunciation shall be
notified in writing to the Secretary- General of the League of
Nations, who will immediately send a copy thereof, certified to
be in conformity with the notifications, to all the other
Contracting Parties, at the same time informing them of the date
on which he received it.
The
denunciation shall come into force only in respect of the High
Contracting Party which shall have notified it and one year
after such notification shall have reached the Secretary-General
of the League of Nations.
The
denunciation of the Protocol on Arbitration Clauses shall
entail, ipso facto, the denunciation of the present
Convention.
Article 10.
— The present Convention does not apply to the colonies,
protectorates or territories under suzerainty or mandate of any
High Contracting Party unless they are specially mentioned.
The
application of this Convention to one or more of such colonies,
protectorates or territories to which the Protocol on
Arbitration Clauses opened at Geneva on September 24th, 1923,
applies, can be effected at any time by means of a declaration
addressed to the Secretary-General of the League of Nations by
one or the High Contracting Parties.
Such
declaration shall take effect three months after the deposit
thereof.
The
High Contracting Parties can at any time denounce the Convention
for all or any of the Colonies, Protectorates or territories
referred to above Article 9 hereof applied to such denunciation.
Article 11.
— A certified copy of the present Convention shall be
transmitted by the Secretary-General of the League of Nations of
every Member of the League of Nations and to every Non-Member
State which signs the same.