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<\/p>\n
Question 3.
\nHow the term International Commercial Arbitration is been defined under the Arbitration and Conciliation Act, 1996.
\nAnswer:
\nInternational Commercial Arbitration:
\nSec. 2(1)(f) of The Arbitration and Conciliation Act, 1996 defines the term International Commercial Arbitration as It 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:<\/p>\n
- \n
- an individual who is a national of, or habitually resident in, any country other than India; or<\/li>\n
- a body corporate which is incorporated in any country other than India; or<\/li>\n
- an association or a body of individuals whose central management and control is exercised in any country other than India; or<\/li>\n
- the Government of a foreign country.<\/li>\n<\/ol>\n
Question 4.
\nRequirements of an arbitration agreement are prescribed by statutory provisions and decide case law. State those requirements.
\nAnswer:
\nRequirements of Arbitration Agreement:
\nRequirements of an arbitration agreement as prescribed by statutory provisions and decide case law are:
\n(a) Writing: Arbitration agreement are required to be mandatorily in writing, though it may be stipulated through separate agreement.<\/p>\n(b) Clarity of consent: Parties to the contact must have given consent to arbitration agreement and that consent have not been withdrawn. The words used should disclose a determination and obligation on the part of parties to go to arbitration and not merely contemplate the possibility of going for arbitration.<\/p>\n
(c) Defined Legal relationship: Any dispute that arises from a legal relationship can be submitted to arbitration unless it is expressly or impliedly barred by a Statute. Thus disputes concerning illegal activities cannot be submitted to arbitration.<\/p>\n
(d) Final and binding award: Parties to the arbitration agreement must agree that the determination of their substantive rights by a neutral third person acting as the arbitral tribunal would be final and binding upon them.<\/p>\n
(e) Specific words: Mere use of words like \u2018arbitration\u2019 or \u2018arbitrator\u2019 in a clause will not make it an arbitration agreement. Consent of the parties to refer their disputes to arbitration must be reflected.<\/p>\n
(f) Dispute: There must be a present or a future dispute\/difference in connection with some contemplated affairs that is proposed to be submitted to arbitration.<\/p>\n
(g) Arbitrability: The disputes submitted\/proposed to be submitted to arbitration must be arbitrable. There are certain disputes that the law retains exclusively for the court, and the same cannot be submitted for arbitration. Examples of the disputes that cannot be arbitrated are criminal offences, matrimonial disputes, guardianship matters, testamentary matters, mortgage suit for sale of a mortgaged property, etc. cannot be arbitrated.<\/p>\n
(h) Signature: Signature is required when the arbitration agreement is contained in a contract i.e. in one set of documents. However, no signature is required if the arbitration agreement is contained in correspondence or exchange of pleadings.<\/p>\n
<\/p>\nQuestion 5.
\nABC Pvt Ltd. is a construction company. Mr. Builder is a Chief Engineer of the ABC Pvt. Ltd. A common arbitration agreement was framed by ABC Pvt. Ltd. in case of disputes if arises under any contract. According to the term of an agreement, any question, claim, right, matter, thing, whatsoever, in any way arising out of or relating to the contract designs, drawings, specifications estimates, instructions, or orders, or those conditions or failure to execute the same whether arising during the progress of the work, or after the completion, termination or abandonment thereof, the dispute shall, in the first place, be referred to the Chief Engineer who has jurisdiction over the work specified in the contract.<\/p>\nThe Chief Engineer shall within a period of ninety days from the date of dispute bought into notice, give written notice of his decision to the contractor. Chief Engineer’s decision shall be final. Examine on the validity of such arbitration agreement. [MTP-Aug. 18]
\nAnswer:
\nDetermination of Validity of Arbitration Agreement:<\/p>\n- \n
- Parties to the arbitration agreement must agree that the determination of their substantive rights by a neutral third person acting as the arbitral tribunal would be final and binding upon them.<\/li>\n
- In the instant case, Chief Engineer is not a neutral party and has a control over the work specified in the contract.<\/li>\n<\/ul>\n
Conclusion: This is not a valid arbitration agreement.<\/p>\n
Question 6.
\nMr. R, the respondent had placed an order of purchase of various quantities of phosphoric acid from the Mr. P, the petitioner. The purchase order noted that the terms and conditions were to be as per the Fertilizer Association of India (FAI). Terms and Conditions for Sale and Purchase of Phosphoric Acid were as per Clause 15 of the FAI which also provided terms for settlement of disputes by arbitration. Enumerate in the light of the given circumstances as to existence of a valid arbitration agreement between the parties as per the Arbitration and Conciliation Act, 1996. [RTP-May 20]
\nAnswer:
\nDetermination of Validity of Arbitration Agreement:<\/p>\nThe Arbitration and Conciliation Act, 1996 envisages a possibility of an arbitration agreement coming into being through incorporation. In other words, parties to an agreement could agree to arbitrate by referring to another contract containing an arbitration agreement. The requirement is that the reference must leave no doubt in the mind of the reader that the parties indeed wanted to incorporate the arbitration agreement into the agreement between them.<\/p>\n
In the instant case Mr. R had placed an order of purchase of various quantities of phosphoric acid from Mr. R The purchase order noted that the terms and conditions were to be as per the Fertilizer Association of India (FAI) Terms and Conditions for Sale and Purchase of Phosphoric Acid. Clause 15 of the terms provided for settlement of disputes by arbitration.<\/p>\n
Facts of this case are similar to Groupe Chimique Tunisien v. Southern Petrochemicals Industries Corpn. Ltd. wherein it was held by the Supreme Court of India that for a reference to constitute an arbitration agreement the contract should be writing and reference should be such as to make that arbitration clause a part of the contract. Both the conditions were held to be fulfilled in the present.<\/p>\n
Conclusion: For a reference to constitute an arbitration agreement the contract should be in writing and reference should be such as to make that arbitration clause a part of the contract. Both the conditions were held to be fulfilled in the present instance, hence this is a valid reference for an arbitration agreement.<\/p>\n
Question 7.
\nIn 2018, Company Amar, food process or manufacturing unit entered into a joint venture agreement ; with Company IJSHA, the largest manufacturer of Food processors for supply of parts of mixer & grinder for manufacturing its latest model. Both the companies are registered under the Companies Act, 2013. Agreement carries the term that all disputes shall he arbitrated in Mumbai. State the type of arbitration agreement made between them.
\nWhat will happen if the agreement does not have any clause relating to arbitration? Disputes arose between them concerning quality of material supplied in 2019. [MTP-April 18, April 19; RTP-May 18, May 19]
\nOr
\nOn 1st day of April, 2018, Arnold Food Processors Limited, a company engaged in food processor manufacturing unit entered into a joint venture agreement with Ronnie and Coleman Company Limited, the largest manufacturer of Food processors for supply of parts of mixer and grinder for manufacturing its latest model. Both the companies are registered under the Companies Act, 2013. Agreement carries the term that all disputes shall be arbitrated in Delhi. In the light of the Arbitration and Conciliation Act, .1996, discuss:<\/p>\n- \n
- The type of arbitration agreement made between them.<\/li>\n
- Examine what will happen if the agreement does not have any clause relating to arbitration where disputes arose between them concerning quality of material supplied in 2018. [RTP-Nov. 18]<\/li>\n<\/ol>\n
Answer:
\nDetermination of Type of Arbitration Agreement:
\nThere are two basic types of arbitration agreement are:<\/p>\n(a) Arbitration clause: Arbitration clause is contained within a principal contract. The parties undertake to submit disputes in relation to or in connection with the principal contract that may arise in future to arbitration.<\/p>\n
(b) Submission agreement: An agreement to refer disputes that already exist to arbitration. Such an agreement is entered into after the disputes have arisen.<\/p>\n
If the agreement already carries the term that all disputes shall be arbitrated in Mumbai at the time of entering into joint venture agreement, it would be an arbitration clause as it is contained in the principal contract (JVA) and no disputes have arisen till yet. It concerns future disputes that may arise.<\/p>\n
However, if the agreement does not have any clause relating to arbitration and disputes arise between the parties concerning quality of supplied goods in 2017. To resolve this dispute, parties may entered into an agreement through Submission Agreement. Following clause may be agreed upon: “That all disputes including quality of goods supplied by Company USHA to Company Amar shall be submitted to arbitration. The parties here by agree to abide by the decision of the arbitrator.\u201d<\/p>\n
Question 8.
\nMr. X wants to start a bakery and so he contacts Mr. Y Confectioners & Bakers for supply of cakes and biscuits. The communication between the parties were over email. On e-mail, there was a term of service between the parties containing that \u201cany disputes regarding quality or delivery shall be submitted to arbitration conducted under the guidance of Indian Confectionery Manufacturers Association. Please place your order if the above terms and conditions are agreeable to you.” X placed an order. State the legal position as the validity of the arbitration agreement.
\nOr
\nMs. Rajkumari launch her boutique. She contacted with M\/s Shyamlal merchants for supply of dress materials. The communication between the parties were over e-mail. There was a term of service between the parties containing that “any disputes regarding quality or delivery shall be submitted to arbitration conducted under the guidance of Indian Clothes Manufacturers Association. Please place your order if the above terms and conditions are agreeable to you.” Ms. Rajkumari placed an order. Comment on the validity of the such arbitration agreement according to the Arbitration and Conciliation Act, 1996. – [MTP-March 19, Oct. 19, May 20]
\nAnswer:
\nDetermination of Validity of Arbitration Agreement:
\nAs per the arbitration and Conciliation Act, an agreement must be in writing. There is however no requirement for the same to be in writing in one .document. There is also no particular form or template for an arbitration agreement. The communication over e-mail of the term of services is a proper valid agreement and the same have been stood affirmed by reason of their conduct.<\/p>\nThis would be an arbitration agreement in writing contained in correspondence between the parties. Raman garments manufacturer entered into an arbitration agreement with its regular customers on the supply of dress material on demand in advance. At the same time, also hold the term that in case of disputes they may refer to the arbitration for the settlement of the matter. Raman garments manufacturer fail to make delivery of supply of dress material to Mr. X, a regular customer. Mr. X already made<\/p>\n
Question 9.
\nRaman garments manufacturer aware of this important order in advance. Since Raman garments manufacturer was not able to meet the said the order well in time, he took the pica of theft and setting of fire to the property in the manufacturing unit.
\nThe said matter was referred to the arbitration. State the validity as to the submission of the said dispute to the arbitration in the light of the Arbitration and Conciliation Act, 1996. [MTP-March 18]
\nAnswer:
\nDetermination of Validity of Arbitration Agreement:<\/p>\nAs per the requirements of arbitration agreement, the disputes submitted\/ proposed to be submitted to arbitration must be arbitrable. In other words that law must permit arbitration in that matter only which are capable of arbitration. There are certain disputes that the law retains exclusively for the court, and the same cannot be submitted for arbitration. The rationale is that given the nature of disputes, the courts are the only appropriate forum for adjudicating the matter.<\/p>\n
In the given matter, it clearly reveals of non-performance of the duties of the Raman garments manufacturer within the specified timelines. To safeguard himself from the non-performance of the contract, took the cause of theft and setting of fires in the manufacturing unit.<\/p>\n
Conclusion: Submitted disputes before arbitration is not arbitrable as the offences are of criminal natures. Such types of disputes are to be tried by the court of proper jurisdiction. Therefore, the submission of the dispute in the situation to arbitration is invalid.<\/p>\n
<\/p>\nQuestion 10.
\nSmart Automobiles Limited and Apex Four wheelers Limited entered into an agreement regarding annual maintenance services to be provided by Smart Automobiles for all vehicles within the state of Uttar Pradesh for five years. The agreement was containing a clause that in the event of a dispute between the parties the matter would be submitted to arbitration. At the end of the fifth year, the service agreement was not renewed.
\nDecide whether the arbitration agreement should not be treated as terminated. Also describe the other grounds of termination of an arbitration agreement. [May 18 – New Syllabus (3 Marks)]
\nAnswer:
\nTermination of Arbitration Agreement:<\/p>\nAn arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.<\/p>\n
An arbitration agreement always operates in relation to a principal contract. If the principal contract is terminated through discharge or novation, the arbitration agreement terminates with the contract. However, if the principal contract is breached, then the arbitration agreement survives because of the operation of the doctrine of separability.<\/p>\n
In the present case, at the end of existing contract, service agreement was not renewed. It results in discharge of existing agreement and hence, the arbitration agreement.
\nConclusion: Arbitration agreement should be treated as terminated.<\/p>\nOther Grounds of Termination: Arbitration agreement may be terminated on following grounds:<\/p>\n
- \n
- Mutual consent: Parties to the contract can jointly agree to put an end to a particular arbitration agreement.<\/li>\n
- Death of parties: Arbitration agreement is not discharged by the death of any party. It shall be enforceable by or against the legal representatives of the deceased.<\/li>\n
- Operation of Law: Arbitration agreement can be extinguished by the operation of law by virtue of which any right of action is extinguished.<\/li>\n<\/ol>\n
Question 11.
\nExamine the validity of the following statements with reference to the Arbitration and Conciliation Act, 1996:
\n(i) Every Court would be a Judicial Authority but every Judicial Authority would not be a court.
\n(ii) The disputes submitted to arbitration must be arbitrable. [Nov. 18 – New Syllabus (3 Marks)]
\nAnswer:
\nValidity of statements under Arbitration and Conciliation Act, 1996:
\n(i) Statement is valid. A judicial authority as such is not defined in the Act. It would certainly include the court as defined in Section 2(1)(e) of the Act and would also include special tribunals and quasi judicial authorities.<\/p>\n(ii) Statement is valid. The disputes submitted\/proposed to be submitted to arbitration must be arbitrable. There are certain disputes that the law retains exclusively for the court, and the same cannot be submitted for arbitration. Examples of the disputes that cannot be arbitrated are criminal offences, matrimonial disputes, guardianship matters, testamentary matters, mortgage suit for sale of a mortgaged property, etc. cannot be arbitrated.<\/p>\n
Question 12.
\nShyam started a fresh juice shop and contacted Naresh for supply of fruits and vegetables. Most of the communication between them happened over email. Oil the email, they decided the payment, terms and other conditions of service. For initial 5 months, Shyam was regular in making payment to Naresh for the fruits bought, but later on stopped making payments. Naresh filed a suit against Shyam in a Magisterial Court but Shyam contended that the matter should be settled through Arbitration. Referring to provision of the Arbitration and Conciliation Act, 1996, state whether the contention of Shyam is correct. [Nov. 20 – New Syllabus (3 Marks)]
\nAnswer:
\nValidity of Arbitration Agreement:<\/p>\nAs per the Arbitration and Conciliation Act, an agreement must be in writing. There is however no requirement for the same to be in writing in one document. There is also no particular form or template for an arbitration agreement. The communication over email of the term of services is a proper valid agreement and the same have been stood affirmed by reason of their conduct.<\/p>\n
- \n
- However, it is essential that the terms of the agreement must clearly mention the resolution of disputes through arbitration.<\/li>\n
- In the given case, there is no specific fact provided whether the terms include intention of parties to resolve disputes through arbitration.<\/li>\n<\/ul>\n
Conclusion: Contention of the Shyam is not correct. Based on the facts of the case, it appears that there is no agreement among the parties as to resolution of disputes through arbitration.
\nNote: Alternate answer possible with different assumption.<\/p>\nArbitral Tribunal<\/p>\n
Question 13.
\nHow important are the ideas of independence and impartiality in arbitration?
\n(a) Is the arbitrator required to disclose anything to the parties?
\n(b) Is membership of the same sports club as one of the parties problematic?
\nAnswer:
\nRequirement of Independence and impartiality in Arbitration:
\n(a) The arbitrators are under a duty of disclose any relations with parties or their lawyer that might give rise to justifiable doubts as to their independence and impartiality.
\n(b) Membership of the same sports club is too remote to count as a relation that might lead to doubts of bias.<\/p>\nQuestion 14.
\nArbitrator should remain neutral, unbiased and should not favour any party in arbitration. An arbitral tribunal should at all times impartial. State the instance when the arbitrator may be said to be biased.
\nAnswer:
\nInstance in which arbitrator may be said to be biased:<\/p>\n- \n
- Arbitrator should remain neutral, unbiased and should not favour any party in arbitration. An arbitral tribunal should at all times remain independent and impartial.<\/li>\n
- Independence is presence of certain relationship between the arbitrator and a party such as previous employment, creditor, etc.<\/li>\n<\/ul>\n
Impartiality is the state of mind of the arbitrator i.e. by his\/her behaviour the arbitrator gives an impression that they are favouring one party over the other. It can be understood as a preconceived notion to decide a case or an issue in a particular manner.<\/p>\n
Instances as to existence of biasness<\/p>\n
- \n
- Arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party<\/li>\n
- Arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties<\/li>\n
- Arbitrator has given legal advice or provided an expert opinion on the dispute to a party or an affiliate of one of the parties<\/li>\n
- A close family member of the arbitrator has a significant financial interest in one of the parties
\nor an affiliate of one of the parties<\/li>\n - Arbitrator is a legal representative of an entity that is a party in the arbitration<\/li>\n
- Arbitrator has a significant financial interest in one of the parties or the outcome of the case<\/li>\n
- Arbitrator has previous involvement in the case.<\/li>\n<\/ul>\n
Question 15.
\nCan an arbitrator resign on their own account? Do they have to give reasons for their resignation? Could an award be challenged on the ground that the arbitrator had resigned without giving any proper justifications?
\nAnswer:
\nResignation by Arbitrator:
\nAn arbitrator can resign when they want, without giving reasons for their resignation. It does not affect the validity either of the arbitration proceedings or the arbitral award.<\/p>\n<\/p>\nQuestion 16.
\nState the grounds on which an arbitrator may be terminated or removed.
\nAnswer:
\nGrounds on which arbitrator may be terminated or removed:
\nArbitrator that has been chosen by the parties or appointed by the court may be removed in following instances:<\/p>\n(1) Arbitrator leaves voluntarily: Arbitrator may for any reason, which he may or may not disclose to the parties, decides to no longer act as the arbitrator. Being a private consent based arrangement arbitrator cannot be forced against their will to act or continue acting as an arbitrator.<\/p>\n
(2) On mutual consent of all parties: The parties through a unanimous decision, may decide to have another person as arbitrator. This could be for many reasons including that the parties realise that the arbitrator does not have the particular expertise they had desired.<\/p>\n
(3) Operation of law:<\/p>\n
(A) Failure or impossibility to act (Sec. 14): The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if<\/p>\n
(a) he becomes unable to perform his functions or for other reasons fails to act without
\nundue delay; and
\n(b) he withdraws from his office or the parties agree to the termination of his mandate.<\/p>\n(B) When the arbitration process ends: The mandate of the arbitrator ends when the arbitration process ends. Arbitration process can end in multiple ways:<\/p>\n
- \n
- When the parties decide to no longer continue with arbitration (Sec. 25)<\/li>\n
- Failure to make the award within 12 months (Sec. 29A) or<\/li>\n
- When final award has been made (Sec. 32).<\/li>\n<\/ul>\n
(4) On application of any party court so decides: If a party feels that the arbitrator should not continue (on grounds of bias), then it can approach the court to remove the arbitrator.<\/p>\n
Question 17.
\nWrite a short note on different types of arbitral awards.
\nAnswer:
\nTypes of arbitral award:<\/p>\n(1) Final Award: An award that finally adjudicates on the issues submitted to arbitration and made in accordance with the requirements of the law (including signature, reason and delivery) would be a final award.<\/p>\n
(2) Interim Award: There can be two types of interim awards, one which remains in force till the final award is rendered, and another is final as regards the matters it deals with. The latter is referred to as interim, because when it was rendered there were still other pending issues.<\/p>\n
(3) Settlement Award: 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. This is referred to as a settlement award.<\/p>\n
(4) Additional Award: In a situation, when a final award has been rendered, but certain claims that had been submitted to the arbitral tribunal were omitted to be adjudicated, a party with notice to the other party, may request, within 30 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.<\/p>\n
Question 18.
\nMention the grounds under which arbitral award may be challenged before the court under the provisions of Arbitration and Conciliation Act, 1996.
\nAnswer:
\nGrounds under which arbitral award may be challenged:<\/p>\n(1) Challenge of bias against the arbitral tribunal (Sec. 13): The parties can challenge an arbitral tribunal on the ground that the arbitral tribunal is favouring or is biased in favour of one of the parties. Such a challenge should be first raised before the arbitral tribunal u\/s 13. If the challenge is not accepted by the arbitral tribunal then the award rendered by that arbitral tribunal can be challenged.<\/p>\n
(2) Overstepping of jurisdiction by the arbitral tribunal (Sec. 16): If during the arbitral proceedings one of the parties challenges the arbitral tribunal stating that the arbitral tribunal does not have jurisdiction, the arbitral tribunal will decide on this challenge. If, however the arbitral tribunal does not agree with the parties, the arbitral tribunal will render the award. That award can later be challenged by the parties for review.<\/p>\n
(3) Specific grounds for reviewing an award (Sec. 34): An arbitral award may be set aside by the Court only if \u2019<\/p>\n
(a) the party making the application establishes that on the basis of records of Arbitral Tribunal:<\/p>\n
(i) the party was under some incapacity; or
\n(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
\n(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<\/p>\n(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; or<\/p>\n
(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<\/p>\n
(b) the Court finds that:<\/p>\n
- \n
- the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or<\/li>\n
- the arbitral award is in conflict with the public policy of India.<\/li>\n<\/ol>\n
Question 19.
\nMadhav prefers an appeal for setting aside the arbitral award on the ground that he was not given a proper notice of arbitral proceedings and thereby not being able to present his case. He also furnishes sufficient proof and pleads before the court that he received the arbitral award just 15 days back. Decide with reasons whether Madhav will succeed is his prayer.
\nAnswer:
\nGrounds under which arbitral award may be challenged:
\nAs per Sec. 34 of the Arbitration and Conciliation Act, 1996, an arbitral award may be set aside by the Court only if the party making the application establishes that on the basis of records of Arbitral Tribunal:<\/p>\n1. the party was under some incapacity; or<\/p>\n
2. 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<\/p>\n
3. 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<\/p>\n
4. 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; or<\/p>\n
5. 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.<\/p>\n
In the instant case, Madhav prefers an appeal for setting aside the arbitral award on the ground that he was not given a proper notice of arbitral proceedings and thereby not being able to present his case. He also furnishes sufficient proof and pleads before the court that he received the arbitral award just 15 days back.<\/p>\n
Question 20.
\nDistinguish between: Conciliation and Mediation.
\nAnswer:
\nConciliation vs. Mediation:<\/p>\n\n\n
\n Mediation<\/td>\n Conciliation<\/td>\n<\/tr>\n \n Mediator plays only a facilitative role and guide the parties towards a solution. Parties to the mediation have to find the solution themselves.<\/td>\n Conciliator plays role of a facilitator, evaluator and intervener, thereby, he can also along with the parties suggest solutions.<\/td>\n<\/tr>\n \n Outcome of mediation is an agreement between the parties.<\/td>\n Outcome of settlement is a settlement agreement.<\/td>\n<\/tr>\n \n Agreement reached by the parties being a con\u00adtract, enforceable by law.<\/td>\n Settlement agreement between the parties has the status of an arbitral award on agreed terms, hence, executable as a decree of the civil court.<\/td>\n<\/tr>\n \n Mediation is governed by Sec. 89 of the Code of Civil Procedure, 1908.<\/td>\n Conciliation is governed by the Arbitration and Conciliation Act, 1996.<\/td>\n<\/tr>\n \n Mediation is governed by confidentiality, which is based on trust.<\/td>\n Conciliation is bound by confidentially. Breach of confidentially could be fatal to the entire process.<\/td>\n<\/tr>\n \n In case of breach of agreement, the parties would have to proceed in the usual process adopted for breach of contract.<\/td>\n Breach of the settlement agreement has the same effect as that of breach of an arbitral award.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\nQuestion 21.
\nExplain the process of settlement agreement in case of conciliation as per the provisions of Arbitration and Conciliation Act, 1996.
\nAnswer:
\nProcess of Settlement agreement in case of conciliation:<\/p>\n(1) Making proposal for settlement- Sec. 67(4): The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be writing and need not be accompanied by a statement of the reasons therefor.<\/p>\n
(2) Suggestions by parties for settlement of dispute – Sec. 72: 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.<\/p>\n
(3) Settlement Agreement – Sec. 73: 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. If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement.<\/p>\n
If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement. When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively. The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.<\/p>\n
(4) Status and effect of settlement agreement – Sec. 74: The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Foreign Contribution Regulation Act, 2010 \u2013 CA Final Law Study Material is designed strictly as per the latest syllabus and exam pattern. The Foreign Contribution Regulation Act, 2010 \u2013 CA Final Law Study Material Question 1. What are the alternate methods of dispute resolution. State the primary legislation dealing with alternate methods of dispute …<\/p>\n