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    Salient Features of The Arbitration and Conciliation Act

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    Janakiraman R
    The Arbitration and Conciliation Act of 1996 consolidated three previous arbitration laws and introduced important changes. It emphasizes the necessity of an arbitration agreement to begin proceedings. The Act applies to both domestic and international commercial arbitration. It aims to minimize court interference and maximize party autonomy by allowing parties flexibility to determine procedures and applicable law. The Act also distinguishes arbitration, where a tribunal renders a binding decision, from conciliation, where an impartial conciliator facilitates negotiation between parties to reach a voluntary settlement agreement.

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    Salient Features of The Arbitration and Conciliation Act

    Uploaded by

    Janakiraman R
    2K views3 pages
    The Arbitration and Conciliation Act of 1996 consolidated three previous arbitration laws and introduced important changes. It emphasizes the necessity of an arbitration agreement to begin proceedings. The Act applies to both domestic and international commercial arbitration. It aims to minimize court interference and maximize party autonomy by allowing parties flexibility to determine procedures and applicable law. The Act also distinguishes arbitration, where a tribunal renders a binding decision, from conciliation, where an impartial conciliator facilitates negotiation between parties to reach a voluntary settlement agreement.

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    SALIENT FEATURES OF THE ARBITRATION AND CONCILIATION ACT

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    The Arbitration and Conciliation Act of 1996 consolidated three previous arbitration laws and introduced important changes. It emphasizes the necessity of an arbitration agreement to begin proceedings. The Act applies to both domestic and international commercial arbitration. It aims to minimize court interference and maximize party autonomy by allowing parties flexibility to determine procedures and applicable law. The Act also distinguishes arbitration, where a tribunal renders a binding decision, from conciliation, where an impartial conciliator facilitates negotiation between parties to reach a voluntary settlement agreement.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views3 pages

    Salient Features of The Arbitration and Conciliation Act

    Uploaded by

    Janakiraman R
    The Arbitration and Conciliation Act of 1996 consolidated three previous arbitration laws and introduced important changes. It emphasizes the necessity of an arbitration agreement to begin proceedings. The Act applies to both domestic and international commercial arbitration. It aims to minimize court interference and maximize party autonomy by allowing parties flexibility to determine procedures and applicable law. The Act also distinguishes arbitration, where a tribunal renders a binding decision, from conciliation, where an impartial conciliator facilitates negotiation between parties to reach a voluntary settlement agreement.

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    © All Rights Reserved
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    SALIENT FEATURES OF THE ARBITRATION AND CONCILIATION ACT, 1996

    Following are some of the key features of the Arbitration and Conciliation Act, 1996:

    1. Replacement of three old statutes: The Act is a consolidation of three laws of


    arbitration previously in force – viz, the Arbitration Act, 1940, the Arbitration
    (Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and
    Enforcement) Act, 1961 into one enactment. Though the three Acts have been
    consolidated the provisions regarding each of the acts have been kept distinct within
    the 1996 Act.
    2. Necessity of Arbitration Agreement: The Act emphasizes the importance of the
    Arbitration agreement without which arbitration proceedings cannot be instituted. The
    arbitration agreement is a clause in a contract or an agreement between parties stating
    that any dispute will be referred to arbitration proceedings. The Act mentions that the
    arbitration agreement or arbitration clause must contain the following information –
    the subject matter of dispute, the timing of dispute (past/present/future), number of
    arbitrators, qualifications of arbitrators, jurisdiction, and composition of the tribunal.
    3. Application to Domestic and International Arbitration: The Act provides the
    procedure not only for domestic arbitration but also includes International
    Commercial Arbitration. The 1996 Act is a law that relates to the enforcement of
    foreign Arbitration awards and ensures greater autonomy in the process of arbitration
    and puts a limit on the intervention of the judiciary.
    4. Procedural Advantage: Arbitral Tribunal has full powers to decide the procedure to
    be followed unless parties agree on the procedure to be followed. The Tribunal also
    has powers to determine the admissibility, relevance, materiality, and weight of any
    evidence. The place of arbitration will be decided by mutual agreement. However, if
    the parties do not agree to the place, the same will be decided by a tribunal. Similarly,
    language to be used in arbitral proceedings can be mutually agreed upon. Otherwise,
    the Arbitral Tribunal can decide. The Act allows parties to choose the substantive law
    to be applied by the arbitration tribunal and this must also be mentioned in the
    arbitration agreement.
    5. Party Autonomy: The concept of party autonomy is the central theme of the Act. The
    expressions used in the Act – ‘unless otherwise agreed by the parties’, ‘with the
    agreement of parties’, `if the parties in dispute have expressly authorized’ etc.,
    strengthen the idea of party autonomy.
    6. Minimal Interference by Judiciary: One of the major defects of earlier arbitration
    law was that the party could access court almost at every stage of arbitration – right
    from the appointment of an arbitrator to implementation of the final award. Thus, the
    defending party could approach the court at various stages and stall the proceedings.
    Now, the approach to court has been drastically curtailed. In some cases, if an
    objection is raised by the party, the decision on that objection can be given by the
    Arbitral Tribunal itself. After the decision, the arbitration proceedings are continued,
    and the aggrieved party can approach Court only after Arbitral Award is made.
    7. Arbitral Award: Decision of Arbitral Tribunal is termed as ‘Arbitral Award’. The
    arbitrator can decide the dispute ex aequo et bono (In justice and in good faith) if both
    the parties expressly authorized him to do so. The decision of the Arbitral Tribunal
    will be by majority. The arbitral award shall be in writing and signed by the members
    of the tribunal. The award should be dated and the place where it is made should be
    mentioned. A copy of the award should be given to each party.
    8. Reasoned Award: The award must be in writing and signed by the members of the
    Arbitral Tribunal. It must state the reasons for the award unless the parties have
    agreed that no reason for the award is to be given. Previous to this Act reasoning of
    the award by the arbitrator was not mandatory.
    9. Enforceability of Award: Under this Act, every final arbitral award is enforceable as
    a decree of the court of law and not required to be made a “rule of court”.
    10. Over-Riding Effect of the Act: Section 5 of the Act clarifies that notwithstanding
    anything contained in any other law for the time being in force, in matters governed
    by the Act, the judicial authority can intervene only as provided in this Act and not
    under any other Act.
    11. Applicability of the Limitation Act: For this purpose, the date on which the
    aggrieved party requests another party to refer the matter to arbitration shall be
    considered. If on that date, the claim is barred under the Limitation Act, the arbitration
    cannot continue. If the Arbitration award is set aside by the Court, time spent in
    arbitration will be excluded for purposes of the Limitation Act.
    12. Aligning Procedure with the UNCITRAL Model Law: The Act has been enacted
    taking into account the United Nation’s Commission on International Trade Law
    (UNCITRAL) Model Law and UNCITRAL Conciliation Rules. This promotes
    unification and harmonization of International Tarde Law by harmonizing concepts of
    Arbitration and Conciliation of the legal system of the world.
    13. Clear Distinction Between Arbitration and Conciliation: The provisions that relate
    to the process of Arbitration are contained in Part I which includes Chapters I to IX,
    while the provisions that relate to the process of Conciliation are dealt with in Part III
    that includes section 61 to 81.
    14. Conciliation: Conciliation is the amicable settlement of disputes between the parties,
    with the help of a conciliator. Part III of the Act makes provision for conciliation
    proceedings. In conciliation proceedings, there is no agreement for arbitration. In fact,
    conciliation can be done even if there is an arbitration agreement. The conciliator only
    brings parties together and tries to solve the dispute using his good offices. The
    conciliator has no authority to give an award. He only helps parties to arrive at a
    mutually acceptable settlement. After such an agreement, they may draw up and sign
    a written settlement agreement. However, after the settlement agreement is signed by
    both the parties and the conciliator, it has the same status and effect as if it is an
    arbitral award.

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