SCHOOL OF LAW AND CONSTITUTIONAL STUDIES

A project file submitted in partial fulfillment of the requirements of the degree of

LLB

On

ALTERNATE DISPUTE RESOLUTION

(Subject Code: LLB - 504)

Submitted by: Submitted to: -

Name: - ATHARVA Ms. Neha Bharti

Enrollment no. 2021130094 Assistant Professor

School of Law and Constitutional Studies

Shobhit Institute of Engineering and Technology – Deemed to be University,
NH-58, Roorkee Road, Modipuram, Meerut (U.P.) - 250110

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ACKNOWLEDGMENT

I would like to express my gratitude and appreciation to all those who gave me the possibility
to complete this project. Special thanks to my supervisor Ms. Neha Bharti for giving me this
golden opportunity to work on ADR project and whose help, stimulating suggestions and
encouragement helped me in all time of fabrication process and in writing this report. I also
sincerely thank her for the time she spent in proofreading and correcting my many mistakes.

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DECLARATION

I hereby declare that my Project titled ADR is a bona- fide record of the project work which I
have submitted to School of Law and Constitutional Studies, Shobhit University in partial
fulfilment of credit requirements for the degree of LL.B is my authentic work. This project
has not been copied, duplicated or plagiarised from any other paper, journal, document or
book and has not been submitted to any educational institute or otherwise for the award of
any certificate, diploma, degree or recognition.

Name of Student. ATHARVA

Roll No. MRT21UGLLB029
Date. 28-11-2023

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 CONTENTS
1. INTRODUCTION

2. What are the Key Features of the Act ?

a. Pre-litigation Mediation:
b. Disputes not Fit for Mediation
c. Applicability:
d. Mediation Process
e. Mediation Council of India
f. Mediated Settlement Agreement
g. Community Mediation
3. Why does India Need to Promote Mediation
a. Absence of Standalone Laws on Mediation
b. Mediation as Tool for True Justice and Social Change
c. Aspirations to Become an International Mediation Hub
4. What are the Key Issues and Concerns with the Act
a. Mandating Pre-litigation Mediation
b. Limited Relevant Experience of Mediators
c. Requiring Central Government Approval before issuing
Regulations:
d. Challenges in Enforcing International Settlements
e. Multiple registration needed for Mediators
f. Undefined Terminology
g. Issues with Online Mediation
h. Issues with Community Mediation
5. What are the Steps Ahead ?
a. Phased Introduction of Mandatory Pre-litigation
b. Reduce Time Frame
c. Capacity Building
d. Scaling Accessibility

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 e. Use of Disruptive Technologies
6. History of Mediation in India
7. The draft Mediation Bill, 2021

8. Overview of the Bill

9. Observations/ Recommendations of the Parliamentary Standing

Committee:

10. Mediation effect on ADR system

11.CONCLUSION

12.ADR PROCEEDINGS

 Nagireddy Srinivasa RaoVs.Chinnari Suryanarayana and Others

 Sawera Township v. Faisal Bin Tirif

 Jyoti Sarup Mittal v. South Delhi Municipal Corporation

 Swastik Pipe Ltd. v. Shri Ram Autotech Pvt. Ltd.

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INTRODUCTION
 Mediation is a voluntary, binding process in which an impartial and
neutral mediator facilitates disputing parties in reaching a settlement.
 A mediator does not impose a solution but creates a conducive
environment in which disputing parties can resolve all their disputes.
 Mediation is a tried and tested alternative method of dispute
resolution. It has proved to be a great success in the cities of Delhi,
Ranchi, Jamshedpur, Nagpur, Chandigarh and Aurangabad.
 Mediation is a structured process where a neutral person uses
specialized communication and negotiation techniques. Litigants
participating in the mediation process have unequivocally endorsed it.
 Other than mediation there are some other dispute resolution methods
such as Arbitration, Negotiation and Conciliation.
What are the Key Features of the Act ?
 Pre-litigation Mediation:
 Parties must attempt to settle civil or commercial disputes by
mediation before approaching any court or certain tribunals.
 Even if they fail to reach a settlement through pre-litigation
mediation, the court or tribunal may at any stage refer the parties to
mediation.
 Disputes not Fit for Mediation:
 The Act contains a list of disputes which are not fit for mediation.
These include disputes:
 relating to claims against minors or persons of unsound mind,
 involving criminal prosecution, and
 affecting the rights of third parties.
 The central government may amend this list.
 Applicability:
 The Act will apply to mediations conducted in India:
 involving only domestic parties,
 involving at least one foreign party and relating to a commercial
dispute,

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  if the mediation agreement states that mediation will be as per this
Act.
 Mediation Process:
 Mediation proceedings will be confidential, and must be completed
within 180 days (may be extended by 180 days by the parties).
 A party may withdraw from mediation after two sessions.
 Mediation Process
 Mediators may be appointed by:
 the parties by agreement, or
 a mediation service provider.
 Mediators must disclose any conflict of interest that may raise
doubts on their independence.
 Mediation Council of India:
 The central government will establish the Mediation Council of
India.
 The Council will consist of
 a chairperson,
 two full-time members (with experience in mediation
or ADR),
 three ex-officio members (including the Law
Secretary, and the Expenditure Secretary), and
 a part-time member from an industry body.
 Functions of the Council include: (i) registration of mediators, and
(ii) recognising mediation service providers and mediation institutes.
 Mediated Settlement Agreement:
 Agreements resulting from mediation (other than community
mediation) will be final, binding, and enforceable in the same
manner as court judgments.
 They may be challenged on grounds of:
 fraud
 corruption
 impersonation

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  relating to disputes not fit for mediation.
 Community Mediation:
 Community mediation may be attempted to resolve disputes likely
to affect the peace and harmony amongst residents of a locality.
 It will be conducted by a panel of three mediators.
Why does India Need to Promote Mediation?
 To Tackle Case Pendency:
o As of May 2022, over 4.7 crore cases are pending in courts
across different levels of the judiciary. Of them, 87.4% are
pending in subordinate courts, 12.4% in High Courts.
o Thus to reduce the case pendency,the Mediation and
Conciliation Project Committee of the Supreme Court of India
describes mediation as a tried and tested alternative for conflict
resolution
 Absence of Standalone Laws on Mediation :
 There are several statutes containing mediation provisions, such as
o the Code of Civil Procedure, 1908,
o the Arbitration and Conciliation Act, 1996,
o the Companies Act, 2013, the Commercial Courts Act, 2015,
and
o the Consumer Protection Act, 2019
o Despite the presence of above statutes, there is no dedicated
standalone mediation legislation In India.
o Various countries including Australia, Singapore, and Italy
already have standalone laws on mediation.
 Mediation as Tool for True Justice and Social Change :
o Mediation simplifies the delivery of justice through plain
language and proves to be a cost-effective alternative to
traditional methods.
o The resolution arrived during mediation secures true justice for
individuals where social norms are brought in consonance with
Constitutional values through the exchange of ideas and flow of
information.
 Aspirations to Become an International Mediation Hub :

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 o The Singapore Convention on Mediation is a uniform and
efficient framework for international settlement agreements
resulting from mediation.
o As India is a signatory to the Singapore Convention on
Mediation (since 2019), it is appropriate to enact a law
governing domestic and international mediation.
o It will boost India’s credential to become an International
Mediation Hub.
What are the Key Issues and Concerns with the Act ?
 Mandating Pre-litigation Mediation:
o According to the Act, pre-litigation mediation is mandatory for
both parties before filing any suit or proceeding in a court,
whether or not there is a mediation agreement between them.
o However, as per Article 21 of the Constitution, access to justice
is a fundamental right which cannot be fettered or restricted.
 Limited Relevant Experience of Mediators:
o While the full-time members of the Council must possess
knowledge or experience pertaining to mediation or ADR laws
and mechanisms, they may not necessarily be practicing
mediators with significant experience.
o For instance, the Act would permit an arbitrator to be appointed
as a full-time member of the Council. An arbitrator may not be
best suited to perform functions such as prescribing standards of
professional conduct of mediators.
 Requiring Central Government Approval before issuing
Regulations:
o Under the Act, the Council will discharge its major functions by
issuing regulations. It must take approval from the central
government before issuing such regulations.
o Thus, Council's effectiveness could be limited if it requires
central government approval for its core functions. Similar
organizations don’t require prior approval before issuing
regulations. e.g. National Medical Commission and the Bar
Council of India.
 Challenges in Enforcing International Settlements:

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 o The Act considers international mediation to be domestic when
it is conducted in India with the settlement being recognised as a
judgment or decree of a court.
o The Singapore Convention does not apply to settlements that
already have the status of judgments or decrees. As a result,
conducting cross-border mediation in India will exclude the
tremendous benefits of worldwide enforceability.
 Multiple registration needed for Mediators:
 Mediators must be registered registered/ empanelled at all four places:
o Mediation Council of India,
o Empanelled by a court annexed mediation center,
o A recognised mediation service provider, and
o A Legal Services Authority .
 It is unclear why satisfying any one of these conditions is not sufficient
for such mediators.
 Undefined Terminology:
 Clause 8 of the Act entitles a party to move the Court, before the
commencement or during mediation, for interim relief, only
in “exceptional circumstances”.
 The term “exceptional circumstances” is undefined in the Act.
 Issues with Online Mediation:
 A recent NITI Aayog report reveals that only 55%of India have access
to the internet and only 27 % possess compatible devices.
 This poses an accessibility problem for a significant portion of the
population.
 Issues with Community Mediation :
 As for community mediation, the Act makes it mandatory to have a
panel of three mediators.
o Community Mediation is a powerful tool that offers an
opportunity for people to resolve disputes through managed
communication.
 This requirement seems unnecessary and impinges on the flexibility
that mediation brings.
What are the Steps Ahead ?

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  Phased Introduction of Mandatory Pre-litigation :
 Rolling out mandatory pre-litigation mediation in a phased manner,
first for certain categories of disputes and then eventually to cover a
wide range of disputes.
 Reduce Time Frame:
 The Parliamentary Standing Committee Report on Mediation Bill,
2021 recommended reduction in the time for concluding a mediation
from 180 to 90 days.
 Capacity Building :
 NITI Aayog noted that a framework for mandatory pre-litigation
mediation in India must be planned keeping in mind the number of
mediators available and the ecosystem’s ability to provide a large
number of mediators.
 The Mediation and Conciliation Project Committee, Supreme Court
of India, has recommended steps to lay down model mediation codes,
facilitate training of mediators across the country and regulate the
process across all districts.
 Scaling Accessibility:
 For online mediation to be a success, we will have to scale our
bandwidth accessibility to remote parts of the country.
 Setting up legal aid or access to justice clinics with adequate IT
infrastructure could address this issue.
 Use of Disruptive Technologies :
 International Arbitration (IA) and Artificial Intelligence (AI) are
leading alternatives to conventional practices. IA replaces conventional
dispute resolution methods, while AI replaces traditional performance
approaches.
 Artificial Intelligence could provide immense benefits for the
arbitration process and its users. By augmenting human cognitive
abilities, AI powered services could assist lawyers in drafting,
identification of better authorities, reviewing of documents, etc.

History of Mediation in India:

Much before the adoption of the formal British judicial system, the
traditional Panchayat system prevailed in India whereby community issues
were resolved by a group of village elders. Disputes were also referred to

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respected businessmen called Mahajans, to informally resolve the same
amongst contesting parties.

The formal integration of mediation into the Indian legal system during the
post-British era can be traced to the Industrial Disputes Act, 1947, wherein
detailed procedures were prescribed for settling disputes out of court.
Subsequently the enactment of the Legal Services Authority Act, 1987 provided
for the establishment of Lok Adalats, which gave further impetus to the concept
of mediation. Further, commercial mediation was given a statutory flavour
through the introduction of Section 89 into the Code of Civil Procedure,
1908[5].

The enactment of the Commercial Courts Act, 2015[6], providing mandatory

pre-institutional mediation in certain classes of Commercial Suits, where no
urgent relief is sought, was also an important step in favour of commercial
mediation. The Hon’ble Supreme Court has also recently held that this
provision is not merely procedural, and must be complied with before any
remedy can be availed under the said Act; and in the event of failure to invoke
pre-institutional mediation, a commercial suit is liable to be dismissed[7].

The draft Mediation Bill, 2021

Introduction:

In order to further concretise a statutory framework for compulsory mediation

in certain cases of civil and commercial disputes and strengthen the process of
mediation in India, the Bill was placed before the Rajya Sabha (Upper House of
Parliament) on December 20, 2021 and referred to the Parliamentary Standing
Committee on the same day. The Standing Committee submitted its report on
July 13, 2022.

The Statement of Objects and Reasons of the Bill indicate that the Bill seeks to
achieve, inter alia, the following objectives:

i. subsuming conciliation under Part III of the Arbitration and Conciliation Act,
1996, in mediation as per international practice of using the terms “conciliation”
and “mediation” interchangeably.

ii. implementing compulsory pre-litigation mediation in certain classes of civil

and commercial disputes before parties approach a court or tribunal.

iii. facilitating online mediation, the importance of which has increased

manyfold in view of the Covid-19 pandemic.

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iv. prescribing a fixed timeline of 180 days for completing a mediation, further
extendable by another 180 days.

v. establishment of Mediation Councils, inter alia, to promote mediation and to

develop India as a robust centre for domestic and international mediation.

vi. making the mediated settlement agreement resulting from mediation

enforceable in accordance with the provisions of the Code of Civil Procedure,
1908, in the same manner as if it were a judgment or decree of a Court.

Overview of the Bill:

i. The provision under Section 2 of the Bill permits/assigns application of the Bill
in cases where a mediation is conducted in the territory of India, and (a) all or both
parties habitually reside in or are incorporated in or have their place of business in
India; or (b) the mediation agreement provides that any dispute shall be resolved in
accordance with the provisions of the Bill; or (c) international mediation, where at
least one party is an individual who is a national of or habitually resides in any
country other than India or a body corporate with its place of business outside
India. However, the provisions of the Bill shall not apply where one of the parties
to the dispute is the Central or State Government (or any of their functionaries),
except where the matter pertains to a commercial dispute (as defined under the
Commercial Courts Act, 2015).

ii. Under Section 7 of the Bill, certain disputes inter alia involving allegations of
fraud, fabrication of documents, forgery, impersonation and coercion are rendered
unfit for mediation. This is also the case for disputes relating to claims against
minors, persons of unsound mind and persons with intellectual disabilities.

iii. The Bill provides for compulsory pre-litigation mediation, requiring parties to
attempt resolution of their disputes by mediation, before approaching
courts/tribunals. The Bill mandates that parties attend a minimum of two pre-
litigation mediation sessions, before withdrawing from the process. However,
Section 8 of the Bill also provides that in exceptional circumstances, a party may,
before the commencement of or during the continuation of mediation proceedings,
file appropriate proceedings before a court or tribunal of competent jurisdiction
seeking urgent interim measures and the court or tribunal shall after granting or
rejecting urgent interim relief, as the case may be, refer the parties to undertake
mediation to resolve the dispute, if deemed appropriate.

iv. Under Section 22, a Mediated Settlement Agreement (“Agreement”) means

and includes a written agreement between the parties resulting from mediation,
settling some or all the disputes between them, and authenticated by the mediator.
Further the Agreement is required to be registered with the State/ District
authorities constituted under the Legal Services Authorities Act, 1987, as the case
may be.
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v. The Bill further provides that the Agreement shall be final and binding on the
parties and enforceable in the same manner as if it were a judgment or decree
passed by a court and is open to challenge on the grounds of fraud, corruption,
impersonation or where the mediation was conducted in respect of disputes or
matters unfit for mediation. An application challenging the Agreement cannot not
be made after 90 (ninety) days have elapsed from the date on which the party
making the application received the copy of the Agreement under Section 22(3).

vi. In cases of disputes involving the Central Government or the State Government,
Section 50 of the Bill provides that the settlement agreement arrived at shall be
signed only after obtaining the prior written consent of the competent authority of
such government body.

vii. The Bill also provides for community mediation with prior mutual consent of
parties for resolution of disputes affecting the peace, harmony and tranquility
amongst residents or families of any area or locality and empowers the concerned
Authority or District Magistrate or Sub-Divisional Magistrate to constitute a panel
of three mediators for conducting the community mediation. However, any
settlement agreement arrived at in a community mediation shall not be enforceable
as a judgment or decree of a civil court.

viii. Section 33 of the Bill provides for the establishment of the Mediation Council
of India by the Central Government. Section 40 further provides that such Council
shall inter alia endeavour to promote domestic and international mediation in India
through appropriate guidelines and also lays down the framework/protocol for the
continuous education, certification, and assessment of mediators by recognised
mediation institutes.

Observations/ Recommendations of the Parliamentary Standing

Committee:

i. The Committee observed that making pre-litigation mediation mandatory may

result in further delay of cases and may prove to be an additional tool in the
hands of errant litigants to delay the disposal of cases. According to the
Committee, pre-litigation mediation should be optional and not mandatory, and
should be introduced in a phased manner, as opposed to its immediate
implementation in matters related to all civil and commercial disputes.

ii. The Committee recommended that the Bill may be suitably modified so that
the government-related disputes are not excluded from its purview, considering
the intended purpose of the Bill to reduce pendency of cases in courts.

iii. The Committee made a crucial observation regarding the time limit for
completion of the mediation process. The Committee recommended that the
same be reduced to 90 days, with an extended period of 60 days.
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iv. Considering that the mechanism of online dispute resolution gained severe
traction during the Covid 19 pandemic, the Committee also recommended that
detailed provisions and modalities for online mediation be incorporated within
the Bill.

v. The Committee also observed that the non-enforceable character of the

settlement agreement arising out of community mediation will defeat the very
purpose of a community mediation.

vi. The Committee observed that the purpose of the SCM is to facilitate
international trade and commerce by enabling disputing parties to easily enforce
and invoke settlement agreements across borders. Having noted that India has
not ratified the SCM and the reasons in support thereof, the Committee
recommended that the present definition of ‘International Mediation’ be
revisited, so that, in future, the provisions of SCM can be incorporated in the
enactment without any ambiguity.

Mediation effect on ADR system

Mediation is the facilitation of a negotiated agreement by a neutral third party

who has no decision-making power.

Mediation is now recognised as one of the quickest and most cost-effective

ways of resolving a dispute and is the most common form of ADR. The number
of disputes mediated annually has increased rapidly in the past decade and
evidence suggests that the numbers of mediations each year will continue to
increase.

A mediator is an independent third party who is appointed by the parties to help

them attempt to negotiate a solution. He will not propose his own solution. The
mediation process involves each party sending short written submissions to the
mediator followed by a mediation hearing. At the mediation hearing each party
will begin by making a presentation to the mediator and normally the other
side. The mediator will then meet with each party individually in private in an
attempt to facilitate a settlement. The individual private meetings are often
known as caucuses. Caucusing may be followed by one or more joint sessions
(plenary sessions).

The mediator's style can generally be described as either evaluative or

facilitative. Evaluative mediators are characterised as more prone to actively
narrowing the topics for discussion, assessing their opinion of the law, the
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merits and what seems fair and working to narrow the "settlement range" in an
attempt to cajole the parties to agree. They seek to articulate and impose their
view of the merits. Facilitative mediators assist the parties to find a solution
through the process, leaving the active evaluation and articulation of views on
the merits in the hands of the parties.

Occasionally the mediator may be requested to give a non-binding view on their

suggested terms of settlement or the merits of the case. However, this is
generally only given at the end of the mediation if there is deadlock. In
addition, all parties and the mediator must agree to the mediator giving a non-
binding view

Conclusion

A mediated settlement, by its very nature, is not very susceptible to a challenge

(and objections, if at all, is restricted to limited specified grounds). A mediated
settlement would, therefore, reduce the burden not only of Courts of original
jurisdiction, but also appellate and writ Courts, along with the Supreme Court.
Such an avenue of dispute resolution is also very cost effective (does not entail
payment of Court fee or legal/professional fee) and time efficient. However,
given the frame of mind of parties in a dispute scenario, merely leaving their
representatives in a room together with a passive mediator, will only be counter-
productive. An effective mediation is centred around a skilled mediator, without
whom the process is fait accompli. It is, therefore, imperative that an adequate
framework for training appropriate mediators be included either in the Act, or
the Rules/Regulations to be framed thereunder.

An area of concern in the regime contemplated in the current version of the Bill,
are the provisions relating to International Mediation, which do not appear to be
entirely in consonance with international standards or practices. The Bill ought
to be brought in line with the international practices, enabling parties to easily
enforce settlement agreements across different jurisdictions, while retaining the
necessary checks and balances.

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[ADR PROCEEDINGS]
(PROCEEDING 1)
Petitioner: Nagireddy Srinivasa Rao

Respondents: Chinnari Suryanarayana and Others

Date of Judgment: 30.09.2022

HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

FACTS:

Nagireddy Srinivasa Rao and Chinnari Suryanarayana entered into a

development agreement in 2011 for constructing an apartment complex in
Srikakulam District.
Disputes arose, leading to an application under Section 11 of the Arbitration Act
for an arbitrator's appointment, granted on 27.08.2021.
ISSUE:
The primary contention was whether the arbitration application was barred by
limitation.
JUDGMENT:

The review petitioner argued that the court didn't address their claim on
limitation, causing them to lose the right to object.
The court discussed the maintainability of a review under Section 11,
distinguishing between procedural reviews and reviews on merits.
As no provision allowed a review of an order under Section 11 and the review
sought was on merits, the application was dismissed on 30th September 2022.

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(PROCEEDING 2)
Sawera Township v. Faisal Bin Tirif

IN THE HIGH COURT OF TELANGANA

FACTS:
Parties: Sawera Township (Applicant) v. Faisal Bin Tirif (Respondent).
Dispute related to a Memorandum of Understanding cum agreement (MOU) for
development of land into housing plots.
The MOU included an arbitration clause (Clause 13) naming Mr. Javeed
Mohammed Janjua as the arbitrator.
Disputes arose, and the Applicant alleged collusion between Respondents and
the named arbitrator.
ISSUE:
Whether a party can seek the appointment of a substitute arbitrator based on
allegations of collusion, and if such allegations can be decided under Section 11
of the Arbitration and Conciliation Act, 1996.

HIGH COURT'S OBSERVATION:

The High Court emphasized that an application under Section 11 has limited
jurisdiction, focusing on the prima facie existence of an arbitration agreement.
Allegations of collusion cannot be a basis for seeking a substitute arbitrator in
such an application.
Issues of collusion or justifiable doubts about an arbitrator's independence must
be addressed by the arbitral tribunal under Section 13 of the Act.

HIGH COURT'S DECISION:

The Court held that a party cannot seek the appointment of a substitute
arbitrator solely on allegations of collusion.
Such issues, even if they exist, cannot be decided under Section 11 of the Act,
and the tribunal appointed under the arbitration agreement (here, Mr. Javeed
Mohammed Janjua) must address them under Section 13.

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(PROCEEDING 3)
Jyoti Sarup Mittal v. South Delhi Municipal Corporation

FACT

M/s. Jyoti Sarup Mittal (“Petitioner”) and South Delhi Municipal Corporation
(“Respondent”) entered into an agreement dated 21 November 2006, for the
execution of the works relating to improvement to drainage system in a specific
part of Delhi. The Respondent awarded the contract for a sum of Rs.
25,30,28,517/- and stipulated 06 December 2006 as the commencement date
and 05 December 2008 as the completion date.

ISSUES

Whether the Commissioner of the Respondent was empowered to unilaterally

appoint the Sole Arbitrator?
Whether the entire agreement between the parties to refer the dispute to
arbitration will be void or non-existent in case the appointment mechanism is
considered to be void?

JUDGMENT

At the outset, it was observed by the learned single judge that despite the signed
copy of the GCC or the agreement not being produced, the agreement to refer
the parties to arbitration was evident enough. Thus, the first ground of the
Petitioner was not merited.

The learned single judge then identified the principal controversy in the present
case that pertained to the fact as to whether a Sole Arbitrator could be
unilaterally appointed by the Commissioner. In this regard, the Delhi High
Court placed strong reliance upon the judgments of the Supreme Court in the
cases of TRF Ltd.[4] and Perkins Eastman Architects[5] to observe that it was
no longer permissible in law for the Commissioner of the Respondent to appoint
an arbitrator unless the Petitioner agreed for such appointment in writing. After
briefly examining the legislative history, the learned single judge was not
inclined to accept the arguments advanced by the Respondent to this extent.
The Delhi High Court then moved to examine the second issue that was of
greater importance. It was observed that according to the expansive reading of
the decisions in TRF Ltd.[6] and Perkins Eastman Architects[7] and legislative
19 | P a g e
history, the wordings of the clause cannot be read in such a manner so as to
render the clause ineffective of reference merely because the clause only
permitted a unilateral appointment mechanism.

In view of the learned single judge, the entire arbitration clause will not fail
merely because the mechanism for appointment of an arbitrator by the
Commissioner is no longer permissible. To substantiate the same, reliance was
placed upon the doctrine of severability[8] where the reference of disputes was
considered to be severable from the appointment mechanism.
he learned single judge then relied upon the judgment in the case of Indian Oil
Corporation Ltd.[9] and held that in view of the facts, it is necessary for the
Delhi High Court to appoint an arbitrator and the wording of the clause that
only restricts the power of appointment to the Commissioner cannot interfere or
supersede the power of the Delhi High Court.

The Delhi High Court concluded the judgment on two fronts viz., (i) where
there exists a contentious issue and the same is beyond the power of the court
under Section 11 of the 1996 Act, the reference to arbitration is best-suited and
(ii) the fact that the Petitioner had followed all tiers and exhausted all remedies
before approaching the Delhi High Court. With these two conclusions, the
petition was allowed by the Delhi High Court.

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(PROCEEDING 4)
Swastik Pipe Ltd. v. Shri Ram Autotech Pvt. Ltd.

FACTS
The present petition was filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (‘the Act’) for the appointment of a Sole Arbitrator. The
appointment was sought by the Petitioner Swastik Pipe Ltd. (‘Petitioner’) for
adjudicating upon a dispute that arose due to non-payment of outstanding sums
against the goods delivered to Shri Ram Autotech Pvt. Ltd. (‘Respondent’).
Petitioner based its application on the arbitration clause mentioned in an invoice
exchanged between the Parties.
ISSUE:

Whether the terms and conditions appearing in an unsigned invoice and

containing an arbitration clause constitute a valid arbitration agreement between
the parties to appoint an arbitrator under Section 11(6A) of the Act?
JUDGEMENT OF THE DELHI HIGH COURT

The Hon’ble High Court while considering the language of Section 7(4)(b) of
the Act observed that the signature of either party on the arbitration agreement
is not mandatory. It was opined by the Court that sub-clauses (b) and (c) of
Section 7(4) show that the legislative intent is also to include a written
document not signed by the parties, within the ambit of a valid arbitration
agreement, as Section 7(4)(b) provides that an arbitration agreement can be in
the nature of exchange of communication, which provides a record of the
agreement in writing. Taking into consideration the language deployed in the
aforesaid provision, there can be no doubt that, the signature of either party on
the Arbitration Agreement is not mandatory. Moreover, the provision noted
above manifests that an arbitration agreement need not be in a particular form,
and a valid agreement can be constituted if it has all the necessary attributes.
Further, while construing the terms of any agreement, the real intent of the
parties is germane, which could be gleaned from the facts and circumstances.
Since the terms and conditions printed on an invoice are generally inserted
unilaterally by the party issuing the invoice, the Court called upon the Petitioner
to validate the mutual intention of the parties to settle the disputes through
arbitration.

Further, in view of the language of Section 7(4)(c) of the Act, the Court delved
into the meaning of the expression “statements of claim and defence” occurring
in Section 7(4)(c) of the Act and held that it cannot be given a restrictive
meaning referring to decisions of the Supreme Court relied by the Petitioner
stating that the existence of the arbitration agreement can also be inferred from
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the stand taken by the parties in the pleadings filed under the petition under
Section 11 of the Act. The Court thus observed that although there was no
exchange of statements of claim and defense, the fact that the Respondent failed
to reply to deny the existence of an arbitration agreement, both in response to
the legal notice invoking arbitration as well as to the present petition, the
existence of the arbitration agreement was unrebutted. It was opined that the
Court at this stage has to only form a prima facie view regarding the existence
of the arbitration agreement in terms of Section 11(6A) of the Act. Detailed
examination and final determination regarding the existence of the arbitration
agreement is in the domain of the Arbitral Tribunal.

Deferring to the restricted jurisdiction available to the Court under Section 11 of

the Act, it was observed that if there existed sufficient material on record to
establish that the condition/clause in the invoices/exchanges were accepted and
acted upon, the parties would be ad idem, and arbitration agreement could be
safely inferred. This aspect, however, had to be conclusively determined on the
basis of evidence as well as on the surrounding facts and circumstances, by the
Arbitral Tribunal.

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