Arbitration and Contractual Disputes, Indore

The chambers appear in arbitration proceedings and in the court applications that surround them, including for public sector undertakings in infrastructure and contractual disputes.

When arbitration applies

An arbitration agreement must be in writing under Section 7. Where one exists and a party nevertheless files a suit, the other party may apply under Section 8, not later than the date of submitting its first statement on the substance of the dispute, and the judicial authority is then required to refer the parties to arbitration.

The scope of the court's examination at that stage is narrow. It looks at the existence of the agreement, not at the merits of the dispute.

Appointment of the tribunal

Where the parties fail to agree on an arbitrator in accordance with the procedure in their contract, an application for appointment lies under Section 11 to the High Court, which for matters at Indore means the High Court of Madhya Pradesh at Indore. The court's role at this stage is confined to the existence of the arbitration agreement.

Interim measures

Interim relief may be sought from the court under Section 9, before or during the arbitral proceedings or after the award but before enforcement, and from the tribunal itself under Section 17 once it is constituted. An order of the tribunal under Section 17 is enforceable in the same manner as an order of the court.

Where a tribunal is in place, the court will ordinarily decline to entertain a Section 9 application unless the remedy before the tribunal is shown to be inefficacious.

Challenge to an award

An award may be set aside only on the grounds in Section 34, which include incapacity of a party, invalidity of the agreement, want of proper notice, the award dealing with matters beyond the scope of the reference, improper composition of the tribunal, non arbitrability of the subject matter, and conflict with the public policy of India.

The application must be made within three months of receipt of the award, extendable by a further thirty days on sufficient cause and not thereafter. The court does not sit in appeal over the award, and an error of fact or a different view on the evidence is not by itself a ground.

An appeal from an order under Section 34 lies under Section 37.

Enforcement

Once the time for challenge has expired, or a challenge has been refused, the award is enforced under Section 36 in the same manner as a decree of the court. A challenge under Section 34 does not by itself operate as a stay; a separate application for stay is required and the court may impose conditions including a deposit.

Contractual disputes outside arbitration

Where there is no arbitration clause, a contractual dispute proceeds as a civil suit: for recovery of money, for damages for breach, for specific performance under the Specific Relief Act 1963, or for a declaration. The Specific Relief (Amendment) Act 2018 made specific performance the rule rather than a discretionary remedy in the cases to which it applies, which has changed how these suits are framed.

Frequently asked questions

What is the time limit to challenge an arbitral award?

Three months from the date on which the party making the application received the award, under Section 34(3) of the Arbitration and Conciliation Act 1996. The court may entertain an application within a further thirty days if satisfied that there was sufficient cause, but not after that. The period is strict and is not extended under the Limitation Act beyond those thirty days.

Can a court interfere with an arbitral award on the merits?

No. Section 34 does not permit a review on the merits. The court does not reassess the evidence or substitute its own view for that of the tribunal. Interference is confined to the specified grounds, of which conflict with the public policy of India is the most litigated, and that ground has itself been read narrowly.

What happens if a suit is filed despite an arbitration clause?

The other party may apply under Section 8 before submitting its first statement on the substance of the dispute, and the judicial authority must then refer the parties to arbitration. If that application is not made in time, the right to insist on arbitration can be lost and the suit proceeds.

Can interim relief be obtained before the arbitration starts?

Yes. Section 9 allows a party to apply to the court for interim measures before the commencement of arbitral proceedings, during them, or after the award but before enforcement. Where a Section 9 order is made before the arbitration begins, the proceedings must ordinarily be commenced within ninety days of that order.

Is arbitration faster than a civil suit?

It can be, because the Act prescribes timelines for completion of pleadings and for the award. Whether it is faster in practice depends on the conduct of the parties and on how many court applications are generated around it, for appointment, for interim relief, for challenge and for enforcement. A dispute that is contested at every one of those stages is not necessarily quicker than a suit.