The Arbitration and Conciliation Act 1996, Act 26 of 1996, governs how private dispute resolution works in India, and its central bargain is easy to state and hard to keep. The parties choose their judge, their procedure and their timetable, and in return the court promises to stay out of the way until the award arrives. The promise is qualified at every stage by a small set of gates through which a court may still enter: to refer the parties to their bargain, to protect the subject matter while the tribunal forms, to appoint arbitrators when the agreed machinery fails, to set aside an award for defects of process rather than of reasoning, and to enforce the award as if it were a decree of the court itself. Every section of the Act is best read as an allocation of power between the parties, the tribunal and the court, and every major dispute about the Act is a dispute about where one gate should sit. Two consequences follow from that design and they govern everything that follows in this account. A challenge to an award is not an appeal, and the filing of a challenge does not stop enforcement. A reader who holds those two propositions, and understands the gates that qualify them, holds the working model of Indian arbitration.

The Act was assented to on 16 August 1996, but its life began earlier. Parliament legislated against the background of three successive Ordinances, the first promulgated on 25 January 1996, and Section 1(3) answers the commencement question inside the statute itself: the Act is deemed to have come into force on 25 January 1996, the date of the first Ordinance. That deeming clause matters beyond ceremony. It fixes the regime that governs agreements and proceedings around the changeover, and it explains why Section 85, the repeal provision, had to speak with care. Section 85 repealed the Arbitration (Protocol and Convention) Act 1937, the Arbitration Act 1940 and the Foreign Awards (Recognition and Enforcement) Act 1961, the three statutes that had carried Indian arbitration law until that point, while saving proceedings and awards already in motion under the repealed law. The 1996 Act is therefore a consolidating and reforming statute at once: one code for domestic arbitration, for international commercial arbitration seated in India, for the enforcement of foreign awards, and for conciliation, a subject the earlier law had left largely to contract.

What stood before 1996 and why it was replaced

The Arbitration Act 1940 governed arbitration agreements and proceedings in India for more than half a century, and its failure was structural rather than accidental. The 1940 Act treated the court as a standing supervisor of the arbitration. A party could approach the court to file the agreement, to appoint or remove arbitrators, to remit or set aside the award on grounds that invited scrutiny of the arbitrator’s reasoning, and to have the award converted into a rule of court before it could be executed. Each stage was an occasion for litigation, and the arbitration frequently became a preliminary round inside a longer court contest. Arbitrators, very often retired judges working with the habits of the courtroom, applied the procedure and evidence codes by instinct, so the process replicated the delays it was meant to escape. The Supreme Court recorded the failure plainly in Guru Nanak Foundation v. Rattan Singh, observing that the way arbitrations were conducted under the old regime made lawyers laugh and legal philosophers weep. Foreign awards travelled under separate statutes tied to the conventions India had accepted: the 1937 Act for the Geneva system and the 1961 Act for the New York Convention, each with its own procedure and its own conditions for enforcement. A commercial party with a foreign counterparty faced one regime, a domestic party another, and neither regime promised speed.

The replacement was drafted from an international template rather than invented at home. The Act is based on the UNCITRAL Model Law on International Commercial Arbitration of 1985 for its arbitration parts and on the UNCITRAL Conciliation Rules of 1980 for its conciliation part, and the preamble says so in terms.Working from the Model Law bought India three things at once: a vocabulary that foreign commercial parties already understood, a set of court intervention points that the Model Law had deliberately kept narrow, and the doctrine that the seat of the arbitration determines which court supervises it. The Model Law’s Article 5 principle, that no court shall intervene except where the law so provides, is carried into Indian law by Section 5 of the Act, and that section remains the interpretive key to Part I. Where the Act confers a power on the tribunal, a court asked to exercise the same power at the same stage is ordinarily being asked to break the statute’s allocation of functions.

The statute’s own defects declared themselves within its first decade, and the reform conversation that followed is part of its biography. The Law Commission’s 176th Report of 2001 examined the working of the Act and proposed an amendment bill addressing, among other matters, the appointment machinery and the challenge regime; the bill was introduced in Parliament and lapsed without enactment, leaving the courts to discipline the Act by interpretation for a further decade. The interpretation era produced the expansions this account records at their proper places: the widening of Part I to foreign seats, the widening of public policy to patent illegality, and the widening of the appointment power into a judicial enquiry of some depth. When Parliament returned to the Act in the following decade it legislated against those expansions one by one, which is why the amendments read as point-by-point replies to judgments rather than as a fresh design. A reader of the bare Act is therefore reading two documents at once: the Model Law design of 1996 and the legislative corrections layered over its pressure points, and the discipline of keeping them distinct, which this account maintains by flagging each correction at the provision it touched, is the discipline the amendment article in this series applies to the full trail.

The map of the Arbitration and Conciliation Act 1996

The Act has four Parts and a family of Schedules, and the map repays memorising because every practical question begins with locating the right Part. Part I, Sections 2 to 43, governs arbitration itself where the place of arbitration is in India: definitions, the arbitration agreement, the composition and jurisdiction of the tribunal, the conduct of proceedings, the award, the challenge to the award and its enforcement. Part II, Sections 44 to 60, governs the enforcement of foreign awards, with Chapter I (Sections 44 to 52) carrying the New York Convention and Chapter II (Sections 53 to 60) carrying the older Geneva Convention. Part III, Sections 61 to 81, governs conciliation as a free-standing process with its own settlement machinery. Part IV, Sections 82 to 86, holds the supplementary provisions: the rule-making power of the High Courts and the Central Government, the power to remove difficulties, and the repeals and savings in Section 85.

Two later additions changed the map without changing the numbering of the original Parts. The amendments of 2015 and 2019 attached Schedules to the Act: the First, Second and Third Schedules reproduce the texts of the New York Convention, the Geneva Protocol and the Geneva Convention that Part II enforces; the Fourth Schedule sets a model scale of arbitrator fees; the Fifth and Seventh Schedules list, respectively, the circumstances that give rise to justifiable doubts about an arbitrator’s independence and the relationships that make a person ineligible for appointment. The Eighth Schedule, added in 2019 to prescribe arbitrator qualifications, was omitted by the amendment of 2021, and this account notes the fact without retelling the amendment history, which a later article in this series owns. The 2019 amendment also inserted a Part IA (Sections 43A to 43M) providing for an Arbitration Council of India, but those provisions, together with the provisions that would have moved appointment powers from courts to graded arbitral institutions, were never brought into force. The statute book therefore contains a designed institutional future that has not legally begun, a point that returns when this account reaches appointments.

The arbitration agreement and the duty to refer

Everything in Part I flows from an agreement, and Section 7 defines what counts. An arbitration agreement is 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. The agreement must be in writing, but writing is read generously: a document signed by the parties, an exchange of letters or other means of telecommunication providing a record, an exchange of statements of claim and defence in which the agreement is alleged and not denied, or a reference in a contract to a document containing an arbitration clause where the reference makes the clause part of the contract. The clause may stand inside the main contract or exist as a separate agreement, and its fate is partly independent of the container: the doctrine of separability, stated in Section 16(1)(a), treats the arbitration clause as an agreement distinct from the other terms of the contract, so that a decision that the contract is null and void does not, by that fact alone, destroy the clause. Parties draft against this section constantly, most often by arguing over whether a document chain contains the record of agreement Section 7 requires, and by testing hybrid clauses that send some disputes to arbitration and others to court.

Drafting failures against Section 7 form a predictable catalogue, and the courts’ treatment of each is part of the working law of the section. Incorporation by reference fails most often in standard terms: in M.R. Engineers and Contractors (P) Ltd. v. Som Datt Builders Ltd., (2009) 7 SCC 696, the Supreme Court distinguished a reference to a document in a single contract between the same parties, where a general reference may carry the arbitration clause with it, from a reference to the contract of a third party, where the arbitration clause travels only if the reference is specific to the clause itself or the parties’ intention to incorporate it is otherwise clear. Tiered clauses fail differently: where the parties prescribe negotiation, conciliation or a dispute board before arbitration, the tiers describe a sequence the parties must be able to prove they worked through, and courts divide on whether an unworked tier makes the reference premature or makes the step directory; the drafting lesson is to fix the tier’s duration in days so that exhaustion is provable. Unilateral option clauses, under which one party alone may elect arbitration or litigation after the dispute has arisen, concentrate the election in stronger hands and sit uneasily with the equality analysis the Constitution Bench later applied to appointments, so clauses that distribute election, seat and appointment symmetrically are the clauses that survive contact with the sections intact.

Section 8 converts the agreement into a duty on courts. Where an action is brought before a judicial authority in a matter that is the subject of an arbitration agreement, and a party applies before submitting its first statement on the substance of the dispute, the authority shall refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists. The italicised qualifier entered through the amendments and states the modern test: the referring court performs a prima facie examination, not a trial of the agreement’s validity. The Supreme Court in Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1, explained that referral should be refused only when the claim is manifestly and ex facie time-barred or dead, or when there is no subsisting dispute, because the balance of the validity enquiry belongs to the tribunal under its power to rule on its own jurisdiction. Section 8(2) obliges the applicant to produce the original agreement or a duly certified copy, and Section 8(3) protects the arbitration itself: arbitral proceedings may be commenced or continued, and an award made, even while the referral application is pending before the court. Section 5 closes the circle by barring judicial intervention in matters governed by Part I except where the Part itself provides for it.

Where Part I reaches: the seat and Section 2(2)

Section 2(1) supplies the definitions on which the architecture rests. “Court” is defined by reference to the forum that would have had jurisdiction over the subject matter as a suit, at the level of the principal civil court of original jurisdiction in a district, including the High Court in its ordinary original civil jurisdiction, and expressly excluding inferior courts and courts of small causes. “Arbitral tribunal” means a sole arbitrator or a panel of arbitrators. “International commercial arbitration” is defined in Section 2(1)(f) by the nationality or incorporation of at least one party: an individual who is a national of, or habitually resident in, a country other than India; a body corporate incorporated outside India; an association whose central management and control is exercised outside India; or the government of a foreign country. That definition decides the regime of the arbitration, and two consequences of the regime, the exclusion of patent illegality as a ground of challenge and the mandatory character of the award timeline examined later, turn entirely on it. Section 2(1)(e) and the definition of “legal representative”, “party” and “arbitral award” (which includes an interim award) complete the working vocabulary.

Section 2(2) fixes the territorial reach of Part I: the Part applies where the place of arbitration is in India. The place, or seat, is fixed by the parties under Section 20, failing which by the tribunal, and the seat is a juridical concept rather than a description of where hearings happen to be held. In Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552, a five-judge Constitution Bench held that Part I has no application to arbitrations seated outside India, overruling the earlier contrary position in Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105, and declaring the ruling prospective for arbitration agreements entered into after 6 September 2012. A party to a foreign-seated arbitration therefore cannot use Part I to appoint arbitrators, obtain interim measures or challenge the award in India; its remedies lie at the seat and, at the enforcement stage, in Part II. The amendments later softened one edge of the ruling: by a proviso to Section 2(2), Sections 9, 27 and 37(1)(a) and 37(3) apply to international commercial arbitration seated outside India unless the parties agree otherwise, even though the arbitral proceedings themselves remain governed by the law of the seat. Party drafting that ignores the seat question, or confuses the seat with the venue of meetings and hearings, produces the most expensive preliminary litigation in Indian arbitration, and the confusion is examined again in the questions at the end of this account.

The seat, once fixed, concentrates supervision. Because the seat is the juridical home of the reference, the courts of the seat exercise the supervisory jurisdiction the Act assigns, to the exclusion of courts elsewhere that might have held jurisdiction over the parties or the cause of action in a suit. The Supreme Court restated the principle in BGS SGS Soma JV v. NHPC Ltd., decided in 2019, holding that the designation of a seat is akin to an exclusive jurisdiction clause, that applications under Part I lie to the seat court, and that the place where hearings or the signing of the award happened cannot displace the juridical seat the parties chose. The consequences run through the whole Part: the appointing court is the seat’s court, the Section 34 court is the seat’s court, and parties who signed a contract in one State, performed it in a second and seated the arbitration in a third discover at the challenge stage that the third State’s courts own the file. Two Indian parties may even choose a foreign seat: in PASL Wind Solutions (P) Ltd. v. GE Power Conversion India (P) Ltd., (2021) 7 SCC 1, the Supreme Court held that nothing in the Act prevents two Indian parties from designating a seat outside India, that the resulting award is a foreign award to be enforced under Part II, and that party autonomy under the Act extends to that choice, subject to the public policy controls that guard enforcement of foreign awards against Indian parties.

The international commercial arbitration regime: what changes and what does not

Where a reference qualifies as an international commercial arbitration under Section 2(1)(f), four features of the machinery change their settings, and it is worth holding them together because parties routinely misjudge which regime their clause invokes. The appointing forum moves to the Supreme Court, and Section 11(9) directs an endeavour, in such a case, to appoint an arbitrator of a nationality other than the nationalities of the parties where they belong to different countries. The challenge regime sheds a ground: Section 34(2A)’s patent illegality is confined to arbitrations other than international commercial arbitration, so an award rendered in India in a reference with a foreign party can be attacked for public policy in the Explanation’s narrow sense but not for illegality on the face of the reasons. The award clock changes character: Section 29A states a twelve-month period for international commercial arbitration as an endeavour to be made, not a mandate whose expiry terminates the tribunal. The bridge provisions of the Section 2(2) proviso connect a foreign-seated international commercial arbitration to Indian courts for the limited purposes of Sections 9, 27 and 37, so that a party to a London or Singapore seated reference with assets in Mumbai may still seek protective orders in India while the supervision of the reference itself remains abroad.

What does not change is equally instructive. The arbitration agreement must still satisfy Section 7’s writing discipline where the seat is in India, the appointment safeguards of Sections 12 to 15 apply with the same force, the tribunal’s procedural freedom under Section 19 is identical, and the enforcement machinery of Section 36 converts the award into a decree by the same route. The definition’s boundary litigation is its own small field: disputes turn on whether a body corporate with Indian incorporation but management exercised abroad qualifies under Section 2(1)(f)(iii), whether an individual habitually resident outside India at the relevant date qualifies, and whether a transaction between two formally distinct foreign entities but wholly Indian assets and performance is commercial in the relevant sense. The choices made at the drafting table about incorporation and seat, taken for tax or regulatory reasons by advisers who never read the arbitration clause, thus decide years later which court appoints, which grounds attack the award and whether the award deadline is a wall or a wish.

When the appointment machinery stalls: dead clauses and emergency relief

A large share of Section 11 litigation is not about who should be appointed but about repairing clauses that cannot operate as written. The named arbitrator has died, has retired from the institution the clause assumed, or declines to act. The appointing institution named in the clause has closed, merged or never existed. The clause fixes an even number of arbitrators against Section 10, or names an appointment procedure tied to an office that has been abolished. The Act’s answer to the whole family is the default jurisdiction of the court: Section 11(6) is engaged not only where a party fails to act but wherever the agreed arrangement fails to produce a tribunal, and the court, when it appoints, supplies the missing step of the parties’ own design rather than replacing the design with one of its choosing. The severability of the defective step is implicit in the enterprise: an unworkable pre-appointment step is discarded, while the agreement to arbitrate, which is the substance of the bargain, is carried into effect. Drafting practice has absorbed the lesson by providing cascading fallbacks, but the statute’s own fallback is the reason a pathological clause is usually an inconvenience rather than a defeat.

One gap the Act leaves entirely to the parties is relief in the hours before a tribunal can exist. The statute contains no provision for an emergency arbitrator: a party that needs an injunction within days of a dispute erupting must go to the court under Section 9, because no tribunal, emergency or otherwise, exists under the Act until one is appointed. Institutional rules chosen by the parties can fill the space, and several international institutions’ rules provide for emergency arbitrators whose orders bind the parties by contract. The Supreme Court addressed the enforceability of such an order in an India-seated arbitration in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd., decided in 2021, holding that an emergency arbitrator’s award under the rules the parties had adopted was an order within Section 17(1), made by a tribunal the parties’ agreement had itself constituted for that purpose, and was enforceable under Section 17(2) in the same manner as any other interim order of the tribunal. The reasoning matters beyond its facts: it treats party autonomy under the Act as capable of creating a decision-maker the statute never named, while locating the coercive force of the decision inside the statute that the autonomy invoked. A party drafting for a transaction where emergency relief is foreseeable therefore has a real choice between relying on the Section 9 court door, which always exists, and adopting institutional rules that bring an emergency mechanism inside the arbitration itself.

Appointing the tribunal: Section 11 as it operates

An arbitration lives or dies on the constitution of its tribunal, and Section 11 supplies the machinery in layers. Section 10 lets the parties fix the number of arbitrators, provided the number is not even, failing which the tribunal is a sole arbitrator. Section 11(2) records the governing principle: the parties are free to agree on a procedure of appointment. Most commercial arbitration in India begins exactly there, with each party nominating an arbitrator and the two nominees choosing a presiding arbitrator, or with a sole arbitrator named by consent. The statute enters when the agreed machinery breaks down. Under Sections 11(4), 11(5) and 11(6), a party may request the Supreme Court or the High Court, as the case may be, to take the necessary measure where a party fails to act as required under the agreed procedure, where the parties or the appointed arbitrators fail to reach an agreement expected of them, or where a person or institution entrusted with a function fails to perform it. For international commercial arbitration the request lies to the Supreme Court; for other arbitrations, to the High Court within whose jurisdiction the seat falls. The request is to be disposed of as expeditiously as possible, with an endeavour to conclude the matter within sixty days of service of notice, a target written into Section 11(13) that records Parliament’s expectation without making delay fatal to the appointment.

The court’s enquiry at the appointment stage is deliberately thin. Section 11(6A) confines the court to the examination of the existence of an arbitration agreement, and the general drift of the case law, stated by Vidya Drolia and reaffirmed in the line of authority following it, is that a court appoints unless the agreement is ex facie non-existent or the claim is dead on its face. Everything else, limitation disputes that are arguably alive, allegations that the contract was discharged, questions of fraud of an ordinary kind, is left to the tribunal, which Section 16 empowers to decide its own jurisdiction. Section 11(8) directs the appointing court to have due regard to the qualifications required of the arbitrator by the agreement of the parties and to considerations bearing on securing an independent and impartial arbitrator. The orders made under Section 11 are recorded in Section 11(7) as final, and no appeal lies against them except to the Supreme Court under Article 136 of the Constitution; the appointment stage is designed to be a beginning, not a first round of litigation.

The original scheme of the Act, as enacted, placed the appointment power in the hands of the Chief Justice of the High Court or of the Supreme Court, or persons and institutions designated by them, and named the appointee the appointing authority across both domestic and international cases. Successive amendments transferred the power to the courts themselves and then redrafted it again, and the 2019 amendment proposed the largest change of all: designation of arbitral institutions by the Supreme Court and the High Courts, grading of institutions by the Arbitration Council of India, and appointments made by those institutions rather than by judges. That redesign was never notified into force, so the operative machinery remains the court-based machinery described above. A fuller account of each change, and of the litigation over the amendments’ commencement, belongs to the companion article on the arbitration amendment trail, and this account flags the trail without walking it. What matters for a reader of the bare Act is the distinction between the printed text and the operative text: the printed Section 11 contains a sub-section, Section 11(3A), empowering designation of institutions, but because the provision has not been brought into force, appointments continue to be sought from courts.

Can the same person who drafted the contract be kept off the tribunal entirely?

In a public contract, yes. A clause that lets the interested party appoint the sole arbitrator alone, or hand the other party a panel to choose from, fails at the appointment stage itself, because the appointment must respect equality, and a public employer must also respect Article 14 of the Constitution.

That is the holding of a Constitution Bench in Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML (JV), 2024 INSC 857, where a five-judge Bench held that a clause in a public-private contract which allows one party, interested in the outcome, to unilaterally appoint a sole arbitrator, or to curate a panel from which the other party must choose, offends the equality principle at the stage of appointment and, in the case of a public sector employer, Article 14 of the Constitution. The majority treated the appointment stage as the first point at which the tribunal’s independence is either secured or lost, and held the ruling prospective, applying it to appointments made after the judgment, as expressed for three-member tribunals. The position connects directly to statutory arbitration under other enactments. The National Highways Act sends disputes over compensation to an arbitrator appointed by the Central Government under Section 3G(5), and whether the Constitution Bench ruling reaches that mechanism is a question the account of the National Highways Act and land compensation records as open; the equality logic of the ruling plainly bears on it, but the ruling itself was delivered on appointment clauses in contract.

Independence, challenge and substitution: Sections 12 to 15

Section 12 builds the disclosure regime on which the integrity of the tribunal depends. A person approached for appointment must disclose in writing any circumstances likely to give rise to justifiable doubts as to independence or impartiality, and any circumstances that might affect the ability to devote sufficient time and complete the proceedings within twelve months; the duty continues throughout the proceedings. The Fifth Schedule guides the enquiry into justifiable doubts, listing relationships of the arbitrator with the parties, with counsel, with the dispute and with the subject matter. The Seventh Schedule goes further and states disqualifications: a person whose relationship with a party, counsel or the subject matter falls within its categories is ineligible to be appointed as arbitrator at all, and the ineligibility under Section 12(5) can be escaped only by an express written agreement of the parties made after the dispute has arisen. An employee, consultant or advisor of a party, or a person with a controlling influence in an affiliate of a party, sits squarely inside the disqualification, which is why the standard appointment clause naming a senior officer of one party as arbitrator cannot survive in its old form.

Challenge follows in Sections 13 and 14. The parties may agree their own challenge procedure; failing agreement, a party intending to challenge must send a written statement of reasons to the tribunal within fifteen days of becoming aware of the constitution of the tribunal or of the ground relied on. The tribunal itself decides the challenge, and if the challenge fails, the tribunal continues and makes its award, leaving the unsuccessful challenger to raise the ground again in a setting aside application under Section 34. The design deliberately denies a mid-stream court battle over arbitrator bias except through Section 14: where an arbitrator becomes de jure or de facto unable to perform the functions of the office, or fails to act without undue delay, the mandate terminates, and if a controversy remains, a party may apply to the court to decide on the termination. Section 15 then completes the circuit: where the mandate terminates, a substitute arbitrator is appointed according to the rules that applied to the arbitrator being replaced, the reconstituted tribunal may repeat hearings already held unless the parties agree otherwise, and orders and rulings made before the replacement are not invalid solely because the composition changed.

What happens if an arbitrator dies or withdraws in the middle of the case?

The proceedings do not collapse with the exit of the arbitrator. Section 15 requires a substitute to be appointed under the same rules that governed the original appointment, the record already made stays alive, and the reconstituted tribunal may repeat hearings already held unless the parties have agreed that they should stand.

The practical damage is delay rather than destruction, since the substitute must master a record made by another mind, and the mandate terminates only where Section 14’s termination grounds are separately established. The consequence worth noting is that the substitute mechanism preserves the arbitration agreement even where the named arbitrator was personally chosen: the agreement to arbitrate survives the named individual, and a party cannot convert the death or withdrawal of its chosen arbitrator into an escape from the clause.

Arbitration imposed by other statutes: Section 2(4)

Not every Indian arbitration begins in a clause the parties drafted. Section 2(4) extends Part I 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 the agreement, except in so far as Part I is inconsistent with that enactment or with rules made under it, and excepting Section 40(1), Sections 41 and 43 from the extension. The statutes that work this way form a family: the National Highways Act 1956 sends compensation disputes to an arbitrator appointed by the Central Government under Section 3G(5); the Electricity Act 2003 arms the Appropriate Commission with adjudicatory and reference functions over disputes between licensees and generating companies; the Micro, Small and Medium Enterprises Development Act 2006 sends delayed-payment disputes through the Facilitation Council, first to conciliation and then to arbitration conducted by the Council itself or a centre to which it refers the dispute. In each case the referring statute supplies the compulsion, the appointing authority and, frequently, modifications of the ordinary machinery, and the Act supplies everything else: procedure, challenge under Section 34 and enforcement under Section 36.

The arrangement generates a recurring interpretive contest between the two texts. The referring statute prevails where it speaks with specific intent, which is why an arbitrator appointed by the Central Government under the highways statute is not selected by the parties’ procedure or the court’s Section 11 machinery at all, and why the Facilitation Council’s reference displaces a pre-existing private arbitration clause rather than competing with it. Where the referring statute is silent, the Act fills the space, and its safeguards follow the dispute into the statutory reference: the independence discipline of Section 12, the challenge machinery of Section 34, the confidentiality of Section 42A. The constitutional pressure on this family comes from the appointment side, since statutory arbitration concentrates appointment in the State or its instrumentalities in precisely the configuration the Constitution Bench examined in the contractual setting in Central Organisation for Railway Electrification. The questions the ruling left open there, as the highways account records, will have to be answered statute by statute, because Section 2(4) makes the Act the floor of these references rather than their ceiling.

Interim protection from two doors: Sections 9 and 17

Arbitration takes time to organise, and assets have a way of moving in the interval. The Act therefore runs interim protection through two doors. Section 9 lets a party apply to a court for interim measures of protection before or during arbitral proceedings, or at any time after the award is made but before it is enforced: preservation, custody or sale of goods that are the subject matter, securing the amount in dispute, detention or inspection of property, interim injunctions and the appointment of a receiver, and any other measure the court considers just and convenient. The court applies its ordinary standards for such relief, but two statutory disciplines control the door. Where a court grants relief before the tribunal is constituted, Section 9(2) requires the arbitral proceedings to be commenced within ninety days of the order, or such further time as the court determines, failing which the protection lapses with the delay. And where the tribunal has been constituted, Section 9(3) directs the court not to entertain the application unless circumstances exist which may not render the remedy under Section 17 efficacious, which channels parties toward the tribunal for the bulk of interlocutory protection.

Section 17 is the tribunal’s own armoury, widened by amendment until it matches the court’s in content. On the application of a party at any time during the arbitral proceedings, the tribunal may order interim measures of the same families as the court: protection of goods and property, securing the amount in dispute, injunctions, receivers, and measures for the preservation of evidence and assets. An order under Section 17 is deemed to be an order of the court for all purposes and is enforceable under the Code of Civil Procedure as if it were an order of the court, which answers the classic weakness of tribunal orders, the absence of a coercive arm. Appeals from interim orders are confined by Section 37: an order granting or refusing a measure under Section 9, and an order granting or refusing a measure under Section 17, are appealable, and a second appeal is barred, though a revision to the Supreme Court under Article 136 is not excluded. A party choosing a door should understand the asymmetry that remains between them: after the tribunal is constituted, the court door narrows to cases the tribunal cannot effectively handle, such as measures against third parties who are strangers to the arbitration agreement, while the tribunal door has no power over non-parties at all.

The powers the tribunal does not have

The tribunal’s authority is contractual in origin, and its boundaries are the boundaries of the agreement. The Act contains no power for a tribunal to consolidate two arbitrations, to join a stranger to the reference, or to compel a non-party to produce documents or submit to its orders. Each gap has produced its own body of litigation and its own workaround. Consolidation exists where the parties’ overlapping contracts adopt the same institutional rules and the institution’s framework permits it, but the statute itself offers no equivalent of a court’s power to club suits. The court assistance provision in Section 27 is the statute’s own borrowing mechanism: the tribunal, or a party with the tribunal’s approval, applies to the court for assistance in taking evidence, the court executes the request within its competence as if the evidence were being taken in a suit, and a person who fails to attend or refuses to give evidence faces the consequences the court would impose for the same default in a trial. The tribunal thus decides commercial disputes with private authority, and borrows public coercion openly when it needs a witness compelled.

The boundary at its most contested is the non-signatory. Commercial groups contract through several companies, and disputes rarely respect the line between the entity that signed and the entities that performed. In Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, the Supreme Court allowed a non-signatory affiliate to be joined to an international arbitration where the transactions were composite, the agreements interlinked and the affiliate’s participation in performance direct. A five-judge Bench in Cox and Kings Ltd. v. SAP India (P) Ltd., decided in December 2023, restated the position on a fuller canvas: the group of companies doctrine forms part of Indian arbitration law, and a non-signatory can be bound by an arbitration agreement where the relationship between the parties, the composite nature of the transaction, the common intention gathered from the negotiations and performance, and the conduct of the non-signatory itself show that it was a true party to the bargain in substance. The doctrine is a rule of construction about who consented, not a licence to drag strangers into references: a party that seeks to bind an affiliate must prove the factors, the tribunal or court examines them on evidence rather than on assertion, and the award that results remains exposed under Section 34 if the tribunal took jurisdiction over a person the agreement never covered. Corporate groups drafting for current transactions write express multi-party clauses because the doctrine, though settled, is an argument to be won rather than a right to be assumed.

How the tribunal runs the case

Section 16 states the doctrine that carries the whole procedural design: competence-competence. The tribunal may rule on its own jurisdiction, including rulings on any objections to the existence or validity of the arbitration agreement, and it must decide a jurisdictional objection not later than the submission of the statement of defence, though it may admit a later plea if the delay is justified. A party is not precluded from raising the plea by having participated in appointing the arbitrator. If the tribunal takes the objection as a preliminary question and rejects it, the proceedings continue and the objector’s remedy lies after the award, in a Section 34 application; if the tribunal accepts the plea, the decision that it lacks jurisdiction is appealable under Section 37. The doctrine is the procedural expression of separability: because the clause is treated as an agreement distinct from the contract, the tribunal can examine attacks on the contract’s validity without sawing off the branch on which it sits.

The conduct provisions then free the tribunal from the courtroom’s inheritance. Section 18 requires the parties to be treated with equality and each party to be given a full opportunity to present its case. Section 19 releases the tribunal from the Code of Civil Procedure 1908 and the Indian Evidence Act 1872; the parties may agree on the procedure, failing which the tribunal may conduct the proceedings in the manner it considers appropriate, including the power to determine the admissibility, relevance, materiality and weight of any evidence. Section 20 fixes the juridical place of arbitration, the seat, distinct from the venues at which the tribunal may meet under Section 20(3) for consultation, hearings and inspection. Section 21 dates the commencement of proceedings: 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, unless the parties have agreed otherwise. That date has real consequences, because limitation for the underlying claim is computed against it, and a claimant who lets limitation expire before the notice is received has a dead claim however perfect the clause. Section 22 leaves the language of the proceedings to agreement or tribunal determination.

Section 23 governs the exchange of pleadings: within the period agreed by the parties or determined by the tribunal, the claimant states the facts supporting its claim, the points at issue and the relief sought, and the respondent states its defence, with documents and a set-off or counterclaim where the mandate covers them. Since the amendments, Section 23(4) disciplines the exchange from the other end: the statement of claim and defence shall be completed within six months from the date the arbitrator or all the arbitrators, as the case may be, received notice in writing of their appointment. Section 24 regulates hearings and written proceedings, requiring sufficient advance notice of hearings and meetings, and Section 24(3) requires statements, documents and information supplied to the tribunal by one party to be communicated to the other. Default is policed by Section 25: a claimant who fails to communicate its statement of claim without sufficient cause faces termination of the proceedings, while a respondent who fails to file a defence faces no automatic sanction other than the tribunal’s discretion to proceed, the failure not being treated as an admission. Section 26 permits the tribunal to appoint experts, Section 27 allows the tribunal, or a party with its approval, to apply to the court for assistance in taking evidence, and Section 28 fixes the substantive law: in a domestic arbitration the tribunal decides in accordance with the substantive law for the time being in force in India, and in an international commercial arbitration it applies the rules of law designated by the parties, with references to a country’s law read as references to its substantive law rather than its conflict rules, and in all cases decides in accordance with the terms of the contract and takes trade usages into account.

In practice the procedural freedom of Section 19 is exercised at a preliminary hearing held soon after the tribunal is constituted, at which the reference acquires its working constitution: a procedural timetable fixing the Section 23 exchange, the document production rounds, the dates for evidence and hearing; a list of issues drawn from the pleadings; directions on witness statements of fact, which parties file in place of examination in chief so that oral time is reserved for cross-examination; and directions on expert evidence, whether party-appointed experts are to exchange reports and meet, or whether the tribunal will appoint its own expert under Section 26 and examine that expert itself. Tribunals that adopt the discipline of a reasoned procedural order, recorded and circulated, give the parties a document against which the Section 29A clock can be managed and against which a later allegation of unequal treatment under Section 18 can be tested. The informality the Act permits is thus an informality of source rather than of conduct: the tribunal is free of the codes, but the references that run well reproduce the codes’ fairness guarantees by direction, because an award produced by an opaque process invites precisely the Section 34 grounds, want of notice and inability to present the case, that procedure exists to keep away from the file.

Two short provisions discipline the parties and the tribunal at the margins. Section 4 provides for a deemed waiver of the right to object: a party who knows that a provision of Part I from which the parties may derogate, or a requirement under the arbitration agreement, has not been complied with, and yet proceeds with the arbitration without stating its objection without undue delay, is deemed to have waived the objection. The rule punishes the stored-up grievance, the procedural defect noted in silence and produced after an adverse award, and it intersects with Section 34 because several challenge grounds replicate defects that a vigilant party was obliged to raise inside the reference. Section 29 governs how the tribunal decides: in proceedings with more than one arbitrator, any decision of the tribunal is made by a majority of all its members, unless the parties have agreed otherwise, while questions of procedure may be decided by the presiding arbitrator if authorised by the parties or by all members. The majority rule, combined with Section 31(2)’s permission for majority signatures where the reason for an omitted signature is stated, prevents a dissenting or absent arbitrator from paralysing the reference at the point of decision. Dissenting opinions travel with the award in practice, inform the challenge that follows, and have on occasion supplied the successful applicant’s best arguments, but they carry no independent legal status under the Act.

Can an arbitral tribunal decide a dispute on fairness rather than on law?

Only if the parties hand it that power in terms. Section 28(2) permits the tribunal to decide ex aequo et bono, or as amiable compositeur, solely where the parties have expressly authorised it to do so in their agreement, and the authorisation must be written into the bargain before the dispute arises.

Absent the express grant, the tribunal in a domestic arbitration is bound to the substantive law of India and to the terms of the contract, and an award that departs from both on an appeal to fairness invites challenge for deciding outside the reference. The provision draws a clean line: equity is available inside arbitration, but it is an allocated power, and the parties must write it into their bargain before the dispute arises.

The clock: Sections 29A and 29B

Indian arbitration’s oldest complaint was duration, and the amendments attacked it with a calendar. Section 29A, in the form given to it by the later amendments, requires the award in matters other than international commercial arbitration to be made within twelve months from the date of completion of pleadings under Section 23(4); for international commercial arbitration the same twelve months is stated as a period within which an endeavour shall be made to dispose of the matter expeditiously. Section 29A(3) lets the parties extend the period by consent for a further period not exceeding six months. Beyond that, Section 29A(4) empowers the court to extend the period on the application of a party, for sufficient cause and on terms, and the court may in doing so order a reduction of the tribunal’s fees, not exceeding five per cent for each month of delay it attributes to the tribunal. If the award is not made within the original or extended period, Section 29A(4) terminates the mandate of the tribunal unless the court extends it, and Section 29A(6) permits the court, while extending, to substitute one or all of the arbitrators, in which case the proceedings continue from the stage already reached on the evidence already recorded. The mandatoriness of the domestic calendar is a genuine departure from the Model Law’s silence on deadlines, and it has reordered drafting and case management: pleadings are drafted against a six-month statutory boundary, and the discipline of the clock is one of the first matters a tribunal raises at the preliminary hearing.

Section 29B offers an express lane for cases that can take it. Where the parties agree in writing before or at the time of appointment, the tribunal shall decide by a fast track procedure: the dispute is decided on written pleadings, documents and submissions without an oral hearing, unless all parties request one or the tribunal considers it necessary; where an oral hearing is held, the tribunal may dispense with technical formalities; and the award shall be made within six months from the date the tribunal enters upon the reference. Fast track is a consent-based design rather than an imposition, and its six-month promise depends on the parties having chosen a dispute small and documentary enough to honour it.

How much does an arbitration cost under the Act?

The unsuccessful party ordinarily pays. Section 31A makes the costs of the arbitration part of the award’s business and lays down the general rule that the unsuccessful party pays the successful party’s costs, departing from which requires reasons recorded in writing. Tribunal fees are disciplined by the Fourth Schedule where it applies.

The regime defined in Section 31A counts as costs the fees and expenses of the arbitrators, courts and witnesses, legal fees and expenses, administration fees of any supervising institution, and other expenses of the proceedings; and in fixing costs the tribunal weighs the conduct of the parties, partial success, frivolous counterclaims and offers of settlement that were refused. For fees themselves, the Fourth Schedule sets a slab-based model fee for arbitrators in ad hoc arbitrations where the High Court frames rules or where the parties adopt it, rising with the sum in dispute and capped at thirty lakh rupees, and Section 11(14) allows the High Court to frame fee rules using the Schedule as the frame. Where no institution administers the case, the fee question belongs at the first procedural hearing, because it is the one commercial term of the reference that the parties left unwritten.

The award: Sections 31, 33 and 35

Section 31 prescribes the form and contents of the award. The award must be in writing and signed by the members of the tribunal, with the signatures of the majority sufficient so long as the reason for an omitted signature is stated; it must state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award records a settlement on agreed terms under Section 30; and it must state its date and the place of arbitration, with a signed copy delivered to each party. Section 30 itself deserves a sentence inside this account: where parties settle the dispute during the proceedings, the tribunal terminates the proceedings and, if requested by the parties and not objected to, records the settlement as an arbitral award on agreed terms, which has the same status and effect as any other award. Section 31(6) permits interim awards on matters the tribunal can finally decide later, Section 31(4) folds the place of arbitration into the award, and Section 31A has been covered with costs above.

Interest is the provision parties read most closely after the operative order. Under Section 31(7)(a), unless otherwise agreed, where the award is for the payment of money the tribunal may include 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. Under Section 31(7)(b), the sum directed to be paid by the award carries interest at the rate of two per cent higher than the current rate of interest prevalent on the date of the award, from the date of the award to the date of payment, unless the award otherwise directs. The post-award rate is thus statutory and self-executing: a tribunal that wishes a different rate must say so, and silence produces two per cent above the bench rate used in commercial lending. Section 33 provides the corrective machinery for the award’s surface: within thirty days of receipt, a party may request correction of computation errors, clerical or typographical errors and errors of a similar nature, interpretation of a specific point or part of the award, or an additional award on claims presented in the proceedings but omitted from the award, and the tribunal may correct errors on its own initiative within the same period. Section 35 closes the award’s career inside the arbitration: subject to the challenge provisions, an arbitral award shall be final and binding on the parties and on persons claiming under them.

The reasons requirement deserves its own weight because it is where awards are most often lost. The default of Section 31(3) is a reasoned award: reasons are dispensed with only where the parties have agreed that none need be given or where the award is a consent award under Section 30. The reasons required are not a judgment’s reasons; they must be intelligible, must show that the tribunal addressed the claims and defences actually argued, and must not contradict themselves or rest on a premise the record disowns. An award whose reasons are unintelligible, or which ignores a material contention, fails not because a court prefers its own view but because the parties bargained for a speaking decision and received silence in its place, and the failure is policed under Section 34 through the heads of perversity and, for domestic references, patent illegality, as the Supreme Court’s treatment of unreasoned and self-contradictory awards in Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., decided in 2019, illustrates. Interim awards under Section 31(6), deciding finally some claims or issues while the reference continues on others, are awards for every purpose of the Act: the definition in Section 2(1)(c) includes an interim award within “arbitral award”, so the decided portion may be challenged under Section 34 and enforced under Section 36 without awaiting the final award, a mechanism parties use to release undisputed sums while the contested balance is heard.

The tail of Part I: deposits, death, insolvency and limitation

The closing sections of Part I govern the accidents of the process, and practitioners meet them more often than the tidy provisions at the front. Section 38 empowers the tribunal to fix the amount of the deposit or supplementary deposit as an advance for the costs it expects in relation to the claims and counterclaims before it, ordinarily shared equally by the parties, and where one party defaults in paying its share, the tribunal may direct the other party to pay the whole, suspend or terminate the proceedings in relation to the claim or counterclaim whose deposit is unpaid, and record the arrangement in its orders. The deposit machinery is the ad hoc arbitrator’s protection against working without payment, and its use marks the point in many references where commercial reality is tested: a claimant unwilling to fund its own reference reveals the value it places on the claim. Section 39 answers the fee dispute at the other end: subject to a contrary agreement and to Section 39(2)’s provision for a court application where a party disputes the amount, the tribunal has a lien on the arbitral award for unpaid costs of the arbitration, and the court may order the award to be delivered after payment into court of costs demanded, ordering payment out to the tribunal of the costs it allows.

Section 40 deals with death: an arbitration agreement is not discharged by the death of any party to it, and it is enforceable by or against the legal representative of the deceased party, while the mandate of the arbitrator does not terminate by reason of the death of the party by whom the arbitrator was appointed, and nothing in the section affects any law by which a cause of action is extinguished by death. Section 41 carries the reference through insolvency: where a person who is a party to an arbitration agreement is adjudicated insolvent, the agreement continues to bind the receiver or official assignee for the purposes stated, with a machinery for adopting the agreement where a contract containing it is adopted in the insolvency. Section 42 fixes the forum discipline for the entire Part: notwithstanding anything contained elsewhere in Part I or in any other law, where with respect to an arbitration agreement any application under Part I 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 shall be made in that court and in no other court. The provision prevents the scattering of interlocutory applications across districts and is the reason the first application in a matter is chosen with strategic care. Section 43 completes the tail by importing limitation: the Limitation Act 1963 applies to arbitrations as it applies to proceedings in court, with the statutory adjustments that follow, including the rule that where a court sets aside an award, the period between commencement of the arbitration and the court’s order is excluded in computing limitation for fresh proceedings on the same dispute.

Are arbitral proceedings and awards confidential?

Since the amendments, the statute itself imposes the duty. Section 42A requires the arbitrator, the arbitral institution and the parties to keep confidential all arbitral proceedings, with one stated exception: an award may be disclosed where disclosure is necessary for the purpose of implementation and enforcement of the award itself.

The duty is statutory rather than merely contractual, so it binds parties who never signed a confidentiality clause, and it survives the proceedings. It is not absolute, since enforcement, challenge and regulatory obligations can compel disclosure, but the default the section sets is that what is said and filed inside an arbitration stays there. Practitioners treat the file with corresponding care: the arbitration agreement, the Section 21 notice, the pleadings and the award form a record whose loss or leakage can be fatal to enforcement and embarrassing beyond it, and parties that keep the record in an encrypted private vault built for sensitive professional files are applying the lesson the section teaches.

The appeal architecture around the award

Section 37 deserves a map of its own because it, and not any general appellate law, decides every attempt to carry an arbitration order upward. The section lists as appealable: an order of the court refusing to refer the parties to arbitration under Section 8; an order granting or refusing to grant any measure under Section 9; an order of the tribunal accepting a plea of no jurisdiction under Section 16(2) or 16(3); an order granting or refusing an interim measure under Section 17; and an order setting aside or refusing to set aside an arbitral award under Section 34. Everything not listed is unappealable, however grievous: an order appointing an arbitrator under Section 11, an order on a Section 14 termination application, a tribunal’s rejection of a jurisdictional plea taken as a preliminary question, its procedural orders and its case management directions all lie outside the list, and the Supreme Court has repeatedly declined to expand the list by construction, on the ground that Section 5’s bar on intervention is the background principle the list qualifies. Section 37(3) bars a second appeal from an order passed under the section, leaving only the constitutional route of a special leave petition to the Supreme Court under Article 136, which the Court entertains sparingly in arbitration matters precisely because liberal entertainment would reconstruct the appellate ladder the section dismantled.

The appeals that do lie carry their own discipline. An appeal from a Section 34 order is confined to the grounds the setting aside court could examine, and the appellate court does not rehear the challenge as a fresh application with a wider lens; the Supreme Court has treated an appellate court that substitutes its own reading of the contract for the tribunal’s possible view as committing the very error Section 34 forbids. In commercial dispute references the appeal lies to the Commercial Appellate Division of the High Court, with the commercial courts legislation’s timelines governing its disposal, and in Part II the parallel provision is Section 50, which allows an appeal from an order refusing referral under Section 45 or refusing enforcement under Section 48 while refusing an appeal against an order that enforces the award. The architecture is consistent across both Parts: orders that stop arbitration or stop enforcement may be tested once; orders that let the process continue may not be tested at all until the award, and the award may be tested only under Section 34 or Section 48. A litigant mapping a dispute should therefore plan on the assumption that there is no interlocutory rescue from a wrong procedural turning, which is the statute’s intended pressure toward getting the tribunal and the clause right at the start.

The challenge that is not an appeal: Section 34

Section 34 is the only route by which a court may destroy a domestic award, and its architecture is exclusionary: recourse against an award may be made only by an application for setting aside in accordance with the grounds the section lists, brought within the limitation the section prescribes. The grounds divide into those the applicant must prove on the face of the record and those the court finds for itself. Under Section 34(2)(a), the applicant must furnish proof that a party was under some incapacity; that 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; that the applicant was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case; that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission, with a severability rider protecting the valid part of the award; or that the composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement conflicted with a non-derogable provision of Part I, or, failing such agreement, was not in accordance with Part I. Under Section 34(2)(b), the court itself must find that the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or that the award is in conflict with the public policy of India.

The public policy ground carries a legislative definition. Explanation 1 to Section 34(2)(b) declares that an award is in conflict with the public policy of India only if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or if it is in contravention with the fundamental policy of Indian law; or if it is in conflict with the most basic notions of morality or justice. Explanation 2 adds the crucial negative: the test of contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. Section 34(2A), applicable to arbitrations other than international commercial arbitration, adds the domestic ground of patent illegality appearing on the face of the award, with a proviso that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. In Ssangyong Engineering and Construction Co. Ltd. v. National Highways Authority of India, (2019) 15 SCC 131, the Supreme Court settled the working meaning of these provisions: patent illegality must go to the root of the matter and cannot be a mere illegality in applying the law; reappreciation of evidence is impermissible; a tribunal’s view, if it is a possible view, cannot be disturbed; public policy is confined to the heads the Explanation lists; and the wide enquiry into fundamental policy opened by Oil and Natural Gas Corporation Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263, and organised in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, stands qualified by Explanation 2, which removes merits review from the enquiry altogether.

The definition had to be legislated because its judicial career had been unruly. In Renusagar Power Co. Ltd. v. General Electric Co., (1994) Supp (1) SCC 644, construing public policy in the foreign awards statute, the Supreme Court read the concept narrowly, confining it to the fundamental policy of Indian law, the interests of India, and justice or morality. In Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705, the Court widened the ground for domestic awards by adding patent illegality to it, holding that an award contrary to the substantive provisions of law or the terms of the contract could be set aside as patently illegal. The Western Geco bench then folded reasonableness and the judicial approach into fundamental policy, and Associate Builders gathered the strands into propositions, holding that fundamental policy includes compliance with statutes and judicial precedents, the need for a judicial approach, natural justice and the exclusion of unreasonableness of the Wednesbury kind. The legislative response, of which the Explanations are the text, was to cut the enquiry back to its listed heads and to reserve patent illegality to domestic awards in its narrower statutory form. A Section 34 applicant therefore pleads from the section, not from the history: the heads are closed, the standard for each head is set out in the provision and in the reading Ssangyong gives it, and an argument that the tribunal simply got the law or the facts wrong is not a ground at all.

Limitation is unforgiving. Section 34(3) gives three months from the date on which the applicant received the award, or, if a request was made under Section 33 for correction or an additional award, from the date on which that request was disposed of. The court may condone delay if satisfied that the applicant was prevented by sufficient cause from applying within the three months, but only for a further period of thirty days, and not thereafter. The Supreme Court has repeatedly treated the window as a hard outer boundary, and the machinery of Section 5 of the Limitation Act 1963 cannot be used to extend it beyond the thirty days the statute itself allows. Section 34(4) supplies one remedial device inside the challenge: on an application by a party, the court may adjourn the proceedings for a period determined by it to give the tribunal an opportunity to resume the arbitral proceedings or to take such other action as will eliminate the grounds for setting aside. The device exists for curable defects, a missing finding, an unstamped paper in the chain, an unexplained computation, and its presence in the section qualifies any simple statement that Section 34 is only a weapon of destruction. Section 34(5) requires prior notice to the other party, and Section 34(6) directs disposal of the application expeditiously and in any event within one year from the date of service of that notice, a direction courts treat as an expectation of discipline rather than a condition of jurisdiction.

Appeals under Part I form a closed list, mapped in full in the appeals account above. No appeal lies at all from anything Section 37 does not list, which is why the award itself, as distinct from the orders around it, can never travel upward. Where the dispute is a commercial dispute, the forums of Part I are re-pointed rather than changed: applications that would ordinarily lie to the district court or the High Court lie instead to the Commercial Court or the Commercial Division constituted under the commercial courts legislation, and the companion account of the Commercial Courts Act 2015 explains the thresholds and the appellate ladder that then apply. The relationship between the two statutes is one of forum allocation: the Arbitration Act supplies the grounds and the procedure, the commercial courts statute supplies the specialised bench.

The challenge forum and its discipline

A Section 34 application lies to the Court as Section 2(1)(e) defines it, and two allocations decide where in practice it is filed. The first is territorial: the court that would have had jurisdiction over the subject matter of the arbitration as if it had been a suit, disciplined by Section 42 where an earlier Part I application has already fixed the forum for the arbitration as a whole. The second is institutional: where the subject matter is a commercial dispute of the specified value, the application lies to the Commercial Court or the Commercial Division of the High Court, as the case may be, and the special procedural discipline of the commercial courts legislation then applies to the challenge as it applies to the suit it replaced. Forum errors are among the few unforced mistakes in the life of an award: an application filed before a court without jurisdiction consumes the irreplaceable months of Section 34(3), and the doctrine of exclusion of time spent in a wrong forum, available in ordinary litigation, sits uneasily with the section’s hard outer limit, which is one reason the choice of the first forum is treated by experienced counsel as an act of limitation management rather than a formality.

The application is also designed to be singular. A challenge is not a stage through which an award ordinarily passes: the statute expects most awards to go unchallenged, and it loads the challenge with discouragements, the narrow grounds, the short limitation, the absence of an automatic stay and the one-year disposal expectation of Section 34(6). Where a challenge is filed, the court’s first instruments are managerial: it may adjourn to let the tribunal eliminate a curable ground under Section 34(4), it may sever the infected part of an award where the infection is separable under the provisos the section contains, and it may impose costs under Section 31A’s principles as applied to the challenge. What it may not do is expand its review into an appeal by relabelling error as policy: the restraint is statutory before it is judicial, and the appellate history of Section 34 since 2015 is largely the history of courts being reminded of the limits by the text they were applying.

From award to money: Section 36

Section 36 converts the award into an executable instrument. Where the time for making a Section 34 application has expired, or such an application having been made has been refused, the award shall be enforced in accordance with the provisions of the Code of Civil Procedure 1908 in the same manner as if it were a decree of the court. The award-holder files for execution where the award-debtor or its assets are, the executing court applies the decree machinery of the Code, and the award-debtor’s objections in execution are confined to the narrow band that the Code allows a judgment-debtor. This is general information about the statute and not advice on a particular dispute; limitation under Section 34 is measured in weeks, and the one task no party should delegate to a general account is the calendar.

The original Act tied enforcement to the outcome of the challenge automatically: the filing of a Section 34 application suspended enforcement until the application was decided, and award-debtors filed challenges in part for the free stay that came with them. The amendments dismantled that incentive. Section 36(2) provides that the filing of a Section 34 application shall not by itself render the award unenforceable, unless the court grants an order of stay under Section 36(3) on a separate application. Section 36(3) empowers the court, subject to such conditions as it may deem fit, to grant stay of the operation of the award for reasons to be recorded in writing, and its proviso directs that where the award is for the payment of money, the court shall have due regard to the provisions for grant of stay of a money decree under the Code, which in practice means deposit of the awarded sum or security as the ordinary price of a stay. The Court confirmed in Board of Control for Cricket in India v. Kochi Cricket Partners (P) Ltd., (2018) 6 SCC 287, that the amended regime reaches Section 34 proceedings pending when the amendment took effect, so the automatic stay died for pending and fresh challenges alike. A further proviso, inserted by the amendment of 2021 and taking effect retrospectively from 23 October 2015, qualifies the stay power in one scandal-shaped case: where the court is satisfied that a prima facie case is made out that the arbitration agreement or contract which is the basis of the award, or the making of the award itself, was induced by fraud or corruption, the court shall stay the award unconditionally pending disposal of the challenge to the award. The unconditional stay is thus the exception that marks the rule: stays are bought with deposits, except where the very integrity of the process is prima facie in issue, in which case the court holds the award without terms.

Execution has its own practical jurisprudence. Between the award and the opening of execution lies an interval the Act anticipates: Section 9 expressly permits an application for interim measures at any time after the making of the award but before it is enforced under Section 36, so an award-holder who watches the debtor begin to strip assets during the challenge window is not confined to waiting for the window to close. The court asked for such protection applies the same standards as for pre-award relief, with the award itself altering the balance of the enquiry, since the claimant’s merits have been adjudicated in its favour and the debtor’s remaining case is the closed list of Section 34. The award-holder executes where the debtor or the debtor’s attachable assets are found, and because the award is enforced as a decree, the executing court applies the Code’s provisions on transfer of decrees, attachment and sale of property, arrest and detention in execution of money decrees, and the appointment of receivers, with interest running on the decretal amount as the award and Section 31(7)(b) provide until realisation. Objections in execution are confined to the narrow ground of nullity, that the award is a nullity for want of jurisdiction or was made in defiance of the statute’s most basic conditions; the executing court cannot reopen Section 34 grounds that were not raised or that failed. Limitation for execution follows the decree pattern, twelve years from the date the award becomes enforceable, and the award-holder who sleeps across that period loses the instrument the arbitration produced. The unglamorous conclusion is that the value of Sections 34 and 36 to a winner is measured in the office of the executing court, and the value of competent advice at the award stage is measured in how few of the debtor’s remaining moves come as a surprise.

The process on one page

The whole domestic journey can be laid out as a sequence of steps, each with its own clock and its own cost of failure, and the table below compresses the sections this account has examined into that sequence.

Step	Provision	Who acts	Period the statute gives	Consequence of missing it
Notice invoking arbitration	Section 21	Claimant	Within the limitation period for the underlying claim	The claim dies as time-barred before the tribunal is formed
Referral application in a pending suit	Section 8	Defendant	Before the first statement on the substance of the dispute	The suit proceeds and the arbitration clause is waived in practice
Court-ordered interim protection	Section 9(2)	Applicant	Commence arbitration within ninety days of the order	The protection lapses and the assets may move
Application for appointment	Section 11	Any party	After the agreed procedure fails, typically on thirty days’ notice	The tribunal is never constituted and the clause remains a promise
Statement of claim and defence	Section 23(4)	Both parties	Six months from the arbitrators receiving notice of appointment	The Section 29A award clock consumes the party’s own delay
Fast track award	Section 29B(4)	Tribunal	Six months from entering upon the reference	The parties lose the expedited lane they consented to
Award	Section 29A	Tribunal	Twelve months from completion of pleadings, extendable by consent and court order	The tribunal’s mandate terminates unless the court extends it
Challenge	Section 34(3)	Award-debtor	Three months from receipt of the award, plus at most thirty days	The challenge is barred and the award becomes executable
Stay of enforcement	Section 36(3)	Award-debtor	By separate application after the challenge is filed	Execution proceeds while the challenge waits
Execution	Section 36(1)	Award-holder	Within the decree limitation period of twelve years	The award becomes a paper victory

The clocks in the table interlock rather than merely accumulate, and the interlocking is where parties lose rights they believed they held. The six months of Section 23(4) feeds the twelve months of Section 29A, so delay in pleading is not forgiven by the award clock but consumed by it, and a party that treats the pleadings stage as leisurely discovers the tribunal extending time for the award because the pleadings stage ate the award stage. The three months of Section 34(3) feeds Section 36, because enforcement waits on the window’s expiry and a stay application must be built inside the same window to be useful. One clock is deliberately absent from the table: the thirty days of Section 33, within which a party may seek correction, interpretation or an additional award, because it is optional to the journey; but it moves the start of the challenge clock when used, so it belongs in every diary even though it belongs in no summary of the route.

Foreign awards: Part II and the two Conventions

Part II governs awards that arrive in India from outside, and it is split by treaty history. Chapter I, Sections 44 to 52, implements the New York Convention of 1958 and covers awards made in territories the Central Government has notified as reciprocating territories, in pursuance of an agreement in writing for arbitration to which the Convention applies. Section 45 obliges a judicial authority, when seized of an action in a matter covered by such an agreement, to refer the parties to arbitration unless the agreement is found to be null and void, inoperative or incapable of being performed. Section 46 declares a foreign award binding for all purposes on the persons between whom it was made. Section 47 fixes the evidence the enforcing party must produce: the original award or a duly authenticated copy, the original arbitration agreement or a duly certified copy, and such evidence as is necessary to prove that the award is a foreign award, with certified translations where the documents are in a foreign language. Section 48 lists the grounds on which enforcement may be refused, at the request of the party against whom the award is invoked and on proof furnished by that party: incapacity or invalidity of the agreement, want of proper notice or inability to present the case, an award beyond the scope of the submission, a tribunal or procedure not in accordance with the agreement or the law of the seat, and an award not yet binding or set aside or suspended by a competent authority of the seat country. The court may also refuse on its own findings, where the subject matter is not capable of settlement by arbitration under Indian law or where enforcement would be contrary to the public policy of India, a ground its Explanations confine to fraud or corruption, contravention of the fundamental policy of Indian law and conflict with the most basic notions of morality or justice, and which the Supreme Court in Shri Lal Mahal Ltd. v. Progetto Grano S.p.A., (2014) 2 SCC 433, held carries the narrow Renusagar meaning rather than the wider domestic reading. Section 49 completes the process: where the court is satisfied that the foreign award is enforceable, the award is deemed to be a decree of that court, and execution follows as with any decree. Section 50 allows an appeal from an order refusing to refer under Section 45 or refusing to enforce under Section 48, but bars an appeal from an order enforcing the award, and bars second appeals altogether.

Chapter II, Sections 53 to 60, preserves the Geneva Convention machinery of 1927 for the shrinking class of awards to which it applies, defining a foreign award in Section 53 by reference to the territories and the Geneva Protocol, and restating conditions for enforcement in Section 57, including the condition that the award has become final in the country in which it was made. Sections 55 and 59 repeat the binding and decree effects with appeals on the same closed pattern. A savings provision in Section 51 of Chapter I preserves rights a party would have had to enforce an award if Part II had not been enacted, and Section 60 performs the same office for Chapter II. The practical weight of Part II sits almost entirely in Chapter I: India is a New York Convention state with the reciprocity and commercial reservations, the notified-territory requirement of Section 44 is a condition enforcement applicants must prove, and the Geneva chapter survives as a treaty fossil whose conditions, notably the finality requirement, are stricter for the award-holder than the New York scheme that superseded it in most commerce.

Foreign awards in practice: reciprocity, proof and patience

Three features of Part II decide real outcomes more often than the catalogue of refusal grounds. The first is the reciprocity condition inside the definition of a foreign award in Section 44: the award must be made in a territory which the Central Government, being satisfied that reciprocal provisions have been made, has declared by notification in the Official Gazette to be a territory to which the Convention applies. An award from a Convention state that has not been notified does not qualify under Chapter I, whatever its validity at its seat, and the notifications cover the principal trading jurisdictions while leaving gaps that enforcement counsel must check before promising a client an Indian execution. The second is the evidentiary discipline of Section 47: the award-holder’s burden is documentary and threshold, the authentication and certification requirements are applied strictly because the executing court is being asked to convert a foreign instrument into an Indian decree, and defects of authentication are among the few grounds on which enforcement founders before the merits of resistance are reached. India also made the commercial reservation under the Convention, so Part II applies to differences arising out of legal relationships considered commercial under Indian law, a qualification that aligns the Convention machinery with the domestic definition work of Part I.

The third is time at the seat. Section 48(1)(e) entitles resistance where the award has been set aside or suspended by a competent authority of the country in which it was made, and the proviso added to the section arms the Indian court for the interval: where an application for setting aside or suspension has been made at the seat, the court may adjourn its decision on enforcement and may also, on the application of the party claiming enforcement, order the resisting party to give suitable security. The adjournment power converts the foreign challenge into a managed wait rather than a veto, and the security order prices the wait for the party causing it. Awards have also been tested in India against the resistance that they were rendered in disregard of Indian law governing the substance; the settled answer is that Section 48 does not review the foreign tribunal’s application of law, and the public policy enquiry stops at the narrow heads the Explanations state. A party shut out of Chapter I, because the seat’s territory is not notified or the relationship is not commercial under Indian law, retains whatever it can pursue outside the Chapter: Section 51 saves any right a person would have had of enforcing an award in India, or of availing itself of the award in India, if Chapter I had not been enacted, which preserves the older route of founding proceedings on the award itself. The Chapter’s shape in practice is therefore pro-enforcement in the strong sense: the grounds are defences to be proved by the resistor, the court’s own grounds are few and narrow, and the end of a successful application is not a judgment but a decree, which executes with the full machinery of the Code behind it.

Conciliation: Part III, Sections 61 to 81

The Act’s second process is the one its title carries and its practice neglects. Part III applies to conciliation of disputes arising out of or relating to a legal relationship, whether contractual or not, and to all proceedings relating thereto, unless the parties agree to exclude it or a law forbids settlement of the dispute by conciliation. Section 62 starts the process: the party initiating conciliation sends a written invitation to the other party briefly identifying the subject of the dispute, and proceedings commence when the other party accepts the invitation in writing; silence or rejection ends the attempt at the threshold. Section 63 fixes one conciliator unless the parties agree on two or three, and Section 64 governs appointment with the parties free to agree, to enlist an institution, or to seek recommendations. The conciliator’s method is stated in Section 67: a role of assisting the parties in an independent and impartial manner, guided by principles of objectivity, fairness and justice, giving consideration to the rights and obligations of the parties, the usages of their trade and the circumstances of the dispute, with freedom to conduct the proceedings as the conciliator considers appropriate and to make proposals for settlement at any stage. Section 69 protects the channel of communication, permitting the conciliator to meet or communicate with the parties together or separately, and Section 71 obliges the parties to cooperate in good faith.

The settlement end of Part III is what gives it legal weight. Under Section 73, when it appears to the conciliator that elements of a settlement exist, the conciliator formulates the terms, observes the parties’ reactions and reformulates; when the parties sign the settlement agreement, it is final and binding on them and on persons claiming under them, and the conciliator authenticates it. Section 74 then grants the settlement agreement the status and effect of an arbitral award on agreed terms rendered under Section 30, which makes it enforceable as a decree without a separate action on the contract. Sections 75 and 81 fence the process: notwithstanding anything contained in any other law, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings, and views expressed, suggestions made, admissions and proposals in the conciliation are inadmissible in evidence in arbitral or judicial proceedings, whether or not those proceedings relate to the same dispute. Section 77 bars the parties from initiating arbitral or judicial proceedings on the same subject matter while conciliation runs, except where a party considers proceedings necessary to preserve its rights, and Section 80 disables the conciliator from later acting as arbitrator, representative or counsel in proceedings on the same dispute, and from being presented as a witness by a party. Part III supplied Indian law with a statutory settlement code a generation before mediation received its own statute, and readers comparing the two regimes will find the companion account of the Mediation Act 2023 the natural continuation, since the newer Act borrows Part III’s settlement architecture and builds the institutional layer the older Part never received.

The machinery between invitation and settlement is deliberately light but not empty. Section 65 requires each party, once the conciliator is appointed, to submit a brief written statement describing the general nature of the dispute and the points at issue, and the conciliator may call for further statements, documents and evidence. Section 66 frees the conciliator from the Code of Civil Procedure and the Indian Evidence Act, as Section 19 frees the tribunal. Section 68 lets the conciliator enlist administrative assistance from a suitable institution or person with the parties’ consent, and Section 70 disciplines the flow of information between the rooms: factual information received from one party is to have its substance disclosed to the other so that the other may present its explanation, except where the information is given subject to a specific condition of confidentiality, in which case it stays sealed. Section 72 permits each party, on its own initiative or at the conciliator’s invitation, to submit suggestions for settlement, and Section 76 terminates the proceedings on the signing of the settlement, on a written declaration of the conciliator after consultation that further effort is unjustified, on written declarations of the parties, or on a declaration by one party to the other and the conciliator. Sections 78 and 79 regulate the money: the conciliator fixes the costs of the conciliation on termination, to be borne equally by the parties unless the settlement agreement provides a different apportionment, and may direct each party to deposit an equal advance against anticipated costs, with supplementary deposits as the process develops.

Two features separate Part III conciliation from the negotiations and mediations around it, and both explain its continued presence in the statute book. The first is the settlement’s legal status: Section 74 raises a signed settlement agreement to the status of an arbitral award on agreed terms, which negotiation minutes and mediated memoranda do not carry by themselves, so a party who signs in conciliation signs a decree in waiting. The second is the evidentiary fence: Sections 75 and 81 keep admissions, views, proposals and the conciliator’s drafts out of any later arbitration or litigation, so the concession made to close a gap in the conciliation room cannot be carried into the courtroom if the settlement fails. The Part is little used relative to arbitration because commercial parties usually prefer a process that guarantees an outcome to one that guarantees only a structured conversation, but for parties who expect settlement and want it armoured, Part III remains the most direct statutory route between a live dispute and an enforceable compromise.

What cannot be arbitrated

The agreement is the engine of the Act, but agreement alone cannot move every subject. Section 34(2)(b)(i) and Section 48(2)(a) both treat subject matter incapable of settlement by arbitration as a defect in the award, and the doctrine of non-arbitrability marks the boundary. Vidya Drolia restated the test in fourfold form: a dispute is not arbitrable where the cause of action and subject matter relate to actions in rem, which do not pertain to subordinate rights in personam arising from rights in rem; where they affect third party rights, have erga omnes effect, or require centralised adjudication; where they relate to the inalienable sovereign and public interest functions of the State; and where the subject matter is expressly or by necessary implication non-arbitrable under a mandatory statute. Applying the test, the Court treated disputes under rent control legislation that grants special protection to tenants as non-arbitrable, while holding that tenancy disputes under the Transfer of Property Act 1882 are arbitrable, and it placed fraud on a discriminating scale: allegations of fraud that touch the public domain or impeach the arbitration agreement itself in a manner requiring public enquiry resist arbitration, while inter-party allegations of fraud in the performance of a contract are ordinarily for the tribunal. The fourfold test also disciplines the referral enquiry: the court at Section 8 or Section 11 applies it prima facie, and the tribunal under Section 16 applies it in full, so a dispute can pass the referral gate and still be sent back if the tribunal finds the subject matter beyond its remit.

The categories behind the test were first collected in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532, where the Supreme Court illustrated non-arbitrable subject matter with disputes relating to rights and liabilities arising out of criminal offences, matrimonial disputes, insolvency and winding up, testamentary matters, eviction and tenancy governed by special statutes that confer jurisdiction on specified courts, and analogous public law territories. Vidya Drolia absorbed the catalogue into the fourfold structure and refined its edges, holding that the test is ultimately about whether the dispute is amenable to the private, consensual and party-funded nature of the arbitral process without displacing a public adjudicatory function. The contested frontier since then has run through subject statutes rather than through the test itself: oppression and mismanagement petitions under company law sit outside arbitration because the tribunal cannot grant the company court’s statutory remedies; disputes under special recovery regimes with their own tribunals follow those regimes; intellectual property disputes divide between rights in rem, which the State grants and the world must respect and which resist arbitration, and disputes about licences, royalties and infringement as between the parties, which arbitral tribunals routinely decide. A drafter testing a clause against the doctrine asks four questions in Vidya Drolia’s order: does the dispute concern a right against the world, does it bind strangers, does it belong to a sovereign function, and does a special statute take it away; a yes at any step is the end of the clause’s reach over that dispute.

A related boundary dispute of a different kind ended in December 2023. Arbitration clauses frequently sit inside contracts that are unstamped or insufficiently stamped under the Indian Stamp Act 1899, and a five-judge Bench in the NN Global litigation had held that such an agreement could not be acted upon until the stamp duty was paid. A seven-judge Bench in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, 2023 INSC 1066, unanimous in result, corrected the position: non-stamping or insufficient stamping renders the agreement inadmissible in evidence under Section 35 of the Stamp Act but does not render it void or unenforceable, the defect is a curable defect of admissibility, the court examining the agreement under Section 8 or Section 11 at the referral stage is not required to decide the stamping question, and the earlier five-judge view stands overruled. The stamping objection continues to exist as a revenue defect to be cured before the authority under the Stamp Act; it has ceased to exist as a weapon for keeping a claim out of arbitration.

The three laws inside one clause

An arbitration clause sits at the meeting point of three distinct legal systems, and most governing law trouble in Indian arbitration is a failure to say which system is meant at which point. The first is the proper law of the main contract, the law that governs the parties’ substantive obligations, the interpretation of their promises and the consequences of breach. The second is the law of the arbitration agreement itself, governing the formation, validity and scope of the promise to arbitrate, a promise which separability treats as a distinct contract for exactly this purpose. The third is the lex arbitri, the arbitration law of the seat, which governs the proceedings, the supervisory jurisdiction of the seat’s courts and the challenge to the award. In a wholly domestic transaction the three ordinarily coincide, and the Act’s references to law in Sections 28 and 34 are read against that coincidence. In a cross-border transaction they separate: an Indian buyer and a foreign seller may choose the seller’s law for the contract, a neutral seat whose lex arbitri supervises the reference, and leave the law of the arbitration agreement to be gathered from the other two choices and the seat. Section 28(1)(b) addresses the first system directly for international commercial arbitration, directing the tribunal to apply the rules of law designated by the parties as applicable to the substance of the dispute, and to read a designation of a State’s law as its substantive law and not its conflict of laws rules, which forecloses the tribunal’s being sent onward to a third system by a renvoi. Section 34(2)(a)(ii) addresses the second, judging the arbitration agreement’s validity by the law to which the parties subjected it or, failing any indication thereon, by the law for the time being in force in India where the challenge lies in India. The drafting discipline follows from the analysis: a clause that names the contract’s governing law, the seat, and, where they are to differ, the law of the arbitration agreement, leaves nothing for a court to reconstruct, while a clause that names only a venue forces the reconstruction to happen at the worst possible time, after the dispute has made every ambiguity expensive.

The institutional question

The Act’s text is indifferent to who administers the arbitration, and Indian practice made its choice anyway: the overwhelming pattern is the ad hoc arbitration, organised by the parties and the tribunal themselves, with institutions administering a modest share of the caseload. The costs of the pattern are visible in the sections this account has covered. Appointments default to courts because no standing appointing authority exists outside the agreement; fee discipline depends on the Fourth Schedule and on the tribunal’s own restraint; the Section 29A clock presses tribunals whose secretarial support is improvised. Reform committees have answered with institutionalisation for decades. The High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India, chaired by Justice B. N. Srikrishna and reporting on 30 July 2017, recommended a specialist council to grade institutions, court practices aligned to institutional appointment, and the creation of a flagship institution in the capital. Parliament legislated the flagship: the New Delhi International Arbitration Centre Act, Act 17 of 2019, established the Centre as an institution of national importance and vested in it the undertakings of the older International Centre for Alternative Dispute Resolution, and by the amendment of Act 23 of 2022 the institution was renamed the India International Arbitration Centre, the change of name taking effect on 27 January 2023. The Council recommended in the same wave, the Arbitration Council of India designed in Part IA, remains the piece that exists in print rather than in operation, and until the appointment provisions of the 2019 amendment are notified, the institutional question in Indian arbitration is answered case by case, in the clause, by the drafting party who decides whether to name an institution and adopt its rules or to leave the machinery to Sections 10 to 15.

Between the flagship and the ad hoc default sits a working middle layer that the institutions debate sometimes overlooks: arbitration centres run under the aegis of the High Courts themselves. The Delhi High Court’s arbitration centre, the Delhi International Arbitration Centre, administers references under its own rules from within the court’s ecosystem; the Madras High Court, the Bombay High Court through its association with the Mumbai Centre for International Arbitration, and the High Courts at Hyderabad and Bengaluru maintain or sponsor comparable facilities of differing structures. Their significance for the statute is practical rather than textual. They give the appointing court under Section 11 a standing destination for administered references, they give parties who failed to name an institution a respectable default to adopt by consent after the dispute, and they run the rosters, fee schedules and secretarial support whose absence is the ad hoc system’s chronic cost. The institutional future the amendments designed has therefore been arriving by accretion through the courts even while the designed future itself waits for notification. Readers who want the wider architecture of the courts that stand behind this system, and the statutes that organise them, will find it mapped in the guide to laws shaping the judicial system of India, of which the supervisory courts of Part I form one working part.

A worked dispute: from notice to money

The statute’s operation is easiest to test against a single dispute followed through its gates. Take a components manufacturer that supplies machined parts to an automotive buyer under a five-year supply contract, seated in Pune, with a clause referring all disputes to a sole arbitrator to be appointed by consent of the parties, failing which by the High Court. The buyer rejects a consignment, withholds payment for three earlier consignments alleging defects, and threatens to source elsewhere; the manufacturer claims the price and damages for the repudiation. The manufacturer’s first act is not a plaint but a notice: a written request that the dispute be referred to arbitration, delivered to the buyer and proved received, because Section 21 fixes commencement at receipt and the manufacturer’s price claim must beat limitation measured to that date. The parties exchange names for the sole appointment and fail to agree on any of them, each suspecting the other’s nominee of sympathy; the agreed procedure has failed, and the manufacturer applies to the High Court under Section 11. The court examines the arbitration agreement at the prima facie level, finds it subsisting, and appoints a retired judge as sole arbitrator, leaving the buyer’s allegation that the manufacturer had itself repudiated the contract for the tribunal, where Section 16 places it.

Constitution changes behaviour on both sides. The buyer, which planned to move finished stock out of a leased warehouse, faces a Section 17 application; the manufacturer, told that the court door under Section 9(3) narrows once the tribunal exists, applies to the tribunal, which orders the stock preserved and the disputed amount secured by a bank guarantee pending the award. The pleadings run on the statute’s rails: claim and defence are completed inside six months of the arbitrator’s receipt of notice of appointment under Section 23(4), documents are admitted under Section 19 without the Evidence Act’s formalities, an expert on casting defects is appointed under Section 26, and the tribunal, deciding under Section 28 in accordance with Indian substantive law and the contract terms, delivers a reasoned award within twelve months of the completion of pleadings under Section 29A, awarding the price, damages on a measured scale, interest for the period to the award at a rate it records as reasonable under Section 31(7)(a), and post-award interest at the statutory rate until payment.

The buyer’s challenge tests Section 34 and finds its limits. The application, filed within three months of receipt of the award, argues that the tribunal misconstrued the rejection clause and misread the defect evidence; the court records that neither complaint is a ground, that the construction adopted is a possible view, that public policy is not engaged by a wrong answer on a contract term, and dismisses the application, adding that the buyer never alleged fraud, incapacity, want of notice or a defect in the tribunal’s composition, which are the currency in which Section 34 trades. Because the filing earned no automatic stay, the manufacturer had already begun execution after the challenge period opened, and the buyer’s separate application under Section 36(3) for a stay succeeds only on deposit of the awarded amount in court. When the challenge fails, the deposit is released toward the decree and execution proceeds against the buyer’s assets for the balance, interest running until realisation. The dispute that began as a withheld payment ends, roughly two calendars after the notice, in money; and the features that decided its course were not the strength of either side’s rhetoric but the statute’s allocation of each decision to the gate built for it.

The narrowing of review, argued both ways

The live argument about the Act is no longer whether court review of awards should be narrow, but whether the narrowing that Sections 34 and 36 have received since 2015 has gone to the right place and stopped at the right point. The case for narrowing is the case for the statute’s own promise. The Law Commission of India, in its 246th Report of August 2014, chaired by Justice A. P. Shah, recommended the amendments that confined public policy, removed the automatic stay and barred merits review, on the reasoning that a dispute resolution system whose end product invites a second litigation has failed its only commercial purpose. The Model Law design makes the same point from principle: the tribunal is the parties’ chosen judge, and a court that re-examines its decisions substitutes a judge the parties did not choose. On the evidence of the stay reform alone, the narrowing changed behaviour in the direction intended: the free stay that made challenge profitable as a delaying instrument was replaced by deposit-linked stays, and arbitration clauses in Indian contracts survived the change without migrating to foreign seats in protest.

The case against further narrowing rests on the character of Indian appointment practice and drafting power. Where arbitrators are repeatedly drawn from a narrow pool, where one party’s standard terms nominate the machinery, and where domestic awards can determine the fortunes of a public contract, a review ground with no purchase on a perverse award leaves the weaker party with a remedy against everything except the injustice it suffered. The older judicial doctrine spoke to exactly this fear. Saw Pipes and Western Geco were not accidents of drafting; they were considered assertions by the Supreme Court that an award which is illegal on its face, or reached by ignoring the contract, is not the product the parties bargained for, and that public policy in a legal system committed to the rule of law must be wide enough to refuse enforcement of it. The domestic retention of patent illegality in Section 34(2A), recommended by the same Law Commission that narrowed public policy, is the institutional admission that the fear is not imaginary: for arbitrations without an international element, Parliament kept a ground that can catch an award illegal at its root.

The verdict this account defends follows from the deciding factor between the two positions, which is not the width of the challenge ground but the distribution of the delay incentive. Grounds of challenge, wide or narrow, are exploited by the party who profits from time; stays are what make time profitable. The 2015 settlement narrowed both margins at once, ground and stay, but it is the stay reform that disciplines the ground, because a challenge that costs a deposit and earns no automatic halt is filed for its merits rather than for its calendar. The evidence supports keeping the public policy heads where the Explanations and Ssangyong have placed them, keeping patent illegality for domestic awards as the safety valve the Law Commission designed, and resisting the periodic judicial instinct to widen the ground again through interpretation. Where the system still underperforms, in appointment quality and institutional depth, the cure lies in the unfinished institutional settlement rather than in wider review, and on that question the statute book’s own unnotified Part IA is the standing rebuke.

Reading an award on arrival: the recipient’s triage

The hours after an award is delivered decide more outcomes than the months of hearing that produced it, because the Act’s clocks start on receipt and its grounds are fixed by the document itself. The losing party’s first reading is forensic in a specific sense: it works through the award against the closed list of Section 34, checking the tribunal’s composition against Section 11 and the agreement, checking the notice record against the proceedings as actually held, checking each operative direction against the reference and the pleadings for excess of scope, and reading the reasons for the internal contradictions and ignored contentions that alone can convert a wrong answer into a challengeable one. The limitation diary is built on the same day: the date of receipt from which three months run, the Section 33 window of thirty days within which a correction, interpretation or additional award may be sought, and the effect of a Section 33 request in moving the limitation start to the disposal of that request, which makes the decision whether to seek a correction a limitation decision and not merely a cosmetic one. The winning party’s reading is logistical: it maps the debtor’s assets against the forums of Section 36, tests whether an immediate stay application is likely and on what deposit, and prepares the execution file, the award, the agreement, the proof of service and the record of the challenge period, so that enforcement follows the expiry of the challenge window without a further interval of assembly. Both readings share one discipline imposed by Section 42A: the file is confidential matter, and the triage is conducted accordingly, because the enforcement and challenge proceedings that follow are the only stages at which the award must enter the public record, and then only to the extent those proceedings require.

How this account can be used

A commercial party reading the Act against a live dispute should extract from the Act the four dates that decide most outcomes: the date the Section 21 notice is received, because limitation runs to it; the date the arbitrators receive notice of appointment, because pleadings and the award clock are counted from it; the date the award is received, because the three-month challenge window and the thirty days of grace are counted from it; and the date any stay application is heard, because money follows that hearing rather than the filing of the challenge. A student or examinee should read the Act in the order this account has taken: agreement, reference, appointment, procedure, award, challenge, enforcement, foreign awards, conciliation, and test each stage against the question of who holds the power at that stage, tribunal, court or parties. A drafter should treat the sections as defaults to be improved upon in the clause: name the seat, fix the number and appointment route of arbitrators, choose institutional rules where the dispute justifies them, write the language of the proceedings, and record expressly any authorisation for decision on fairness alone. The statute rewards the party who reads it before the dispute, and its gates are widest for the party who arrives at them first.

A final discipline applies to every use. The Act’s provisions interact: the seat chosen in the clause decides the appointing court years later; the notice served at the start decides limitation at the end; the grounds not raised inside the reference are frequently the grounds unavailable against the award. Reading any single section in isolation therefore produces confident errors, and the sections most often misread in isolation are Section 11, whose prima facie enquiry looks deeper than it is; Section 34, whose public policy ground reads wider than the Explanations leave it; and Section 36, whose enforcement promise is misread as automatic where a stay application intervenes. The reader who works through the Act in the order of a dispute’s life, from clause to execution, and who tests each stage against the question of which actor holds the power at that stage, holds the model the statute was built to teach.

Frequently Asked Questions

Q: What does the Arbitration and Conciliation Act 1996 cover?

The Act is India’s single code for arbitration and conciliation. Part I governs arbitration where the place of arbitration is in India, covering the arbitration agreement, appointment and challenge of arbitrators, the conduct of proceedings, the award, its setting aside under Section 34 and its enforcement under Section 36. Part II governs the enforcement of foreign awards, Chapter I carrying the New York Convention and Chapter II the Geneva Convention. Part III governs conciliation as a separate process whose settlement agreement carries the status of an award. Part IV contains rule-making powers, repeals and savings. One statute therefore answers every stage of a private commercial dispute, from the clause to the execution of the award.

Q: What makes a valid arbitration agreement?

Section 7 requires an agreement in writing by which parties submit present or future disputes arising from a defined legal relationship to arbitration. Writing is satisfied by a signed document, an exchange of letters or other communication that provides a record, or an exchange of statements of claim and defence alleging the agreement without denial. A reference in a contract to another document containing an arbitration clause also suffices if the reference makes the clause part of the contract. The dispute must concern a legal relationship the law permits parties to arbitrate, and the parties must have capacity to contract. The clause is treated as an agreement independent of the main contract, so attacks on the contract do not by themselves destroy the clause.

Q: How is an arbitrator appointed?

The parties’ agreed procedure governs first: most clauses have each party nominate an arbitrator, with the two nominees choosing a presiding arbitrator, or the parties naming a sole arbitrator by consent, or an institution appointing under its rules. If the agreed procedure fails, if a party does not act, if the nominees cannot agree, or if an entrusted institution does not perform, a party may apply under Section 11 to the Supreme Court for an international commercial arbitration or to the High Court for other arbitrations. The court examines only whether an arbitration agreement exists at a prima facie level and then makes the appointment. A party with a disqualifying relationship to the dispute cannot be appointed, whatever the clause says.

Q: What interim relief is available in arbitration and from whom?

Interim measures of protection can be ordered by two authorities. A party may apply to the court under Section 9, before or during the proceedings or after the award but before enforcement, for preservation, custody or sale of goods, securing the amount in dispute, detention or inspection of property, injunctions and the appointment of a receiver. Once the tribunal is constituted, the court entertains such an application only where the tribunal’s remedy may not be efficacious. The tribunal itself, under Section 17, may order the same families of measures on a party’s application during the proceedings, and its order is deemed an order of the court and is enforceable as one. Court relief obtained before the tribunal forms must be followed by commencement of the arbitration within ninety days.

Q: How long does an arbitral tribunal have to make an award?

For arbitrations other than international commercial arbitration, Section 29A requires the award within twelve months from the date of completion of pleadings, and the pleadings themselves must be completed within six months of the arbitrators receiving written notice of their appointment. The parties may extend the period by consent by up to six months, and the court may extend it further for sufficient cause; if no extension is granted, the tribunal’s mandate terminates on the expiry of the period. For international commercial arbitration, the twelve-month period is framed as an endeavour to dispose of the matter expeditiously rather than a hard deadline. In fast track cases under Section 29B, where the parties have agreed to that procedure, the award is due within six months.

Q: On what grounds can an arbitral award be set aside?

Setting aside under Section 34 is available only on the grounds the section lists. The applicant must prove incapacity of a party, invalidity of the arbitration agreement, absence of proper notice or inability to present its case, an award beyond the scope of the submission, or a tribunal composition or procedure contrary to the parties’ agreement or to Part I. The court must also find the dispute non-arbitrable or the award in conflict with the public policy of India, which means it was induced by fraud or corruption, contravenes the fundamental policy of Indian law, or conflicts with the most basic notions of morality or justice. Domestic awards may additionally be set aside for patent illegality on the face of the award. The application must be filed within three months, extendable by thirty days at most.

Q: How is a domestic arbitral award enforced against a losing party?

Once the three-month period for a setting aside application has expired, or an application made has been refused, Section 36 requires the award to be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the court. The award-holder files execution proceedings where the losing party resides, works or holds assets, and the executing court realises the award through the decree machinery. Filing a challenge does not itself stay enforcement; the losing party must obtain a stay by a separate application under Section 36(3), and for a money award the court ordinarily requires deposit or security, having regard to the rules for staying money decrees. Where fraud or corruption is prima facie shown to have induced the agreement, contract or award, the stay is unconditional.

Q: How is a foreign award enforced in India?

A foreign award from a territory notified as a reciprocating territory under the New York Convention is enforced under Part II, Chapter I. The award-holder produces the original award or a duly authenticated copy, the original arbitration agreement or a duly certified copy, and evidence that the award is a foreign award, with certified translations where needed. The party resisting must prove a Section 48 ground, such as invalidity of the agreement, want of notice, an award beyond the submission, or that the award was set aside at the seat; the court may also refuse where the subject matter is not arbitrable in India or enforcement offends public policy in its narrow sense. If the court is satisfied the award is enforceable, Section 49 deems it a decree of that court and execution follows.

Q: When do arbitral proceedings legally begin?

Section 21 fixes the commencement date: 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, unless the parties have agreed on a different date. The receipt matters, not the dispatch, so the claimant bears the burden of proving delivery of the notice invoking arbitration. The date is legally significant because limitation for the underlying claim is computed by reference to it, in the same way the filing of a plaint stops limitation in a suit. A claimant who serves the notice after the claim has become time-barred commences proceedings over a dead claim, and no subsequent appointment of a tribunal revives it.

Q: Can a court refuse to refer parties to arbitration?

Yes, but only on a narrow prima facie enquiry. Under Section 8, a judicial authority before which a suit is brought on a matter covered by an arbitration agreement must refer the parties to arbitration if a party applies in time, unless it finds that prima facie no valid arbitration agreement exists. The Supreme Court has explained that refusal is proper where the claim is manifestly time-barred and dead on its face, where no subsisting dispute exists, or where the arbitration agreement is ex facie non-existent. Contested questions about the agreement’s validity or the claim’s merits belong to the tribunal, which rules on its own jurisdiction first. Doubt at the referral stage resolves in favour of reference, not in favour of the suit.

Q: Who is disqualified from being appointed as an arbitrator?

Section 12(5), read with the Seventh Schedule, makes a person ineligible for appointment where the person’s relationship with a party, with counsel, or with the subject matter of the dispute falls in the listed categories. The categories capture the arbitrator who is an employee, consultant or advisor of a party, who has a controlling influence in an affiliate of a party, who holds a significant financial interest in a party or in the outcome, or who has previously been involved in the dispute in another capacity. The disqualification operates regardless of what the parties agree before the dispute, and can be waived only by an express agreement in writing made after the dispute has arisen. Relationships that raise only justifiable doubts about independence, catalogued in the Fifth Schedule, support disclosure and challenge rather than automatic ineligibility.

Q: Can an arbitral tribunal decide a challenge to its own jurisdiction?

Yes. Section 16 embodies the doctrine of competence-competence: the tribunal may rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. The objection must be raised not later than the submission of the statement of defence, although participation in appointing the arbitrator does not bar raising it. If the tribunal rejects the objection as a preliminary question, it proceeds with the arbitration and the objector must wait to challenge the final award under Section 34 on that ground. If the tribunal accepts the objection and holds that it has no jurisdiction, its decision is itself appealable under Section 37. The arbitration clause is treated as an agreement separate from the main contract, so the tribunal’s power survives even an attack on the contract’s validity.

Q: Is an arbitration clause in an unstamped contract enforceable?

The clause can be acted upon. A seven-judge Bench of the Supreme Court held in the Interplay ruling of December 2023 that an arbitration agreement in a contract that is unstamped or insufficiently stamped under the Indian Stamp Act 1899 is inadmissible in evidence until the defect is cured, but is not void, unenforceable or non-existent. Insufficient stamping is a curable defect of admissibility, not a defect of validity, and the agreement exists in law regardless of the revenue default. A court examining an application under Section 8 or Section 11 therefore does not decide the stamping question at the referral stage, and the objection cannot be used to hold the parties out of arbitration; the stamp duty is pursued before the revenue authorities as a separate matter.

Q: Can an arbitral award be appealed against?

No. The Act provides no appeal against an arbitral award on its merits, and no court can re-examine the tribunal’s findings of fact or law as an appellate court would. The only challenge to the award itself is an application to set it aside under Section 34, on the limited grounds that section lists. What Section 37 makes appealable is a short list of orders around the arbitration: an order refusing referral under Section 8, orders granting or refusing interim measures under Sections 9 and 17, a tribunal’s decision accepting a jurisdictional objection under Section 16, and an order setting aside or refusing to set aside an award under Section 34. No second appeal lies even from those orders. An award that survives Section 34 is final between the parties.

Q: How does fast track arbitration under Section 29B work?

Fast track is an opt-in procedure. If the parties agree in writing, before or at the time of the appointment of the tribunal, that the dispute be resolved by fast track, the tribunal proceeds on the basis of written pleadings, documents and submissions, without an oral hearing, unless all the parties make a request for one or the tribunal considers an oral hearing necessary to clarify specified issues. Where an oral hearing is held, the tribunal may dispense with technical formalities and adopt a procedure it considers appropriate for the expeditious disposal of the case. The award must be made within a period of six months from the date the tribunal enters upon the reference. The procedure suits documentary disputes of modest complexity where both parties genuinely prefer speed to an oral contest.

Q: What interest can an arbitral tribunal award?

Two periods are treated separately. For the period between the cause of action and the award, Section 31(7)(a) permits the tribunal, unless the parties have otherwise agreed, to include in a money award interest at such rate as it deems reasonable, on the whole or any part of the money and for the whole or any part of that period. For the period after the award, Section 31(7)(b) provides that the sum directed to be paid carries interest at the rate of two per cent higher than the current rate of interest prevalent on the date of the award, from the date of the award until payment, unless the award itself directs a different rate. A tribunal that considers the statutory post-award rate unsuitable must therefore say so expressly in the award.

Q: What kinds of disputes are not arbitrable in India?

The Supreme Court’s fourfold test excludes disputes whose cause of action and subject matter relate to actions in rem rather than to subordinate rights in personam; disputes that affect third party rights, have effect against the world, or require centralised adjudication; disputes relating to the inalienable sovereign and public interest functions of the State; and disputes that a mandatory statute expressly or by necessary implication makes non-arbitrable. On that test, criminal prosecutions, matrimonial status, insolvency and winding up, testamentary matters and tenancy disputes under protective rent control statutes fall outside arbitration, while ordinary contractual and commercial claims, including tenancy under the Transfer of Property Act and inter-party allegations of fraud in performance, fall inside it. Non-arbitrability is policed both at the referral stage and again when the award is challenged.

Q: Is an arbitral tribunal bound by the Code of Civil Procedure and the Evidence Act?

No. Section 19(1) states that the arbitral tribunal shall not be bound by the Code of Civil Procedure 1908 or the Indian Evidence Act 1872. The parties may agree on the procedure to be followed, and failing their agreement the tribunal may conduct the proceedings in the manner it considers appropriate, which includes deciding the admissibility, relevance, materiality and weight of any evidence produced before it. The freedom is procedural, not a licence for unfairness: Section 18 still requires the parties to be treated with equality and each to be given a full opportunity to present its case, and a procedure that denies that opportunity exposes the award to setting aside under Section 34 for inability to present the case.

Q: What happens if the parties settle while the arbitration is pending?

Section 30 governs the end of the contest by agreement. If the parties settle the dispute during the arbitral proceedings, the tribunal terminates the proceedings. If a party requests it and the other does not object, the tribunal records the settlement in the form of an arbitral award on agreed terms, which is drawn and signed in the same manner as any other award and has the same status and effect, including enforceability as a decree under Section 36. A settlement merely recorded as a termination, without an award on agreed terms, rests on contract alone, so parties who want the settlement to be executable should ask the tribunal to record it as an award. The settlement route also closes the Section 42A confidentiality position on the same terms as the rest of the proceedings.

Q: What is the difference between the seat and the venue of an arbitration?

The seat is the juridical home of the arbitration and the venue is a physical location. The seat, fixed by the parties or failing agreement by the tribunal under Section 20, determines which country’s arbitration law governs the proceedings, which courts supervise the arbitration, and where the award is treated as made; Part I of the Act applies because the seat is in India. The venue is simply where hearings, meetings or inspections conveniently occur, and Section 20(3) allows the tribunal to meet at any place it considers appropriate unless the parties agree otherwise. Hearings held across several cities therefore do not move the seat, and an award records the seat as its place regardless of where the tribunal sat. Confusing the two in drafting has generated substantial litigation, because courts asked to supervise an arbitration first ask where its seat is.