STEP BY STEP ARBITRATION PROCEDURE- STAGES OF ARBITRATION - LAW AND PRACTICE OF ARBITRATION

STAGES OF ARBITRATION - STEP BY STEP PROCEDURE

The arbitration proceeding will only begin when the parties to the contract agree to settle all/ certain existing/future dispute through arbitration. Arbitration is a process of resolving all/certain existing/future disputes before independent and impartial individual(s), who serves as an arbitrator(s). The arbitration/ arbitral proceedings begin when the notice to arbitrate or arbitration notice is delivered to the opponent, which is sent by the claimant. Section 21 of the Arbitration and Conciliation Act, 1996 (hereinafter 'Arbitration Act') states the 'Commencement of arbitral proceedings' as 'Unless otherwise agreed by the parties, the 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'. [See Y. Parthsarthy v. G.M., Railways Electrification, Allahabad, 1997 (2) Arb LR 347; See also Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd., 2017 SCC OnLine Del 7228, decided on 28.02.2017]. An arbitration proceeding is analogous to a regular court proceeding in written submissions, oral arguments, evidence, witness testimony etc. At the end of the arbitration proceedings, the arbitrator will adjudicate the rights and liabilities of the parties by rendering a decision known as an award. An arbitration proceeding will come to an end by 'Termination of proceedings' u/s. 32 of the Arbitration Act.  

STEP BY STEP ARBITRATION PROCEDURE- STAGES OF ARBITRATION - LAW AND PRACTICE OF ARBITRATION

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Step 1: NOTICE TO ARBITRATE

As already mentioned in the introductory part that commencement of arbitration proceeding is with the arbitration notice u/s. 21 read with sec. 3 of the Arbitration Act.
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Step 2: APPOINTMENT OF ARBITRATOR(S)

The parties may mutually appoint the arbitrator(s). In the case of disagreement section 11 of the Arbitration Act would come to rescue. See Appointment of Arbitrator by Court u/s. 11 (here). In Institutional arbitration, the institution will decide the arbitrator in accordance with the arbitration agreement/clause. Or the parties may decide the procedure for appointment of an arbitrator. A party may challenge the appointment of an arbitrator only according to the ground laid down in the Arbitration Act.
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Step 3: CHALLENGE OF ARBITRATOR(S)

The appointment of an arbitrator may be challenged if the party suspect the impartiality or independence of the arbitrator. Even, if the arbitrator does not hold the requisite qualification according to the arbitration agreement/clause or the procedure decided by the party then also the appointment can be challenged. These challenges will effectuate only after the appointment of the arbitrator and not before. 

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Step 4: ARBITRATOR'S RESPONSIBILITY: SEC. 18

The arbitrator should act impartial and adhere to the principle of natural justice. Section 18 of the Arbitration Act confer mandatory responsibility on the arbitrator(s) to bestow equal treatment to parties. 'The parties shall be treated with equality and each party shall be given a full opportunity to present his case.'
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Step 5: RULES OF PROCEDURE

Arbitration proceedings doesn't govern by the CPC or IEA. Therefore, parties/arbitral tribunal have given authority to determine the procedure to be followed by the arbitral tribunal in conducting its proceedings.

(i) By Parties
(ii) If parties fail (i) then the arbitral tribunal will frame procedure
See Section 19 of the Arbitration Act.
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Step 6: PLACE OF ARBITRATION

The place where the arbitral proceedings will be undertaken may be decided by the parties. If there is no such determination then the arbitral tribunal will decide the place. The place of arbitration u/s. 20 of the Arbitration Act must not be confused with 'seat of arbitration'.
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Step 7: LANGUAGE(S) OF PROCEEDINGS

The language(s) to be used in arbitral proceedings can be fixed by the parties. In case of disagreement, the arbitral tribunal will fix the language. See Section 22 of the Arbitration Act.
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Step 8: CLAIM AND DEFENCE STATEMENT: SEC. 23

Statement of Claim: A statement of claim should contain (i) all of the facts supporting claimant's claim (ii) points at issue (dispute(s)) and, (iii) relief or remedy sought (prayer). With supporting annexures.

Statement of Defence: A statement of defence set out defence against the particulars of claims and may include counterclaim or set-off.
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Step 9: AMENDMENT Of PLEADINGS

The amendment of pleadings can be done during the arbitral proceedings

(i) on conditions agreed by the parties
(ii) If (i) is not there then amendment will be allowed by the arbitral tribunal when it deems fit. See Section 23(3) of the Arbitration Act.
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Step 10: HEARING PARTIES

The arbitral tribunal shall decide whether to hold an oral hearing or to decide on the basis of documents and other materials. It is the discretion of the arbitral tribunal to decide the format of hearing, unless otherwise agreed by the parties. See Sec. 24 of the Arbitration Act.
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Step 11: DEFAULT OF A PARTY

The Arbitration Act addresses the failure to submit a written submission without sufficient cause u/s. 25 as follows

When Claimant defaults - Arbitral tribunal shall terminate the proceedings
When Respondent defaults - Ex-parte and defence will forfeit the right to file a statement of defence
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Step 12: EXPERT APPOINTMENT BY ARBITRAL TRIBUNAL

The arbitral tribunal may seek assistant of an expert for particular issues, however not mandatory. Moreover, parties can restrict the power of the arbitral tribunal to appoint experts. See Section 26 of the Arbitration Act.
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Step 13: COURT ASSISTANCE IN TAKING EVIDENCE

The Arbitration Act gives the power to the arbitral tribunal or one of the parties having prior permission of the tribunal to request the court for granting assistance in taking evidence. The assistance given by the court u/s. 27 is discretionary in nature. See Section 27 of the Arbitration Act.
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Step 14: ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS

See Chapter VI of the Arbitration Act.
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