Key Concepts

Sections 18 to 27 of the Arbitration and Conciliation Act, 1996, outline the key principles and procedures governing the conduct of arbitral proceedings in India. These sections ensure a fair, efficient, and impartial process for resolving disputes through arbitration.

Section 18: Equal Treatment of Parties

• Principle: Parties must be treated equally and given a full opportunity to present their case.  
• Case Law:
  • Vodafone International Holdings B.V. v. Union of India: The Supreme Court emphasized the importance of this principle, stating that any deviation from it can render the award vulnerable to challenge.

Section 19: Procedural Matters

• Principle: Arbitral tribunal is not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872.  
• Principle: Tribunal can conduct proceedings in a manner it deems appropriate, unless agreed otherwise by the parties.  
• Case Law:
  • Rashid Raza v. Ideal Insurance Co. Ltd.: The Supreme Court held that the tribunal has wide discretion to conduct proceedings in a fair and just manner.

Section 20: Place of Arbitration

• Principle: Parties may agree on the place of arbitration.  
• Principle: If no agreement, the tribunal determines the place, considering factors like convenience.  
• Case Law:
  • Larsen & Toubro Ltd. v. Fertilisers & Chemicals Travancore Ltd.: The Supreme Court clarified that the tribunal’s decision on the place of arbitration should be reasonable and fair.

Section 21 – Commencement of Arbitral Proceedings:

• Principle: Proceedings commence when the respondent receives a request for arbitration
• Case Law: In Daimler Financial Services India Pvt Ltd v. Jenson Mathew, the Madras High Court held that the arbitral tribunal has the authority to determine limitations in the absence of formal notice under Section 21​

      Section 22: Language of Arbitration

• Principle: The tribunal determines the language(s) to be used, subject to party agreement.

Section 23 – Statement of Claim and Defence:

• Principle: Parties may be represented by legal counsel or other representatives.
• Case Law: The Delhi High Court in Vil Rohtak Jind Highway Pvt Ltd v. NHAI ruled that amendments to statements under Section 23(3) are not appealable under Section 37 unless they result in an interim award​.

Section 24: Oral Hearing

• Principle: The tribunal may hold oral hearings if it considers them necessary.

Section 25: Evidence

• Principle: Tribunal decides on the admissibility, relevance, weight, and form of evidence
  • Case Law: In Union of India v. Delhi State Consumer Co-operative Federation Ltd., the Delhi High Court held that orders terminating proceedings under Section 25(a) could be recalled by the tribunal​

Section 27 – Court Assistance in Taking Evidence:

• Principle: The Tribunal may seek assistance from courts in certain circumstances, such as securing evidence or enforcing interim measures.
• Case Law: The Bombay High Court in Dilip v. Errol Moraes emphasized that Section 27 does not grant the court adjudicatory powers but only enables it to assist in the collection of evidence​

Key Takeaways

• The conduct of arbitral proceedings should be fair, impartial, and efficient.
• Parties should be treated equally and given a full opportunity to present their case.  
• The tribunal has wide discretion in determining the procedure to be followed.
• The tribunal should consider the convenience of the parties in determining the place of arbitration.
• The tribunal may appoint experts to assist in technical matters.
• The tribunal may seek assistance from courts in certain circumstances

Key Terms

1. Section 18: Equal Treatment of the Parties
   • Parties must be treated equally, and each party must be given a full opportunity to present their case.
2. Section 19: Freedom of Procedure
   • The arbitral tribunal may determine the procedure for arbitration, subject to the parties’ agreement and any mandatory laws.
3. Section 20: Place of Arbitration
   • The tribunal has the authority to determine the place of arbitration. If not specified, the tribunal may choose the location, considering convenience and fairness.
4. Section 21: Commencement of Arbitral Proceedings
   • Arbitral proceedings commence when a party sends a notice to the other party or when the tribunal confirms receipt of a request.
5. Section 22: Language of Arbitration
   • The parties may agree on the language(s) of arbitration. If they do not agree, the tribunal may decide.
6. Section 23: Statement of Claim and Defense
   • The claimant submits the statement of claim, and the respondent submits the statement of defense. Both documents must specify the issues in dispute.
7. Section 24: Interim Measures
   • Arbitral tribunals have the power to issue interim measures to safeguard the rights of the parties pending the final decision.
8. Section 25: Procedural Order
   • The tribunal may issue procedural orders, including for the exchange of documents and the conduct of hearings.
9. Section 26: Hearings and Written Proceedings
   • The tribunal may decide whether to hold hearings or resolve the dispute based on written submissions alone.
10. Section 27: Court Assistance

• Courts may assist in the collection of evidence or the appointment of arbitrators if necessary.

Review Questions

1. What is the significance of equal treatment of parties in arbitral proceedings?
2. Under Section 19, what are the limitations, if any, to the tribunal’s freedom of procedure?
3. How does Section 20 guide the tribunal in determining the place of arbitration?
4. When do arbitral proceedings officially commence according to Section 21?
5. What factors must the arbitral tribunal consider when deciding the language(s) of the arbitration as per Section 22?
6. What is the purpose of the statement of claim and statement of defense, and what should each contain under Section 23?
7. What types of interim measures can an arbitral tribunal issue under Section 24?
8. What is the purpose of procedural orders in arbitral proceedings, and who determines their content?
9. Under Section 26, when might a tribunal choose written proceedings over hearings, and why?
10. In what situations would a court be involved in assisting arbitral proceedings under Section 27?