Part 1 - Arbitration MCQ Quiz in தமிழ் - Objective Question with Answer for Part 1 - Arbitration - இலவச PDF ஐப் பதிவிறக்கவும்

Correct answer is option 3

Key Points Option 3 is correct because it accurately describes that the filing of an application to set aside the award does not make it automatically unenforceable. Instead, the award remains enforceable unless the Court grants a specific stay of its operation based on a separate application.

Solution:

Section 36 of "The Arbitration and Conciliation Act, 1996" addresses the enforcement of arbitral awards and the conditions under which such enforcement may be affected.

1. Enforcement After Time Expiry (Sub-section 1):
   • Once the time limit for filing an application to set aside the arbitral award under Section 34 has expired, the award shall be enforced in the same manner as a court decree, according to the Code of Civil Procedure, 1908.
2. Effect of Filing an Application to Set Aside (Sub-section 2):
   • Filing an application to set aside the arbitral award under Section 34 does not automatically render the award unenforceable. The award remains enforceable unless the Court specifically grants an order to stay its operation.
3. Application for Stay (Sub-section 3):
   • If an application for stay of the arbitral award is filed, the Court may grant a stay subject to conditions it deems appropriate. The Court must record its reasons for granting the stay in writing. In cases involving monetary awards, the Court will consider the provisions for staying a money decree as per the Code of Civil Procedure, 1908.

The correct answer is Option 3.

Key Points

• Under the provisions of clause (c) of section 25, if either party without sufficient cause fails to appear at an oral hearing or to produce documentary evidence, after the pleadings have been filed before the arbitral tribunal, then unless otherwise agreed by the parties, the arbitral tribunal may continue the proceedings and make the arbitral award on the basis of the evidence before it.
• In the case of Mordue vs. Parmer (1871), it was held that an arbitrator having signed his award is functus officio and cannot alter his award and cannot alter the slightest error in it, even though such error has arisen from the mistake of a clerk in copying the draft. The proper course in such was to obtain an order to refer the award back to the arbitrator.

The correct answer is Option 2.

Key Points

• Section 21 of the Act deals with the commencement of arbitral proceedings. The section provides that the arbitral proceedings commence from the date the request to refer the dispute to arbitration has been received by the respondent unless the parties themselves have agreed upon a particular date.
• This means that informing the respondent through a legal notice regarding referring the dispute to arbitration is one of its essential ingredients. This also implies that the process of arbitration is based on the consent of both  parties.

In the case of M/S D.P. Construction v. M/S Vishvaraj Environment Pvt. Ltd. (2021), the court referred to various judicial precedents with respect to Section 21 of the Act and requirement of notice before commencing the procedure and held that:

• The notice which is given under Section 21 of the Act must be clear and reflect the intention of the party to refer a dispute to arbitration by calling and informing the other party and further proceeding with the appointment of arbitrators. 
• Another important thing to note and unless a request is made by one party to a dispute to refer a dispute to arbitration, mere setting out the claims and issues would not be enough and cannot be used to refer a dispute to arbitration. 
• The question of failure does not arise if the parties failed to adhere to the agreed procedure mentioned in the arbitration clause for referring a dispute to arbitration. This only means that the pre-condition for invoking the jurisdiction under Section 11 of the Act is not fulfilled and thus, invokes the jurisdiction of the court to look into the matter. 
• The court also observed that it has been mentioned in various judicial precedents that once a notice is issued according to Section 21 of the Act, there are legal consequences which also include computation of limitation period. 

Additional InformationThe following particular must be mentioned in the notice issued under Section 21 of the Act:

1. Names of both the parties. 
2. Address of parties.
3. Relationship and commercial interactions existing between the parties.
4. Facts of the case.
5. Issues pertaining to the dispute.
6. Responsibilities to be performed by the opposite party.
7. Mention the arbitration clause which was used to refer the dispute to arbitration.
8. Provide a time period within which the opposite party has to send the reply. 
9. In case the arbitral tribunal is to be established, ask the opposite party to nominate arbitrator or arbitrators. 

Section 14 says Expeditious disposal of appeals. The Commercial Appellate Court and the Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal.

As per section 10 Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and–– (1) If such arbitration is an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that have been filed in a High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court. (2) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that have been filed on the original side of the High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court. (3) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be filed in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted.

In the case of Oil & Natural Gas Corpn. Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705, it was held that under section 34 of the Arbitration and Conciliation Act, 1996 the court can examine the validity of International awards

In Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105 Supreme Court held that power to grant interim measure under section 9 of the Arbitration and Conciliation Act, 1996 extends to International arbitration as well. 

The arbitration jurisprudence centers around the Freedom of the parties to agree.

The correct answer is Option 4

Key Points

Section 15: Termination of Mandate and Substitution of Arbitrator
1. Termination of Arbitrator's Mandate:

In addition to the circumstances outlined in Sections 13 and 14, the mandate of an arbitrator will terminate in the following cases:
(a) If the arbitrator voluntarily withdraws from office for any reason.
(b) If the parties mutually agree to terminate the arbitrator's mandate.
2. Appointment of Substitute Arbitrator:

When the mandate of an arbitrator is terminated, a substitute arbitrator must be appointed following the same rules that applied to the appointment of the original arbitrator.
3. Repetition of Hearings:

Unless the parties agree otherwise, if an arbitrator is replaced, any hearings already conducted may be repeated at the discretion of the arbitral tribunal.
4. Validity of Previous Rulings:

Unless otherwise agreed by the parties, any orders or rulings made by the arbitral tribunal before the replacement of an arbitrator will remain valid and are not affected solely due to the change in the tribunal's composition.

The correct answer is Option 4

Key Points

• Presiding Arbitrator replaces the Umpire of the old Act:
• Under the Arbitration and Conciliation Act, 1996, the term "Presiding Arbitrator" replaces the concept of the "Umpire" from the Arbitration Act of 1940. The Presiding Arbitrator is appointed when there is a panel of arbitrators to oversee and coordinate the proceedings, a role previously filled by the Umpire.
• Presiding Arbitrator is a part and parcel of the Arbitral Tribunal, while Umpire under the old Act was a third person:
• The Presiding Arbitrator is one of the arbitrators in the panel and works as part of the tribunal. Under the old Act, the Umpire was a separate entity who only stepped in when the arbitrators failed to reach an agreement. The Umpire acted independently of the tribunal.
• Presiding Arbitrator makes the award along with the panel of arbitrators, while Umpire could make the award single-handedly when the appointed arbitrators had failed to arrive at a consensus:
• In the 1996 Act, the Presiding Arbitrator collaborates with the other arbitrators to make a decision or award. Under the previous 1940 Act, if the arbitrators could not reach a unanimous decision, the Umpire could make an award independently, acting alone.

Thus, all the statements are correct, and the answer is Option 4.