INDIA Law and Practice Contributed by: Anuradha Mukherjee, Omar Ahmad, Vikram Shah and Soumya Dasgupta, Cyril Amarchand Mangaldas
arbitrations. It regulates the conduct of arbitra- tors and the recognition and enforcement of domestic and foreign awards. The Arbitration Act is based on the UNCITRAL Model Law and the Arbitration (Protocol & Con- vention) Act, 1937 (the Geneva Convention). Part I of the Arbitration Act deals with domestic arbi- trations, and Part II provides guidelines for the enforcement of foreign awards. Certain other statutes also provide for the reso- lution of disputes by arbitration – eg, the Micro, Small & Medium Enterprises Development Act, 2006 and the Electricity Act, 2003. In case of conflict between the provisions of the statute concerned and the Arbitration Act, the provi- sions of the statute concerned will prevail, being a special act. 13.2 Subject Matters Not Referred to Arbitration Generally, disputes of a civil and commercial nature are arbitrable. The following types of disputes are not arbitrable, and thus cannot be referred to arbitration: • disputes pertaining to actions in rem (eg, insolvency or intracompany disputes, matters pertaining to probate, testamentary, consum- er disputes); • disputes affecting third-party rights (eg, disputes pertaining to intellectual property rights); • disputes pertaining to inalienable sovereign and public interest functions of the state (eg, violations of criminal law, matrimonial dis- putes); and • disputes arising under particular statutes that mandate disputes arising thereunder as being non-arbitrable (disputes arising under the DRT Act, rent control legislation, etc).
Disputes involving fraud were previously held to be non-arbitrable. However, cases involv- ing non-serious allegations of fraud that do not affect the making of the contract, and that are not criminal in nature or have no implication in the public domain, can be referred to arbitration. 13.3 Circumstances to Challenge an Arbitral Award While hearing a challenge to an arbitral award, the court seized of such challenge can exercise limited jurisdiction and does not sit in appeal over the award. It can only set aside or uphold the award, or remand the award to the arbitra - tor for a fresh decision on certain matters, and only if such an application is made by the par- ties under Section 34(4) of the Arbitration Act. The courts have no power to modify an arbitral award. Under the Arbitration Act, a domestic arbitral award can be challenged on the following nar- row grounds: • the parties to the agreement are under some incapacity; • the agreement is void; • the award contains decisions on matters beyond the scope of the arbitration agree- ment; • the composition of the arbitral authority or the arbitral procedure was not in accordance with the arbitration agreement; • the award has been set aside or suspended by a competent authority of the country in which it was made; • the subject matter of dispute cannot be set- tled by arbitration under Indian law; or • the enforcement of the award would be con- trary to Indian public policy.
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