DHARMASHASTRA NATIONAL LAW UNIVERSITY, JABALPUR

SESSION 2023-2024

ALTERNATIVE DISPUTE RESOLUTION

TOPIC:-WAIVER OF RIGHT TO OBJECT UNDER ARBITRATION AND

CONCILIATION ACT,1996

SUBMITTED TO: SUBMITTED BY:

Ms Shruti Nandwana Karnika Patidar
(Assistant Professor of Law) (ROLL NO.-048)
 Acknowledgement
I would like to express my deep gratitude towards my subject teacher, Asst. Professor of Law, Ms. Shruti
Nandwana ma’am who took an acute interest in my project and guided me all along. I’m feeling
extremely privileged to have her as my instructor in the project. I owe my deep gratitude to the vice-
chancellor Prof. (Dr.) Manoj Kumar Sinha and for their valuable support throughout the project.

I would like to extend my gratefulness to my parents and friends for their valuable support and advice.
The completion of this project required counselling and assistance from many people and I’m thankful to
them for counselling in my project.

Karnika Patidar

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 Table of contents

S.No. Name of the topic Page no.

01 Acknowledgement 02
02 Abstract 04
03 05-06
Introduction

04 Waiver of right to object 07-08

05
Case Laws and Waiving of right to object
09-12

06 Conclusion 13
07 Bibliography 14

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 ABSTRACT

Doctrine of waiver of right to object is enshrined under section 4 of the Arbitration and Conciliation Act and
it seeks to provide that if the party to the dispute fails to raise the concerned objections with respect to non
compliance of provisions within reasonable time then it is said to waive of his right. This paper attempts to
study the requisite conditions of this doctrine and undertakes to study certain judgments in order to
understand more clear position of this doctrine.

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INTRODUCTION

Arbitration is considered as the platform or means to resolve the disputes in which an arbitrator is appointed
by the parties and the concerned parties agrees to bind by the decision of the arbitrator in lieu of the decision
pronounced in respect of the concerned dispute. Generally, these outside courts settlement preaches the
notion that these are economical, less cumbersome and less time taking. In such kind of proceedings, parties
are expected to be compliant with the provisions of the arbitration agreement and act but there are instances
when party fails to be compliant with such requirements and thereby the other party is required to raise the
objection within reasonable time.

In arbitration proceedings when any of the party want to object upon the non compliance of provisions on
the part of the other party then it has the right to object against the same without any undue delay. But when
a party does not choose to object even after being aware of the fact that requirements under the agreement
aren’t being complied with then it is termed as, ‘waiver of right to object’. The very object of this concept is
to preserve the arbitration proceedings from being undue delays and it stems from the principle of estoppels.

Under Arbitration and Conciliation Act, 1996 one of the sections i.e., section 4 seeks to incorporate the
concept of waiver of right to object. It states that when the party is aware of the non compliance with
respect to part I or any other requirements under the arbitration agreement and does not raises any objection
to the same within specified time then it is said that the party has waived its right of object.

RESEARCH QUESTIONS

 What are the conditions precedents to waiver of right to object?

 Would it amount to waiver under section 4 of the Arbitration and Conciliation Act if party does not
participate in the arbitration proceeding and does not raise objections regarding the jurisdiction
before the arbitral tribunal itself?

 Can waiving of right to object be exercised with respect to the mandatory provisions ?

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RESEARCH OBJECTIVES

 To understand the concept of waiver of right to object under Arbitration and Conciliation Act.

 To understand the position of waiver of right by taking into consideration judicial pronouncements.

 To study the application of section 4 of Arbitration and Conciliation Act with certain other
provisions of the act.

RESEARCH METHODOLOGY

This research work is completely based on Doctrinal research. I have collected the material mostly from
the journals, articles, books, statutes and some internet sources.

SCOPE OF STUDY
This piece of study seeks to understand the aspect of waiver of right to object by taking into consideration
relevant judicial pronouncements in order to develop wide understanding.

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WAIVER OF RIGHT TO OBJECT

Section 4 of the Arbitration & Conciliation Act, 1996 incorporates the idea of ‘waiver of right to object’.
The very basis of the same can be traced to the principles enshrined under Article 4 of the UNCITRAL
Model Law on International Commercial Arbitration.
Section 41 of the Arbitration and Conciliation Act provides that -
“A party who knows that –

 any provision of this Part from which the parties may derogate, or
 any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the arbitration without stating his objection to such non-
compliance without undue delay or, if a time limit is provided for stating that objection, within that period of
time, shall be deemed to have waived his right to so object.”

Conditions required for waiver of right to object-

It is said that a party is deemed to waive his right to object if the following conditions are satisfied:

 There is voluntary relinquishment of right to object :

The concerned party against whom the principle enshrined in section 4 of Arbitration and Conciliation
Act is invoked should be aware of the noncompliance of:

 a non-mandatory provision under Part I of the Act; or

 any requirement under the arbitration

Further, there must be voluntary attempt or intention of refraining to raise reasonable objections in lieu of
the concerned issues. If such requirements are present then it can be said that parties have waived their right
to object. Also, it must be noted that in order to ascertain whether the party was aware of the non-

1
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s. 4
7
compliance or not, can be very well inferred from the circumstances of the case. The awareness with respect
to non-compliance is pertinent because here there is relinquishment of known right voluntarily.

 No objection raised within the stipulated time

Section 4 of the Arbitration and Conciliation Act provides that concerned party who possesses the
knowledge of non-compliance does not raises the objection with regard to the same then he is said to
have waived of his right to object. This reflects that it is essential that the objection must be raised
within reasonable time or within the time period prescribed for doing so. But it must also be noted
that if a party fails to raise an objection within the reasonable time or stipulated time frame due to
reasons beyond his control then is would not be deemed to waived his right to object.

 Party proceeds with the arbitral proceedings without any objection

The right to object can be said to have been waived only if the concerned party proceeds with the
arbitration without objecting in respect of non-compliance of arbitration agreement or of the
provisions of the act within a period of reasonable time then it can be said that arty has chose to
waive of his right to object.

 Extent of waiver of right to object

The rule of waiver of right to object is not merely restricted to arbitral proceedings. It also extends to
the Court proceedings under Section 34 of the Act.

 Principle of waiver when not applicable in arbitration proceedings

The principle of waiver u/s 4 of the Act does not apply in arbitral proceedings under certain
circumstances, which are as follows-
 absence of arbitration agreement;
 cases where arbitration clause in the contract is void or voidable;
 absence or lack of jurisdiction of the arbitral panel;
 cases in which mandatory provision of law has not been adhered to while conducting arbitral

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CASE LAWS AND WAIVING OF RIGHT TO OBJECT

The term “waiver” has not been defined in Model Law but Indian courts by means of judgments have
defined the term waiver as the voluntary relinquishment of right. Section 4 of the act incorporates the aspect
of waiver of right to object.

In the said provision , there is a phrase which goes like, ‘any provision of this part from which parties may
derogate’, this raises the question that whether the mandatory provision of the said act can be waived of
or not?
The same could was raised for the first time in the case of Narayan Prasad Lohia v. Nikunj Kumar Lohia 2 .In
the concerned case, parties chose to proceed with the composition of two arbitrators. Then, one of the parties
seek for setting aside of arbitral award on the ground that section 103 of the Arbitration and Conciliation Act
is a mandatory provision and thereby it could not be derogated which ultimately makes the award invalid.
The Apex court in order to decide whether section 10 was derogable or not , took into account the point that
whether parties had the right to object to the composition of the arbitral tribunal and if yes then at what
stage. The Court then held that section 10 was derogable provision as party was free to raise an objection
with respect to the composition of the tribunal under section 16(2)4 of the act and thus if the concerned party
did not raise the objection at the right stage then it can be precluded from raising at the later stage. Also, it
was held that if the composition of the arbitral tribunal was in line with the arbitration agreement then the
same cannot be raised as a ground for challenge under section 34 5 of the said act by stating that it is in
violation of provisions of part 1 of the act. Further, the concerned judgment was only limited to section 10
and court chose to limit to this particular section.

But in another case, Adani Enterprises Ltd. v. Antikeros Shipping Corpn. 6, one of the parties to the dispute
laid the basis of argument on Lohia case and said that similarly section 11 7 of the said act can be derogated
from and thus the right can be waived of in this respect. The Court held that in the Lohia Case was restricted
to section 10 of the act only and the same could not be applied in the context of section 11 8 of the act

2
(2002) 3 SCC 572.
3
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s. 10
4
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s. 16
5
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s. 34
6
2019 SCC OnLine Bom 528.
7
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s. 11
8
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.11
9
because and thereby section 11 could not be derogated from since the provision confers power upon High
courts and Supreme Court. Thus, the parties even by its conduct cannot have deemed to waive its right to
recourse under section 11 of the Act.

The following cases and relation of provisions with section 4 of the act shows how such provisions are
applied in light of arbitral proceedings

Section 4 and Section 8 of the Arbitration and Conciliation Act

Section 8(1)9 of the A&C Act provides the right of a party to refer the dispute to arbitration provided the
same has been raised within the prescribed time frame which points out to before submission of the first
statement on the substance of the dispute. In the case of Rashtriya Ispat Nigam Ltd. v. Verma Transport
Company10, the court held that if the party has submitted the application before filing of the first statement
then the party cannot be said to have waived of its right to object.
Further, in the case of Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd 11., it was held by the court that
though section does not provide any time limit but it must be ensured on the part of the parties the same is
raised within reasonable time period and there is no undue delay. Also, it has been clarified in the said case
that the intention of the parties to submit to the jurisdiction of the court must be inferred from the statement,
application and affidavit. Like if application under the said action and written statement are filed
simultaneously then it is considered under section 8 of the act but if written statement is filed prior to
application under section 8 then inference can be drawn by this conduct of the part that it submitted to
jurisdiction of the court and thereby can be said to waive of its right to object.
And as far as interim orders are concerned, then it can be said that any action to vacate an interim order does
not amount to waiver owing to the reason that interim orders are incidental to main proceedings and any step
to challenge interim order does not amount to waiver.

Section 4 and 11 of the Arbitration and Conciliation Act

Section 1112 of the Act does not specify a fixed time by which any objection with respect to the existence of
the arbitration agreement ought to be raised and in absence of such limit it is said that it must be raised

9
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.8
10
(2006) 7 SCC 275.
11
(2011) 5 SCC 532.
12
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.11
10
without any undue delay. In BSNL v. Motorola India (P) Ltd.13, the appellant challenged the appointment of
arbitrator done by high court in lieu of section 11 by laying the basis of argument that the arbitration
agreement did not cover a dispute with respect to liquidated damages. The Court held that the appellant
should have raised the same objection before first hearing and since he failed to do so then he is deemed to
waive of his right to object.
Also, mere participation in appointment of the arbitrator does not prevent the party from raising the
objection on grounds of jurisdiction and maintainability provided the same is raised within reasonable time.

Section 4 and Section 12 of the Arbitration and Conciliation Act

Section 1214 of the A&C Act provides the grounds of challenge to the appointment of an arbitrator and
Section lays down the procedure for challenging the arbitrator. In the case of Haryana Space Application
Centre v. Pan India Consultants (P) Ltd.15, the court held that Section 12(5) of the A&C Act read with the
Seventh Schedule was a mandatory provision which could not be derogated from. Though, the court did not
consider the proviso of the said section which allows the parties to waive such ineligibility subsequent to the
dispute arising between the parties. However, the Honorable Supreme Court has clarified in Bharat
Broadband Network Ltd. v. United Telecoms Ltd16, that the waiver under section 12(5) must be clearly
expressed in writing by parties. Also,the court held that this section is mandatory provision and the express
language of the same does not attract the applicability of section 4 of the act. Therefore, if parties failed to
object then it cannot be said that parties have waived their right to object as it a mandatory provision.

Section 4 and Section 16 of the Arbitration and Conciliation Act

Section 1617 of the Act incorporated the kompetenz kompetenz principle and governs the power of the
Arbitral Tribunal to rule on its own jurisdiction. And if there is any objection with respect to arbitral tribunal
jurisdiction then the same must be raised before statement of defence. The same was held in the case of
Konkan Railway Corpn. Ltd. v. Rani Construction Pvt Ltd.18, and it was held that if such objections are not
raised within the required time limit and the award is passed then it cannot be set aside on the concerned

13
(2009) 2 SCC 337.
14
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.12
15
(2021) 3 SCC 103.
16
(2019) 5 SCC 755.
17
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.16
18
(2002) 2 SCC 388.
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objection. In another case of Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt Ltd.19, the court
held that the respondent even being aware of the proceedings chose not to participate and did not raise any
objection with respect to jurisdiction at any stage before coming to section 3420 of the act then it is
considered that he is deemed to waive of all his right to object.

Section 4 and Section 34 of the Arbitration and Conciliation Act

The grounds provided under Section 34(2)(a) and (b) of the A&C Act can be categorized into three. First
being which affects the jurisdiction of the arbitration proceedings and if the party fails to raise the objection
regarding the same under section 16 of the act then it is said parties have deemed to waive of his right. But
with respect to other two grounds i.e., grounds which affect the party interest alone and grounds related to
public policy. There can be a lot of irregularities which can form the basis of such ground but parties by
giving a clear stand that even though he is proceeding with the arbitration proceeding but his right to object
should not be prejudiced. And with grounds related to public policy it is said that doctrine of waiver does not
apply Therefore, it can be said that applicability of section 4 on section 34 of the Act is based upon the
nature of the ground resorted to for raising the concerned objection.

19
(2020) 18 SCC 277.
20
The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), s.34
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 CONCLUSION

The principle enshrined under section 4 of Arbitration and Conciliation the act which encompasses the
aspect of doctrine of waiver of right to object basically secures the ends of justice. It lays it basis on the
principle ‘rights should not merely be exercised; they must be exercised within reasonable time’. This
provision thereby provides that if the objections are not raised within stipulated time frame then it is
considered as voluntary relinquishment of right to object. The principle of waiver under the said act seeks to
strike a balance in the arbitration proceedings by empowering the adjudicating authority to carry on
proceedings if objections are not raised without undue delay and thereby it can avoid the unnecessary and
delayed objections causing hurdles in arbitration proceedings.

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 BIBLIOGRAPHY

 https://www.barandbench.com/news/litigation/waiver-of-right-to-object-in-arbitral-proceedings-what-the-
supreme-court-observed-read-judgment
 Arbitration and Conciliation Act, 1996
 SCC Online
 https://blog.scconline.gen.in/post/2022/05/02/waiver-of-the-right-to-object-under-the-arbitration-and-conciliation-
act-1996/

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