1. What do you mean by an Arbitration agreement?

How is it different from an

arbitration clause? (5)

While arbitration clause is included within a written agreement between the parties, an
arbitration agreement is an agreement made after a dispute has arisen between the
parties.

Arbitration is a way of settling a civil dispute outside the general court based on an
arbitration agreement or arbitration clause made in writing by the parties to the dispute.

"arbitration agreement" means an agreement by the parties to submit to arbitration all or

certain disputes which have arisen or which may arise between them in respect of a
defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or

in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication

1[including communication through electronic means] which provide a record of
the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes

an arbitration agreement if the contract is in writing and the reference is such as to make
that arbitration clause part of the contract.

BASIS ARBITRATION AGREEMENT ARBITRATION CLAUSE

FOR
DISTINCT
ION
Definition: A separate agreement between parties to A clause within a larger contract that
resolve disputes through arbitration. specifies arbitration as the method for
resolving disputes.

Form
Can be a standalone document or a Incorporated as a part of a main contract
separate contract entered into after a from the beginning.
dispute arises.

Scope
Can cover existing disputes and potential Typically addresses only future disputes
future disputes. that may arise under the contract.

Timing
Can be signed at any time, before or after a Agreed upon at the time the main contract
dispute has arisen. is executed.

Legal Basis
Governed under Section 7 of the Also falls under Section 7 but exists as
Arbitration and Conciliation Act, 1996, part of the primary contractual terms
which requires an explicit agreement to agreed upon by the parties.
submit disputes to arbitration.

1. Arbitration Agreement: A formal agreement between parties to submit disputes

to arbitration rather than litigation.
2. Arbitration Clause: A clause in a contract specifying that any disputes will be
resolved through arbitration.
3. Scope: An arbitration agreement can be a standalone document, while an
arbitration clause is part of a broader contract.
4. Timing: An arbitration agreement can be created before or after a dispute arises,
whereas an arbitration clause is preemptively included in a contract.
5. Legal Basis: Governed by Section 7 of the Arbitration and Conciliation Act,
1996.
2. What is the nature and scope of the Settlement Agreement entered into between
the parties to a dispute in conciliation proceedings? (5)

Settlement agreement.— Section 73

(1) When it appears to the conciliator that there exist elements of a settlement which may be
acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to
the parties for their observations. After receiving the observations of the parties, the conciliator
may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a
written settlement agreement. If requested by the parties, the conciliator may draw up, or assist
the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties
and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each
of the parties

Status and effect of settlement agreement.— Section 74

The settlement agreement shall have the same status and effect as if it is an arbitral award on
agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.

1. Nature: A settlement agreement is a contract that resolves the dispute and is binding on
the parties.
2. Scope: It addresses all issues agreed upon during conciliation.
3. Enforceability: As per Section 73 of the Arbitration and Conciliation Act, 1996, it has
the same status as an arbitral award.
4. Finality: It concludes the conciliation process with no further legal proceedings required.
5. Confidentiality: The terms of the agreement are confidential unless otherwise agreed by
the parties.

3. What are the different kinds of Arbitrations? (5)

1. Domestic Arbitration: Disputes within a single country, governed by the national

arbitration law.
2. International Commercial Arbitration: Involves parties from different countries,
governed by international treaties and national laws.
3. Institutional Arbitration: Administered by an arbitration institution like ICC or LCIA.
 4. Ad hoc Arbitration: Parties conduct arbitration independently without institutional
support.
5. Statutory Arbitration: Imposed by statute, such as in labor disputes.

4. What do you mean by Arbitral Award? (5)

According to Section 2(1)(c) of the 1996 Act an arbitral award includes an interim award.
As a preventive measure and at the request of the party an arbitrator can issue an interim
order or award regarding the dispute.

Form and contents of an arbitral award - Section 31 of the A and C Act 1996

1. An arbitral award shall be made in writing and shall be signed by the members of the
arbitral tribunal.
2. In case of an arbitral proceedings with more than one arbitrator, the signatures of the
majority of all the members of the arbitral tribunal shall be sufficient so long as the
reason for any omitted signature is stated.
3. An arbitral award must state the reasons upon which it is based. However, there are
exceptions to this clause such as
● Parties have agreed that no reasons are to be given
● Its is an arbitral award on agreed terms under section 30.

4. shall state its date and the place of arbitration as determined in accordance with
section 20 and the award shall be deemed to have been made at that place.
5. A signed copy shall be delivered to each party after the award is made
6. Arbitral award is for the money, it may include in the sum for which the award is
made an interest amount that seems reasonable for whole or part of the money…..for
whole or part of the period between the date on which the cause of action arose and
the date on which the award is made.
7. The sum directed to be paid by an arbitral award shall carry interest at the rate of 2%
- HIGHER THAN THE CURRENT RATE OF INTEREST PREVALENT ON THE
DATE OF AWARD, FROM THE DATE OF AWARD TO THE DATE OF
PAYMENT.

1. Definition: A binding decision made by an arbitral tribunal.

2. Types: Final, interim, and partial awards.
3. Legal Binding: Enforceable like a court judgment under Section 36 of the Arbitration
and Conciliation Act, 1996.
 4. Content: Includes reasons for the decision, the relief granted, and costs.
5. Appeal: Can be challenged only on specific grounds under Section 34 of the Arbitration
and Conciliation Act, 1996.

5. What are the grounds for setting aside an arbitration award? (10)

Chapter 7 of the act delas with recourse against arbitral ward.

Sec 34 (2) To set aside an award an application has to be made.

The grounds related to the setting aside of the award are :-

PARTY MAKING APPLICATION ESTABLISHES

● Party under some incapacity

● Arb agreement not valid under law that parties have subjected
● Proper notice was not served to the party making application regarding the
appointment of the arbitrator / arbitral proceeding / unable to present his case
● The award not falls within the terms of the submission to arbitration /
● contains decisions on matters beyond scope of the submission made during
arbitration ( in this case only matters beyond scope will be set aside)
● Composition of the arbitral tribunal / arbitral procedure was not in accordance
with the agreement of the parties

COURT FINDS THAT

● Subject matter of the dispute not capable of settlement by arbitration under the
law for the time being in force
● Award in conflict with the public policy of Indian Law

( if the making of award was induced or affected by fraud or corruption /

violation odf sec 75 & 81

OR

n contravention with the fundamental policy of Indian law

OR

conflict with the most basic notions of morality or justice

Section 34 (2A) - Any award arising out of the arbitration other than international commercial
arbitration may alsi be set aside by court ………if the court finds the award is vitiated by patent
illegality on its face.
34(3) - The party who wants to set side the award has to make an application within 90 days
since the award was received . application may not be made after 3 months period is elapsed.
However, a request u/s 33 of the act allows the party to calculate 3 months from the date on
which the request was disposed of by the arbitral tribunal .

Also, upon satisfaction that a reasonable cause was there for a party to not present an application
within 30 days then a further period of 30 days is provided.

34(4) - application received - court may adjourn the proceedings for a time period determined
…….so that the tribunal gets an opportunity to resume proceedings or eliminate the grounds for
setting aside.

34(5) - prior notice is to be issued by the party to the other party, such application has to be
withan affidavit

34(6) - application disposed expeditiously within 1 year from date on which notice is served
upon the other party.

1. Incapacity of a party: Under Section 34(2)(a)(i) of the Arbitration and Conciliation Act,
1996.
2. Invalid agreement: If the arbitration agreement is not valid.
3. Improper notice: If a party was not given proper notice of the arbitration or was unable
to present their case.
4. Award beyond scope: If the award deals with issues beyond the arbitration agreement.
5. Tribunal composition or procedure not as per agreement: As per Section 34(2)(a)(iv).
6. Arbitrability: Dispute not capable of settlement by arbitration under Indian law.
7. Public Policy: If the award is in conflict with the public policy of India.
8. Fraud or corruption: If the award was induced or affected by fraud or corruption.
9. Breach of confidentiality: Disclosure of confidential information.
10. Impartiality or independence: If the arbitrator was biased.

6. What are the grounds for removal of an Arbitrator? (5)

1. Lack of impartiality or independence: Section 12 of the Arbitration and Conciliation

Act, 1996.
2. Incapacity: Physical or mental incapacity to perform functions.
3. Failure to conduct proceedings: Deliberate or unreasonable delay.
4. Agreement of parties: If both parties agree to remove the arbitrator.
5. Court Order: On application by a party, under Section 14 of the Arbitration and
Conciliation Act, 1996.

7. Explain negotiation as a process of dispute resolution (10)

 1. Definition: A voluntary process where parties attempt to resolve their disputes by mutual
agreement.
2. Process: Includes preparation, discussion, clarification of goals, negotiation towards a
win-win outcome, and agreement.
3. Confidentiality: Negotiations are typically confidential.
4. Flexibility: Allows for creative solutions tailored to the parties’ needs.
5. Control: Parties retain control over the outcome.
6. Non-binding: Agreements reached are not legally binding unless formalized in a
contract.
7. Cost-effective: Generally less expensive than litigation or arbitration.
8. Time-saving: Can be quicker than formal dispute resolution processes.
9. Preserves Relationships: Focuses on mutual benefit, often preserving business or
personal relationships.
10. Legal Basis: Governed by principles of contract law if formalized.

8. How is a Conciliator appointed under the Arbitration and Conciliation Act? (5)

1. Agreement of Parties: Parties agree on a conciliator.

2. Appointment by Institutions: If parties cannot agree, an institution may appoint the
conciliator.
3. Number of Conciliators: Typically one, but can be more by agreement.
4. Qualifications: Should have the necessary skills and experience.
5. Legal Provision: Governed by Sections 64 and 65 of the Arbitration and Conciliation
Act, 1996.

9. Explain the role of Mediator in the mediation process. (5)

1. Facilitator: Helps parties communicate and understand each other’s perspectives.

2. Neutral: Remains impartial and does not take sides.
3. Guidance: Assists parties in exploring options and negotiating an agreement.
4. Confidentiality: Ensures the confidentiality of the discussions.
5. No Decision-making Power: Unlike an arbitrator, a mediator does not impose a
decision.

10. Enumerate the grounds on which an arbitral award may be challenged before
the Court. (10)

1. Incapacity of a party: Section 34(2)(a)(i).

2. Invalid arbitration agreement: Section 34(2)(a)(ii).
3. Lack of proper notice: Section 34(2)(a)(iii).
4. Award beyond scope: Section 34(2)(a)(iv).
 5. Improper tribunal composition: Section 34(2)(a)(v).
6. Non-arbitrable dispute: Section 34(2)(b)(i).
7. Conflict with public policy: Section 34(2)(b)(ii).
8. Fraud or corruption: Section 34(2)(a).
9. Procedural irregularities: Violation of Section 18 principles of equal treatment.
10. Manifest disregard of the law: Ignoring established legal principles.

11. Define international commercial arbitration and how is it different from

domestic arbitration (5)

A domestic arbitration is one concerned with purely national or domestic issues. This
means, in general terms, that all aspects of the arbitration proceedings are related to a
single jurisdiction. For example, the nationality of the parties, the governing law of the
contract, the place of performance of the contract and the facts giving rise to the dispute
will all relate to the same jurisdiction.
An international arbitration, on the other hand, will reach beyond the borders of a single
jurisdiction.
S. Basis of
International arbitration Domestic Arbitration
No. difference

International arbitration is a method of Domestic arbitration is the process o

resolving disputes between parties resolving disputes between parties fr
1. Meaning from different countries outside of the same country through arbitration
court which may be governed by rather than traditional court litigation
Indian Law or foreign law. governed by national arbitration laws

Disputes involve parties from different

Disputes are within the boundaries o
2. Jurisdiction countries and transcending national
single country
boundaries

Complex issues related to choice of

law, often from different jurisdictions.
3. Applicable law Arbitration and Conciliation Act, 1996
In case Indian Law is applicable Part 1
of the Act shall govern the arbitration.

Can be challenging due to sovereign

immunity, differing legal system, and
Easier with jurisdiction where arbitra
international treaties
Enforcement is held. Section 36 of the Arbitration a
4. If the International Arbitration had its
of awards Conciliation Act, 1996 deals with
seat in India and governed as per Part
Enforcement of Arbitral Awards in Ind
1 of the Act it can be enforced as per
section 36 of the Act.
 Parties from diverse cultural
5. Language Parties generally have common langu
background may require translation

Follows institutional rules or ad hoc Institutional rules or ad hoc procedur

6. Procedures
procedures depending on preference and laws

Chosen for expertise in international

Arbitrator Selected based on knowledge of spe
7. law, familiarity with multiple legal
selection area of law relevant to disputes
systems

More expensive and time-consuming Domestic Arbitration process can be

8. Cost/time due to travel, language barriers, cost-effective and efficient, especially
specialised expertise parties and arbitrators are in proximi

12. Discuss the law relating to appointment and removal of conciliators under the
Arbitration & Conciliation Act, 1996 (10)

SECTION
62.
Commencement of conciliation proceedings.

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate
under this Part, briefly identifying the subject of the dispute.
(2) Conciliation proceedings shall commence when the other party accepts in writing the
invitation to conciliate.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the date on
which he sends the invitation, or within such other period of time as specified in the invitation, he
may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall
inform in writing the other party accordingly.

SECTION 63. Number of conciliators.

—
(1) There shall be one conciliator unless the parties agree that there shall be two or three
conciliators.
(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Appointment of Conciliators- Section 64

 1. If there is one conciliator in a conciliation proceeding, the parties may agree on
the name of a sole conciliator.
2. If there are two conciliators in a conciliation proceeding, each party may appoint
one conciliator.
3. If there are three conciliators in a conciliation proceeding, each party may appoint
one conciliator and the parties may agree on the name of the third conciliator who
shall act as the presiding conciliator.
Sub- section (2) of section 64 provides for the assistance of a suitable institution or
person in the appointment of conciliators. Either a party may request such institution or
person to recommend the names of suitable individuals to act as conciliators, or the
parties may agree that the appointment of one or more conciliators be made directly by
such institution or person.

Termination of Conciliation Proceedings – Section 76

Section 76 lays down four ways of the termination of conciliation proceedings. These are:
1. The conciliation proceedings terminate with the signing of the settlement agreement by
the parties. Here the date of termination of conciliation proceedings is the date of the
settlement agreement. (Sec 76(a))
2. The conciliation proceedings stand terminated when the conciliator declares in writing
that further efforts at conciliation are no longer justified. Here the date of termination of
conciliation proceedings is the date of the declaration. (Sec 76(b))
3. The conciliation proceedings are terminated by written declaration of the parties
addressed to the conciliator to the effect that the conciliation proceedings are
terminated. Here the date of termination of conciliation proceedings is the date of the
declaration. (Sec 76(c))
4. The conciliation proceedings are terminated when a party declares in writing to the other
party and the conciliator, that the conciliation proceedings are terminated. Here the date
of termination of conciliation proceedings is the date of the declaration. (Sec 76(d))

1. Appointment by Agreement: Parties can agree on a conciliator (Section 64).

2. Institutional Appointment: If parties cannot agree, an institution may appoint (Section
64(2)).
3. Qualifications: Parties can specify the qualifications of the conciliator.
4. Neutrality: Conciliator must be impartial and independent (Section 12).
5. Replacement: If a conciliator withdraws or is unable to act, a replacement is appointed
(Section 66).
6. Removal for Bias: A conciliator can be removed for lack of independence or impartiality
(Section 12).
7. Agreement of Parties: Parties can agree to remove and replace a conciliator.
8. Court Intervention: Parties can apply to the court for removal.
9. Written Agreement: Any appointment or removal must be documented.
 10. Legal Provisions: Governed by Part III of the Arbitration and Conciliation Act, 1996.

13. What are the different types of negotiation? (5)

TYPES OF NEGOTIATION

1. Principled negotiation - Principled negotiation is a type of bargaining that uses the

parties' principles and interests to reach an agreement. This type of negotiation often
focuses on conflict resolution. This type of bargaining uses an integrative negotiation
approach to serve the interests of both parties. There are four elements to a principled
negotiation:
a. Mutual gain: The integrative approach to a principled negotiation invites parties
to focus on finding mutually beneficial outcomes through bargaining.
b. Focus on interests: Negotiators can identify and communicate their motivations,
interests and needs in principled negotiation.
c. Separate emotions from issues: In principled negotiation, parties can reduce
emotional responses and personality conflicts by focusing on the issues rather
than how the problems make them feel.
d. Objectivity: Parties in a principled negotiation can agree to using objective
criteria as a baseline for negotiations. Examples of objective criteria in
negotiations include market rates, expert opinions, laws and industry standards
For example, the leaders of two departments for a large company often argue over
the resources for each department. The two leaders enter a principled negotiation
to discuss solutions. They listen to each other's positions and decide to base
resource allocation on the percentage of revenue each department generates for
the company. The department leader who receives more resources agrees to
support the other department's functions, and the two leaders reach a compromise.
2. Team negotiation - In a team negotiation, multiple people bargain toward an agreement
on each side of the negotiation. Team negotiations are common with large business deals.
There are several personality roles on a negotiation team. In some cases, one person may
perform more than one role. Here are some common roles on negotiation teams:
a. Leader: Members of each team in a negotiation usually appoint a leader to make
the final decisions during negotiations.
b. Observer: The observer pays attention to the other party's team during a
negotiation, discussing their observations with the leader.
c. Relater: A relater on a negotiation team works on building relationships with the
other team members during bargaining.
d. Recorder: A recorder on a negotiating team can take notes on the discussions of a
negotiation meeting.
e. Critie: While this may sound like a negative role, having a critic on the team
during negotiations can help you understand an agreement's concessions and other
negative results.
 f. Builder: A builder on a negotiation team creates the deal or package for a
bargaining team. They can perform financial functions during negotiations,
calculating the cost of an agreement.
3. Multipart negotiation - A multiparty negotiation is a type of bargaining where more
than two parties negotiate toward an agreement. An example of a multiparty negotiation
is bargaining between multiple department leaders in a large company. Here are a few of
the challenges of multiparty negotiations:
a. Fluctuating BATNAS: BATNA stands for best alternative to a negotiated
agreement. With multiple parties in a negotiation, each party's BATNA is more
likely to change, making it harder for parties to agree. Each party can evaluate its
BATNA at each negotiation stage to understand the results of a proposed
agreement.
b. Coalition formation: Another challenge of multiparty negotiations is the
possibility for different parties to form coalitions or alliances. These alliances can
add to the complexity of bargaining. Coalitions can agree to a specific set of terms
to help all parties reach an agreement.
c. Process-management issues: Managing the negotiation process between multiple
parties can lead to a lack of governance and miscommunications. People in
multiparty negotiations can avoid these issues by choosing a leader willing to
collaborate with others toward an agreement.
4. Adversarial negotiation - An adversarial negotiation is a distributive approach in which
the most aggressive party in a negotiation achieves an agreement that serves their
interests. Here are a few examples of adversarial negotiation tacties:
a. Hard bargaining: Hard bargaining is a strategy in which one party refuses to
compromise in an agreement.
b. Future promise: A person using this tactic can promise the other party a future
benefit in exchange for current concessions. You can counteract this tactic by
asking for the future promise in writing.
c. Loss of interest: Another adversarial negotiation tactic is loss of interest, in which
one party pretends they've lost interest in pursuing an agreement

14. Explain the different stages of mediation (10)

1. Preparation: Mediator and parties prepare for the mediation process.

2. Opening Statements: Mediator introduces the process and parties present their positions.
3. Joint Session: Parties discuss the issues face-to-face.
4. Private Caucus: Mediator meets each party separately to explore interests.
5. Negotiation: Parties negotiate with mediator's assistance.
6. Option Generation: Developing possible solutions.
7. Evaluation: Assessing the feasibility of options.
8. Agreement: Reaching a mutually acceptable agreement.
 9. Closure: Formalizing the agreement in writing.
10. Follow-up: Ensuring implementation of the agreement.

15. Explain the terms ‘seat of arbitration’ and ‘place of arbitration’. How is seat of
arbitration relevant to an arbitration proceeding? (5)

1. Seat of Arbitration: Legal jurisdiction where arbitration is based.

2. Place of Arbitration: Physical location where arbitration hearings are held.
3. Legal Significance: Seat determines procedural laws and court jurisdiction.
4. Enforcement: Awards are subject to the laws of the seat.
5. Choice: Parties choose the seat, influencing neutrality and convenience.

16. Explain the different types of ADR mechanisms under section 89 of Civil
Procedure Code. (10)

Section 89 of the Civil Procedure Code (CPC) of India provides for alternative dispute resolution
(ADR) mechanisms to facilitate the settlement of disputes outside the traditional court system.
The aim is to reduce the burden on courts and provide a faster and more efficient means of
resolving conflicts. The different types of ADR mechanisms under Section 89 of the CPC are as
follows:
1. Arbitration:
o Definition: A private dispute resolution process where the parties agree to
submit their dispute to one or more arbitrators, who make a binding decision on
the matter.
o Process: The parties choose arbitrators, or they are appointed by a court or
institution. The arbitration proceedings are less formal than court proceedings,
and the arbitrator's decision (award) is final and enforceable by law.
2. Conciliation:
o Definition: A process where a neutral third party (the conciliator) helps the
disputing parties to reach a mutually acceptable settlement.
o Process: The conciliator meets with the parties, either separately or together, to
understand their issues and facilitate negotiations. Unlike arbitration, the
conciliator does not impose a decision but helps the parties reach their own
agreement.
 3. Judicial Settlement:
o Definition: A process where the court itself plays an active role in facilitating the
settlement of disputes through negotiation and mediation.
o Process: The judge, acting as a mediator, helps the parties explore settlement
options. The settlement arrived at is recorded as a court order and has the same
effect as a court decree.
4. Mediation:
o Definition: A voluntary and confidential process where a neutral third-party
mediator assists the parties in reaching a mutually acceptable resolution.
o Process: The mediator facilitates communication, helps identify issues, and
explores potential solutions. The mediator does not impose a decision; the
parties retain control over the outcome. If a settlement is reached, it is recorded
and can be enforced like a court decree.
5. Lok Adalat (People’s Court):

Article 39-A of the Constitution which was inserted by the Constitution (Forty second)
Amendment Act,1976 casts an obligation on the State to secure that the operation of the
legal system promotes justice on a basis of equal opportunity, and in particular, provide
free legal aid by suitable legislation or schemes or in any other way, to ensure that the
opportunities for securing justice are not denied to any citizen by reason of economic or
other disabilities. Besides, the right to free legal aid has now been included as part of
right to life and personal liberty guaranteed under Article 21 of the Constitution
With a view to accomplishing this objective, the Government of India appointed, a
committee for implementing the legal aid schemes in 1980. This committee was headed
by Mr. Justice P.M. Bhagwati.The committee prepared a draft-legal aid programme
which could be applicable throughout India. It is on the basis of the recommendations
and the draft outlined by this Committee that the Legal Services Authorities Act, 1987,
was passed to establish Statutory Legal Services Authorities. It also contained
provisions relating to Lok Adalats.
o Definition: An informal court convened to settle disputes amicably through
compromise and mutual agreement.
o Process: Organized by the State Legal Services Authority or District Legal
Services Authority, Lok Adalats can take up both pre-litigation and pending
cases. The settlement reached is binding and has the same status as a court
decree. There is no appeal against the decision of a Lok Adalat.
These ADR mechanisms provide various pathways for parties to resolve their disputes
efficiently, saving time and resources while reducing the caseload on the judiciary.

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26
of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for
settlement under the provisions of that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the
provisions of sub-section (1) of Section 20 of the Legal Services Authority Act, 1987 (39 of
1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the
Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and
such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal
Services Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under
the provisions of that Act;
(d) for mediation, the Court shall effect a compromise between the parties and shall follow such
procedure as may be prescribed.”

1. Arbitration: Binding resolution by an arbitrator.

2. Conciliation: Non-binding process where a conciliator helps parties reach a settlement.
3. Mediation: Mediator facilitates negotiation between parties to reach a voluntary
agreement.
4. Judicial Settlement: Judge facilitates a settlement between parties.
5. Lok Adalat: Informal court where disputes are settled amicably.
6. Nature: ADR mechanisms are alternatives to traditional litigation.
7. Voluntary: Parties opt for ADR voluntarily.
8. Confidentiality: Proceedings are confidential.
9. Cost-effective: Generally less expensive than litigation.
10. Time-saving: Can resolve disputes quicker than traditional courts.

17. What is alternative dispute resolution? Should it be preferred over the

adversarial system? (5)

ADR has gained a rapid popularity over the years. The business disputes are resolved more by
the
arbitration process than the litigation. The reason for acceptance of arbitration over litigation is
due to
many reasons.
1. 1.Arbitration is more cost-effective. The cost of the process involved in the dispute is
much less than the cost involved in the litigation.
2. The process is more informal as compared to the litigation process. There are no lengthy
procedures as that is present in the court.
3. ADR process is flexible. The parties can withdraw their case anytime they want which, is
not possible in the court process.
4. The dispute is resolved more quickly with the assistance of a third person, who advises
the parties according to their needs and suitability. This is not same in the case of the
court process. The judges do not give judgment according to the suitability of the parties.
5. The resolution of the dispute is made faster. On the other hand, filing cases in the court
take years and years to resolve one case.
6. In ADR, an approach is made to balance the interest of both the parties. Whereas, in the
litigation, the other party loses the case.
 7. Discussions of the proceedings in ADR is confidential and no public record is to be
maintained. The discussions in the court involve knowledge of the public.
8. The venue and schedule are according to the convenience of the parties as they have
the power to choose the arbitrator, the place of the proceedings etc.

1. Definition: Processes like arbitration, mediation, and conciliation to resolve disputes

outside courts.
2. Advantages: Cost-effective, quicker, flexible, and confidential.
3. Preserves Relationships: Focuses on mutual benefit and preserving relationships.
4. Binding and Non-binding: Can be either, depending on the method chosen.
5. Preference: Preferred for its efficiency and less adversarial nature compared to litigation.

18. Is an arbitration proceeding bound by CPC? What should be the procedural law
of arbitration? (5)

(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of
1908) or the Indian Evidence Act, 1872 (1 of 1872).

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by
the arbitral tribunal in conducting its proceedings.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject
to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to
determine the admissibility, relevance, materiality and weight of any evidence.

1. Not Bound by CPC: Arbitration proceedings are not strictly bound by the Civil
Procedure Code.
2. Arbitration Act: Governed by the Arbitration and Conciliation Act, 1996.
3. Procedural Flexibility: Parties have flexibility to agree on procedures.
4. Equal Treatment: Must adhere to principles of natural justice and equal treatment
(Section 18).
5. Efficiency: Procedural rules aim to make arbitration efficient and fair.

19. Distinguish between arbitration and conciliation, with reference to the role and
requisite skills of the third neutral party (5)

Aspect Arbitration Conciliation

Nature and Formal, structured process Informal, flexible process focused on
Aspect Arbitration Conciliation
Formality similar to a court trial. dialogue and negotiation.
Decision-maker; acts as a private Facilitator; assists parties in reaching a
Role of the Third
judge and makes a binding mutually acceptable agreement without
Neutral Party
decision. imposing a decision.
Binding Nature of Binding arbitral award, Non-binding settlement unless parties
Outcome enforceable under law. enter into a settlement agreement.
Governed by specific legislation Flexible framework with minimal judicial
(e.g., Arbitration and Conciliation intervention; governed by guidelines in
Legal Framework
Act, 1996); limited judicial the Arbitration and Conciliation Act,
oversight. 1996.
Limited control by parties once
Control Over the Greater control by parties; outcome
the process begins; decision
Outcome based on mutual agreement.
imposed by arbitrator.
Requires legal and subject- Requires strong interpersonal and
Expertise of Third
matter expertise; strong negotiation skills; effective problem-
Neutral Party
analytical skills. solving abilities.
Generally confidential, but
Confidential discussions and proposals,
Confidentiality depends on the agreement and
encouraging open communication.
applicable rules.
This table highlights the primary differences between arbitration and conciliation, focusing on
the nature of the process, the role and skills of the third neutral party, the binding nature of
outcomes, the legal framework, control over the outcome, expertise required, and
confidentiality.

1. Role of Arbitrator: Makes a binding decision after hearing both parties.

2. Role of Conciliator: Facilitates negotiation and helps parties reach a voluntary
agreement.
3. Skills for Arbitrator: Legal expertise, decision-making, impartiality.
4. Skills for Conciliator: Negotiation, communication, impartiality, problem-solving.
5. Outcome: Arbitration results in an enforceable award; conciliation results in a settlement
agreement.
20. Discuss common negotiation strategies and bargaining techniques (10)

1. Interest-Based Negotiation: Focuses on underlying interests rather than positions.

2. BATNA: Best Alternative to a Negotiated Agreement; knowing your alternatives.
3. Win-Win Negotiation: Seeks outcomes beneficial for all parties.
4. Positional Bargaining: Each party takes a position and negotiates from there.
5. Integrative Bargaining: Parties collaborate to find mutually beneficial solutions.
6. Distributive Bargaining: Dividing a fixed amount of resources.
7. Anchoring: Setting a reference point around which negotiations revolve.
8. Concessions: Gradually giving ground to reach an agreement.
9. Framing: Presenting options in a way that influences perceptions.
10. Active Listening: Ensuring understanding and addressing concerns of the other party.