2.3.1 Fundamental Principles
The conduct of arbitral proceedings is governed by two overarching principles: party autonomy and equal treatment. These principles, enshrined in Sections 18 and 19, form the foundation of fair arbitration proceedings.
Section 18 - Equal Treatment of Parties
The parties shall be treated with equality and each party shall be given a full opportunity to present its case. This includes:
- Equal Time: Both parties get similar time for presentations and submissions
- Equal Access: All documents and evidence shared with tribunal must be provided to the other party
- Right to be Heard: No decision on merits without opportunity to respond
- No Ex Parte Communication: Tribunal cannot communicate with one party without the other
Section 19 - Procedural Flexibility
The arbitral tribunal is not bound by the Code of Civil Procedure or the Indian Evidence Act. Parties are free to agree on procedure, failing which the tribunal may conduct proceedings as it considers appropriate.
The tribunal's power to determine procedure includes the power to determine admissibility, relevance, materiality, and weight of evidence. This is a significant departure from court litigation where strict evidence rules apply.
2.3.2 Commencement of Proceedings
Section 21 - When Arbitration Commences
Unless otherwise agreed by parties, arbitration commences on the date on which a request for the dispute to be referred to arbitration is received by the respondent.
Notice Requirements
- Written notice clearly identifying the dispute
- Reference to the arbitration agreement being invoked
- Statement of relief sought
- Proposal for number and appointment of arbitrators (if applicable)
Section 20 - Place (Seat) of Arbitration
Parties are free to agree on the place of arbitration. Failing agreement, the tribunal determines the place having regard to circumstances including convenience of parties.
Seat vs. Venue: The seat determines the legal framework (lex arbitri) and supervisory court jurisdiction. The venue is merely the physical location of hearings. Section 20(3) allows hearings at any convenient place unless parties agree otherwise.
2.3.3 Statements of Claim and Defence
Section 23 - Pleadings
Statement of Claim
Within the period agreed or determined by the tribunal, the claimant shall state:
- Facts supporting the claim
- Points at issue
- Relief or remedy sought
- Supporting documents or list of documents to be produced
Statement of Defence
The respondent shall state its defence in respect of the particulars in the statement of claim, and may include:
- Admission or denial of facts alleged
- Additional facts relied upon
- Legal grounds for defence
- Counter-claims or set-off (if applicable)
Amendment of Pleadings
Parties may amend or supplement their pleadings during the course of arbitration unless the tribunal considers it inappropriate due to delay.
| Document | Contents | Timeline (Typical) |
|---|---|---|
| Notice of Arbitration | Dispute, relief sought, arbitrator proposal | Day 0 |
| Response to Notice | Comments on arbitrator, preliminary objections | 15-30 days |
| Statement of Claim | Facts, evidence, legal basis, relief | 30-45 days after tribunal formation |
| Statement of Defence | Response to claim, counter-claim | 30-45 days after SoC |
| Reply | Response to defence/counter-claim | 15-30 days after SoD |
| Rejoinder | Response to reply (if permitted) | 15-30 days after Reply |
2.3.4 Hearings and Written Proceedings
Section 24 - Oral Hearings vs Documents-Only
Unless parties agree on documents-only arbitration, the tribunal shall hold oral hearings at an appropriate stage if requested by a party.
Pre-Hearing Conference
Best practice involves a preliminary hearing to:
- Establish procedural timetable
- Identify issues in dispute
- Determine document production scope
- Schedule witness evidence
- Fix hearing dates
Main Hearing
- Opening Statements: Summary of case and evidence
- Witness Evidence: Examination, cross-examination, re-examination
- Expert Evidence: If applicable, expert presentations and questioning
- Closing Arguments: Oral or written submissions on law and facts
Section 25 - Default of a Party
Where a party fails to appear or produce evidence:
- Claimant fails to submit SoC: Arbitration may be terminated
- Respondent fails to submit SoD: Proceedings continue (not deemed admission)
- Party fails to appear at hearing: Tribunal may proceed based on evidence before it
- Party fails to produce documents: Tribunal may make award on available evidence
2.3.5 Time Limits and Extensions
Section 29A - Time Limit for Arbitral Award
The 2015 Amendment introduced mandatory timelines:
| Category | Time Limit | Extension |
|---|---|---|
| Domestic Arbitration | 12 months from completion of pleadings (Section 23(4)) | 6 months by consent; further by court on sufficient cause |
| International Commercial Arbitration | No statutory limit (endeavour to dispose expeditiously) | N/A |
| Fast Track (Section 29B) | 6 months from tribunal appointment | 6 months by consent |
Consequences of Delay
- Mandate of arbitrator terminates if award not made within time
- Parties may extend time by consent (additional 6 months)
- Beyond that, court extension required under Section 29A(5)
- Court may reduce arbitrator fees for delay-causing conduct
- Court may substitute arbitrator if delay is attributable to them
Arbitrators should issue a procedural timetable at the first hearing working backward from the 12-month deadline. Build in buffer time for unforeseen delays. Monitor timeline actively and seek timely extensions if needed.
Section 29B - Fast Track Procedure
Parties may agree for dispute to be resolved on fast track basis. Features include:
- Decision on documents only (unless hearing requested)
- Single arbitrator unless parties agree otherwise
- Award within 6 months
- Suitable for lower-value disputes or documentary disputes
Key Takeaways
- Equal treatment (Section 18) and procedural flexibility (Section 19) are foundational principles
- Arbitration commences when request is received by respondent (Section 21)
- Seat determines supervisory jurisdiction; venue is physical hearing location
- Tribunal is not bound by CPC or Evidence Act - can determine its own procedure
- Domestic arbitrations must be completed within 12 months (extendable)
- International commercial arbitrations have no statutory time limit
- Default by a party does not prevent tribunal from proceeding
- Fast track procedure: 6 months, documents-only, sole arbitrator