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Arbitration

ARBITRATION

Arbitration is a private dispute resolution process where one or more impartial arbitrators are appointed to hear the parties’ arguments and evidence before rendering a binding decision, known as an award. It offers a quicker, cost-effective, and confidential alternative to litigation, especially suited for commercial disputes. The legal framework for arbitration in India is provided by the Arbitration and Conciliation Act, 1996.

Role of an Arbitrator

An arbitrator is a neutral third party appointed by the disputing parties—or by an institution under agreed rules—to hear and decide a dispute outside the traditional court system. The arbitrator functions much like a judge but in a more flexible and private setting. Their role involves evaluating evidence, hearing arguments, and ultimately delivering a binding decision, known as an arbitral award. Arbitrators ensure fairness, maintain procedural integrity, and apply relevant laws or contractual terms to resolve the matter efficiently. Their authority stems from the agreement between the parties and the applicable arbitration law, making arbitration a trusted alternative for commercial and civil disputes.

Provisions of Arbitration and Conciliation Act, 1996

The enactment of Arbitration and Conciliation Act, 1996, has imparted a greater finality to the Arbitration and Conciliation proceedings which has, consequently, found favour with a large number of leading companies which are the members of the Chamber and whose commercial disputes have been arbitrated satisfactorily. The Chamber has a Panel of Arbitrators comprising of eminent senior industry professionals, retired judges of the High Courts and other Courts, and others who possess the requisite expertise.

Arbitration Process

Case Referred

Dispute sent to the Chamber for arbitration.

Legal Brief Prepared

Legal Department prepares a case summary.

Notice Issued

Both parties receive a notice of arbitration initiation.

Advance Payment & Form Submission

Each party submits fees and fills Form ‘A’.

Committee Review

The Arbitration & Conciliation Committee selects an Arbitrator from a confidential panel.

Arbitrator’s Consent

Appointed Arbitrator’s approval is obtained.

Proceedings Begin

Arbitration proceedings are conducted at the Chamber.

Support Provided

Senior officer assists; secretarial support & computerized records are available.

Notes

  • For more than one Arbitrator, the deposit payable will be proportionate to the number of Arbitrators.
  • The processing charges will be non-refundable and the administrative charges will be paid irrespective of whether the case is finalized or not.
  • The entire arbitration charges are payable to the Chamber by each party to the dispute on equal sharing basis. In the event of either of the parties to the dispute not honouring their commitments, the other party will have to pay the entire amounts for the deposit, administrative and other charges.
  • In the event of the arbitration proceedings during a particular meeting lasting beyond three hours, additional charge for one meeting will be payable.

Arbitration Clause Recommended by Bombay Chamber

The Bombay Chamber of Commerce and Industry recommends to all parties desirous of making reference to Arbitration of the Bombay Chamber, the inclusion of the following arbitration clause in their contracts/agreements:

“All disputes or differences whatsoever arising between the parties out of or relating to the construction, meaning or operation or effect of this contract / agreement or breach thereof shall be settled by arbitration in accordance with the Rules of Arbitration and Conciliation of the Bombay Chamber of Commerce & Industry and the Award made in pursuance thereof shall be binding on the parties”.

Bombay Chamber’s Rules of Arbitration and Conciliation

On the basis of the Arbitration and Conciliation Act, 1996, the Bombay Chamber has made its Rules for Arbitration and Conciliation.

These can be obtained from the Chamber’s Office on payment of Rs.100/- only.

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Arbitration facilitation

The arbitration of disputes arising from commercial transactions, where parties willingly consent to abide by the Chamber’s judgment and decision, is enshrined within the ‘objects clause’ of the Memorandum of the Bombay Chamber. Before initiating the arbitral process, each reference to the Bombay Chamber undergoes a thorough examination based on specific parameters to ensure a fair and effective resolution.

Arbitration clause in agreements

The presence of an arbitration agreement is an essential prerequisite for exercising jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996. It is advisable for parties to include an arbitration clause in their respective commercial and service agreements to facilitate the resolution of disputes arising from breaches of contractual obligations.

Provisions of Arbitration and Conciliation Act, 1996

The enactment of the Arbitration and Conciliation Act, 1996, has significantly enhanced the finality of arbitration and conciliation proceedings, thereby earning the confidence of numerous leading companies affiliated with the Chamber. These organisations have had their commercial disputes resolved satisfactorily through arbitration. The Chamber maintains a distinguished Panel of Arbitrators, consisting of eminent senior industry professionals, retired judges from the High Courts and other judicial bodies, as well as experts possessing the requisite proficiency in the field.

Arbitration process

  1. When a dispute is referred to the Chamber for arbitration, the designated officer conducts a thorough review and issues a formal letter to the Claimant requesting an advance payment towards the arbitration costs. A notice is also sent to the Respondents, informing them of the initiation of arbitration proceedings, requesting an advance payment towards the costs, and seeking their concurrence for the appointment of a mutually agreeable Arbitrator in accordance with the Chamber’s Rules of Arbitration and Conciliation.                             
  2. Once the consent of the appointed Arbitrator is obtained, the arbitration proceedings are initiated. Hearings are conducted either at the Chamber’s premises or virtually, subject to mutual agreement between the parties. A senior Chamber officer oversees the proceedings and provides assistance to the Arbitral Tribunal. Additionally, secretarial support services, including computerised record-keeping, are made available at a nominal cost.

Notes:

  1.  If more than one Arbitrator is appointed, the deposit payable will be proportionate to the number of Arbitrators.
  2. Processing charges are non-refundable, and administrative charges must be paid regardless of whether the case reaches a final resolution.
  3.  Arbitration costs are to be shared equally by both parties.  However, if one party fails to fulfil its financial obligations, the invoking party will be required to cover the full amount of the deposit, administrative charges, and other applicable fees, as per the prevailing fee schedule.
  4. If an arbitration session exceeds three hours, an additional fee will be levied for the extended duration.

Arbitration clause recommended by Bombay Chamber

The Bombay Chamber of Commerce and Industry advises all parties intending to refer disputes to its arbitration mechanism to incorporate the following arbitration clause in their contracts or agreements:

“Any disputes or differences whatsoever arising between the parties, whether concerning the interpretation, application, operation, or effect of this contract / agreement, or any breach thereof, shall be settled / resolved through arbitration in accordance with the Rules of Arbitration and Conciliation of the Bombay Chamber of Commerce & Industry and the Award made in pursuance thereof shall be final and binding upon the parties.”

Bombay Chamber’s Rules of Arbitration and Conciliation

In alignment with the Arbitration and Conciliation Act, 1996, and its subsequent amendments, the Bombay Chamber has undertaken periodic revisions to its Rules for Arbitration and Conciliation as deemed necessary to ensure efficiency, fairness, and compliance with evolving legal standards.

Contact: Mr. R. Ganesh.
Tel: 022-61200213.
Email: Ganesh.R@bombaychamber.com

Rules of Arrangement

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Schedule of Charges for Arbitration

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Arbitration Enquiry

    Dispute resolution & request for empanelment

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