The Lugeon Test: Methodology, Interpretation, and Applications in Geotechnical Engineering

 The arbitration process involves several key stages, from initiating the dispute to the enforcement or potential challenge of an arbitral award. This process is governed primarily by the Arbitration and Conciliation Act, 1996, with specific provisions and rules applied by arbitral institutions like the GCCI-ADRC and state-specific tribunals.

Here is a step-by-step overview of the arbitration process:

1. Existence of an Arbitration Agreement

   • Arbitration typically commences with an arbitration agreement, which is a prerequisite for referring a dispute to arbitration. This agreement binds parties to submit disputes to arbitration, whether these disputes have already arisen or may arise in the future, concerning a defined legal relationship.
   • An arbitration agreement can be in the form of an arbitration clause within a contract or a separate agreement. A reference in a contract to a document containing an arbitration clause can also constitute an arbitration agreement if it's in writing and the reference makes it part of the contract.
   • Even if a works contract with the State Government or a public undertaking in Gujarat does not contain an arbitration clause, disputes must still be referred to the Gujarat Public Works Contracts Disputes Arbitration Tribunal (GPWCDAT).

2. Initiation of Arbitration Proceedings

   • Arbitral proceedings commence on the date a request for the dispute to be referred to arbitration is received by the respondent.
   • A party initiates arbitration by issuing a notice invoking the arbitration agreement, calling upon the other party to appoint an arbitrator in accordance with the agreement.
   • If a specific procedure is required by the arbitration agreement as a condition precedent, it must be followed before invocation. Failure to object to non-compliance without undue delay may result in waiver of the right to object.
   • For conciliation cases handled by GCCI-ADRC, the case is taken up only after 100% of the fees are deposited by any party. If fees are not received within 30 days of notice, the proceedings may be terminated.

3. Appointment of the Arbitral Tribunal

   • Parties are free to determine the number of arbitrators, provided it is an odd number; otherwise, a sole arbitrator is appointed.
   • Institutions like GCCI-ADRC maintain a panel of arbitrators comprising experienced professionals, domain experts, and business leaders. For international arbitrations, the center allows parties to choose experts in substantive law.
   • GCCI preferably appoints sole arbitrators from retired District judges/Advocates for claims up to Rs 2 crore, and retired High Court and Supreme Court Judges for claims above Rs 2 crore.
   • A person approached for appointment as an arbitrator is obligated to disclose in writing any circumstances that could give rise to justifiable doubts about their independence or impartiality, including past or present relationships or interests with parties or the subject matter. This disclosure is continuous throughout the proceedings.
   • Unilateral appointment of an arbitrator by one party is deemed void ab initio due to conflict with Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996. A waiver of this disqualification must be an express agreement in writing.
   • If parties cannot agree on an arbitrator, a court can appoint the arbitral tribunal. The court's power in appointing arbitrators is primarily limited to examining the existence of an arbitration agreement.

4. Jurisdiction and Seat of Arbitration

   • The arbitral tribunal has the power to rule on its own jurisdiction (Kompetenz-Kompetenz principle), which includes determining the existence of a valid arbitration agreement, its proper constitution, and whether the submitted matters align with the agreement.
   • The "seat" of arbitration is crucial as it determines the court with exclusive supervisory control over the arbitration proceedings. If parties have agreed on a seat, courts at that location will have exclusive jurisdiction for challenges against the award. The venue for hearings can change without altering the fixed seat.
   • If there are multiple courts with territorial jurisdiction, the court where the first application under Part-I of the Arbitration and Conciliation Act is filed will have exclusive jurisdiction over all subsequent applications related to that arbitration agreement.

5. Conduct of Arbitral Proceedings

   • The arbitral tribunal is not bound by the Code of Civil Procedure (CPC) or the Indian Evidence Act and can adopt any reasonable procedure consistent with natural justice.
   • The tribunal must treat both parties equally.
   • Oral hearings for evidence or arguments should be held on a day-to-day basis, with adjournments granted only for sufficient cause. Costs, including exemplary costs, may be imposed for undue delays.
   • Statements of claim and defense must be completed within six months from the date the arbitrators receive notice of their appointment.
   • All statements, documents, or information provided by one party to the tribunal must be communicated to the other party.
   • GCCI-ADRC provides various facilities such as air-conditioned courtrooms, presentation and videoconferencing capabilities, status boards for cases, and other amenities like a pantry, restroom, library, and photocopying.

6. Interim Measures

   • Courts can grant interim measures under Section 9 of the Arbitration Act, 1996, before or during arbitral proceedings, or even after an award is made but before its enforcement. These measures aim to protect the parties' interests and ensure the enforceability of the eventual award.
   • The arbitral tribunal also has the power to issue interim orders under Section 17 during the pendency of proceedings. These orders are enforceable as if they were orders of the Court.
   • Interim measures can be ordered to secure the amount in dispute in the arbitration.

7. Arbitrator Fees and Costs

   • Arbitrator fees are structured based on the value of the claim/counter-claim and the type of arbitrator. For instance, a sole arbitrator's lump sum fees range from Rs 50,000/- for claims up to Rs 25 lacs to Rs 1,00,000/- for claims between Rs 1 crore and Rs 2 crore. For higher values or panels, fees are per session with a maximum limit.
   • MSME cases receive a 10% concession on the rates.
   • A "session" typically consists of three hours or a fraction thereof.
   • Fees are exclusive of all applicable taxes (e.g., Service Tax, GST).
   • Administrative charges, hearing room rental, stenography, and other service charges are additional. Hearing room rental charges vary based on the claim value.
   • GCCI-ADRC acts as a facilitator for collecting, disbursing, and accounting fees.
   • If a party fails to pay, the other party may cover the payment. If both fail, the arbitral tribunal may suspend or terminate the proceedings.
   • A minimum of three sitting fees must be deposited in advance with GCCI-ADRC.
   • For claims above Rs 2 crore, a non-effective hearing incurs a Rs 10,000/- charge to the arbitrator, which is not counted as a session.
   • Arbitrators must adhere to the agreed-upon fee structure and cannot unilaterally impose changes. Courts can review excessive arbitrator fees.

8. Making and Delivering the Award

   • The tribunal makes an award or an interim award, providing reasons for its decision.
   • An award should be made within twelve months from the date the arbitral tribunal enters upon the reference. This period can be extended by consent of the parties for an additional six months. The court may grant further extensions for sufficient cause.
   • If delays are attributable to the arbitral tribunal, the court may reduce the arbitrator's fees by up to five percent for each month of delay.
   • The award, including an interim award, is final and binding on the parties, subject to review or revision.

9. Challenge and Enforcement of the Award

   • Recourse against an arbitral award is primarily through an application to a court for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996.
   • The limitation period for filing such an application is three months, with a potential extension of up to 30 days, but no further.
   • Challenges under Section 34 are based on the record of the arbitral tribunal, and generally, new evidence cannot be introduced as a matter of right, to prevent the proceedings from becoming an original trial. The court does not reassess or re-appreciate evidence.
   • Grounds for setting aside include "patent illegality," which means the award is based on no evidence, irrelevant material, ignores vital evidence, or breaches the arbitration statute or fundamental principles of natural justice. The court may only quash the award, not correct its errors.
   • An arbitral award is enforceable as if it were a decree of a civil court. The Act aims for the efficacious enforcement of awards.
   • For awards made under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the buyer can only challenge the award upon depositing 75% of the awarded amount.
   • In cases under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992, if its provisions are inconsistent with the Arbitration and Conciliation Act, 1996, the provisions of the Gujarat Act cease to apply, and proceedings may be transferred to the Tribunal.

This step-by-step process highlights the structured approach to dispute resolution through arbitration in India, emphasizing legal frameworks, institutional support, and judicial oversight.