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Report No. 76

Chapter 13

Summary of Recommendations

The recommendations made in this Report for amendment of the Arbitration Act, 1940, may be briefly summarised as follows:-

(1) In section 2(a), an Explanation should be inserted to the effect that where the members of any association agree to abide by the rules of the association which contain provisions for arbitration, the members shall be deemed to agree with each other for arbitration.1

(2) Another Explanation may be added2 to the same clause to the effect that where an arbitration agreement provides for the submission of future differences to arbitration, fresh consent of the parties to the arbitration should not be required when differences actually arise.

(3) Section 6, sub-section (1), should be revised by replacing the present phrase "either as respects the deceased or any other party with the words "either as respects the deceased or as respects any other party".3

1. Para. 2.8, supra.

2. Para. 2.21, supra.

3. Para. 3.9, supra.

(4) Section 6(2) should be revised as follows:-

"the authority of an arbitrator shall not be terminated by the death of any party to the agreement."1

(5) A new section-section 8A-should be inserted to provide for the power of the court to supply the vacancy in case of arbitrator or umpire appointed by the court itself.2

(6) Section 12(1) should be verbally amended, as recommended.3

1. Para. 3.11" supra.

2. Para. 3.29, supra.

3. Para. 3.42, supra.

(7) In section 13, a new clause should be inserted as follows1:-

"Section 13(aa) proceed ex parte against any party who, without sufficient cause and after due notice, fails to attend personally or through agent."

(8) A new section 13A should be inserted to deal with the powers of the arbitrators or umpire to award interest, as recommended.2

(9) In section 14, two new sub-sections-sections 14(2A) and 14(2B)-should be inserted as recommended,3 to cover cases of death of the arbitrator after making the award but before filing it and similar situations.

1. Para. 4.3, supra.

2. Para. 4.30, supra.

3. Para. 4.42, supra.

(10) In section 16(1), a new clause (d) should be added as followsl1:-

"(d) where for any other reason the court considers that in the interests of justice it should, instead of setting aside the award, order such remission."

(11) Section 20(2) should be revised as recommended,2 so that two situations in regard to filing an application are dealt with separately.

(12) Section 21 and the Heading of the Chapter should be revised as recommended,3 to include appeals within its scope.

(13) Section 24 should be revised as recommended4, by the addition of the word "appeal".

(14) In section 28, a proviso should be inserted5 forbidding in respect of the time for making the award an extension beyond one year, except for special and adequate reasons to be recorded.

(15) In section 30, an Explanation should be inserted as recornmended,6 to provide that the expression "or is otherwise invalid" includes the ground that there was no valid agreement or no valid reference to arbitration.

(16) New section 30A, should be inserted7 to provide that no arbitrator or umpire can be compelled to give evidence as to the reasons for his award.

(17) Section 32 should be re-numbered as sub-section (1), and there after sub-sections (2) and (3) should be inserted as recommended,8 to provide that an award shall not be pleaded in defence except in certain specified cases.

(18) In section 33, after the words "any party", the word "including one alleged to be a party" should be added.9

(19) From section 34, the words "or taking other steps in the proceedings" should be deleted.10

(20) In section 34, an amendment should be made as to suits brought under Order 37 of the Code of Civil Procedure, by substituting the word recommended.11

(21) In section 37(1), reference to the Limitation Act, 1963 should be substituted.12

(22) In section 37, sub-sections (3) and (5), reference to the Limitation Act, 1963, should be substituted in place of the old Act. Further, new sub-sections (6) and (7) should be inserted as recommended.13

(23) In section 38, new sub-sections (4), (5), (6), (7) and (8) should be inserted,14 so as to prevent disputes about the amount of fees of the arbitrator and as to the time of payment.

(24) Section 42(a) should be amended15 to provide for the delivery of notice to duly empowered agent, in certain situations.

(25) In section 47, the proviso should be replaced as recommended,16 to deal with the effect of arbitrations entered into otherwise than under the Act.

(26) In the First Schedule, a new paragraph 2A should be added17 to deal with the powers of arbitrators or umpire to act on evidence recorded by their predecessors, and also to provide that proceedings held before arbitrators shall be deemed to be proceedings before the umpire.

(27) In the First Schedule, paragraph 3, the periods 18should be extended to six months and an Explanation be added defining the expression "entering on reference".

(28) In the First Schedule, paragraph 5, a similar amendment should be made,19 defining the above expression and the period be increased to four months.

(29) In the First Schedule, paragraph 6 should be recast as recommended.20

(30) In the First Schedule, paragraph 7 should be amended by adding an Explanations 21to deal with cases where rules of an association provide for appeal.

New Delhi,

Dated: 9th November, 1978.

H.R. Khanna, Chairman.

S.N. Shankar, Member.

T.S. Krishnamoorthy Iyer, Members.

P.M. Bakshi, Member-Secratary

1. Para. 5.19, supra.

2. Para. 6.2, supra.

3. Para. 7.3, supra,

4. Para. 7.6, supra.

5. Para. 8.3, supra.

6. Paras. 5.23 and 8.12, supra

7. Para. 8.15, supra.

8. Para. 8.30, supra.

9. Para. 8.34, supra.

10. Para. 8.40, supra.

11. Para. 8.41, supra.

12. Para. 8.47 supra.

13. Para. 8.58, supra.

14. Para. 8.59, supra.

15. Para. 10.5, supra.

16. Paras. 2.6 and 10.13, supra.

17. Para. 11.4, supra.

18. Para. 11.24, supra.

19. Para. 11.28, supra.

20. Para. 11.30, supra.

21. Para. 11.32, supra. 9. 10.



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