Professional Documents
Culture Documents
Conciliation and
Arbitration Aspects:
Role of Company
Secretary in the said
process
Kavita
Jha,
Ms. Ms.
Kavita
Jha,
Principal
Associate,
Vaish
Advocate,
Vaish
Associates
https://www.nclt.in
Associates
Mediation and
Conciliation
and
Companies Act, 2013
COMPANIES ACT,
2013:
The Central
Gov. shall442
maintain a
Section
I.
ALTERNA
TIVE
DISPUTE
Introduction
ADR refers to the other ways that the
parties can use to settle civil
disputes with the help of an
independent third party and without
the need for a formal court hearing.
The main types of ADRs are:
a.Arbitration
b.Negotiations
b.Mediation
c.Conciliation
NEGOTIATION
Negotiations occur when two
parties set forth the type of remedy
each desires, and try to reach some
sort of an agreement that satisfies
everyone involved. In the best-case
scenario, negotiations are done
between the parties and both come
to a happy agreement.
Once agreement has been reached,
the parties will create a written
CONCILIATION
Conciliation is limited to
encouraging the parties to discuss
their differences and to help them
develop their own proposed
solutions.
It is voluntary, flexible, confidential
and interest based process. the
parties seek to reach an amicable
dispute settlement with the
assistance of the conciliator, who
CONCILIATION
Section related to conciliation:
i. Commencement of conciliation proceeding u/s 62
of the Act.
ii.After proceedings S.71 cooperation of parties with
conciliator.
iii.S.76 termination of conciliation proceeding.
Mediation
The term mediation broadly refers to
any instance in which a third party
helps others reach agreement. more
specifically, mediation has a structure,
timetable and dynamics that
ordinary negotiation lacks.
The process is private and
confidential, possibly enforced by law.
participation is typically voluntary. the
mediator acts as a neutral third party
and facilitates rather than directs the
TYPES OF DISPUTE
SUITABLE FOR
MEDIATION
Mediation is suitable
for resolving a
wide range of
disputes including:
ROLE OF MEDIATOR/
CONCILIATOR UNDER
The mediator/conciliator
shall
attempt to
SECTION
442
facilitate the
following:
voluntary resolution of the dispute(s) by the
parties,
communicate the view of each party to the
other,
assist them in identifying issues,
reducing misunderstandings,
clarifying priorities,
exploring areas of compromise and generating
options in
an attempt to resolve the dispute(s),
emphasizing that it is
An ounce of mediation is
worth a pound of
arbitration and a ton of
litigation! Joseph
Grynbaum
II.
ARBITRATIO
N
Introduction
Arbitration: As per Halsbury s Laws
of England
It means reference of a dispute
between not less than two parties, for
determination, after hearing both sides
in a judicial manner, by a person or
persons other than a court of
competent jurisdiction.
Object of Arbitration
Settlement of dispute in an
expeditious, convenient, inexpensive
Evolution of Arbitration
Act Position (1940 Act): This Act was
The Pre-1996
largely premised on mistrust of the arbitral process
and afforded multiple opportunities
to litigants to approach the court for intervention.
Coupled with a sluggish judicial system, this led to
delays rendering arbitrations inefficient and
unattractive.
Part I Domestic
Arbitration
Part II Enforcement of
foreign awards
Part III Conciliation
Procedures
Part IV Supplementary
In spite of Arbitration
being an effective tool
of dispute resolution,
there were various
shortcomings which
were required to be
resolved.
Arbitration and
Conciliation
In an attempt to make arbitration a preferred
(Amendment)
Act,
mode of
settlement of commercial
disputes and
2015
making India a hub of international
Amendments
made in
2015
The Law Commission of India had
brought out Report No. 246 in
August 2014,
recommending
various
amendments to the Arbitration &
Conciliation Act, 1996, which
have been incorporated vide
Issues resolved by
Arbitration and
Conciliation
(Amendment) Act,
2015
1. Appointment of
ArbitratorSection
11 of Arbitration and Conciliation
Act, 1996
administrative
power
2. Independence of
Arbitrator
Neutrality
of arbitrators, viz. their independence
and
impartiality, is critical to the entire process.
Independence of
Section
12(1) of Arbitration and Conciliation Act, 1996
Arbitrator
expected Arbitrator to make disclosure of his possible
connection or interest
3. FEES
OF
ARBITRA
Unilateral and disproportionate fixation
of fees by several arbitrators.
TORS
4. CONDUCT OF
ARBITRAL
Commission had
proposed addition of the
PROCEEDINGS
second proviso to section 24 (1) to the Act,
7. JUDICIARY AND
ARBITRATION
Judicial intervention in
arbitration
proceedings
Judicial intervention in arbitration
10.
Public Policy:
Solution- 2015
Practically, the
Court had become appellate
Amendment
authority over
the arbitral tribunal.
Public Policy:
Solution- 2015
Amendment
Further, following sub-clause was inserted:
Enforcement of arbitral
awards
12. JUDICIAL
INTERVENTIONS IN
Section
2(2) of the Arbitration
and Conciliation Act,
FOREIGN
SEATED
1996 (the Act), contained in Part I of the Act, states
that ARBITRATIONS
This Part shall apply where
the place of
arbitration is in India.
JUDICIAL INTERVENTIONS IN
FOREIGN
SEATED ARBITRATIONS
The above issues
have
been
addressed
by
(contd.)
way of
adding a proviso to sections 2(2) of the
Act:
Provided that subject to an agreement to
the contrary, the provisions of sections 9,
27, and 37(3)(1)(a) shall also apply to
international commercial arbitration, even if
the place of arbitration is outside India, and
an arbitral award made or to be made in
such place is enforceable and recognize
under the provisions of Part II of this Act.
Other Amendments
Interest on amount payable under arbitration award
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. The expression current
rate of interest shall have the same meaning as
assigned to it under section 2(b) of the Interest Act,
1978. The earlier provision was for payment of interest
@18%.
Cost of Arbitration
Section 31A of Arbitration and Conciliation Act, 1996 as
inserted by Amendment Act, 2015 contains detailed
guidelines on determination and award of costs to the
successful parties.
As per provisions of section 31A(5), an agreement to
pay whole or part of costs of arbitration in any even
shall be valid only if such agreement is made after
dispute has arisen.
Other Amendments
Appeal if Court refuses to refer parties to
arbitration
Section 37(1)(a) of Arbitration and Conciliation
Act, 1996 as inserted by the Amendment Act,
2015 now provides that appeal can be filed
before appellate Court if the Court refuses to
refer parties to arbitration.
There was no parallel provision earlier.
Enforcement of foreign awards and Geneva
convention awards
Explanation to Section 47 inserted by the
Amendment Act, 2015 now provides that only High
Court can be approached for enforcement of
foreign award.
III.
Company
Secretary &
ADR
ROLE OF A COMPANY
SECRETARY
Role Of a Company
Secretary As a
or Conciliator
The Mediator
Central Government
is to maintain
a
panel of experts to be called as Mediation
and Conciliation Panel for mediation
pendency
of any
proceedings
between parties
during the
Government
Tribunal or the Appellate
before the or the
Central
Tribunal
under the new law.
Rules
in respect of Section 442 provide
for
qualifications for being appointed in the
Mediation and Conciliation Panel and
states: Rule 28.1(g): Professionals with at least
fifteen years of continuous practice as
appointed
in
the Cost
Chartered Accountant
or
Accountant or Company Secretary
panel.
Role Of a Company
Secretary As a
Mediator or Conciliator
Advantages of a Company
Secretary
in the secretaries
Arbitration
process
Company
are not only
CONCLUSION
Thus, CS can act as arbitrators and the society
can get the
benefit of their knowledge and
expertise in commercial and legal matters.
The Institute can also make representations to the
Government through proper channels so as to
encourage appointment of company secretaries
as arbitrators.
This is possible only after an awareness is created
among the
society about this new role of
company secretaries. Apart from the Institute,
even the company secretaries in practice can
help in creating this awareness in the society. If
this happens, the day is not far when even the
Chief Justices of the various High Courts will
appoint company secretaries as arbitrators under
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