Mediation and Conciliation and Companies Acts, 2013 - NCLT

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Negotiation, Conciliation and Arbitration
Aspects Role of Company Secretary in the said
process
Ms. Kavita Jha, Principal Associate,
Vaish Associates Advocates
Ms. Kavita Jha, Advocate, Vaish
Associates Advocates
https//www.nclt.in/
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Mediation and Conciliation and Companies Act, 2013
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COMPANIES ACT, 2013
Section 442

• The Central Gov. shall maintain a panel of
  experts to be called as Mediation and
  Conciliation Panel for mediation between
  parties during the pendency of any proceedings
  before the Central Govt. or the Tribunal or the
  Appellate Tribunal under the new law.
• The Panel shall dispose of the matter referred
  to it within a period of 3 months from the date
  of reference.

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I. ALTERNATIVE DISPUTE RESOLUTION
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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
• Arbitration
• Negotiations
• Mediation
• Conciliation

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Salem Bar Association v. Union of India
(AIR 2005 SC 3353)

• If the Court for one reason or the other cannot
  itself effect a
• compromise, the only option it would have is to
  refer the parties to conciliation etc.
• In the historic judgement in Salem Bar
  Association v. Union of India, the Supreme Court
  has directed the constitution of a committee to
  frame draft rules for mediation under S. 89(2)(d)
  of the CPC. Consequently, the Committee presided
  over by Mr Justice M. Jagannadha Rao, Chairman
  of the Law Commission of India has prepared a
  comprehensive code for the regulation of ADR
  process initiated under S 89 of CPC. which
  consists of two parts---Part I ADR Rules 2003
  consisting of the procedure to be followed by
  the parties and the Court in the matter of
  choosing the particular method of ADR and Part
  II Mediation Rules, 2003 consisting of draft
  rules of mediation under section 89(2)(d) of the
  Code of Civil Procedure.

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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 statement to reflect the
  terms of the negotiated assets.

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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 acts as a
  neutral third party.

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CONCILIATION

• Section related to conciliation
• Commencement of conciliation proceeding u/s 62
  of the Act.
• After proceedings S.71 cooperation of parties
  with conciliator.
• S.76 termination of conciliation proceeding.
• What cannot be referred to conciliation
• Matters of Criminal nature
• Illegal transactions
• Matrimonial matters like divorce suit etc.
• What can be referred to conciliation?
• Matters of Civil Nature
• Breach of Contract
• Dispute of Movable or Immovable Property

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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
  process.

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TYPES OF DISPUTE SUITABLE FOR MEDIATION

• Mediation is suitable for resolving a wide range
  of
• disputes including
• Business and Commercial
• Partnership
• Family
• Workplace
• Personal injury
• Industrial and Construction

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COMPANIES ACT, 2013 Need for Mediation
and Conciliation

• Mediation is assisted negotiation. It is a
  flexible process conducted confidentially in
  which a neutral party i.e. the mediator, manages
  the interaction between disputing parties to
  help them come to a negotiated settlement of the
  dispute. The disputants and not the mediator have
  ultimate control over the decision to settle and
  terms of resolution. The final terms of
  settlement are recorded in the form of a binding
  agreement.
• The process is time bound and cost effective.
• Confidentiality of the entire process and all
  concessions made by parties during negotiation
  is maintained. Since the parties mutually agree
  to the settlement terms, probability of
  litigation over settlement is also low.

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ROLE OF MEDIATOR/ CONCILIATOR UNDER SECTION 442

• The mediator/conciliator shall attempt to
  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
• the responsibility of the parties to take
  decision which
• affect them.
• He shall not impose any terms of settlement on
  the parties.
• However, if both the parties consent, he may
  impose such
• terms and conditions on the parties for early
  settlement of
• the dispute.

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An ounce of mediation is worth a pound of
arbitration and a ton of litigation! Joseph
Grynbaum
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II. ARBITRATION
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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 and private manner to
  prevent it fro, becoming a subject of future
  litigation.

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Types of Arbitration Practice - Institutional
Arbitration and Ad Hoc Arbitration
AD HOC ARBITRATION INSTITUTIONAL ARBITRATION
A. The procedures have to be agreed upon by the
parties and the arbitrator. This requires co-
operation between the parties and involves a lot
of time
A. In institutional arbitration, the procedural
rules are already established by the institution.
The fees are also fixed and regulated under
rules of the institution.
B. Infrastructure facilities for conducting
arbitration pose a problem and parties are often
compelled to resort to hiring facilities of
expensive hotels, which increase the cost of
arbitration. Other problems include getting
trained staff and library facilities for ready
reference.
B. In contrast, the institution will have ready
facilities to conduct arbitration, trained
secretarial/administrative staff, as well as
library facilities.
C. No such panel per se is available here.
C. The arbitral institutions maintain a panel of
arbitrators along with their profile. The parties
can choose the arbitrators from the panel. Such
arbitral institutions also provide for
specialized arbitrators.
Inspite of the numerous advantages of
institutional arbitration over ad hoc
arbitration, there is currently an overwhelming
tendency in India to resort to ad hoc arbitration
mechanisms.
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Evolution of Arbitration Act

• The Pre-1996 Position (1940 Act) This Act was
  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.
• The 1996 Act The 1996 Arbitration Act based on
  the UNCITRAL on International Commercial
  Arbitration and the Arbitration Rules of the
  United Nations Commission on International Trade
  Law 1976 was enacted.
• The Statement of Objects and Reasons to the Act
  said that the old Act had become outdated and
  there was need to have an Act more responsive
  to contemporary requirements. Amongst the main
  objectives of the 1996 Act were to minimize the
  supervisory role of courts in the arbitral
  process and to provide that every final
  arbitral award is enforced in the same manner as
  if it were a decree of the Court.

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Arbitration and Conciliation Act, 1996

• Part I Domestic Arbitration
• Part II Enforcement of foreign awards
• Part III Conciliation Procedures
• Part IV Supplementary
• Provisions

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In spite of Arbitration being an effective tool
of dispute resolution, there were various
shortcomings which were required to be resolved.
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Issues faced under 1996 Act

• High costs and delays Thus, making it no better
  than either
• the earlier regime which it was intended to
  replace.
• After the award, a challenge under section 34
  makes the award in executable and such petitions
  remain pending for several years.
• Proceedings in arbitrations are becoming a
  replica of court
• proceedings.
• Appointment and independence of Arbitrators.

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Arbitration and Conciliation
(Amendment) Act, 2015

• In an attempt to make arbitration a preferred
  mode of
• settlement of commercial disputes and making
  India a hub of international commercial
  arbitration, the President of India on 23rd
  October 2015 promulgated an Ordinance
  ("Arbitration and Conciliation (Amendment)
  Ordinance, 2015) amending the Arbitration and
  Conciliation Act, 1996.
• Prior to the amendment of the Indian Arbitration
  and Conciliation Act 1996 (the Act), Indias
  journey towards becoming an international
  commercial hub that could rival Singapore and
  London was hampered by a largely ineffective Act
  and an arbitration regime that was afflicted
  with various problems including those of high
  costs and delays.
• To address these issues the Arbitration and
  Conciliation Act, 2015 was introduced.

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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 Arbitration and Conciliation
(Amendment) Act, 2015
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Issues resolved by Arbitration and Conciliation
(Amendment) Act, 2015
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1. Appointment of Arbitrator-
administrative power

• Section 11 of Arbitration and Conciliation Act,
  1996 provided for appointment of Arbitrator by
  Chief Justice or any person or institution
  designated by him. Now, the powers are with High
  Court or Supreme Court. Thus, now, any bench of
  High Court/ Supreme Court can appoint
  Arbitrator.
• Section 11(6A) has been inserted to provide that
  the Supreme Court or High Court, while
  considering application for appointment of
  arbitrator, shall examine only existence of
  arbitration agreement (and not merits of the
  case).
• Section 11(6B) has been inserted to clarify that
  appointment of Arbitrator by any person or
  institution nominated by Supreme Court or High
  Court will not be considered as delegation of
  judicial powers.
• Thus, appointment of Arbitrator is only an
  administrative matter.

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2. Independence of Arbitrator

• Neutrality of arbitrators, viz. their
  independence and
• impartiality, is critical to the entire process.
• Test for neutrality is set out in section 12(3)
  which provides
• An arbitrator may be challenged only if (a)
  circumstances exist that give rise to
  justifiable doubts as to his independence or
  impartiality
• The balance between procedural fairness and
  binding nature of these contracts, appears to
  have been tilted in favour.
• Large scale amendments were suggested to address
  this fundamental issue of neutrality of
  arbitrators particularly to sections 11, 12 and
  14 of the Act.
• Further, the Commission had proposed the
  requirement of
• having specific disclosures by the arbitrator.

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Independence of Arbitrator

• Section 12(1) of Arbitration and Conciliation
  Act, 1996 expected Arbitrator to make disclosure
  of his possible connection or interest
• However, the section did not specify any
  criteria.
• Now, fifth schedule has been inserted specifying
  grounds to guide on which
• independence and impartiality of Arbitrator can
  be doubted.
• Section 12(5) also inserted by Amendment Act,
  2015, which provides that if arbitrator has
  interest ( direct or indirect) as specified in
  schedule seven of the Arbitration and
  Conciliation Act, 1996, he cannot be appointed as
  Arbitrator, unless both parties agree in
  writing, after dispute has arisen.
• Thus, a mere clause in Arbitration Agreement
  about appointment of
• arbitrator of choice of one of the parties is not
  sufficient.
• This is a very good provision. The reason is
  that, at the time of contract, one of the
  parties is usually in dictating position and
  other party has practically no option to sign on
  dotted lines.

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3. FEES OF
ARBITRATORS

• Unilateral and disproportionate fixation of fees
  by several arbitrators.
• The subject of fees of arbitrators has been the
  subject of the lament of the Supreme Court in
  Union of India v. Singh Builders Syndicate,
  (2009) 4 SCC 523.
• Commission had recommended a model schedule of
  fees and has empowered the High Court to frame
  appropriate rules for fixation of fees for
  arbitrators and for which purpose it may take
  the said model schedule of fees into account.

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• The model fees payable to Arbitrator have been
  specified in Fourth Schedule inserted to
  Arbitration and Conciliation Act, 1996 vide 2015
  amendment. The fee varies between Rs. 45,000 to
  Rs. 30 lakhs depending on the sums in dispute.
• Section 11(14) inserted by Amendment Act, 2015
  For the purpose of determination of the fees of
  arbitral Tribunal, the High Court may frame such
  rules as may be necessary, after taking into
  consideration the rates specified in the Fourth
  Schedule.

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4. CONDUCT OF ARBITRAL
PROCEEDINGS

• Commission had proposed addition of the second
  proviso to section 24 (1) to the Act, which is
  intended to discourage the practice of frequent
  and baseless adjournments, and to ensure
  continuous sittings of the arbitral tribunal for
  the purposes of recording evidence and for
  argument.
• Proviso to section 24(1) of Arbitration and
  Conciliation Act,
• 1996 inserted by Amendment act, 2015.
• Hearing of Arbitrator Tribunal should be on day
  to day basis
• without adjournment.
• If any party seeks adjournment without sufficient
  cause, costs including exemplary costs can be
  imposed on him - - proviso to section 24(1) of
  Arbitration and Conciliation Act, 1996 inserted
  by Amendment act, 2015.

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5. Time Limit for making awards

• Section 29A inserted by Amendment Act, 2015.
• The Arbitral tribunal shall make Arbitration
  Award
• within 12 months from date of reference.
• The period can be extended by the parties upto
  six months by mutual consent.
• Fees payable to Tribunal can be reduced upto 5
  for
• each month of delay.
• If award is not made within that period, the
  mandate of arbitrator terminates.
• However, court can further extend the mandate on
• suitable terms and conditions.
• In fact, now Arbitrator, while giving declaration
  under section 12(1) of the Act has to state
  whether he has sufficient time to complete
  assignment within 12 months.

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6. Fast track procedure for arbitral award

• If both parties agree in writing, the arbitral
• tribunal can follow fast track procedure.
• Decision will be on basis of written pleadings,
• documents and submissions.
• Oral hearing will be only to clarify certain
  points. Technical formalities for oral hearing
  may be dispensed with by arbitral tribunal.
• Award shall be made within six months section
  29B of Arbitration and Conciliation Act, 1996
  inserted by Amendment Act, 2015.

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7. JUDICIARY AND ARBITRATION

• It is thought in some quarters that judicial
  intervention is anathema to arbitration, and
  this view is not alien to a section of the
  arbitration community even in India. The
  Commission however, does not subscribe to this
  view. The Commission recognizes that the
  judicial machinery provides essential support
  for the arbitral process. The paradox of
  arbitration, as noted by a leading academic on
  the subject, is that it seeks the co-operation
  of the very public authorities from which it
  wants to free itself.
• The Commission has strived to adopt a middle path
  to find an appropriate balance between judicial
  intervention and judicial restraint.

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Judicial intervention in arbitration proceedings

• Judicial intervention in arbitration proceedings
  adds significantly to the delays in the
  arbitration process and ultimately negates the
  benefits of arbitration
• Dedicated benches for arbitration related cases
  eg. Delhi High
• Court has a separate bench.
• Amendment in section 11 Delegate the power of
  appointment (being a non-judicial act) to
  specialized, external persons or institutions.
• Amendment to section 11 (7) made providing that
  decisions of the High Court/ Supreme Court
  (regarding existence/nullity of the arbitration
  agreement) are final where an arbitrator has
  been appointed, and as such are non-appealable.

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Judicial intervention in arbitration proceedings
(contd..)

• section 11 (13) was inserted, which requires the
  Court to make an endeavor to dispose of the
  matter within sixty days from the service of
  notice on the opposite party.
• Sections 34 (6) inserted which requires that an
  application under those sections shall be
  disposed off expeditiously and in any event
  within a period of one year from the date of
  service of notice
• New sub-clause (2A) inserted to section 23 of the
  Act in order to ensure that counter claims and
  set off can be adjudicated upon by an arbitrator
  without seeking a separate/new reference by the
  respondent, provided that the same falls within
  the scope of the arbitration agreement

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9. SCOPE AND NATURE OF PRE- ARBITRAL JUDICIAL
INTERVENTION

• The Act recognizes situations where the
  intervention of the Court
• is envisaged at the pre-arbitral stage, i.e.
  prior to the constitution of the arbitral
  tribunal, which includes sections 8, 9, 11 in the
  case of Part I arbitrations and section 45 in
  the case of Part II arbitrations.
• Supreme Court in Shin Etsu Chemicals Co. Ltd. v
  Aksh Optifibre, (2005) 7 SCC 234, (in the
  context of section 45 of the Act) ruled in
  favour of looking at the issues/controversy only
  prima facie.
• Sections 8 and 11 has been amended restricting
  the scope of the judicial intervention only to
  situations where the Court/Judicial Authority
  finds that prima facie no valid arbitration
  agreement exists.

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10. SETTING ASIDE OF DOMESTIC AWARDS AND
RECOGNITION/ENFORCEMENT OF

• FOREIGN AWARDS
• Section 34 of the Act deals with setting aside a
  domestic award and a domestic award resulting
  from an international commercial arbitration
  whereas section 48 deals with conditions for
  enforcement of foreign awards. The Act, as it is
  presently drafted, treats all three types of
  awards as same.
• The legitimacy of judicial intervention in the
  case of a purely domestic award is far more than
  in case of other awards.
• Therefore, Section 34 (2A) was added, to deal
  with purely domestic awards, which may also be
  set aside by the Court if the Court finds that
  such award is vitiated by patent illegality
  appearing on the face of the award.
• In order to provide a balance and to avoid
  excessive intervention, it is clarified in the
  proposed proviso to the proposed section 34 (2A)
  that such an award shall not be set aside
  merely on the ground of an erroneous application
  of the law or by re-appreciating evidence.

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Public Policy- Section 34

• Object of the Act Ensure speedy disposal with
  minimum court intervention.
• Section 34(2)(b)(ii) provides that court can set
  aside an arbitral award if the court finds that
  the arbitral award is in conflict with the
  public policy of India. Similarly, section
  48(2)(b) provides same in case of foreign
  arbitral awards.
• Challenge The term public policy is not
  defined and under UNCITRAL Model (from where
  sec. 34 is derived), the courts were supposed to
  act as Courts of Review and not Courts of
  Appeal.
• However, over the period a very wide
  interpretation has been given to the above term.

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Public Policy- Judicial Interpretation

• Supreme Court in Renusagar Power Co. Ltd. vs.
  General Electric Co. (1994 SCC supp. (1) 644
  gave narrow interpretation to term public
  policy.
• Subsequently, SC in ONGC Ltd. vs. Saw Pipes Ltd.
  (2003 5 SCC 705) expanded its definition to
  include cases of patent illegality.
• Criticism Eminent jurist/ Advocate Fali Nariman
  adversely commented on above judgment.
• International view Enforcement of foreign awards
  is regulated by New York Convention (article
  V(2)(b) and same was incorporated in section 48
  of the Act and so Act should be interpreted in
  consonance with the objectives of NYC that is
  that the term public policy must be
  construed narrowly.

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Public Policy- Judicial Interpretation (contd..)

• This international view was reflected in Delhi HC
  decision in Glencore Grain Rotterdam BV vs.
  Shivnath Rai Harnarain (India) Co. 2008 94 ARB
  LR 497 (Delhi).
• However, SC in Phulchand exports Ltd. v OOO
  Patriot (2011 11 SCALE 475) followed the Saw
  Pipes view of expanded interpretation.
• Thereafter, SC overruled above decision in Sgri
  Lal Mahal Ltd. vs. Progetto Grano Spa (2014) 2
  SCC 433 following the narrow interpretation in
  Renusagar decision.
• Accordingly, 246th report provided for the same
  narrow approach by inserting an explanation to
  section 23((2)(b)(ii) and inserting new
  provision section 34(2A).

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Public Policy- The Problem

• SC in ONGC Ltd. vs. Western Geco International
  Ltd. (2014) 9 SCC 263 in para 39 construed the
  term fundamental policy of
• India very widely incorporating the Wednesbury
  principle of
• reasonableness.
• Same was followed in Associates Builder vs. DDA
  (2014) 4 ARBLR 307 SC.
• Such power of review of award on merits is
  against the international practice and the
  Statement of object of 1996 Act which says
  minimization of judicial intervention.
• This would lead to disastrous effect as
• Erosion of faith in arbitration proceedings
• Reduction of popularity of India as arbitration
• destination
• Increase in judicial backlog iv.Increased
  Investor concern

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Public Policy Solution- 2015
Amendment

• Practically, the Court had become appellate
  authority over
• the arbitral tribunal.
• This was not the intention of Arbitration and
  Conciliation act, 1996 at all.
• Hence, explanations have been added by Amendment
  act, 2015 to section 34(2)(b) of Arbitration and
  Conciliation act, 1996 restricting the scope of
  public policy.
• Thus, now, Courts cannot go into merits of the
  arbitral
• award.

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Public Policy Solution- 2015 Amendment

• 34(2)(b)(ii) The arbitral award is in conflict
  with public policy of India.
• Explanation 1 For the avoidance of any doubt, it
  is clarified that an award is in conflict with
  the public policy of India only if
• making of award was induced or affected by fraud
  or corruption or was in violation of section 75
  or 81
• It is in contravention with the fundamental
  policy of Indian Law or c.It is in conflict
  with most basic notions of morality or justice.
• Explanation 2 For avoidance of doubt, the test
  as to whether there is a contravention with the
  fundamental policy of Indian law shall not entail
  a review on merits of dispute.

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Public Policy Solution- 2015
Amendment

• Further, following sub-clause was inserted
• Section 34(2A) An arbitral award arising out of
  arbitrations other than international commercial
  arbitrations, may also be set aside by the Court
  if the Court finds that the award is vitiated by
  patent illegality appearing on the face of the
  award.
• Provided that an award shall not be set aside
  merely on the ground of an erroneous application
  of law or re-appreciation of evidence.

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11. Enforcement of arbitral awards

• Under Section 1996 Act, pendency of a section 34
  petition
• renders an arbitral award unenforceable i.e.
  automatic stay of enforcement of the award upon
  admission of challenge.
• The Supreme Court, National Aluminum Co. Ltd. v.
  Pressteel Fabrications, (2004) 1 SCC 540 had
  criticized this.
• In order to rectify this mischief, certain
  amendments have been suggested by the Commission
  to section 36 of the Act, which provide that the
  award will not become unenforceable merely upon
  the making of an application under section 34.

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Enforcement of arbitral awards

• Section 36 of arbitration and Conciliation act,
  1996, as amended by the Amendment Act, 2015
  specifically provides that the award can be
  enforced even if one of the parties has
  approached Court for setting aside the arbitral
  award, unless specific stay has been granted by
  the competent court.
• Thus, mere application to Court for setting aside
  the arbitral award would not result in stay for
  enforcement of the arbitral award. This is a
  very good provision to avoid delay in
  enforcement of arbitral award.

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12. JUDICIAL INTERVENTIONS IN
FOREIGN SEATED ARBITRATIONS

• Section 2(2) of the Arbitration and Conciliation
  Act, 1996 (the Act), contained in Part I of
  the Act, states that This Part shall apply where
  the place of arbitration is in India.
• Article 1(2) of the UNCITRAL Model Law provides
  The provisions of this Law, except articles 8,
  9, 35 and 36, apply only if the place of
  arbitration is in the territory of this State
• Supreme Court in Bhatia International vs.
  Interbulk Trading SA, (2002) 4 SCC 105, and
  before the five-judge Bench in Bharat Aluminum
  and Co. vs. Kaiser Aluminium and Co., (2012) 9
  SCC 552 (hereinafter called BALCO) was whether
  the exclusion of the word only from the Indian
  statute gave rise to the implication that Part I
  of the Act would apply even in some situations
  where the arbitration was conducted outside
  India.
• The Supreme Court in BALCO decided that Parts I
  and II of the Act are mutually exclusive of each
  other.

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JUDICIAL INTERVENTIONS IN FOREIGN
SEATED ARBITRATIONS (contd.)

• The above issues have been addressed by 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.

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13. POWERS OF TRIBUNAL TO ORDER
INTERIM MEASURES

• Under section 17, the arbitral tribunal has the
  power to order interim measures of protection,
  unless the parties have excluded such power by
  agreement.
• However, its efficacy is seriously compromised
  given the lack of any suitable statutory
  mechanism for the enforcement of such interim
  orders of the arbitral tribunal.
• Delhi High Court attempted to find a suitable
  legislative basis for enforcing the orders of
  the arbitral tribunal under section 17 in the
  case of Sri Krishan v. Anand, (2009) 3 Arb LR 447
  (Del).
• However, above is not suffice and therefore the
  Commission has recommended amendments to section
  17 of the Act which would give teeth to the
  orders of the Arbitral Tribunal and the same
  would be statutorily enforceable in the same
  manner as the Orders of a Court.

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14. Other Amendments

• Arbitration agreement through emails
• Section 7 has been amended to make specific
  provision that arbitration agreement can be made
  through electronic communications.
• Interim measures by Court
• Section 9 has been amended to provide that if
  Court grants interim relief, Arbitration should
  commence within 90 days.
• Further, once arbitration tribunal has been
  constituted, the Court shall grant interim
  relief only if the Arbitral Tribunal itself
  cannot grant relief under section 17 of
  Arbitration and Conciliation Act, 1996.
• Section 17 of Arbitration and Conciliation Act,
  1996 as amended by Amendment Act, 2015 gives
  wide powers to Arbitral tribunal to grant
  interim reliefs.
• Thus, normally, it may not be necessary to
  approach Court for interim reliefs and such
  orders are enforceable under CPC.

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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 _at_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.
• Thus, a mere clause in Arbitration Agreement
  about payment of cost
• by one of the parties is not sufficient.
• This is a very good provision. The reason is
  that, at the time of contract, one of the
  parties is usually in dictating position and
  other party has practically no option to sign on
  dotted lines.

52
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.
• Explanation to Section 48(2)(b) inserted by the
  Amendment Act, 2015 now provides that
  enforcement of foreign awards can be refused if
  it is contrary to public policy (restricted as in
  part I) and therefore debars the court from
  going into merits of the case.

53
III. Company Secretary ADR
54
ROLE OF A COMPANY SECRETARY

• The Companies Act, 2013 has considerably enhanced
  the role and responsibilities of company
  secretaries both in employment and in practice.

• Company secretary is a key managerial person in a
  company,

responsible to ensure the effective and efficient

• administration of the company and certifying the
  companys compliance with the provision of the
  Act.
• Section 205 has also been added in the Companies
  Act, 2013. According to Section 205 of the
  Companies Act, 2013 the Company Secretary shall
  discharge following functions and duties, this
  is the first time that the duties of the company
  secretary have been specified in
  the company law.

55
New Horizons for CS in Practice under
The Companies Act, 2013

• Corporate Restructuring Insolvency
• Company Liquidators Professional assistance to
  them Sec.275 Sec.291
• Appointment as an Administrator Sec.259
• Technical member of NCLT Sec.409
• E- Filing
• Voting through electronic means Sec.108
• Adjudication of penalties Sec.454
• Mediation conciliation Panel Sec.442

56
Role Of a Company Secretary As a
Mediator or Conciliator

• The Central Government is to maintain a panel of
  experts to be called as Mediation and
  Conciliation Panel for mediation between
  parties during the

pendency of any proceedings before the Central
Government or the Tribunal or the Appellate
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 Chartered
  Accountant or Cost Accountant or Company
  Secretary can be

appointed in the panel.
57
Role Of a Company Secretary As a
Mediator or Conciliator

• The Company Secretaries are authorized to advise
  on arbitration, negotiation and conciliation in
  commercial disputes between the parties.
• A Company Secretary is trained to Act as
  arbitrator / conciliator in domestic and
  international commercial disputes.
• Company Secretaries are also qualified to Draft
• arbitration / conciliation agreement/ clause.

58
Advantages of a Company Secretary
in the Arbitration process

• Company secretaries are not only corporate legal
  experts but due to the very nature of profession,
  their knowledge is far superior in respect of
  commercial understanding. They have an edge in
  the sense that they understand the underlying
  commercial transaction or the legal framework in
  a more effective manner.
• Since they are exposed to various facets of law
  and the management, they can formulate a better
  strategy in arbitral proceedings while advising
  to the client. Thus company secretaries in
  practice can act as strategist and authorized
  representative in arbitral proceedings.

59
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 the powers vested in them under
the Act.
60
THANK YOU

• For more updates associated with
• Mediation Conciliation And Companies Act 2013
• NCLT - New Corporate Laws Treatise

https//www.nclt.in/
/nclt.in/
/NCLTnews
/in/nclt-in-069130119