Search
  • Legis Scriptor

Relation between Arbitration Law and CPC


Authored by Shweta Tated


Keywords: Arbitration, Code of Civil Procedure, settlement of dispute.


Abstract

Alternative Dispute Resolution indicates a variety of techniques for determining disputes by modes other than litigation. ADR System follows to provide cheap, simple, quick and reachable justice. The purpose behind this provision is to withdraw the multiplicity of litigation, save valuable time, money and permit parties to appropriately come to a settlement which is lawful, is in writing and is a spontaneously act on the part of the parties. Additionally, to reduce the overload of the court. The general principle is that all matters, which can be settled in a suit, can also be settled by means of negotiation.


Introduction

Arbitration is a legal procedure for the resolution of disputes outside the courts, by which the parties to a dispute refer it to one or more persons by whose opinion they agree to be obligated.[1]In simple words it’s a dispute settlement process between two agreeable parties to appoint an arbitrator and to give a binding solution on the dispute. The Civil Procedure Code was passed in 1908 and came into force from 1st January, 1908.[2] It neither creates nor takes away any right because it regulates the procedures to be followed in a civil court. The relationship between the arbitration law and the Code of Civil Procedure is such that the arbitration law is developed in itself however the Code of Civil Procedure is relevant in the arbitration matters cited before the Civil Courts under the Arbitration and Conciliation act, 1996.[3]


Meaning

Arbitration

It is a method where disputes are submitted, with agreement between the parties, to one or more arbitrators whose decision is binding on the dispute.


Code of Civil Procedure

It is a procedural law which is linked to the legislation of civil proceedings in India


History: Connecting line between ADR and CPC

Under section 89 of the Code of Civil Procedure a legislative decree was incorporate to the court to refer legal disputes to various ADR mechanisms outlined therein where it finds it convenient to do so, in order to enable the parties to finally resolve their pending cases through an effective dispute resolution method other than litigation. Section 89 CPC has recognized the obligation and importance of ADR even at the post litigation stage. Section 89 was acquainted with the purpose of harmonious, peaceful and mutual settlement between parties without interference of the court. The case or dispute of the parties shall go to trial only if there’s a failure to reach a resolution.


Relationship between Civil Procedure and Arbitration Law

Generally, these two wings of law are distinct to each other but the Civil Procedure Code is applicable in the Arbitration Matters referred before the Civil courts under the Arbitration & Conciliation Act, 1996. Various sections under the Code provide as an exception such as section 19, section 39(2) which states that on the rejection by the Arbitration Tribunal to convey the award except on payment of the costs demanded by it, the court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant, on payment into court by the applicant of the costs demanded, and shall, after such inquiry, in any, as it thinks fit. Additionally, a party may, before, or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in conformity with section 36, apply to a court under the provisions of the Code, 1908, for definite matters; such as


· for the appointment of a guardian for a minor or a person of unsound mind for the intent of arbitral proceedings; or


· for a provisional measure of protection in respect of any of the following matters

Sub-section (3) of Section 37 of the Act 1996 denies the right to second appeal against the order passed under sub-sections (1) and (2) of the Act, which doesn’t achieve the purpose of section 115 of the Code, 1908.


Section 89 CPC- Settlement of dispute outside Court

One of the main deficiencies presents in the legal system is the delay overcome by ADR.ADR was codified with an aim of reducing the burden and render diligent justice. Section 89 was made known to permit different forums and was more practically applicable than any other option of contracting judicial trail, such as increasing number of judges or framework. The provision under Section 89 CPC is an endeavor to bring about resolution of disputes between parties, curtail costs and reduce the burden of the courts.[4] It’s provided for with the one and only objective of integrating judicial and non-judicial dispute resolution mechanism and bringing alternate dispute mechanism to the center of the Indian Judicial System.


Need for Alternative Dispute Resolution

ADR is a separate and complete law in itself and is basically needed for two main reasons which is rising in the arrears of the subjects before Court system and expedite settlement. Due to ADR people can resolve their dispute in short period in comparison with courts. It saves money and is free from all the technicalities of courts.[5] People due to this method are free to express without any fear as the facts can be revealed without informing any courts. In this process there is always a chance for restoration of a relationship by discussing the issues together on one platform. Further conflict is prevented and it preserves the interest of the parties.


Case Laws

1. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd:[6]Arbitration is one of the means of ADR is initiated on account of previous agreement between parties to deal with disputes by arbitration or by filing an application or joint memo before the court, the recent occurs in the case of no arbitration agreement earlier. The award of the Arbitrator, the presiding officer, is irrevocable as a decree of the court or any resolution arrived at by parties during arbitration proceedings shall also have the same effect.


2. Salem Advocate Bar Association, Tamil Nadu vs. Union of India: [7]SC was of the view that there were some “creases” in Section 89, but it did not refer to deviation. It felt that the creases could be ironed out by drafting relevant rules and regulations to implement the section. In his article, the Hon’ble Justice puts forward some new deviations associated with Section 89.


Conclusion

To achieve the inner peace of mind, the events should try and settle the matter in courteous manner which leads to sturdy agreement and ends in effective results. Section 89 is a crucial part of the Code of Civil Procedure and is a powerful approach to clear up dispute between events in which there may be capacity for the same. The section is proper in its essence because the goal has been to reduce the weight of the courtroom, establish a compromise is arrived at among events and flow in the direction of powerful method of administrating justice. Alternate Dispute Resolution is a method of getting entry to justice without contracting the great of justice.

Foot notes: [1]“What Is Alternative Dispute Resolution?” Findlaw, 21 June 2016, www.findlaw.com/hirealawyer/choosing-the-right-lawyer/alternative-dispute-resolution.html. [2]VakilNo1. “VakilNo1.” Vakilno1com, 3 Sept. 2013, www.vakilno1.com/bareacts/laws/civil-procedure-code-1908.html. [3]Post, Guest. “Relation Between Arbitration Law and Code of Civil Procedure.” IPleaders, 8 Nov. 2019, blog.ipleaders.in/relation-between-arbitration-and-civil-code-procedure/#:~:text=Relationship between Civil Procedure Code,Arbitration and Conciliation Act 1996. [4]-, Rituparna Padhy, et al. “Analysing Section 89 of CPC.” Law Times Journal, 13 Sept. 2019, lawtimesjournal.in/analysing-section-89-of-cpc/. [5]“Alternative Dispute Resolution.” Wikipedia, Wikimedia Foundation, 13 Sept. 2020, en.wikipedia.org/wiki/Alternative_dispute_resolution. [6]AFCONS INFRASTRUCTURE LTD Vs. CHERIAN VARKEY CONSTRUCTION CO P LTD, www.the-laws.com/Encyclopedia/Browse/Case?CaseId=000102765000. [7]AFCONS INFRASTRUCTURE LTD Vs. CHERIAN VARKEY CONSTRUCTION CO P LTD, www.the-laws.com/Encyclopedia/Browse/Case?CaseId=000102765000.