#Chapter 5: The Arbitration and Conciliation Act, 1996

Chapter V: Conduct of Arbitral Proceedings

Section 18: Equal treatment of parties

This is a fundamental principle of procedural fairness in arbitration.

Simple Translation: The arbitrator(s) must treat both parties equally, and both sides must be given a complete and fair chance to present their case and arguments.
Practical Example: Party A is given five hours to present their witness testimony, and Party B asks for the same time. The Arbitral Tribunal must grant Party B five hours, or at least ensure the time allocation is fair, demonstrating equal treatment.

Section 19: Determination of rules of procedure

This section clarifies the freedom of the arbitration process from traditional court rules.

(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

Simple Translation: Arbitrators do not have to follow the highly complex rules for court procedure (Code of Civil Procedure), nor do they have to strictly adhere to the technical rules of evidence (Indian Evidence Act) used in court.
Practical Example: In court, hearsay evidence is often disallowed. An arbitrator, however, can choose to accept a witness statement containing some hearsay, judging its relevance as they see fit, because they are not strictly bound by the Evidence Act.

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

Simple Translation: The parties are free to choose their own specific set of rules or procedural steps for the hearings, as long as those rules don’t contradict the mandatory parts of the Arbitration Act.
Practical Example: Company A and Company B agree that the entire arbitration will be conducted through video conference calls and written submissions only, with no physical, in-person hearings. This procedural agreement is valid.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

Simple Translation: If the parties haven’t agreed on the rules of procedure, the arbitrator(s) get to decide how to run the hearings in whatever way they think is best, as long as they follow the mandatory rules of the Act (like equal treatment).
Practical Example: Since the parties didn’t agree on a specific procedure, the Arbitrator issues a procedural order setting strict deadlines for document production and discovery, deciding that this fast-track method is the most appropriate way to resolve the dispute.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

Simple Translation: As part of their power to set procedure, the arbitrator(s) are the final judges on which evidence they will accept, how important it is to the case, and how much value they will give to it.
Practical Example: Party X submits an email that Party Y claims is irrelevant. The Arbitrator looks at the email, decides it is relevant and material, and then assigns a certain weight (importance) to that piece of evidence when writing the final award.

Section 20: Place of arbitration

This section covers the flexibility in determining the physical and legal location of the arbitration.

(1) The parties are free to agree on the place of arbitration.

Simple Translation: The parties can simply agree on the physical and legal location (the “seat”) where the arbitration will take place.
Practical Example: A contract between a Delhi company and a Bangalore company states, “The place of arbitration shall be Mumbai.” Mumbai is the chosen legal seat.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

Simple Translation: If the parties failed to agree on the location, the arbitrator(s) will choose the location, considering all the facts of the case and, most importantly, what is most convenient for the parties.
Practical Example: Neither party agreed on a location. The Arbitrator notes that all key witnesses and most of the legal counsel are based in Hyderabad. The Arbitrator therefore decides that Hyderabad will be the seat of arbitration for convenience.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Simple Translation: Even though a formal legal “place of arbitration” (the seat) has been set (in sub-section 1 or 2), the arbitrators can still hold meetings, hear witnesses, or inspect property anywhere else they deem necessary.
Practical Example: The agreed seat of arbitration is New York (governing law). However, the arbitral tribunal decides to fly to the project site in Dubai for one week to physically inspect the damaged goods and hear local site managers. This temporary change of location for convenience does not change the legal seat of the arbitration (New York).

Section 21: Commencement of arbitral proceedings

This section clearly defines the specific date when an arbitration is legally considered to have begun.

Simple Translation: Unless the parties agreed on a different starting date, the arbitration officially begins on the day the party initiating the process (the claimant) sends a written request to the other party (the respondent) asking for that specific dispute to be sent to arbitration.
Practical Example: Company A sends a letter by registered mail to Company B on March 15th, stating, “We hereby formally request that the dispute regarding the 2023 supply contract be referred to arbitration.” Even if the arbitrator isn’t appointed until June, the official commencement date for calculating deadlines (like limitation periods) is March 15th, when Company B received the request.

Section 22: Language

This section grants the parties flexibility in choosing the language of the proceedings.

(1) The parties are free to agree upon the language or languages to be used in the arbitral proceedings.

Simple Translation: The parties can decide and mutually agree on which language (or languages) the entire arbitration process will use.
Practical Example: An Indian company and a German company agree that although the contract is in English, all arbitration proceedings, oral arguments, and witness examinations will be conducted in English.

(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall determine the language or languages to be used in the arbitral proceedings.

Simple Translation: If the parties can’t agree on a language, the arbitral tribunal will choose the most suitable language(s).
Practical Example: If two parties from different regions of India can’t agree on Hindi or English, the sole arbitrator, noting that most documents are in English, decides that English will be the language of the arbitration for simplicity.

(3) The agreement or determination, unless otherwise specified, shall apply to any written statement by a party, any hearing and any arbitral award, decision or other communication by the arbitral tribunal.

Simple Translation: The chosen language (whether by the parties or the tribunal) must be used for all official documents submitted by the parties, all oral hearings, and every formal decision or communication issued by the arbitrator, unless specifically stated otherwise.
Practical Example: The tribunal determines the language is English. This means the Statement of Claim, the Statement of Defence, all oral arguments in the hearings, and the final Arbitral Award must be in English.

(4) The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

Simple Translation: The arbitrator can require that documents originally written in a different language must be translated into the official language of the arbitration.
Practical Example: The official language is English. Party B wants to submit a technical report originally written in French. The Arbitrator issues an order stating that the French report is admissible only if it is accompanied by an certified English translation.

Section 23: Statements of claim and defence

This section outlines the basic required content and format for the initial formal written submissions by both parties.

(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

Simple Translation: Within the deadline set by the parties or the arbitrator, the claimant (the party starting the dispute) must submit a document detailing:
1. The basic facts of the case.
2. What the specific legal disagreement is.
3. What they want the arbitrator to order (the relief).
The respondent must then reply with a document outlining their side of the facts and their legal defence against those claims.
Practical Example: The Arbitrator sets a deadline of 30 days. The Claimant submits a Statement of Claim detailing the breach of contract and asking for $1 million in damages. The Respondent submits a Statement of Defence arguing that the Claimant breached the contract first, which legally excuses their own performance.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

Simple Translation: Along with their main claim or defence documents, the parties are allowed to attach all the relevant evidence (like contracts, letters, or invoices) immediately, or they can simply mention which documents they plan to use later in the proceedings.
Practical Example: The Claimant attaches copies of the signed contract and the unpaid invoices to their Statement of Claim. They also list (refer to) an upcoming expert report which they promise to submit next month.

(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.

Simple Translation: The Respondent can not only defend themselves but can also file their own separate claim against the Claimant (counterclaim) or argue that the Claimant already owes them money which should cancel out the current claim (set-off). The arbitrator can only hear these new claims if they are covered by the original arbitration agreement.
Practical Example: The Claimant sues for $500,000 in payment. The Respondent files a Statement of Defence, which also includes a Counterclaim for $200,000, arguing that the Claimant’s defective work damaged the project. The Tribunal must decide both the original claim and the counterclaim.

(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

Simple Translation: The parties can change or add to their original claim or defence documents while the arbitration is ongoing, unless the arbitrator decides the change is being made too late and would unfairly delay the whole process.
Practical Example: Midway through the case, the Claimant realizes they forgot to include a small claim for interest. They ask to amend their Statement of Claim. The Tribunal allows it because it’s a small change. However, if the Claimant tried to add a brand new, massive claim just days before the final hearing, the Tribunal would likely refuse the amendment due to delay.

(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing of their appointment.

Simple Translation: The parties must finish filing all their primary written documents (Statement of Claim and Statement of Defence, and any counterclaims) within six months of the arbitrator(s) officially receiving notice of their appointment. This is a key statutory deadline to ensure the proceedings start quickly.
Practical Example: The Arbitral Tribunal officially received its appointment letter on January 1st. The deadline for all initial pleadings to be filed is June 30th.

Section 24: Hearings and written proceedings

This section covers the flexibility in deciding whether to hold oral hearings or rely solely on documents.

(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials:

Simple Translation: The arbitrator(s) get to decide if the case will be handled by having in-person or video hearings where people talk and present evidence, or if they will simply make their decision based only on the documents submitted.

Proviso 1 to 24(1):

Simple Translation: The arbitrator must hold an oral hearing at an appropriate stage if either party asks for it, unless the parties have already agreed that absolutely no oral hearings will take place.
Practical Example: The Arbitrator initially planned to decide the case based on documents only. Party A insists, in writing, “We need a hearing to cross-examine a key witness.” The Arbitrator is then obligated to schedule an oral hearing for that purpose.

Proviso 2 to 24(1):

Simple Translation: To promote efficiency, the arbitrator should try to hold oral hearings on a day-to-day basis (consecutively) and should not grant delays (adjournments) unless there is a very good reason. If a party asks for a delay without sufficient cause, the arbitrator can make that party pay the resulting extra costs (even exemplary costs, which are like a fine).
Practical Example: A hearing is scheduled for Monday to Friday. Party A asks to postpone Tuesday’s hearing because their counsel decided to take another case. The Arbitrator denies the request and tells the party that if they insist, they will be charged all the costs for the lost day, including the arbitrator’s and the opposing party’s fees.

(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property.

Simple Translation: Both parties must be given enough warning (advance notice) about when and where any hearings or inspection meetings will take place.
Practical Example: The Tribunal decides to inspect the disputed machinery on November 10th. The Tribunal must send a formal notice to both parties several weeks in advance, informing them of the inspection time and location.

(3) All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

Simple Translation: The process must be completely transparent: whatever one party gives the arbitrator (submissions, evidence, applications), the arbitrator must share immediately with the other party. The arbitrator cannot receive or use evidence secretly.
Practical Example: Party B secretly sends the Arbitrator a new document arguing their case. The Arbitrator cannot simply look at the document; they must immediately send a copy of that document to Party A and give Party A a chance to respond.

Section 25: Default of a party

This section clarifies what happens when one of the parties fails to participate in the arbitration proceedings.

Simple Translation: Unless the parties agreed otherwise, if a party doesn’t show up or submit required documents without giving a good reason (“sufficient cause”):

(a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings;

Simple Translation: If the Claimant (the party who started the case) fails to file their initial Statement of Claim (the main complaint document) on time, the arbitrator must officially end the entire arbitration proceedings.
Practical Example: The Claimant files the request to arbitrate but misses the deadline for filing the Statement of Claim without explanation. The Tribunal must issue an order stating that the arbitration is terminated.

(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant [and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited].

Simple Translation: If the Respondent fails to file their Statement of Defence on time, the arbitrator must continue the proceedings. The arbitrator cannot automatically assume the Claimant’s allegations are true simply because the defence was missed. However, the arbitrator can declare that the Respondent has lost their right to file the defence later.
Practical Example: The Respondent misses the defence deadline. The Tribunal proceeds to the hearing based only on the Claimant’s evidence. The Tribunal does not automatically rule against the Respondent but must still assess the merit of the Claimant’s evidence. The Tribunal issues an order formally forbidding the Respondent from filing a Statement of Defence at any later stage.

(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.

Simple Translation: If either party fails to attend a hearing or fails to produce documents that were requested, the arbitrator can simply proceed without them and use only the evidence that is currently available to make the final decision.
Practical Example: Party B is notified of the final hearing but doesn’t show up. The Tribunal holds the hearing anyway, listens only to Party A’s evidence and arguments, and issues the final award based on that one-sided evidence.

Section 26: Expert appointed by arbitral tribunal

(NOTE: In the current text of the Act you provided, the heading for Section 26 is followed by “

$$Omitted.$$

” on page 2, but the detailed text for the section is actually present on page 16 of the PDF you provided, titled “Expert appointed by arbitral tribunal.” The text below breaks down the section as provided in the body of the Act.)

(1) Unless otherwise agreed by the parties, the arbitral tribunal may—

Simple Translation: If the parties haven’t agreed otherwise, the arbitrator(s) have the power to:

(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and

Practical Example: An arbitration concerns faulty software code. The Tribunal can hire a neutral, third-party software engineer to review the code and submit a report on whether the code was defective, as the technical expertise is beyond the arbitrators’ knowledge.

(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

Practical Example: The arbitrator-appointed software engineer needs to inspect the server logs of Company X. The Tribunal can order Company X to provide the expert with full access to the server, even if Company X is reluctant to do so.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

Simple Translation: If the arbitrator thinks it’s necessary, or if either party asks for it, the neutral expert who submitted the report must attend a hearing so the parties can ask them questions (cross-examine them) and introduce their own expert witnesses to challenge the report’s findings.
Practical Example: The neutral expert submits a report stating the software was not faulty. Party A, who is claiming the software was faulty, demands a hearing so their lawyer can question the expert on the methodology and data used in the report. The Tribunal must allow this.

(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.

Simple Translation: If a party asks, the neutral expert must share all the materials (documents, goods, etc.) that the arbitrators or parties gave them to prepare their report, allowing the parties to verify the expert’s findings.
Practical Example: The expert used five specific internal emails from Party B to reach a conclusion. Party A can request the expert to provide copies of those specific emails so Party A can review them and challenge the interpretation.

Section 27: Court assistance in taking evidence

This section allows the Arbitral Tribunal to request help from the formal court system to compel witnesses or evidence.

(1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.

Simple Translation: If the arbitrator or a party (with the arbitrator’s permission) needs help to gather crucial evidence, they can ask the local Court for assistance. This is usually necessary when a witness is uncooperative.
Practical Example: A key witness, who is not a party to the arbitration, refuses to attend the hearing or produce a vital document. The Arbitrator, unable to compel them, asks the local Court for assistance.

(2) The application shall specify—

The request sent to the Court must clearly outline what is needed:

(a) the names and addresses of the parties and the arbitrators;

Simple Translation: The identities and locations of everyone involved in the arbitration.

(b) the general nature of the claim and the relief sought;

Simple Translation: A brief summary of the dispute and what the claimant is asking for.

(c) the evidence to be obtained, in particular,—

Simple Translation: A clear description of the specific evidence required:

(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;

Practical Example: The application must state: “We need the testimony of Mr. John Smith, CEO of XYZ Corp., at this address, regarding the original conversation leading to the contract price.”

(ii) the description of any document to be produced or property to be inspected.

Practical Example: The application must specify: “We need the production of all internal memos related to Project Alpha dated between January 1, 2024, and March 31, 2024, held by the finance department.”

(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

Simple Translation: The Court, using its own legal authority and rules, will process the request and issue a formal order that the evidence be collected and sent straight to the arbitrator(s).
Practical Example: The Court issues a subpoena (a formal court order) commanding Mr. John Smith to appear at the arbitration hearing and provide the requested testimony.

(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.

Simple Translation: When the Court issues an order to help the arbitration, it can use the exact same legal tools (summonses, commissions, etc.) that it uses to force witnesses to comply in its own courtroom trials.
Practical Example: The Court uses its power to issue a Warrant if a person repeatedly refuses to comply with the summons to produce documents for the arbitration, treating the refusal as if it happened in a court case.

(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court… as they would incur for the like offences in suits tried before the Court.

Simple Translation: If a witness or person disobeys the Court’s order (issued for the arbitration), they face the same punishments (fines, jail time, etc.) as if they had committed that offense directly in the Court. The Arbitrator reports the refusal, and the Court enforces the penalty.
Practical Example: A witness refuses to answer a question at the arbitration hearing. The arbitrator reports this contempt to the Court. The Court can then find the witness guilty of contempt and impose a fine or sentence equivalent to what they would receive for misbehaving in a regular civil trial.