Arbitration And Conciliation Act MCQ Quiz - Objective Question with Answer for Arbitration And Conciliation Act - Download Free PDF

The correct answer is 'OPTION 4.'

Key Points

• Section 9 of the Arbitration and Conciliation Act:
  • Section 9 of the Arbitration and Conciliation Act, 1996, allows a party to apply to the Court for interim measures of protection before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced.
  • Interim measures can include orders for the preservation of goods, securing the amount in dispute, or any other necessary measures for protecting the interests of the parties involved in arbitration.
  • This provision is crucial for ensuring that the subject matter of the arbitration is preserved and that the parties’ rights are protected while the arbitration process is ongoing.

Additional Information

• Section 8:
  • Section 8 deals with the power of the judicial authority to refer parties to arbitration when an action is brought before it in a matter which is the subject of an arbitration agreement. It does not concern interim measures.
• Section 7:
  • Section 7 defines what constitutes an arbitration agreement and the requirements for such an agreement. It does not provide for interim measures.
• Section 12:
  • Section 12 addresses the grounds for challenging the appointment of an arbitrator, particularly regarding their independence and impartiality. It is unrelated to interim measures.

The correct answer is option 3

Key Points As per Section 34(3) of the Arbitration and Conciliation Act, 1996, an application for setting aside an arbitral award must be made within three months from:

• The date on which the party receives the arbitral award, OR
• If a request under Section 33 (for correction/interpretation of the award) has been made, then from the date on which that request is disposed of by the arbitral tribunal.
• Additionally, the court may extend this period by a maximum of 30 days if the applicant can show sufficient cause for the delay.

Correct answer is option 2

Key Points

• A party seeking to refer a matter to arbitration must make their application to the judicial authority no later than the date of submitting their first statement on the substance of the dispute. This ensures that the request for arbitration is made at an early stage.

• The application must be accompanied by the original arbitration agreement or a duly certified copy of it. If the original or certified copy is held by the other party, the applicant can submit a copy of the agreement along with a petition requesting the court to compel the other party to produce the original or certified copy.

• Even if an application for referral to arbitration is pending before the judicial authority, the arbitration process can commence, continue, and an arbitral award can be made. This provision ensures that the arbitration process is not unduly delayed by the court proceedings

Correct answer is option 2

 Key Points

Option 2 accurately reflects the provisions related to the time limits for making an arbitral award, the termination of the arbitrator’s mandate, and the potential reduction in fees due to delay. 

• The arbitral award must be made within twelve months from the date the arbitral tribunal enters upon the reference. This date is considered to be the date on which the arbitrator(s) receive notice of their appointment.

• If the award is made within six months from the date the tribunal enters upon the reference, the tribunal may be entitled to additional fees as agreed by the parties.

• The parties can extend the initial twelve-month period for making the award for an additional period not exceeding six months by mutual consent.

• If the award is not made within the specified period or any extended period, the mandate of the arbitrator(s) will terminate unless the Court extends the period. The Court may also reduce the fees of the arbitrator(s) by up to five percent for each month of delay attributable to the tribunal.
• Extensions may be granted by the Court only for sufficient cause and on terms and conditions it deems appropriate.

• The Court has the authority to substitute one or all of the arbitrators during the extension period. The proceedings will continue from the stage already reached, based on the existing evidence and material. The reconstituted tribunal is considered to be a continuation of the original tribunal.

• The Court can impose actual or exemplary costs upon any party. Applications for extension of time should be disposed of as expeditiously as possible, ideally within sixty days from the date of notice to the opposing party.

Correct  answer is option 1

Key Points Option 1 is correct because it accurately reflects that the proceedings can be terminated if the claimant withdraws the claim, provided that the respondent does not object or has no legitimate interest in continuing the dispute.

• Arbitral proceedings are terminated either by a final arbitral award or by an order of the arbitral tribunal under certain conditions specified in Sub-section (2).

• Withdrawal of Claim (Sub-section 2(a)): The proceedings may be terminated if the claimant withdraws their claim, unless the respondent objects and demonstrates a legitimate interest in obtaining a final settlement of the dispute.

• The parties may agree to terminate the proceedings.

• The arbitral tribunal can terminate the proceedings if it finds that continuing the arbitration has become unnecessary or impossible for any other reason.

• The mandate of the arbitral tribunal ends with the termination of the arbitral proceedings, subject to provisions under Section 33 and sub-section (4) of Section 34.

the correct answer is Twenty-five percent 

Key Points

 

Sum in Dispute	Model Fees
Upto Rs. 5,00,000	Rs. 45,000
Above Rs. 5,00,000 and upto Rs. 20,00,000	Rs. 45,000 plus 3.5 percent of the claim amount over and above Rs. 5,00,000
Above Rs. 20,00,000 and upto Rs.1,00,00,000	Rs. 97,500 plus 3 percent of the claim amount over and above Rs. 20,00,000
Above Rs. 1,00,00,000 and upto Rs.10,00,00,000	Rs. 3,37,500 plus 1 percent of the claim amount over and above Rs. 1,00,00,000
Above Rs. 10,00,00,000 and upto Rs.20,00,00,000	Rs. 12,37,500 plus 0.75 percent of the claim amount over and above Rs. 10,00,00,000
Above Rs. 20,00,00,000	Rs. 19,87,500 plus 0.5 percent of the claim amount over and above Rs. 20,00,00,000 with a ceiling of Rs. 30,00,000

The correct answer is All of the above

Key PointsSection 38: Deposits under the Arbitration and Conciliation Act
1. Fixing the Deposit: 

The arbitral tribunal may determine the amount of the deposit or supplementary deposit required as an advance to cover the costs anticipated under Section 31(8) for the claim submitted.
If a counter-claim is submitted, the tribunal may set a separate deposit amount for both the claim and counter-claim.
2. Payment of Deposits: 

The deposit must be paid in equal shares by both parties.
If one party fails to pay their share, the other party may cover that share.
If neither party pays their share, the arbitral tribunal has the authority to suspend or terminate the proceedings concerning the claim or counter-claim.
3. Accounting of Deposits:

After the arbitral proceedings conclude, the tribunal must provide an account of the deposits received and return any unspent balance to the respective party or parties.

The correct answer is Option 3

Key Points

• Cox and Kings Limited v. SAP India Private Limited Arbitration Petition (Civil) No. 38 of 2020, held that non-signatories to an arbitration agreement can be bound by the arbitration agreement based on mutual intention. Consequently, the Supreme Court upheld the ‘group of companies’ doctrine
• The Supreme Court emphasized the principles of party autonomy and mutual consent in arbitration agreements. It noted that a party's signature on the agreement is the clearest expression of their consent to submit to the jurisdiction of an arbitral tribunal. However, the Court also pointed out that the assumption that only signatories are bound by an arbitration agreement is not always accurate.
• The Court held that the consent to be bound by an arbitration agreement can also be inferred from the acts or conduct of the parties, as outlined in the Indian Contract Act, 1872. Even though arbitration agreements are contractual in nature, the consent to be bound by them may not necessarily require a formal signature.
• Regarding non-signatories, the Supreme Court made the following conclusions:
• Arbitration agreements can arise from legal relationships between persons or entities, whether contractual or otherwise.
• Non-signatories can be bound by arbitration agreements if their actions or conduct show intent to be bound, even without signing the agreement.
• The requirement of a written arbitration agreement does not exclude the possibility of non-signatories being bound, provided there is a defined legal relationship between signatories and non-signatories.
• Once the validity of the arbitration agreement is established, the court or tribunal can determine which parties are bound by the agreement, including non-signatories.
• The Court further held that a non-signatory party could be considered part of the arbitration agreement if their role in the negotiation, performance, or termination of the underlying contract indicates their intent to be bound by the agreement.

The correct answer is Option 2

Key PointsAn arbitration clause contained in a deficiently stamped and compulsorily registerable document is enforceable only if - the deficient stamp duty along with penalty is paid.

The Arbitration Act provides that an arbitral award will be enforced “in accordance with the provisions of the Code of Civil Procedure, 1908, (“CPC”) in the same manner as if it were a decree of the Court”. Section 36 of the Arbitration and Conciliation Act lays that Enforcement of an arbitral award in a Domestic Arbitration is to be carried out in the same manner as done in a decree passed by the court. 

The delay of 105 days beyond the prescribed time in applying for setting aside of the Arbitral Award pursuant to an Arbitration Agreement dated 1st November, 2017 is not condonable. 

Unless otherwise agreed by the parties, arbitration proceedings are deemed to have commenced on the date on which the respondent receives such notice from the claimant

The arbitration agreement contained in an unregistered and unduly stamped Lease Deed will be invalid and unenforceable prior to payment of deficit duty and penalty as per Stamp Act.

The current position of law appears to be that if seat is mentioned in the contract and the contract has a clause that requires the amendment of the contract to be in writing, then any change in the contract would have to be in writing as per the relevant terms of the contract. In such a situation, the parties would only be able to change the seat of arbitration by following the procedure laid down in the contract.

The correct answer is option 2Key Points

• Section 9 of Arbitration and Conciliation Act, 1996 deals with Interim measures, etc., by Court.—
• (1) 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 accordance with section 36, apply to a court:
  • (i) For the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or
  • (ii) For an interim measure of protection in respect of any of the following matters, namely:
    • (a) The preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
    • (b) Securing the amount in dispute in the arbitration;
    • (c) The detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
    • (d) Interim injunction or the appointment of a receiver;
    • (e) Such other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.
• (2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.