Rule 2

PART G- ARBITRAL PROCEEDING

 

20. Jurisdiction -

  

20.1      Any objection by a party to the existence or, to the competence of the DIAC to administer an arbitration, before the Tribunal is appointed, shall be placed in the first instance before the Chairperson or the Sub-Committee appointed by the Chairperson for that purpose.

 

  20.2      If the Chairperson or the Sub-Committee appointed by the Chairperson sustains the objection, the proceedings shall be terminated. In all other cases, the Tribunal shall decide such objection in accordance with Section 16 of the Act. 

 

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21. Conduct of Proceedings   


21.1  The Tribunal may conduct the arbitration in such manner as it considers appropriate to ensure the avoidance of unnecessary delay and expense, having regard to the complexity of the issues involved and the amount in dispute.

PROVIDED that such procedures ensure fair and equal treatment of the parties and afford them a reasonable opportunity to present their case.

 

21.2  The Tribunal shall, soon after it is appointed, discuss with the parties and determine such procedure, including the procedural timetable, as will be most appropriate and expeditious.

 

21.3  To ensure continued effective case management, the Tribunal, after consulting the parties, may adopt further procedural measures or modify the procedural timetable from time to time.

 

21.4  The Tribunal may decide that for the purposes of Rules 21.2 and 21.3, any one member of the Tribunal will decide the procedure, including the procedural timetable.

 

21.5  The Tribunal may proceed with the arbitration notwithstanding the failure or refusal of any party to comply with these Rules or with the Tribunal’s orders or directions, or to attend any meetings or hearings, and may:-

 

(a)      admonish the Party Representative;

(b)      draw appropriate inferences in assessing the evidence relied upon, or the legal arguments advanced by the Party Representative;

(c)       consider the Party Representative’s misconduct in apportioning the costs of the  arbitration, indicating, if appropriate, how and in what amount the Party Representative’s misconduct leads the Tribunal to a different apportionment of costs;

(d)      take any other appropriate measures in order to preserve the fairness and integrity of the proceedings.

 

21.6  Application for adjournment –

(1)      Any party seeking adjournment or change in the timetable fixed for the arbitration proceedings shall file a written request, supported by sufficient and cogent reasons and necessary documents, if any, at least 30 days prior to the date for which such adjournment is sought along with costs by way of Demand Draft in the name of Delhi International Arbitration Centre for a sum of Rs. 25,000/-. The Arbitral Tribunal may accede to such request after recording its reasons in writing.

(2)      If a request for adjournment could not be made at least thirty days prior to the date for which it is sought, then the same may be entertained only if it is made in writing and supported by sufficient and cogent reasons and necessary documents, subject to payment of costs as given below:

Time

Cost

30 to 26 days (both inclusive) prior to the fixed date

Rs.25,000/- plus

10% i.e. Rs.27,500/-

25 to 21 days (both inclusive) prior to the fixed date

Rs.25,000/- plus 20% i.e. Rs.30,000/-

20 to 16 days (both inclusive) prior to the fixed date

Rs.25,000/- plus 30% i.e.. Rs.32,500/-

15 to 11 days (both inclusive) prior to the fixed date

Rs.25,000/- plus 40% i.e. Rs.35,000/-

 

PROVIDED, that no request for adjournment shall be entertained ten days before the scheduled date unless supported by special or exceptional reasons or in cases of emergency. The percentage of additional costs may be decided by the Arbitral Tribunal in such cases, including the power to exempt the imposition of additional costs, original costs to remain unaffected. In all such cases, the Tribunal shall record special reasons in writing.

(3)   The Tribunal may, for reasons to be recorded in writing, exempt a party from depositing costs for seeking an adjournment or may reduce the amount of costs.

 

(4)   For removal of doubts, it is clarified that the Arbitral Tribunal may, in addition to the above costs payable to the Centre, determine costs, if any, payable by the party seeking an adjournment to the opposite party (ies).

 

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22.  Language -

22.1  The language of the arbitration proceedings shall be English. 

22.2  If a document is in a language other than English, the Tribunal, or if the Tribunal has not been established, the Coordinator may order that party to submit a translation in a form to be determined by the Tribunal or the Coordinator.

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23. Seat and Venue-  

23.1  The parties may agree on the seat of arbitration. Failing such an agreement, the seat of arbitration shall be New Delhi.

23.2  The Tribunal may in consultation with the parties hold hearings, meetings and deliberations by any means and at any venue, it considers expedient or appropriate.

 

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24.   Applicable Law  -

24.1  The Tribunal shall, for deciding the merits of the dispute, apply the law and/or rules agreed upon by the parties. Failing such agreement between the parties, the Tribunal shall decide the dispute on merits by applying the law with which the dispute has the closest connection.

24.2  The law governing the arbitration agreement shall be the Act. The Rules governing the arbitration proceedings shall be the present Rules.

24.3  The Tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorised the Tribunal to do so.

24.4  In all cases, the Tribunal shall decide in accordance with the terms of the contract, if any, and shall take into account any trade usages applicable to the transaction to the extent that the Tribunal considers it relevant to the arbitration.

 

 

 

 

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25. Evidence

25.1  Ordinarily, the burden of proving the facts relied on to support its Claim, Counter-Claim or Defence, shall be on the concerned party.

25.2  The Tribunal shall, while determining the admissibility, relevance, materiality and weight of any evidence, not be bound by the Indian Evidence Act, 1872 or the Code of Civil Procedure, 1908 or by any strict rules of evidence.

25.3  Witnesses, including expert witnesses, who are presented by the parties to testify to the Tribunal on any issue of fact or expertise, may be an individual, notwithstanding that the individual is a party to the arbitration or in any way related to a party. Unless otherwise directed by the Tribunal, statements by witnesses, including expert witnesses, may be presented in writing and signed by them.

25.4  At any time during the arbitral proceedings, the Tribunal may require the parties to produce documents, exhibits or other evidence within such period of time as the Tribunal shall determine. The Tribunal may also, in consultation with the parties, undertake a site visit.

25.5  In addition, the Tribunal shall have the power to:

(a)      conduct such enquiries as may appear to be necessary or expedient;

(b)     order the parties to make any property or item available for inspection; and

 

(c)  order any party to produce to the Tribunal and to the other parties for inspection and to supply copies of, any document in their possession, custody or control which the Tribunal considers relevant to the case and material to its outcome.

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26. Hearings

26.1  Unless the parties have agreed on a documents-only arbitration or as provided in these Rules, the Tribunal shall, if either party so requests or the Tribunal so decides, hold a hearing on the merits of the dispute, including, without limitation, any issue as to jurisdiction.

26.2  The Tribunal may, in advance of any hearing, submit to the parties a list of questions which it wishes them to answer.

26.3  The Tribunal shall fix the date, time and place of any meeting or hearing and shall give the parties reasonable advance notice.

 

26.4  If any party to the proceedings, without sufficient cause, fails to appear at a hearing, the Tribunal may proceed with the arbitration and may make the Award.

26.5  Unless the parties agree otherwise, all meetings and hearings shall be held in private, and any recordings, transcripts, documents or other materials used shall remain confidential.

 

26.6 The Tribunal may at the request of the parties, make appropriate orders binding the parties on the terms of disclosure of documents considered to be sensitive, given the nature of the dispute.

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27. Witnesses

27.1  Before a hearing, the Tribunal may require any party to give a list of witnesses, including expert witnesses, whom it intends to produce, the subject matter of their testimony and its relevance to the issues.

27.2  The Tribunal has the discretion to allow, refuse or limit the number of witnesses intended to be produced by a party. The Tribunal shall also have the discretion to restrict the time to be allocated for the oral testimony of a witness.

 

27.3  The Tribunal is free to determine the manner in which witnesses are to be examined, and may direct that the testimony of any witness be presented in written form.

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28. Joinder of Parties

28.1  A party wishing to join an additional party to the arbitration shall submit its written request for arbitration against the additional party (the “Request for Joinder”) to the Coordinator. The date on which the Request for Joinder is received by the Coordinator shall, for all purposes, except the time for making the award, be deemed to be the date of the commencement of arbitration against the additional party. No additional party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the additional party, otherwise agree in writing. 

 

28.2  The Request for Joinder shall contain the following information:

(a)      the case reference of the existing arbitration;

(b)      the name in full, description, address, including e-mail address, and other contact details of each of the parties, including the additional party;

(c)       a description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made;

(d)      a statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;

(e)      any relevant agreements and, in particular, the arbitration agreement(s);

(f)       where claims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each claim is made;

(g)      such other documents or information as the party filing the Request for Joinder considers appropriate or as may contribute to the efficient resolution of the dispute.

28.3  All parties to the arbitration agreement shall be required to give written consent to the joinder of parties in addition to the written consent of the party to be impleaded and payment of proportionate administrative costs and fees of the Tribunal.

28.4  The rule shall apply mutatis mutandis to the Statement of Claim/plea of Set-Off and/or Counter-Claim submitted by the additional party.

 

PROVIDED that no such reply, Set-Off or Counter-Claim shall be permitted to be filed after the expiry of 30 days from the date of impleadment/ joinder.   

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29. Reference to Med-Arb. 

29.1 Parties to an arbitration agreement may, at any time before the commencement of the arbitration proceedings or while the arbitration proceedings are in progress, opt for mediation, and request the arbitral tribunal to put the arbitration proceedings on hold to enable the parties to resolve their disputes amicably.

29.2 The parties should convey their request to the Arbitral Tribunal, or if the Arbitral Tribunal is not in session, to the Coordinator. 

29.3 The arbitral tribunal shall accept the request of the parties and keep in abeyance the arbitration proceedings, relegating the parties to Med-Arb.  

 

29.4 The Mediators on the panel of the Delhi High Court Mediation Centre shall be deemed to be the mediators for the purpose of the reference to Med-Arb. The parties shall have the liberty to appoint the mediator of their choice and proceed with the mediation proceedings expeditiously.

29.5 The mediation proceedings shall be conducted in accordance with the mediation rules of the Delhi High Court Mediation Centre, which shall be deemed to have been incorporated herein and as an integral part of these rules. The proceedings before the mediators shall remain confidential and shall not be brought on record in the arbitration proceedings, should the mediation fail.

29.6 If the parties settle the dispute through Mediation, the settlement agreement executed between the parties shall be forwarded to the Arbitral Tribunal, which shall, on receipt of the settlement agreement, proceed in accordance with Rule 30.

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30. Settlement of dispute –

30.1 The Tribunal may encourage settlement of the dispute with the agreement of the parties.

30.2 If during the arbitration proceedings, the parties settle the dispute, the Tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the Tribunal, record the settlement in the form of an Arbitral Award on agreed terms. 

30.3 Such Arbitral Award as passed to record settlement between the parties should contain an express statement on its face that it is an award made at the parties' joint request and with their consent.

 

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PART H- ORDER AND AWARD

 

31. Orders of the Tribunal  –

31.1 In addition to the powers specified in these Rules, and not in derogation of the mandatory rules of law applicable to the arbitration, the Tribunal shall have the power to:

(a)      order the preservation, storage, sale or disposal of any property or item which is or forms part of the subject matter of the dispute;

(b)      issue an award for unpaid deposits towards the costs of the arbitration where a party to the arbitration has paid the non-paying party’s share of the deposits on behalf of the non-paying party;

(c)       direct any party -

(i)       to ensure that the assets of such party are not encumbered, alienated or dissipated in any manner so as to frustrate the Award;

(ii)      to provide security for legal or other costs in any manner the Tribunal thinks fit; 

(iii)     to provide security for all or part of any amount in dispute in the arbitration.

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32. Arbitral Award  –

32.1  At the request of any one of the parties and subject to the statutory timeline for completion of proceedings, the Tribunal may submit a draft award to the Coordinator for the scrutiny by the Committee constituted for that purpose. In such event, the Coordinator will, on the advice of such Committee suggest modifications to the draft award without in any manner interfering with the decision of the Tribunal. The suggestions will be communicated not later than 10 days after the receipt of the draft award failing which the Arbitrator will proceed to pronounce the final award without waiting for the suggestions. The Tribunal is at liberty to make such changes as it deems fit to the draft award.

32.2  The Tribunal may make separate Awards on different issues at different times.

32.3  In the event of a settlement, if the parties so request, the Tribunal may render a consent award recording the settlement, provided always that such Award contains an express statement that it is an Award made by the parties’ consent. A consent award need not contain reasons. If the parties do not require a consent award, the parties shall confirm to the Coordinator that a settlement has been reached. The Tribunal shall be discharged and the arbitration concluded upon payment of any outstanding costs of the arbitration.

 

32.4  The DIAC may publish any Award after redacting the names of the parties and other identifying information.

 

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PART I- FEE AND COST

 

33. Costs of the Arbitration

33.1  The Tribunal’s fees and the DIAC’s fees shall be fixed in accordance with the DIAC Fees Rules ordinarily not later than 30 days from the Statement of Claims or Counter-Claims.

33.2  At the first procedural hearing, the Tribunal will determine the terms (other than the fees) which are required to be complied with by the parties.

33.3  The Tribunal shall specify in the award the total amount of the costs of the arbitration. Unless the parties have agreed otherwise, the Tribunal shall determine in the award the apportionment of the costs of the arbitration among the parties.

33.4  Regime for costs-

(A) In relation to any arbitration proceeding or a proceeding under any of the provisions of these Rules pertaining to the arbitration, the Centre or Arbitral Tribunal, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), shall have the discretion to determine—

(a) whether costs are payable by one party to another;

(b) the amount of such costs; and

(c) when such costs are to be paid.

 

Explanation—For the purpose of this Rule, “costs” means reasonable costs relating to— (i) the fees and expenses of the arbitrators, Centre and witnesses; (ii) legal fees and expenses; (iii) any administration fees of the institution supervising the arbitration; and (iv) any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.

 

(B) If the Centre or Arbitral Tribunal decides to make an order as to payment of costs—

(a) the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party; or

(b) the Centre or Arbitral Tribunal may make a different order for reasons to be recorded in writing.

 

(C) In determining the costs, the Centre or Arbitral Tribunal shall have regard to all the circumstances, including—

(a) the conduct of all the parties;

(b) whether a party has succeeded partly in the case;

(c) whether the party had made a frivolous Counter-Claim leading to delay in the disposal of the arbitral proceedings; and

(d) whether any reasonable offer to settle the dispute is made by a party and refused by the other party.

 

(D) The Centre or Arbitral Tribunal may make an order under this section including the order that a party shall pay—

(a) a proportion of another party’s costs;

(b) a stated amount in respect of another party’s costs;

(c) costs from or until a certain date only;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to a distinct part of the proceedings; and

(g) interest on costs from or until a certain date.  

(E) An agreement which has the effect that a party is to pay the whole or part of the costs of the arbitration, in any event, shall be only valid if such agreement is made after the dispute in question has arisen. 

33.5  In making decisions as to costs, the Tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.

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34. Advance on Costs  –

34.1  The Coordinator shall fix the amount of deposits for costs of the arbitration. Unless the Coordinator directs otherwise, 50% of such deposits shall be payable by the Claimant and the remaining 50% of such deposits shall be payable by the Respondent. The Coordinator may fix separate advances on costs for Claims and Counter-Claims, respectively.

34.2  Where the amount of the Claim or the Counter-Claim is not quantifiable at the time payment is due, a provisional estimate of the costs of the arbitration shall be made by the Coordinator. Such estimate may be based on the nature of the controversy and the circumstances of the case. This may be adjusted in light of such information as may subsequently become available.

34.3  The Coordinator may from time to time direct parties to make further advances towards costs of the arbitration incurred or to be incurred on behalf of, or for the benefit of the parties.

34.4  If a party fails to make the deposits as directed within 30 days from the date on which it is due, the Coordinator may, after consulting with the Chairperson or the Sub-Committee appointed by the Chairperson and the parties, direct the Tribunal to terminate the work. If the payment is not made within 30 days, the relevant Claims or Counter-Claims shall be considered as withdrawn without prejudice to the party reintroducing the same Claims or Counter-Claims in another proceeding.

34.5  Parties are jointly and severally liable for the costs of the arbitration. Any party is free to pay the whole of the deposits for costs of the arbitration in respect of the claim or the counterclaim should the other party fail to pay its share. The Tribunal or the Coordinator may suspend its work, in whole or in part, should the advances or deposits directed under this Rule remain either wholly or in part unpaid. On the application of a party, the Tribunal may issue an Award for unpaid deposits towards the costs of the arbitration pursuant to Rule 33.4(D).

34.6  If the arbitration is settled or disposed of without a hearing or in terms of Rule 30.2, the costs of arbitration shall be finally determined by the Coordinator. The Coordinator shall have regard to all the circumstances of the case, including the stage of proceedings at which the arbitration is settled or disposed or terminated under Rule 30.2. In the event that the costs of arbitration determined are less than the deposits made, there shall be a refund in such proportions as the Chairperson or the Sub-Committee appointed by the Chairperson may decide, in the same proportion as the deposits were made.

34.7  All deposits shall be made to and held by the DIAC. Any interest which may accrue on such deposits shall be retained by the DIAC. 

34.8  The Centre shall have a lien on the Arbitral Award for any unpaid costs of the Arbitration including adjournment cost, miscellaneous expenses and the fees of the Arbitrator and the Award will not be notified to the parties unless all such costs have been fully paid to the Centre by the parties or by one of them.

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PART J- MISCELLANEOUS PROVISIONAL