Arbitration Rules of Hyderabad Arbitration Centre

Arbitration, a type of alternative dispute resolution, is a method of resolving disputes but outside the courts. An arbitrator is a third party who resolves a dispute. His decisions on the dispute are always final and binding on the parties. It is an embedded system for conserving time and resources. This method of out-of-court settlement is governed by the “Arbitration and Conciliation Act, 1966.” This Act cuts down the parties’ trouble of spending years in court and saves them a lot of time and money that they would have had to invest otherwise. Arbitration is a quasi-judicial process in which the parties are referred to a local tribunal.

The creation of an arbitration agreement occurs when two parties enter into a contract in which the contract states that any dispute arising between the parties must be resolved without going to court with the assistance of a person known as the Arbitrator, who is a neutral person, a third party appointed by both parties, who acts as a judge. The arbitrator who was appointed should have been mentioned in the contract they signed. They should also specify who will choose the arbitrator, the type of dispute on which the arbitrator will rule, and the location of the arbitration. Furthermore, they should specify any other procedures that have been mentioned or that must be followed during an arbitration agreement. 

India’s first arbitration and mediation centre was established in Hyderabad with a vision to promote and encourage people and business houses to get world class services in India. The Centre is being established with the best available infrastructure and internationally acclaimed arbitrators and mediators from countries like Singapore, UK, etc. would be empanelled. The Centre is expected to serve people not only from India but also from other Asian countries. 

There are specific rules laid down by the HAC for arbitration.

Scope, definition and interpretation

The first provision in the rules states out the definitions and key terms that are mentioned in the rules. 

Notice and time limits

Any Notice or Communication (including any requests / proposals) shall be in writing and be served in the manner provided under the Agreement between the parties. Written communications may be received if it is delivered to the addressee in-person or by hand or through a registered post or courier.

Any written Notice or Communication shall be deemed to have been received on the day it is delivered. Period of time specified under the present Rules shall start to run from the day on which the notice/communication is received, and last until the end of the first following business day.

Request for arbitration

Details of the parties to an arbitration under these Rules (the “claimant”). A brief description of the nature of the dispute and the circumstances out of which the dispute has arisen. The names, addresses, telephone numbers, facsimile numbers and electronic mail addresses of all parties to the arbitration and their representatives. The Claimant shall submit the ‘Request for Arbitration’ with the Registrar, specifying the mode of service employed and the date of service. Submit the number of copies thereof required by Rule 2.7 supra, and b. Make payment of the filing fee required by ‘Schedule of Fees’ inforce on the date the Request is submitted.

Appointment of arbitrators

Rule 6 of the Arbitration and Conciliation Service Rules – The Council alone shall be empowered to appoint the. Arbitrator(s) for all arbitrations, unless it appears to the Council that the dispute warrants the appointment of three arbitrators, A sole Arbitrator shall be appointed.

General provisions

Rules for appointing arbitrators in international arbitration apply to the Indian “Arbitration & Conciliation Act, 1996”. A prospective arbitrator must sign a statement of acceptance, impartiality and independence. No party or anyone acting on its behalf shall, at any time, have any independent or autonomous ex-parte communications with any candidate for appointment as arbitrator.

Challenge to the appointment of arbitrators

A Party to an arbitration can challenge the appointment of arbitrator(s) in writing to the Secretariat. Such a challenge must be made within a time limit decided by the Registrar. If the party making the challenge fails to pay the requisite fees, the challenge is withdrawn.

Replacement of arbitrators

An arbitrator may be replaced upon death, resignation or a unanimous written request from all parties to the arbitration for the removal of an arbitrator. Rule 9.3. If an arbitrator is found not to be impartially or independently acting, a Notice in writing will be issued to the parties and any other members of the arbitral tribunal. The Council may remove such arbitrators and the decision of the Council shall be final.

Expedited procedure

Prior to the constitution of the Tribunal, any party may apply in writing to the Secretariat for conducting the arbitral proceedings in an expedited manner. The Secretariat shall forward the said request to the Council, which shall expeditiously consider if any of the following criteria is satisfied. An Arbitral Tribunal consisting of a Sole Arbitrator. The time limits applicable to the arbitration under these Rules may be shortened by the Registrar, which shall be duly notified to the parties and the Tribunal. The Parties may agree in writing that the Tribunal need not state reasons in the Award or that it shall pass an award by stating reasons in a summary form.

Emergency interim relief

A party in need of emergency interim relief may make an application for such relief with the Secretariat. Once the Application is accepted, the Emergency Arbitrator shall be appointed by the Council within one business day from the date of such decision. The Emergency Arbitrator may modify or vacate the preliminary order, Interim order or Interim Award for good cause. The Tribunal is not bound by the reasons given by the emergency arbitrator. Unless otherwise agreed to by the parties, the Emergency Arbitrator shall not be appointed as the arbitrator in the regular arbitration proceedings.

Interim Measures & Additional Powers to the Tribunal

A party may apply to the arbitrary tribunal for interim relief or a conservatory (protective) measure, on such conditions or furnishing of any security by the party so applying, as it may be appropriate and proper in the circumstances of the case. The Tribunal has the power to –. order preservation, storage, sale or disposal of any property or items, which is or forms part of the dispute.

Consolidation of Arbitrations

Statement of Claim

The Claimant shall submit to the Tribunal a Statement of Claim with the relief being claimed, together with the amounts of all quantifiable claims. The Claim Statement shall set out in detail, the facts and legal grounds supporting the claim. If so determined by the Tribunal at the preliminary procedural meeting, the Claimant may also file a statement of witnesses.

Statement of Defence

The Respondent must submit to the Tribunal a Statement of Defence, setting out in detail the facts, contentions and legal grounds on which it relies, within a period as determined by the Tribunal.

Counterclaim

The Respondent may submit any counterclaim to the Tribunal, by serving the same upon the Secretariat, Claimant and all other Respondents (if any). The Counterclaim shall be submitted along with the Statement of Defence and duly annexed. If the Claimant fails to submit its statement of defence to the Counterclaim within the granted time, the Tribunal may proceed with arbitration.

Pleadings in general

The Registrar of the High Court for the Isle of Man (HAC) has the power to decide suo-moto or on a request by any party whether further pleadings are required from the parties. The Tribunal may also limit the length and scope of the written pleadings and also may limit the number of oral witness statements.

Arbitral proceedings

• Jurisdiction:

The Tribunal has the power to rule on its jurisdiction & authority, including any objections with respect to the existence, termination or validity of the arbitration agreement or scope of its authority. A challenge to the jurisdiction of the Tribunal shall be raised no later than in the Statement of Defence or a statement of defence to the counterclaim.

• Applicable law:

The parties agree that the Tribunal should apply the law as determined by the parties to the substance of the dispute. The Tribunal is vested with an authority to decide the dispute according to the principles of equity and good conscience or to take a decision as per the trade practices and usage.

• Hearings:

Rule 23.1. The parties may mutually agree to have a documents-only arbitration, where the Tribunal passes the final award by referring to documentary evidence relied upon by the parties. Rule 23.2. The Tribunal may at any time require the parties to prepare an agreed list of issues to be determined by the Tribunal.

• Witnesses:

The Parties and the Tribunal, if they wish to produce any witnesses for recording of oral testimony in the subject matter, shall provide a list of the said witnesses, including expert witnesses, in advance. The procedure for the examination of the witnesses – including the 

submission of their written affidavit / statements – shall be determined by the Tribunal.

• Evidence:

The Tribunal has the power to examine and make available to the parties any document in their possession, custody or control which it considers to be relevant to the case and material to its outcome. Unless otherwise specifically agreed between the parties, the Tribunal is at liberty to adopt any procedure to determine the admissibility, relevance and weight of any evidence.

• Language:

The Tribunal, upon its constitution, shall determine the language in which the arbitration proceedings shall be conducted. The parties may then be required to make arrangements for engaging the services of a translator. If a document submitted by a party to HAC is in a language other than English, the Registrar may require the party to submit a translation.

Orders and Awards

All awards made in writing shall be final and binding on the parties. An Award may be executed in any number of counterparts, each of which is an original and all of which are the same Award. HAC may print, publish or otherwise circulate any award passed in an arbitration governed under these Rules or administered by HAC.

Cost and fees

The term “costs” includes only the fees of the Arbitral Tribunal to be stated separately as to each arbitrator. The Registrar may consent for determining the Tribunal’s fee through any other alternative method. The Tribunal is also entitled to be reimbursed by the parties of any reasonable out-of-pocket expenses necessarily incurred during the arbitration.

General provisions

• Confidentiality:

All matters relating to the arbitral proceedings, including any award, except where disclosure is necessary for the purposes of implementation and enforcement of the award, shall be kept confidential. The Tribunal has the power to take appropriate measures, including issuing an order or award for sanctions or costs if a party breaches this Rule.

• Exclusion and waiver of liability:

The parties and the Tribunal agree that statements or comments made in connection with an arbitration proceeding shall not be relied upon for defamation, libel, slander or any other complaint. Any party who proceeds with the arbitration knowing that any provision or requirement of these rules has not been complied with, may be deemed to have waiveect.

• Interpretation of rules:

HAC’s decision on any question relating to interpretation of these rules shall be final and binding on the parties and arbitrators.

• Miscellaneous provisions:

The Chairman of the Arbitration Committee (HAC) and the Tribunal have the sole authority to award Awards, and the Registrar has the sole discretion and authority to prepare forms and resolve disputes. HAC may destroy all documents served on it pursuant to the Rules after the expiry of a period of three years following the last correspondence received by HAC relating to the arbitration.