Introduction to ADR & Arbitration Act for AIBE
Alternative Dispute Resolution (ADR) is a crucial part of the Indian legal system, providing faster and cost-effective solutions to disputes outside traditional courts. The Arbitration and Conciliation Act, 1996 governs arbitration and conciliation in India, ensuring fairness and finality in dispute resolution. This guide covers landmark cases, legal provisions, and MCQs to help law students prepare for the All India Bar Examination (AIBE).
Key Topics Covered:
✅ Meaning & Importance of ADR
✅ Types of ADR – Arbitration, Conciliation, Mediation, Negotiation, Lok Adalats
✅ Arbitration Act, 1996 – Key Provisions & Jurisdiction
✅ Landmark Cases in Arbitration & ADR
✅ MCQs for AIBE Preparation
Landmark Cases on Arbitration & ADR
1. Bhatia International v. Bulk Trading S.A. (2002)
Facts: The issue was whether Part I of the Arbitration and Conciliation Act, 1996, applies to international commercial arbitration.
Judgment: The Supreme Court held that Part I of the Act applies even to international arbitrations unless expressly excluded.
Conclusion: This decision broadened the scope of arbitration in India but was later overruled in BALCO v. Kaiser Aluminium (2012).
2. Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium (2012)
Facts: The case challenged the decision in Bhatia International regarding the applicability of Part I of the Arbitration Act to foreign arbitrations.
Judgment: The Supreme Court ruled that Part I applies only to domestic arbitrations and has no bearing on foreign arbitrations.
Conclusion: This case upheld party autonomy and aligned Indian arbitration law with international practices.
3. ONGC v. Western Geco International Ltd. (2014)
Facts: ONGC challenged an arbitral award on the grounds of “public policy.”
Judgment: The Supreme Court expanded the definition of “public policy” to include judicial approach, principles of natural justice, and fundamental policy of Indian law.
Conclusion: This case emphasized the importance of fairness and reasonableness in arbitral decisions.
4. Vijay Karia v. Prysmian Cavi (2020)
Facts: The case involved enforcement of a foreign arbitral award under the New York Convention.
Judgment: The Supreme Court ruled that foreign awards should be enforced unless they violate fundamental public policy.
Conclusion: Strengthened India’s pro-arbitration stance and limited judicial interference in enforcement of foreign awards.
MCQs on ADR & Arbitration Act
1. What is the primary legislation governing arbitration in India?
A) Indian Contract Act, 1872
B) Arbitration and Conciliation Act, 1996
C) Civil Procedure Code, 1908
D) Indian Evidence Act, 1872
✅ Answer: B) Arbitration and Conciliation Act, 1996
2. Which case overruled the Bhatia International judgment?
A) ONGC v. Saw Pipes
B) Bharat Aluminium Co. v. Kaiser Aluminium
C) Venture Global v. Satyam Computers
D) Afcons Infrastructure v. Cherian Varkey
✅ Answer: B) Bharat Aluminium Co. v. Kaiser Aluminium
3. What does the term “party autonomy” in arbitration mean?
A) Only one party can decide the arbitration proceedings
B) Parties can choose the procedural rules & seat of arbitration
C) The arbitrator has full control over proceedings
D) The judiciary can overrule an arbitral award
✅ Answer: B) Parties can choose the procedural rules & seat of arbitration
4. Which section of the Arbitration Act deals with the enforcement of foreign arbitral awards?
A) Section 9
B) Section 34
C) Section 44-49
D) Section 89
✅ Answer: C) Section 44-49
5. Which landmark case defined the concept of “public policy” in arbitration?
A) ONGC v. Western Geco
B) Bhatia International v. Bulk Trading
C) BALCO v. Kaiser Aluminium
D) Afcons Infrastructure v. Cherian Varkey
✅ Answer: A) ONGC v. Western Geco
