The Conduct of Arbitration Proceedings: A Comprehensive Guide

If you’ve ever wondered how disputes get resolved outside the courtroom in India, arbitration is one of the most important mechanisms to understand. At the heart of this process lies the conduct of arbitration proceedings – the actual steps, rules, and procedures that govern how an arbitral tribunal handles a dispute from start to finish. Governed primarily by Chapter V (Sections 18 to 27) of the Arbitration and Conciliation Act, 1996, these provisions offer a fascinating blend of flexibility, party autonomy, and procedural fairness that makes arbitration a powerful alternative to traditional litigation.

The foundation: equal treatment of parties 🔗

Before diving into any procedural detail, there is one non-negotiable principle that underpins every arbitration proceeding in India – equal treatment. Section 18 of the Arbitration and Conciliation Act, 1996 mandates that both parties must be treated equally and each party must be given a full opportunity to present its case. This is essentially an expression of the principles of natural justice – no one should be condemned unheard, and no side should get an unfair procedural advantage over the other.

This principle is not just a formality. Courts have actively set aside arbitral awards where a party was denied a fair hearing. For instance, if an arbitral tribunal proceeds ex parte without giving adequate opportunity or notice to a respondent, the resulting award can be challenged under Section 34 of the Act. Equal treatment operates as both a right for the parties and a duty on the tribunal throughout the entire proceedings.

Determination of rules of procedure (Section 19) 🔗

One of the most important provisions governing the conduct of arbitration proceedings is Section 19. This section establishes the procedural framework and is central to understanding why arbitration differs so fundamentally from court litigation.

Freedom from the CPC and Evidence Act 🔗

Section 19(1) explicitly states that the arbitral tribunal is not bound by the Code of Civil Procedure, 1908 (CPC) or the Indian Evidence Act, 1872. This is a significant departure from court proceedings, where both of these statutes strictly govern how cases are conducted. In arbitration, the tribunal has far greater latitude in how it manages proceedings, collects evidence, and conducts hearings.

That said, in practice, many arbitral tribunals in India do apply principles analogous to the Evidence Act – particularly when it comes to examining witnesses and determining the admissibility of evidence. According to Global Arbitration Review, arbitral tribunals generally follow principles similar to the Indian Evidence Act while deciding on the admissibility and weight of evidence, even though they are not legally required to do so.

Party autonomy in procedure 🔗

Section 19(2) gives the parties the right to agree on the procedure to be followed by the arbitral tribunal. This is the essence of party autonomy – the parties themselves can decide how their dispute will be resolved, including the rules of evidence, the format of submissions, the timeline, and more. If the parties choose to adopt the rules of an arbitral institution (such as the SIAC Rules, ICC Rules, or ICA Rules), those institutional rules become the procedural framework for the arbitration.

Tribunal’s discretion in the absence of agreement 🔗

What happens if the parties do not agree on a procedure? Section 19(3) steps in and grants the arbitral tribunal the power to conduct the proceedings in whatever manner it considers appropriate, subject to Part I of the Act. This includes the power under Section 19(4) to determine the admissibility, relevance, materiality, and weight of any evidence presented. This broad discretion ensures that proceedings do not stall simply because parties failed to agree on procedural rules.

Place of arbitration (Section 20) 🔗

The question of where arbitration takes place is more significant than it may appear. Section 20 deals with the place or “seat” of arbitration, which has critical legal consequences – it determines which court has supervisory jurisdiction over the proceedings.

Under Section 20(1), the parties are free to agree on the place of arbitration. If they fail to do so, the arbitral tribunal determines the place, considering the circumstances of the case and the convenience of the parties. Importantly, Section 20(3) allows the tribunal to meet at any place it considers appropriate for consultation, hearing witnesses, or inspecting documents – regardless of the designated seat. This distinction between “seat” and “venue” has been the subject of considerable judicial attention. As noted in the landmark case of Bharat Aluminium Co. v. Kaiser Aluminium, the seat determines jurisdiction, while the venue is merely the physical location where hearings are held for convenience.

Commencement and language of proceedings 🔗

When do proceedings begin? 🔗

Under Section 21, unless the parties agree otherwise, arbitral proceedings commence on the date on which the respondent receives a request for the dispute to be referred to arbitration. This is a crucial date because it triggers several timelines, including limitation periods. According to iPleaders, the Limitation Act, 1963 applies to arbitration, and proceedings become time-barred if commenced after three years from the date the cause of action arose.

Language of proceedings (Section 22) 🔗

Section 22 permits the parties to agree on the language or languages to be used during arbitration. In the absence of such agreement, the arbitral tribunal decides. This agreement or determination applies to all written statements, hearings, and the arbitral award itself. For international commercial arbitrations seated in India, the language clause becomes particularly important for parties from different linguistic backgrounds.

Statements of claim and defence (Section 23) 🔗

The formal exchange of claims and defences is a core part of any arbitration proceeding. Section 23 lays down the framework for this stage.

The claimant must state the facts supporting the claim, the points at issue, and the relief or remedy sought. Similarly, the respondent must communicate a statement of defence in respect of these particulars. Both parties can attach relevant documents or refer to other evidence they intend to rely upon. Parties may also amend or supplement their claims or defences during the proceedings, unless the tribunal considers it inappropriate due to delay.

A significant amendment introduced by the Arbitration and Conciliation (Amendment) Act, 2019 added Section 23(4), which requires the completion of statements of claim and defence within six months from the date the arbitrator(s) received written notice of their appointment. This was designed to prevent indefinite delays at the pleading stage itself.

Hearings and written proceedings (Section 24) 🔗

Section 24 addresses one of the most practical aspects of arbitration – how hearings are conducted.

Oral hearings vs. documents-only proceedings 🔗

The arbitral tribunal has the discretion to decide whether to hold oral hearings for presenting evidence or arguments, or whether the proceedings will be conducted entirely on the basis of documents and other materials. However, if any party requests oral hearings, the tribunal must grant that request – unless the parties have previously agreed that no oral hearings will be held.

Day-to-day hearings and restrictions on adjournments 🔗

The 2015 Amendment introduced a critical proviso to Section 24, requiring that oral hearings be held on a day-to-day basis as far as possible. Adjournments should only be granted when sufficient cause is established, and the tribunal may impose costs – including exemplary costs – on the party seeking unnecessary adjournments. As noted by CMS Law, these provisions were specifically introduced to prevent unnecessary delays, which had long plagued arbitration in India.

Communication and transparency 🔗

Section 24(3) mandates that all statements, documents, or information supplied to the arbitral tribunal by one party must be communicated to the other party. Similarly, any expert report or evidentiary document that the tribunal may rely on must be shared with both sides. This ensures transparency and prevents any party from being blindsided by evidence it hasn’t had the chance to examine or rebut.

Default of a party (Section 25) 🔗

What happens when a party fails to participate in the arbitration? Section 25 provides clear rules for such scenarios:

If the claimant fails to submit a statement of claim, the arbitral tribunal must terminate the proceedings. The logic is straightforward – without a claim, there is no dispute to adjudicate.

If the respondent fails to submit a statement of defence, the tribunal continues the proceedings without treating the failure as an admission of the claimant’s allegations. However, the tribunal has the discretion to treat the respondent’s right to file a defence as forfeited. As the Drishti Judiciary portal explains, the tribunal must still examine whether there was sufficient cause for the respondent’s absence before proceeding ex parte.

If a party fails to appear at an oral hearing or produce documents, the tribunal may continue the proceedings and render an award based on the evidence before it. This provision ensures that arbitration cannot be frustrated by a party’s deliberate non-participation.

Expert appointment and court assistance in evidence (Sections 26 and 27) 🔗

Section 26 empowers the arbitral tribunal to appoint one or more experts to report on specific issues. The tribunal can also require a party to provide the expert with relevant information or access to documents, goods, or property for inspection. If a party or the tribunal requests, the expert must participate in oral hearings where parties can question the expert and present their own expert witnesses.

Section 27 provides for court assistance in taking evidence. If the arbitral tribunal or a party (with the tribunal’s approval) finds it necessary, an application can be made to the court for assistance in obtaining evidence. The court can then order the production of documents, issue summonses to witnesses, or take other steps – essentially lending the coercive power of the state to support the arbitral process.

Time limits for the arbitral award (Section 29A) 🔗

One of the most impactful reforms in recent years has been Section 29A, introduced by the 2015 Amendment and further refined by the 2019 Amendment. This provision was designed to address a long-standing criticism of Indian arbitration – that proceedings dragged on for years without conclusion.

Under the current framework, domestic arbitral awards must be made within 12 months from the date of completion of pleadings under Section 23(4). The parties can mutually agree to extend this period by an additional six months. Beyond 18 months, the arbitral tribunal’s mandate terminates automatically, unless a court grants a further extension. According to IBC Laws, the Supreme Court in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. (2024) held that an application for extending the time limit can be filed even after the statutory period has expired, reinforcing a flexible approach to these timelines.

Notably, the 2019 Amendment excluded international commercial arbitrations from the strict 12-month deadline, providing greater flexibility for complex cross-border disputes.

Fast track procedure (Section 29B) 🔗

For parties seeking an even quicker resolution, Section 29B provides for a fast track procedure. Under this mechanism, the parties can agree that the dispute shall be resolved by a sole arbitrator, and the award must be made within six months from the date the tribunal enters upon reference. The proceedings are typically conducted on the basis of written pleadings, documents, and submissions – without oral hearings, unless a party requests one or the arbitrator deems it necessary.

Why this flexibility matters 🔗

The entire framework governing the conduct of arbitration proceedings in India is built around two pillars: party autonomy and tribunal discretion. Parties get to shape the process according to their needs, and the tribunal fills in the gaps where the parties have not reached agreement. This stands in stark contrast to court litigation, where procedures are fixed by statute and leave very little room for customisation.

India has been steadily moving towards a more pro-arbitration regime, with both the judiciary and the legislature working to minimize unnecessary interference. The principle of minimal judicial intervention, codified in Section 5 of the Act, ensures that courts step in only when absolutely necessary – such as for appointing arbitrators, granting interim relief, or enforcing awards.

This combination of procedural flexibility, time-bound resolution, and limited court interference is what makes arbitration an increasingly attractive option for resolving commercial and civil disputes in India.

What do you think? Given the emphasis on party autonomy in arbitration proceedings, do you believe the current statutory time limits under Section 29A strike the right balance between speed and fairness – or do they risk compromising the quality of arbitral awards in complex disputes?

References

1. https://www.indiacode.nic.in/handle/123456789/1978?view_type=browse
2. https://www.globallegalinsights.com/practice-areas/international-arbitration-laws-and-regulations/india/
3. https://globalarbitrationreview.com/insight/know-how/commercial-arbitration/report/india
4. https://blog.ipleaders.in/arbitral-process/
5. https://www.indiacode.nic.in/bitstream/123456789/1978/3/a1996-26.pdf
6. https://cms.law/en/int/expert-guides/cms-expert-guide-to-international-arbitration/india
7. https://www.drishtijudiciary.com/to-the-point/ttp-arbitration-and-conciliation-act/conduct-of-arbitral-proceedings
8. https://ibclaw.in/stance-of-supreme-court-on-expiry-of-mandate-of-arbitrator-and-decoding-of-section-29a4-of-arbitration-act-by-adv-sahil-arora/
9. https://theidrc.com/content/arbitration/arbitration-in-india