Speaker 1: Now, I am going to talk about the Arbitration Clause. This is only the negotiations happening between parties, the clause has not been inserted. Now, what does an Arbitration Clause talk about? Okay, what is an Arbitration Clause? Is there anybody who would like to give any input? According to you, what should be there in an Arbitration Clause?

Speaker 2: Arbitration Clause talks about how arbitration will take place in case of... Yeah, so it specifies how arbitrators will be appointed, who will bear the cost of arbitration, where the arbitration will take place and all these things.

Speaker 1: Okay, yes, anybody else? Speak your mind, whatever you think should be there in an Arbitration Clause, let me explain. You are saying, our disputes will be resolved according to this Arbitration Clause. So, what can be that information that you want to put? One second, excellent. So, very rightly said, we need to know how many arbitrators will be there and who is an arbitrator? So, the first point is, how many arbitrators will be there? Number, very true, you need to know how many arbitrators are going to resolve. Who is an arbitrator? The arbitrator is the judge who is going to resolve the dispute. Okay, what else can be there in an Arbitration Clause? How they will be appointed, excellent. How to appoint, this is very relevant. Okay, what else can be there in an Arbitration Clause? Very, very true, place or venue. Okay, this is fine. What are these things? You have understood that we have to find out what will be the venue, where the arbitration will take place. If Ramanuj is from Kolkata, I am from Delhi and if we don't put the place, then where will be the arbitration? So, if you draft your Arbitration Clause poorly, then it has absurd consequences. Therefore, it is extremely relevant that firstly you know how to draft an Arbitration Clause. How to appoint the arbitrator, how many arbitrators and what will be the place? What else can be there? Cost of arbitration in what sense? Who is going to bear is fine but the law is that both the parties have to share 50-50. So, that's how it's mentioned in the clause. It can't be, there can't be an Arbitration Clause saying that only the claimant will pay full fees because any agreement which is not you know which tries to overlap with the law cannot happen. So, this has to be shared by both parties. Fees, what else? Okay, no other information is required according to you. Now, what do you want to resolve in arbitration that has to come or that doesn't have to come? Let me tell you. So, this is the most important and crucial part because in 90% cases, you write the language of Arbitration Clause so narrowly because of which all disputes are not covered in it. So, always remember when you are drafting an Arbitration Clause, how you word it, it's very important. So, you say any dispute, any dispute covers everything? No, it doesn't or differences. Does it cover everything? What else can we add? Apply your mind. See, the idea is to think because you are a lawyer at the end of the day and you have to anticipate that what all can happen here. You have to foresee all of this. We don't have to think like layman, we have to think like a lawyer. Arising out of, arising out of the agreement is sufficient. Any dispute or differences arising out of this agreement between me and Ramanuj, does that cover everything? Does that cover everything? No, who's saying no? Absolutely or in relation to. So, now I am increasing the ambit of my Arbitration Clause. Any disputes or differences arising out of or in relation to or connected to, I can write as much as I want to make sure that any kind of dispute which is in any sense related to this dispute shall be governed by Arbitration because tomorrow they should not come and say look the dispute that you are trying to raise is not covered by this Arbitration because your language is any dispute arising out of this agreement and assuming tomorrow we enter into another agreement relating to this construction contract for some other work, additional work but Ramanuj may say no, no, no, that Arbitration is only with respect to this agreement but the moment I write in relation to or arising out of or in connection to, it covers all other subsidiary agreements also. Are you following me? Am I clear till now? Especially the second year students, am I clear? Feel free to ask and give your inputs and please understand why I am telling you that it is important for you. A. Because on a Saturday evening you are here and I am sure you had your plans. B. It is going to help you quite a lot in your internships, in your career option. By the time you graduate, Arbitration will be like it is the future and the present. It is going to be the only thing. So please focus and take it seriously. Okay. So any dispute arising out of or in relation to or in connection to the present agreement shall be referred to an Arbitration consisting of a sole Arbitrator. Now how do you decide the number of Arbitrators? If I am the lawyer and you are my client, what should be the number of Arbitrators according to you? It should be an odd number. You tell me. Maybe. Who is agreeing with them? The problem is this. Read section 10. You don't have a bear act. That is a difficulty. But I will tell you. The moment I make two or three decisions, I will tell you the number of Arbitrators. I will tell you the number of Arbitrators. I will tell you the number of Arbitrators. I will tell you the number of Arbitrators. There has to be a third party. Exactly. Therefore, there is a need for an odd number. There can't be an even number. Because the moment there are two or four, you know what happens. So therefore, there is always either a number of three or one Arbitrator who is called a sole Arbitrator. But the moment a person is sitting here as the Arbitrator, what does he become? This is the Arbitral Tribunal. And if there are three members, we are collectively called as Arbitral Tribunal consisting of three members. Any doubt so far? No doubt. Just one second. Let me finish this. And in case the person, the main Arbitrator, because sometimes what happens is parties say in the Arbitration clause then one Arbitrator I will appoint, the other party will appoint the second and the third one will be a neutral Arbitrator. So this third person will be called as the presiding Arbitrator. Because he is presiding the Arbitration. Okay. Now coming back. So you write that two Arbitrators will be appointed or three Arbitrators but two cannot happen. So sole Arbitrator or three Arbitrators. Now what is the basis of deciding the numbers of Arbitrator? How do you decide that I have to keep one Arbitrator or three in the clause? How do you decide that? This is very important. See all of this is extremely relevant. And nobody is going to, you will not find it in any book. So please tell me, apply your mind. Yes. Absolutely. Absolutely. If the amount is relatively less, then you would want one sole Arbitrator. Because at the end of the day you have to pay fees to that Arbitrator. And if you will have three Arbitrators, that fees into three. So the party has to bear the cost. You would not want your party to eventually pay for three people rather than paying for one person. And that would also save time and convenient for the parties. Because if there are three Arbitrators, like today we had three members. One of them couldn't make it. So if that happens, the Tribunal cannot go on. Or maybe one person stays in Mumbai. And dates are fixed six months in advance. That person for some reason cannot come. Then the Tribunal will have to shift the dates again. Then convenience of the parties will get affected because three Arbitrators cannot have same free dates. I will say I am free in May and they will say, no, no, no. May I am occupied. July. Then our dates will be fixed, I think seven, eight months later. So these are the practical difficulties that come when there are more members on the Tribunal. That's why in a lot of domestic arbitrations, you will see one Arbitrator who's the sole Arbitrator. So the language of the clause will say sole Arbitrator to be appointed by the consent of the parties or mutually by the parties. Sometimes what they do is they put the name of the person. But nowadays what mostly happens is that people say that parties will mutually decide. Now once the disputes have arisen, you can't have that kind of mutual decision. Whatever name you will suggest, I will say no, no, no, no, he's your guy. I will say I want him. You'll say, no, no, not that guy. So that happens. But anyway, what else needs to be there in an arbitration clause according to you? Do you think language is relevant? Why? Why is language relevant in an arbitration clause? See the reason why language is relevant is because assuming that I am a party from Russia and you are from London, you are comfortable in English and I'm comfortable in Russian. Now evidence is happening and it's happening. I'm speaking Russian and Arbitrator is from India. So three different languages. Nobody knows what, who's talking. How do I cross examine you? Are you following me? Or probably somebody says I'm from Mumbai. I want to speak in my regional language. You say no, I want to speak in my regional language. So therefore there is a reason why in arbitration clauses people write the language of the arbitration shall be English mostly. And one more thing which is there in arbitration clauses is that they say that the arbitration will be governed by the Indian Arbitration Act 1996 and amendments there too. So that covers any future amendments also. That's how a perfect arbitration clause look like. One more thing, what Uzair I think asked me regarding, you know, the ad hoc arbitration. Now what are ad hoc arbitration? Ad hoc arbitration is basically this, that you and I, we enter into an agreement, we appoint X person as the arbitrator and we decide up any hearings in a hotel etc. And the whole arbitration is conducted there. Whereas the other kind of arbitration is institutional arbitration. What is institutional arbitration? Basically there are institutes which will take care of all of this. Like for instance in Delhi we have Delhi International Arbitration Center. So if the arbitration clause says that the arbitration will be governed by DIC rules. So DIC has its own rules. They have a different fee structure. They will provide all the, that will be a facilitation body that will provide you that kind of, it will be very very convenient. They will make sure arbitration goes conveniently. The room will be provided by them. They will also, you know, coordinate with the parties. They will send emails that arbitrators are saying on this date. They will maintain the files of the arbitrator. So it's like an administrative function that they do. So that's the beauty about institutional arbitration which is I think the best way of doing an arbitration because ad hoc is, you know, very unorganized I must say. So this is how your arbitration clause looks like.