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CBSE Questions for Class 12 Commerce Legal Studies Arbitration,Tribunal Adjudication And Alternate Dispute Resolution Quiz 5 - MCQExams.com
CBSE
Class 12 Commerce Legal Studies
Arbitration,Tribunal Adjudication And Alternate Dispute Resolution
Quiz 5
The word 'arbitration' in $$1996$$ Act connotes the same meaning as contained in ______.
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Article $$2(d)$$ of Model Law of UNCITRAL
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Article $$2(b)$$ of Model Law of UNCITRAL
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Article $$2(a)$$ of Model Law of UNCITRAL
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none of the above
Explanation
Arbitration is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the "arbitrators", or "arbitral tribunal"), by whose decision the "award" they agree to be bound. An arbitrator serves as the decision-maker and referee in an arbitration proceeding, much like a judge during a court case.
Which is the incorrect statement: The High Court before appointing an arbitrator, shall have due regard to _____________.
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qualifications required of the arbitrators by the agreement of the parties
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nationality of the arbitrator
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other considerations which are likely to secure the appointment of an impartial arbitrator
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None of the above
Explanation
Under The Arbitration and Conciliation Act,1996
Section 11: Appointment of arbitrators.
Section 11(8): The Chief Justice or the person or institution designated by him, in appointing arbitrator, shall have due regard to-
any qualifications required of the arbitrator by the agreement of the parties and
other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
Scope and object of section $$8$$ of the Arbitration and Conciliation Act, $$1996$$ is _________________.
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the same as that of section $$34$$ of the Arbitration Act, $$1940$$
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different from that of section $$34$$ of the Arbitration Act, $$1940$$
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same or different from that of section $$34$$ of the Arbitration Act, $$1940$$, depending on the facts and circumstances of the case
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either (A) or (C)
Explanation
Section 8 of the Arbitration and Conciliation Act, 1996, a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. If the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.
Section 34 of Arbitration and Conciliation Act, 1940, says that where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other patty to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in' the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceed
ings were commenced. and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.
Reference in a contract to a document containing an arbitration clause _______________.
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does not constitute an arbitration agreement
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constitutes an arbitration agreement if the contract is in writing and the reference is such as to make the arbitration clause part of the contract
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constitutes an arbitration agreement where the contract though oral, the reference is such as to make that arbitration clause part of the contract
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either (b) or (c)
Explanation
Under The Arbitration and Conciliation Act, 1996
Chapter II : Arbitration agreement
Section 7: Arbitration agreement
Section 7(5): The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.
The court has a jurisdiction to entertain an application for interim measures ________________.
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either before arbitral proceeding or after making of the arbitral award
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before the arbitral award is enforced
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can exercise power suo motu
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both (a) and (b)
Explanation
Under The Arbitration and Conciliation Act,1996
Chapter II: Arbitration agreement
Section 9: Interim measures etc. by Court.
This section discusses about the manner in which a party may apply to a court before, or during arbitral proceedings or at anytime after the making of the arbitral award but before it is enforced in accordance with section 36.
In case of three arbitrators, the 'third arbitrator' shall act as ____________.
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an umpire
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a presiding arbitrator
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sole arbitrator
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none of the above
Explanation
Appointment of arbitrators under Arbitration Act, $$1996$$ has been provided under Section $$11$$ of the act. Under this section, parties are free to agree on a procedure for appointing the arbitrator or arbitrators. If the parties fail to appoint any arbitrator by agreement, the arbitration will be with three arbitrators where each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
An application under section $$8$$, Arbitration and Conciliation Act, $$1996$$, contemplates __________.
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a matter pending before the Court
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a matter pending before a quasi-judicial authority
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a matter pending before an administrative authority
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either (a) or (b) or (c)
Explanation
Section 8 of Arbitration and Conciliation Act, $$1996$$ provides that in spite of application under section $$8(1)$$ that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Here the term used is judicial authority which in Indian legal system is the court.
Under section $$7$$, Arbitration and Conciliation Act, $$1996$$, an arbitration agreement shall be in writing if it is contained in __________.
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a document signed by the parties
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an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement
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an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other party
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either (a) or (b) or (c)
Explanation
Under The Arbitration and Conciliation Act,1996
Chapter II: Arbitration agreement
Section 7: Arbitration agreement
Section 7(4): An arbitration agreement is in writing if it is contained in-
a document signed by the parties;
an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or
an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other
An application for referring the parties to arbitration under section $$8$$, Arbitration and Conciliation Act, $$1996$$, must be accompanied by ____________.
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the original arbitration agreement or a photocopy thereof
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the original arbitration agreement or a duly certified copy thereof
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a duly certified copy of the arbitration agreement or a photocopy thereof
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the original arbitration agreement only. Once an application under section $$8$$
Explanation
Under The Arbitration and Conciliation Act, 1996
Section 8: Power
to refer parties to arbitration where there is an arbitration agreement.
Section 8(1): A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to the arbitration.
Section 8(2) : The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
Section $$8$$, Arbitration and Conciliation Act, $$1996$$ ______________.
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bars the court from referring the parties to arbitration once the party has submitted his statement
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does not bar the court from referring the parties to arbitration after submission of his statement, where the party who has brought the action does not object
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does not bar the court from referring the parties to arbitration after submission of his statement, irrespective of whether the party who has brought the action has any objection to it or not
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only (a), and not (b) or (c)
Explanation
According to section $$8$$ of Arbitration and Conciliation Act, $$1996$$, the judicial authority, before which an action is brought in a matter which is the subject of an arbitration
agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so
applies not later than the date of submitting his first statement on the substance of the dispute, then,
notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to
arbitration unless it finds that prima facie no valid arbitration agreement exists. But it is subject to the objection of the party who has brought the action. If the party does not object then court is not barred to refer parties to arbitration.
The 'Presiding Arbitrator' is appointed by ____________.
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parties to the arbitration agreement
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the appointed arbitrator by each party
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the Court
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either (a) or (b) or (c)
Explanation
Under The Arbitration and Conciliation Act,1996
Section 11: Appointment of arbitrators.
A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
Subject to sub section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
Failing any agreement referred to in sub section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators, shall appoint the third arbitrator who shall act as the presiding arbitrator.
Section $$9$$ of $$1996$$ Act deals with ______________.
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interim measures by the court
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discretionary powers of the court
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both (a) and (b)
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None of the above
Explanation
Under The Arbitration and Conciliation Act,1996
Chapter II: Arbitration agreement
Section 9: Interim measures etc. by Court.
This section discusses about the manner in which a party may apply to a court before, or during arbitral proceedings or at anytime after the making of the arbitral award but before it is enforced in accordance with section 36.
Under section $$10$$, Arbitration and Conciliation Act, $$1996$$, the parties are free to determine the number of 'arbitrators', provided that such number _______________.
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does not exceed three
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does not exceed five
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does not exceed seven
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is not an even number
Explanation
Under The Arbitration and Conciliation Act,1996
Chapter III: Composition of arbitral tribunal
Section 10: Number of arbitrators.
The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.
Failing the determination referred to in subsection (1), the arbitral tribunal shall consist of a sole arbitrator.
Section $$12$$ of Arbitration and Conciliation Act, $$1996$$ deals with _______________.
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procedure 'for arbitration
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grounds for challenge to Arbitrator
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finality of award $$1$$
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none of the above
Explanation
Under The Arbitration and Conciliation Act, 1996 s
ection 12 makes provisions relating to grounds for challenging the appointment of arbitrator.
In the case of appointment of sole or third arbitrator in an international commercial arbitration, a person _______________.
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who is of the nationality of the claimant may be appointed as arbitrator
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who is of the nationality of the disputant may be appointed as an arbitrator
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who is of any nationality irrespective of the nationalities of the parties may be appointed as an arbitrator
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who is of a nationality other than the nationalities of the parties may be appointed as an arbitrator
Explanation
In case of International Commercial Arbitration, the appointment of sole or third arbitrator the procedure is slightly different from that in domestic arbitration. In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.
A party ____________.
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cannot challenge an arbitrator appointed by him
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may challenge an arbitrator appointed by him for reason of which he becomes aware after the appointment has been made
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may challenge an arbitrator appointed by him for reason known to him before the appointment is made
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may challenge an arbitrator appointed by him irrespective of the reasons being known to him before the appointment or becoming aware of the reasons after the appointment has been made
Explanation
Section $$12$$ of the Arbitration and Conciliation Act, $$1996$$ provides grounds for challenging the appointment of the arbitrator. Sub-clause $$(4)$$ of the section states that 'A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.'
The power of appointment of arbitrator in exercise of power under section $$11(6)$$ of $$1996$$ Act by the Chief Justice or his designate is __________.
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an administrative order
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an interim order
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a judicial order
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none of the above
Explanation
There have been a lot of debates regarding whether the power of appointment by the Chief Justice or his designate is administrative or judicial order. The answer to this was developed through various judgments starting from Sundaram Finance vs. NEPC India Ltd where it was held to be administrative in nature which was upheld in Ador Samia Pvt. Ltd. vs. Peekay Holdings Pvt. Ltd. on the reasoning that the appointment of arbitrators is made as per the provision of Section 11 which does not require the Court to pass a judicial order appointing arbitrators. But later one of the leading case of SBP & Co. vs. Patel Engineering, it was held that the power exercised by the Chief Justice or his designate under S. $$11$$ of the Act is a judicial power and not an administrative power.
Under section $$11$$, Arbitration and Conciliation Act, $$1996$$, a person for being an arbitrator ______________.
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must be an Indian national
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must be an Indian citizen
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may be a person of any nationality
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may be a person of any nationality except an alien enemy
Explanation
Under section 11 of the Arbitration and Conciliation Act, $$1996$$, A person of any nationality may be an arbitrator, unless otherwise agreed by the parties and parties are free to agree on the procedure to appoint the arbitrator.
Under section $$11$$, Arbitration and Conciliation Act, the arbitrator has to be appointed _______________.
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within $$30$$ days of the arbitration agreement
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within $$30$$ days of arising of the dispute
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within $$30$$ days of failure of resolve the dispute of their own
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within $$30$$ days from the receipt of request for appointment of arbitrator from the other party
Explanation
As per section $$11$$ of the Act, in an arbitration if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
The parties to the arbitration agreement shall appoint arbitrator within __________.
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thirty days
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sixty days
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forty days
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ninety days
Explanation
As per section $$11$$ of the Act, in an arbitration if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
Where the parties fail to provide for an odd number of arbitrators, the arbitral tribunal shall consist of _______________.
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three arbitrators
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five arbitrators
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sole arbitrators
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either (a) or (b) or (c)
Explanation
Under The Arbitration and Conciliation Act,1996
Chapter III: Composition of arbitral tribunal
Section 10: Number of arbitrators.
The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.
Failing the determination referred to in subsection (1), the arbitral tribunal shall consist of a sole arbitrator.
When the mandate of an arbitrator terminates, _________________.
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no other arbitrator shall be appointed
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a substituted arbitrator shall be appointed
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the matter shall be sent to the court
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the dispute shall remain undecided by the Arbitrators
Explanation
After the mandate of the arbitrator is terminated as per section $$14$$ and $$15$$ of the Act, Section $$15 (2)$$ prescribes that where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.
The party applying for the enforcement of a foreign award shall, produce before the court ____________.
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original award or a copy thereof authenticated by law of the country
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original agreement for arbitration or a duty certified copy thereof
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such evidence as may be necessary to prove that the award is a foreign award
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All of the above
Explanation
Foreign award means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India. As per section $$47$$ of the Arbitration Act, the party applying for enforcement shall produce certain evidences to support the claims which includes:
(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
Which of the following is incorrect statement
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the effect of award being set aside is no longer enforceable by law
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the setting aside of an award acts as a bar to subsequent arbitral proceeding on the same dispute
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the setting aside of an arbitral award invalidates the arbitral agreement
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none of the above
Explanation
An award which is set aside is no longer remains enforceable by law. The parties are restored to their former position as to their claims in the dispute. Setting aside an award means that it is rejected as invalid. It does not affect the original arbitration agreement and hence does not invalidate the agreement.
C is the correct option.
For condonation of delay in making an application for setting aside the arbitral award
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section $$34$$ of the Act is complete in itself
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section $$5$$ of the Limitation Act, $$1963$$ is applicable
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both (a) and (b)
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neither (a) nor (b)
Explanation
Section 34(3) of the Act provides that an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award from the date on which that request had been disposed of by the arbitral tribunal. In case when the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not after that
The provision for setting a side the arbitral award is laid down under:
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section $$32$$ of the Act
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section $$36$$ of the Act
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section $$34$$ of the Act
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none of the above
Explanation
Provision for setting a side the arbitral award has been provided under section 34 of the Arbitration and Conciliation Act, 1996 which says that Application for setting aside arbitral award
only if
the party making the application furnishes proof that-
A party was under some incapacity, or
The arbitration agreement is not valid under the law to
which the parties have subjected it or, failing any indication
thereon, under the law for the time being in force; or
The party making the application was not given proper
notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
The arbitral award deals with a dispute not contemplated by
or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration:
The composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties, unless
such agreement was in conflict with a provision of this Part from
which the parties cannot derogate, or, failing such agreement, was
not in accordance with this Part
The Arbitral Tribunal may____________
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appoint one or more experts to report to it on specific issues to be determined by itself
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appoint only one expert to report to it on specific issues to be determined by the arbitral Tribunal
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appoint a Court Receiver to report specific issues
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may appoint Court Commissioners to report specific issues
Explanation
Under The Arbitration and Conciliation Act,1996
Section 26: Expert appointed by arbitral tribunal.
Under section 26(1) it is stated that unless otherwise agreed by the parties, the arbitral tribunal may appoint one or more expert to report to it on specific issues. The tribunal may even require
a party to give the expert any relevant information or to produce or to provide access to, any relevant documents, goods or other property for his inspection.
The mandate of an arbitrator shall terminate _____________.
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when he withdraws from his office for any reason
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when he becomes de jure or defacto unable to act without undue delay
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when the parties have agreed to terminate arbitrator's authority
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all of the above
Explanation
The arbitrator is appointed by the agreement between the parties or in case of failure to appoint, by any judicial authority prescribed. The mandate of the arbitrator generally lies in the arbitration agreement and can be terminated as per provisions of section $$14$$ and $$15$$ of the Act.
Section $$14$$ says that the mandate of an arbitrator shall terminate if—
(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of his mandate.
Section
$$15
$$ says that the mandate of an arbitrator also terminates—
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
The provision which provides for mutual settlement of dispute by parties before the arbitral tribunal is laid down under _______________.
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section $$24$$
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section $$30$$
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section $$29$$
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section $$27$$
Explanation
Section $$24$$ of the Arbitration and Conciliation Act, $$1996$$ provides for procedure of hearing and written proceedings in arbitration and the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials
Section $$27$$ of the act provides for the assistance by Court in taking evidence
Section $$29$$ says that in case of arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of all its members.
Section $$30$$ of the Act provides for mutual settlement of dispute which says that the tribunal can only encourage settlement on agreement between the parties and may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
Where there is a challenge to arbitrator under any procedure agreed upon by the parties, the Arbitral Tribunal shall ____________.
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send the matter to the court
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appoint any other arbitrator at its own discretion
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not continue the arbitral proceedings
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continue the arbitral proceedings and shall decide on the challenge
Explanation
Section $$13$$ of the Arbitration and Conciliation Act, $$1996$$ provides for the procedure for challenging the arbitration where parties are free to agree upon a procedure for challenging an arbitrator. As per sub section $$(4)$$ of the section, if a challenge under any procedure agreed upon by the parties is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
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