38. Deposits.—(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit,
as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it
expects will be incurred in respect of the claim submitted to it:
Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal,
it may fix separate amount of deposit for the claim and counter-claim.
(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:
Provided that where one party fails to pay his share of the deposit, the other party may pay that share:
Provided further that where the other party also does not pay the aforesaid share in respect of the
claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in
respect of such claim or counter-claim, as the case may be.
(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the
parties of the deposits received and shall return any unexpended balance to the party or parties, as the case
may be.
1. Ins. by Act 3 of 2021, s. 2 (w.e.f. 23-10-2015).
2. Subs. by Act 33 of 2019, s. 8, for “An appeal” (w.e.f. 30-8-2019).
3. Subs. by Act 3 of 2016, s. 20, for clauses (a) and (b) (w.e.f. 23-10-2015).
25
39. Lien on arbitral award and deposits as to costs.—(1) Subject to the provisions of
sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall
have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs
demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall
deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded,
and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court
there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable
and that the balance of the money, if any, shall be refunded to the applicant.
(3) An application under sub-section (2) may be made by any party unless the fees demanded have
been fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be
entitled to appear and be heard on any such application.
(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any
question arises respecting such costs and the arbitral award contains no sufficient provision concerning
them.
40. Arbitration agreement not to be discharged by death of party thereto.—(1) An arbitration
agreement shall not be discharged by the death of any party thereto either as respects the deceased or as
respects any other party, but shall in such event been forceable by or against the legal representative of
the deceased.
(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was
appointed.
(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action
is extinguished by the death of a person.
41. Provisions in case of insolvency.—(1) Where it is provided by a term in a contract to which an
insolvent is a party that any dispute arising there out or in connection therewith shall be submitted to
arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far
as it relates to any such dispute.
(2) Where a person who has been adjudged an insolvent had, before the commencement of the
insolvency proceedings, become a party to an arbitration agreement, and any matter to which the
agreement applies is required to be determined in connection with, or for the purposes of, the insolvency
proceedings, then, if the case is one to which sub-section (1) does not apply, any other party or the
receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order
directing that the matter in question shall be submitted to arbitration in accordance with the arbitration
agreement, and the judicial authority may, if it is of opinion that, having regard to all the circumstances of
the case, the matter ought to be determined by arbitration, make an order accordingly.
(3) In this section the expression “receiver” includes an Official Assignee.
42. Jurisdiction.—Notwithstanding anything contained elsewhere in this Part or in any other law for
the time being in force, where with respect to an arbitration agreement any application under this Part has
been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all
subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that
Court and in no other Court.
1
[42A. Confidentiality of information.—Notwithstanding anything contained by any other law for
the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement
shall maintain confidentially of all arbitral proceedings except award where its disclosure is necessary for
the purpose of implementation and enforcement of award.
42B. Protection of action taken in good faith.—No suit or other legal proceedings shall lie against
the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or
regulations made thereunder.]
1. Ins. by Act 33 of 2019, s. 9 (w.e.f. 30-8-2019).
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43. Limitations.—(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies
to proceedings in court.
(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be
deemed to have commenced on the date referred to in section 21.
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to
which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken
within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it
is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and
notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case
may require, extend the time for such period as it thinks proper.
(4) Where the Court orders that an arbitral award be set aside, the period between the commencement
of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed
by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including
arbitration) with respect to the dispute so submitted.
STATE AMENDMENT
Bihar.—
Omission of sub-section (3) of Section-43 of the Arbitration and Conciliation Act, 1996.—Sub.
by Section-3 of the Section 43 of the said Act shall be omitted.
[Vide Bihar Act 20 of 2002, s. 2]
1
[PART IA
ARBITRATION COUNCIL OF INDIA
43A. Definitions. In this Part, unless the context otherwise requires,—
(a) “Chairperson” means the Chairperson of the Arbitration Council of India appointed under
clause (a) of sub-section (1) of section 43C;
(b) “Council” means the Arbitration Council of India established under section 43B;
(c) “Member” means a Member of the Council and includes the Chairperson.
43B. Establishment and incorporation of Arbitration Council of India.—(1) The Central
Government shall, by notification in the Official Gazette, establish, for the purposes of this Act, a Council
to be known as the Arbitration Council of India to perform the duties and discharge the functions under
this Act.
(2) The Council shall be a body corporate by the name aforesaid, having perpetual succession and a
common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to enter into contract, and shall, by the said name, sue or be sued.
(3) The head office of the Council shall be at Delhi.
(4) The Council may, with the prior approval of the Central Government, establish offices at other
places in India.
43C. Composition of Council.–– (1) The Council shall consist of the following Members, namely:––
(a) a person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or, a
Judge of a High Court or an eminent person, having special knowledge and experience in the conduct
1. Ins. by Act 33 of 2019, s. 10 (w.e.f. 12-10-2023).
27
or administration of arbitration, to be appointed by the Central Government in consultation with the
Chief Justice of India–Chairperson;
(b) an eminent arbitration practitioner having substantial knowledge and experience in
institutional arbitration, both domestic and international, to be nominated by the Central
Government–Member;
(c) an eminent academician having experience in research and teaching in the field of arbitration
and alternative dispute resolution laws, to be appointed by the Central Government in consultation
with the Chairperson–Member;
(d) Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and
Justice or his representative not below the rank of Joint Secretary–Member, ex officio;
(e) Secretary to the Government of India in the Department of Expenditure, Ministry of Finance
or his representative not below the rank of Joint Secretary– Member, ex officio;
(f) one representative of a recognised body of commerce and industry, chosen on rotational basis
by the Central Government–Part-time Member; and
(g) Chief Executive Officer-Member-Secretary, ex officio.
(2) The Chairperson and Members of the Council, other than ex officio Members, shall hold office as
such, for a term of three years from the date on which they enter upon their office:
Provided that no Chairperson or Member, other than ex officio Member, shall hold office as such after
he has attained the age of seventy years in the case of Chairperson and sixty-seven years in the case of
Member.
(3) The salaries, allowances and other terms and conditions of the Chairperson and Members referred
to in clauses (b) and (c) of sub-section (1) shall be such as may be prescribed by the Central Government.
(4) The Part-time Member shall be entitled to such travelling and other allowances as may be
prescribed by the Central Government.
43D. Duties and functions of Council.––(1) It shall be the duty of the Council to take all such
measures as may be necessary to promote and encourage arbitration, mediation, conciliation or other
alternative dispute resolution mechanism and for that purpose to frame policy and guidelines for the
establishment, operation and maintenance of uniform professional standards in respect of all matters
relating to arbitration.
(2) For the purposes of performing the duties and discharging the functions under this Act, the
Council may—
(a) frame policies governing the grading of arbitral institutions;
(b) recognise professional institutes providing accreditation of arbitrators;
(c) review the grading of arbitral institutions and arbitrators;
(d) hold training, workshops and courses in the area of arbitration in collaboration of law firms,
law universities and arbitral institutes;
(e) frame, review and update norms to ensure satisfactory level of arbitration and conciliation;
(f) act as a forum for exchange of views and techniques to be adopted for creating a platform to
make India a robust centre for domestic and international arbitration and conciliation;
(g) make recommendations to the Central Government on various measures to be adopted to
make provision for easy resolution of commercial disputes;
(h) promote institutional arbitration by strengthening arbitral institutions;
28
(i) conduct examination and training on various subjects relating to arbitration and conciliation
and award certificates thereof;
(j) establish and maintain depository of arbitral awards made in India;
(k) make recommendations regarding personnel, training and infrastructure of arbitral institutions;
and
(l) such other functions as may be decided by the Central Government.
43E. Vacancies, etc., not to invalidate proceedings of Council.—No act or proceeding of the
Council shall be invalid merely by reason of—
(a) any vacancy or any defect, in the constitution of the Council;
(b) any defect in the appointment of a person acting as a Member of the Council; or
(c) any irregularity in the procedure of the Council not affecting the merits of the case.
43F. Resignation of Members.—The Chairperson or the Full-time or Part-time Member may, by
notice in writing, under his hand addressed to the Central Government, resign his office:
Provided that the Chairperson or the Full-time Member shall, unless he is permitted by the Central
Government to relinquish his office sooner, continue to hold office until the expiry of three months from
the date of receipt of such notice or until a person duly appointed as his successor enters upon his office
or until the expiry of his term of office, whichever is earlier.
43G. Removal of Member.––(1) The Central Government may, remove a Member from his office if
he––
(a) is an undischarged insolvent; or
(b) has engaged at any time (except Part-time Member), during his term of office, in any paid
employment; or
(c) has been convicted of an offence which, in the opinion of the Central Government, involves
moral turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as
a Member; or
(e) has so abused his position as to render his continuance in office prejudicial to the public
interest; or
(f) has become physically or mentally incapable of acting as a Member.
(2) Notwithstanding anything contained in sub-section (1), no Member shall be removed from his
office on the grounds specified in clauses (d) and (e) of that sub-section unless the Supreme Court, on a
reference being made to it in this behalf by the Central Government, has, on an inquiry, held by it in
accordance with such procedure as may be prescribed in this behalf by the Supreme Court, reported that
the Member, ought on such ground or grounds to be removed.
43H. Appointment of experts and constitution of Committees thereof.––The Council may,
appoint such experts and constitute such Committees of experts as it may consider necessary to discharge
its functions on such terms and conditions as may be specified by the regulations.
43-I. General norms for grading of arbitral institutions.––The Council shall make grading of
arbitral institutions on the basis of criteria relating to infrastructure, quality and calibre of arbitrators,
performance and compliance of time limits for disposal of domestic or international commercial
arbitrations, in such manner as may be specified by the regulations.
29
1
[43J. Norms for accreditation of arbitrators.—The qualifications, experience and norms for
accreditation of arbitrators shall be such as may be specified by the regulations.]
43K. Depository of awards.––The Council shall maintain an electronic depository of arbitral awards
made in India and such other records related thereto in such manner as may be specified by the
regulations.
43L. Power to make regulations by Council.––The Council may, in consultation with the Central
Government, make regulations, consistent with the provisions of this Act and the rules made thereunder,
for the discharge of its functions and perform its duties under this Act.
43M. Chief Executive Officer.––(1) There shall be a Chief Executive Officer of the Council, who
shall be responsible for day-to-day administration of the Council.
(2) The qualifications, appointment and other terms and conditions of the service of the Chief
Executive Officer shall be such as may be prescribed by the Central Government.
(3) The Chief Executive Officer shall discharge such functions and perform such duties as may be
specified by the regulations.
(4) There shall be a Secretariat to the Council consisting of such number of officers and employees as
may be prescribed by the Central Government.
(5) The qualifications, appointment and other terms and conditions of the service of the employees
and other officers of the Council shall be such as may be prescribed by the Central Government.]