Best Arbitration Lawyer for DIAC Cases in Delhi

Why DIAC Arbitration Matters for Businesses in Delhi ?

Delhi continues to be a hub for Commercial Contracts, Corporate disputes and Arbitration. Most business entities based in Delhi NCR have contracts with various third parties. Whether it is vendors, contractors, consultants, distributors, real estate developers, investors and service providers.

At times your business cash flow can suffer due to a Contract Dispute. Before you even file for proceedings.

Your Manufacturing unit may be suffering to pay off its vendors due to lack of funds from a client who hasn't paid you. You may run a Startup and be sued for breach of a Technology Services Agreement. Or you may run a Construction firm and find yourself being deducted money for delays that you may have asked for extension on.

Often these Contract Disputes arise out of different interpretation of a single agreement.

DIAC is a Institutional Arbitration Centre which is attached to the High Court. It provides administration, rules and procedure and infrastructure to help appoint Arbitrators. It is not a court and the arbitral tribunal will not act as a bench of the Delhi High Court.

As mentioned above, the parties need not be located in Delhi. One party can be in Mumbai or Pune, Jaipur, Chandigarh or Hyderabad and so forth. This would depend on your contract and basis of jurisdiction.

Sometimes where you choose to hold your Arbitration can also determine where your Arbitration will have its legal seat. And what court will oversee your matter. Just because you chose Delhi as your seat of hearing does not mean you know all aspects of the legal seat.

Having a good DIAC Arbitration Lawyer in Delhi will be able to explain this to you before you assume something incorrectly.

What Is DIAC Arbitration and How Does It Work?

DIAC Arbitration means the parties will submit their disputes before a panel of arbitrators. The dispute must be covered by an arbitration agreement or some other way that allows for arbitration. DIAC will provide you with the necessary facilities and your arbitrator will hear your dispute.

What's the difference between DIAC arbitration and other forms of arbitration?

Institutional and Ad-hoc are two types of arbitration.

If a body provides the facilities required for arbitration and they have rules that govern the procedure then it can be considered as Institutional Arbitration. They can provide services such as receiving applications, appointing arbitrators, hearing dates etc.

When both the parties and the arbitrator decide on these things without an institution overseeing it its called Ad-hoc arbitration. Laws will still apply.

Arbitration Clause

As stated above the parties have to have an arbitration clause to allow for disputes to be taken to arbitration.

Depending on your arbitration clause it can say what kind of disputes can be taken to arbitration. If the dispute is to be heard at DIAC, who can be appointed as your arbitrator, the legal seat of the arbitration and any conditions that must be met.

If your clause says all disputes that arise out of the contract can be taken to arbitration. Your clause could be worded so only certain claims can be taken to arbitration.

There may be situations where your dispute cannot be arbitrated. Depending on what the dispute is about it may have to be heard before a Court or other statutory forum.

Always consult your lawyer before you want to take a dispute to arbitration.

Can you approach DIAC if there isn't a clause that states DIAC?

Yes, if both parties can come to an agreement that the dispute will be heard by DIAC. Or if a Court makes an order for the dispute to be arbitrated at DIAC. There may be other ways as well.

DIAC Rules 2023 has listed various ways your dispute can be sent to DIAC.

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You cannot force someone to arbitrate their dispute at DIAC just because you think its convenient.

Speak to your lawyer if your unsure about your arbitration clause.

What Does the Arbitration and Conciliation Act, 1996 Provide?

This forms part of Indias key arbitration legislation which deals with arbitration agreement, appointment of tribunal, interim measures, arbitration process, award, challenge to award and enforcement.

Rules of DIAC would need to be read together with any applicable legislation. Terms of contract and rules need to be considered if they comply with the law.

Some points of note.

Section 7

This section deals with Arbitration Agreement.

There may be questions around the Arbitration Agreement being valid or not which can impact you ability to go to arbitration.

Review any commercial contracts you have entered into and check if the parties and dispute has been agreed.

Section 8

When a court action is commenced in respect of a matter that is covered by an Arbitration Agreement you can refer the matter to arbitration.

Subject to the requirements of this section and timing.

Section 9

Allows a party to approach the courts to obtain certain interim measures.

Depending on what you want this could include protection of property, goods in dispute or obtaining security for an amount in dispute.

Any such measure will be at the discretion of the court. You may file for an injunction or security but this is not guaranteed.

Section 11

Provides a statutory method of resolving the issue of appointment of an arbitrator/s in certain circumstances.

Will depend on your arbitration agreement and how appointment was to take place and any institution involved as well as the nature of the dispute.

Section 16

Tribunal can determine its own jurisdiction. Including any objection relating to existence or validity of an arbitration agreement.

Objections to jurisdiction need to be considered.

Section 17

After the tribunal is appointed you can ask them to grant you interim measures.

Section 9 and 17 both provide for interim measures but are different. You may find yourself using one or the other depending on the situation.

Section 34

Limited grounds for a party to challenge an arbitral award.

Just because you did not like the decision of the tribunal does not mean you can re-litigate your claim.

Section 36

Deals with enforcement of an award under part 1 of the act.

If you file a section 34 it does not stop enforcement of an award. You may need to apply for a stay of enforcement.

Which Commercial Disputes Can Be Handled Through DIAC?

Disputes can be sent to DIAC if there is enough legal validity and the issue is capable of being arbitrated.

This could range from commercial dues, construction disputes, supply chain issues, contracts related to providing certain services, and disputes which arise out of a contract in partnership.

It will depend upon the type of relief the parties seek and what the law allows.

Dues not paid / Recovery under contract

If you have provided goods to someone and they haven't paid for them after the credit period has expired you can bring a claim against them.

The counterparty can argue that the goods were not up to standard or that too much money was charged or the quantity supplied was less.

Documents can range from purchase orders to invoices and dispatch notes. Reports and communications.

Construction Disputes

Most construction contracts give rise to claims around delay in payments, variation, extension of time, snags, LDs and bank guarantee.

Your claim should not merely consist of what amount you lost.

You need to tie your project documents together to establish that there is a nexus between the breach and the loss you suffered.

Partnerships / Collaborations

Partnerships can fail for many reasons. Be it money, division of work, capital put into the business or even to exit from the arrangement.

This area of law will require some analysis to see whether the dispute is arbitrable. There may be instances where you have a claim under company law that you may not be able to arbitrate.

Software / Technology

Disputes can arise when software is being developed. Payments being withheld or data breaches and disputes regarding exit.

You can approach LEGALS365 to help you understand what issues you may be able to raise under a contract.

Real Estate Contracts

Some disputes relating to property can be arbitrated if there is a contract. Other disputes may have to be heard by a court or statutory authority.

It is important to know these differences when dealing with a DIAC arbitration lawyer in Delhi.

What Documents Are Required for DIAC Arbitration?

Usually when there are solid organized contract and finance information. You should have proof of your contract. The breach you feel was committed and your loss and what you would like to receive. The defendant will need documentation that supports their argument that the contract was not breached and any counter claim.

Essential documents and evidence checklist

• Contract, any variations, schedules and arbitration clause.
• Orders placed, job cards, service contracts and invoices.
• Bank records, proof of payments and accounts.
• Any legal letters and responses to said letters.
• Correspondence in form of emails and other electronic communications that can be authenticated.
• Proof of delivery, test results and handover.
• Evidence of any extension of time, delay, defective works or extra works.
• Worked out figures to show loss or interest or cross claims.
• Authorisation from company if you are not the owner of the contract.
• Court Orders/ Arbitration Award.

Electronic communications may also show if an extension was given to complete a task or an objection was lodged or agreement was made to something.

If a contractor wishes to claim money due to lack of access to site they would want to show any demands and or project programs that may have been effected.

All documents will need to be looked at and determined to see if they are relevant.

Common evidence mistakes

Sometimes parties will file hundreds of pages of documents without stating what each one pertains to what they are trying to allege.

Some parties will take your word for it even if there is a written agreement.

Also another issue is with numbers not adding up. If you are requesting an amount owed for principal balance plus interest and damages you need to specify what your asking for.

You can contact BK Singh Advocate to go over any documentation or things being withheld from you. Arbitration cases as well.

How Are DIAC Arbitration Proceedings Started?

Generally the proceedings will commence by a request for arbitration or other admissible form of reference. It will need to contain certain details about the dispute, arbitration agreement, the parties involved and claim(s) if any. As well as meeting the conditions laid out by the rules and fees. The response and appointment of an arbitral tribunal will vary based on which set of DIAC rules apply.

Request for arbitration

Before lodging a request for arbitration a claimant should review their arbitration agreement to see if there are any requirements that need to be met.

Such as negotiating or giving written notice. Some agreements may require you to undertake certain actions prior to commencing arbitration. What effect this has will depend on the agreement and law that applies.

It should outline the nature of the dispute and contain information/documents as prescribed by the Centre.

Response from opposite party

The respondent will have 30 days from receipt of the request to provide a response as per Rule 5.1 of the DIAC Arbitration Proceedings Rules 2023.

This will allow them to respond to the allegations made against them and provide information on the arbitration agreement and constitution of the arbitral tribunal. They can also make any counter claims.

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If no response is received this can lead to adverse consequences. Do not ignore arbitration letters thinking your case will be dropped.

Appointment of Arbitral Tribunal

As mentioned above you can appoint either 1 arbitrator or 3 to hear your dispute.

They will be appointed in accordance with the agreement and rules of procedure. There are some legislation that may also require the tribunal to be appointed in a certain manner.

It is also important to ensure your arbitrator is independent and impartial.

Claim and Defence Statements / Hearings

After the arbitral tribunal has been appointed the matter can progress further with the exchange of Claim and Defence statements and evidence. There may also be hearings to discuss and resolve issues between the parties.

Expert witnesses may be called to testify in more complex technical disputes.

The arbitral tribunal will decide the outcome of the claim and hand down an award in accordance with the rules.

Can a Business Obtain Urgent Protection During DIAC Arbitration?

If there is a possibility of grave prejudice occurring due to time factor then interim relief can be sought. Section 9, 17 or the emergency arbitration clause as per DIAC rules may provide remedy depending upon the situation and requirement. Such relief lies at the discretion of the authority.

It may be possible that the business may lose control over certain assets, its information may leak or the subject matter in dispute may change beyond repair.

The application made should clearly mention what may happen if no action is taken and on what grounds the relief can be granted.

Emergency arbitration

As discussed above the DIAC Rules 2023 have provided a mechanism for emergency arbitration to deal with situations where immediate steps need to be taken.

The party seeking relief needs to fulfill the criteria set out for the procedure to commence.

There is no hard rule which says when emergency relief will be granted. This would have to be decided on case to case basis.

Assistance from Court

The Court can still be approached for interim measures as per the Arbitration and Conciliation Act, 1996.

The lawyer should be well aware of the difference between seeking relief from the Court and asking for interim measure from the arbitral tribunal.

At times seeking relief from Court may become fruitless if the subject matter is transferred to someone else before your case comes up.

How Much Does DIAC Arbitration Cost in Delhi?

There will be cost involved with DIAC Arbitration. It all depends upon amount of claim, fees applicable, no. of arbitrators, advocates engaged and no. of hearings/proceedings required. DIAC has prescribed certain costs which needs to be paid as Admin cost and Fees of arbitrators. Cost of advocates and other expenses will be calculated separately.

It could include cost of institution, fees of arbitrators, Advocate charges, Expert witness charges, cost of proving evidences/holding hearings.

As mentioned above there are prescribed Admin and Arbitrator fee structure available on DIAC website.

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It is advised to get an estimate for your case before initiating proceedings.

Cost involved in Arbitration for a small invoice could be negligible in comparison to a construction dispute of few crores of rupees.

It is always advisable to keep in mind what you can recover out of it, money spent on legal process, money/assets available with opposite party, chances of winning the case and business impact.

You can contact us at LEGALS365 and we can look into the matter and help you understand what legal work might be required.

When Should You Consult a DIAC Arbitration Lawyer?

When there is an on going dispute or you are about to receive a contractual deadline or notice of arbitration. By having a file looked at early it can help you understand if arbitration is applicable and what documentation you need to retain. As well as what you may want to make a claim or defence against.

This could include:

• You have been asked to arbitrate against another party.
• Contractual amount owing to you.
• Guarantee/security is called upon.
• Contractor is accused of being behind program or poor workmanship.
• Your company has broken down.
• Amounts claimed with high quantum/interest.
• Require urgent protection of your assets.
• An award has been made against you and you would like to know your options.

Once a dispute reaches the point of a first hearing you may be left short on time to gather information.

If you are a company who may want to sign a settlement or final account it may be wise to get advice.

Contact BK Singh Advocate to speak with us about any contractual related issue's and arbitration.

What Happens After a DIAC Arbitration Award?

Once an arbitral award has been passed it will determine the issue that was referred to the arbitrators. Provided that there is an act which governs this the party may seek to enforce their award. However there are certain grounds that one can challenge an award on as set out in section 34. These will be discussed below. One will not have an appeal on the merits when arbitrating.

Challenging your Award

There is a statute of limitation that applies when you are making a section 34 application.

Typically you will have 3 months from the date of receipt of the award to make your application (depending on section 33 if applicable).

If you can show good reason to the court they may allow you to make an application within a further period of 30 days but no more than this. Again subject to any Act that excludes this provision.

Just because you do not agree with the arbitrators findings of fact will not be enough to challenge your award.

Appeal of Orders relating to Arbitration

Section 37 allows you to appeal certain orders that are listed.

You cannot appeal any and all directions given to you in arbitration.

Enforcing your Award

If your award is able to be enforced under section 36 you can follow due process to enforce.

Just because you have challenged your award under section 34 does not mean you can't enforce it.

At LEGALS365 we would advise clients to be mindful of this distinction once they receive their award.

Common Mistakes That Can Weaken a DIAC Arbitration Case

It is easy to ruin a good commercial position by making simple procedural / documentary errors.

• Arbitration being thought of as your normal claim for recovery when you have not pinpointed what you are actually claiming under contract.
• Not factoring in limitation.

Section 43 of the Arbitration and Conciliation Act will apply the limitation act in most cases subject to certain provisions.

Check when your contractual terms were breached, invoice dates, acknowledgment's date's, payments and date arbitration was called for.

• Failures to abide by any notice by the institution.
• Claim and counter claims not separated.
• Asking for damages without quantification.
• Assuming everything will be decided by the arbitrator just because its included in the dispute clause.
• Hiding documents that may hurt you.
• Believing Delhi is where the arbitration takes place when the juridical seat may be elsewhere.
• Not thinking about cost when you take on litigation.
• Thinking you can challenge an arbitral award on facts.

How LEGALS365 Can Help With DIAC Arbitration Matters

When looking into Commercial Arbitration there are many things to take into consideration. Your Contract Rights, your business situation and what you are legally required to do. LEGALS365 can provide you with information if you have any questions concerning your DIAC case and any other commercial situations.

You may need help with. Arbitration Agreements, Assessing your claims, preparing documents, Notice's of dispute. Replying to a dispute. Interim Applications and after the Award what legal options you have.

If you have a business that is being hit with a large counter claim you will need to look at your situation differently than a business that is trying to collect on invoices.

Just as a business that has been accused of poor performance would need to gather information about what their contract says.

You can contact BK Singh Advocate if you have any questions about Arbitration. Whether you need help looking over your contracts and legal action.

There is no way we can tell you if you will get an Award. You will have to look at your contract and see what information you can use.

Frequently Asked Questions

Final Thoughts:

Commercial matters cannot be decided on quantum of dispute or threats sent by advocate's letter. It will depend upon your agreement, arbitration clause, documentary proof, limitation and remedies that can be taken.

An arbitration lawyer in Delhi who deals in DIAC will always tell you about your dispute and will not assure you about winning if it depends on documents or the decision of arbitral tribunal.

By taking a call at initial stage you can protect yourself from losing important documents and know about your liability. If the matter can be solved through arbitration or negotiation or some other legal means.

LEGALS365 can be contacted for DIAC arbitration in Delhi NCR and any other part of India if you have a commercial dispute.

Contractual Arbitration, commercial dues and similar matters can be discussed with BK Singh Advocate depending upon the facts of the case.