Here are some early Indian legislations worth learning about.
- Bengal Regulation of 1772, 1780, 1781 – in the British period, the initial Bengal Regulations did not try to abolish the system of panchayats, on the other hand, in connection with certain matters like accounts, the Regulations 1772 expressly recommended the parties submit the decision of their disputes “to arbitration, the award of which shall become a decree of Court” . The Bengal Regulations of 1772, 1780 and 1781 were designed to encourage arbitration and attempts were made with a tendency to enlarge the scope of arbitration. The common feature of these Regulations was the recommendation for arbitration. We find in a Bengal Regulation of 1781 an interesting provision recommending arbitration and also another interesting provision to the effect that no award of any arbitrator or arbitrators shall be set aside, except upon full proof, made by the oath of two credible witnesses, that the arbitrators had been guilty of gross corruption or partiality, in the cause in which they had made their award.
- Cornwallis Regulation of 1787 – They were drawn up in a very unsatisfactory manner and were full of serious defects and omissions that their usefulness turned out to be extremely limited. While the Regulation included a provision for arbitration with the consent of parties, but, there were no provisions for the consequences of the award not being made in time, nor for the situation, when arbitrators differed in their opinions.
- Bengal Regulation 16 of 1793 – much more comprehensive – provided for the reference by the court of arbitration with the consent of the parties in suits for accounts, partnership debts, breach of contract, where the valuation exceeded 200 sicca rupees and the like. There were provisions relating to procedure on parties consenting to arbitration, for delivery of award within appointed time, for extension of time, for selection of arbitrator and umpire, for making the award a rule of Court, for prohibition of Vakils of parties acting as arbitrators, for execution of Arbitration Bonds, for transmission of papers to the arbitrator, for procedure before arbitrators and for other matters. Procedural provisions this time were very elaborate, and, after the extension of this Regulation by subsequent Regulation of 1795 and 1803 to Banaras and to the ceded Provinces, the territorial application of the Bengal Regulation of 1793 covered a pretty large portion of so much of Northern and Eastern India as had, by the time, come under the British Rule. Regulation 6 of 1813 extended the Regulation of 1793 to disputes relating to land. (Parties were given the right of getting the help of Court in case of private arbitration relating to land disputes. Any party could make a summary application to the Diwani Adalat, which after hearing the opposite party if he intended to show cause, could order the award to be summarily executed as a decree of a Court. The application had to be made within six months from the date of the award, and the Court had no power to extend time.)
- Madras Regulation 4 of 1816 – gave certain powers for calling in Panchayats for settling disputes; Madras Regulation 5 of 1816 was intended to encourage awards by village panchayats and provided machinery for working out the scheme. The scheme contemplated awards by village panchayats with compulsory service for a villager on a panchayat and was administered through the village Munsiff – later by the District Munsiff.
- Bengal Regulation 7 of 1822 – extended the scheme of arbitration from Civil Courts to Courts of Land Revenue. Without recapitulation of the elaborate provisions contained in the Regulation, it will suffice to note that the Regulation directed Collectors to try their best to induce parties to refer disputes to arbitration, like what was enjoined on Civil Courts by other Regulations.
- Bombay Regulation 4 and 7 of 1827 – The idea underlying the Bombay Regulation 4 was to enable the European Judges presiding in Civil Courts to secure the help of Indians by referring to them the whole suit, or particular points involved in it, and this scheme was extended to Bengal by Regulation 6 of 1832. Regulation 7 (repealed by Act 1 of 1861) in its preamble expressly provided for arbitration through the intervention of the court. Section 1 of the Regulation gave express power to resort to arbitration notwithstanding a pending suit. Section 9, clause 1 of the Regulation provided that awards (when filed under the Regulation) have the force of decreases. Section 9, clause 2, of the Regulation, provided that “arbitration awards or other adjustments not so filed shall not be entitled to any other consideration in a court other than as evidence, or agreements, to be adduced or proceeded on by ordinary course of law.” (Chanabassappa v Baslingayyaya, AIR 1927 Bom. 565, 568.)
- Civil Code 1859 – codified procedure of Civil Courts (except those established by Royal Charter) provided for arbitration. Arbitration in the course of a suit was dealt with in sections 312 to 325 of the Act. In 1862, when the Supreme Courts and the courts of Sudder Diwany Adalat in the Presidency towns were abolished, the Act was extended to courts in the Presidency towns.
- Codes of Civil Procedure 1877 and 1882 – no notable change relating to the law of Arbitration was introduced by these two codes, they were confined to arbitration in the course of a suit.
- Indian Arbitration Act, 1899 – based on the English Arbitration Act of 1889– did not apply to disputes which were the subject-matter of suits. (Amar Chand v Banwari Lall, ILR 1922 49 Cal. 608) The Act applied in cases where, if the subject-matter submitted to arbitration were the subject of a suit, the suit could, whether with leave or otherwise, be instituted in a Presidency town. By section 23 of the Act, a similar provision was made for Rangoon. The Local Government was given power by the provisions of section2 to extend the Act to other areas, but this power was never exercised. The Act thus dealt with arbitration by agreement without the intervention of the court and was limited to Presidency towns and to such other area to which it may be applied by local Government notification (Section 2).
The Act had limited area of applicability. However, it widened the scope of arbitration in another direction. Up to 1899 arbitration was limited to disputes which had arisen, but Act of 2899 defined “submission” as meaning “a written agreement to submit present or future differences to arbitration.”
- Civil Procedure Code amendment 1908 – Second schedule was completely devoted to arbitration. It extended to all places to which the Act of 1899 did not extend, and contained (i) provisions for arbitration in respect of the subject-matter of suits and (ii) provisions whereunder parties to a dispute might file their arbitration agreements before the court, which would then refer the matter to arbitration, and (iii) provisions on arbitration in the Code of Civil Procedure, 1908, were section 89 and the Second Schedule.
The Special Committee which was presided over by Sir Erle Richards recorded in 1907 its opinion that in due course the provisions regarding arbitration should find a place in a new and comprehensive Arbitration Act; but since there were difficulties in doing so at that time, they decided to leave the arbitration provisions in the Code, placing them, however, in a Schedule in the hope that they would be transferred to a comprehensive Act.
- Mid-1920s – Civil Justice Committee – appointed to report on the machinery of ‘civil justice in the country’ – also made suggestions for modification of arbitration laws. Some time passed before action could be taken on the recommendations of the Civil Justice Committee – primarily due to the fact that the Government proposed to wait till the expected new English Act was placed on the Statute book after consideration of the Mackinnon Committee on the law of arbitration. That Committee made its report in 1927, which was followed by the English Act of 1934, and thereafter the way was cleared for action in India.
- Arbitration (Protocol and Convention) Act, 1937 – gave effect to the Geneva Protocol on Arbitration Clauses, 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention).
- In 1938, the Government of India appointed Shri Ratan Mohan Chaterjee, Attorney-at-Law, as a special officer, for revision of the Law of arbitration, and the revised Act was passed in 1940.
- Arbitration Act, 1940 – based on the English Arbitration Act 1934. This act repealed the Arbitration Act, 1899 and the relevant provisions in the Code of Civil Procedure, 1908 including the second schedule thereof. Dealt only with domestic arbitrations and not with foreign awards.
- Sircar, Law of Arbitration in British India (1942), page 6.
- “The Judge do recommend, and so far as he can without compulsion prevail on the parties, to submit to the arbitration of one person to be mutually agreed upon by the parties”
- Quoted in Civil Justice Committee (1924-1925) Report, page 208, Chapter 12, para.1.
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