Setlen Arbitration Rules – SETLEN-Your ADR Partner for the Financial Industry

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AN INSTITUTIONAL ARBITRATION CLAUSE AVOIDS COMPLICATIONS AND SAVES TIME.

CHOOSE SETLEN RULES OF ARBITRATION AND VENUE AS INDIA / INDIAN CITY

PREAMBLE

RULES OF ARBITRATION | SETLEN

SETLEN Arbitration and Dispute Resolution Forum

(CIN U85499UP2023NPL179154) (SETLEN) is a non-profit institutional structure whose primary goal is to lower the expense of litigation and promote arbitration as a successful method of resolving conflicts. The efficacy of the service will be based on its proficiency in managing arbitration proceedings, providing stable expenses and a clearly defined and accelerated arbitration procedure. SETLEN is constantly striving to be a really non-profit organization by partnering with reputable independent arbitrators who have similar goals and who work pro gratis to an extent possible to promote arbitration in India. The value that SETLEN will add will come from a straightforward procedure for selecting arbitrators, handling all financial matters, keeping an eye on the arbitral process, offering logistical support and services when needed, and assisting with administrative and clerical duties. In keeping with the aforementioned goal, SETLEN strives to offer a cost-effective procedure for an impartial and independent institutional arbitration system that supports the Indian economy by settling business conflicts to facilitate trade.

SUGGESTED MODEL ARBITRATION CLAUSE

All parties intending to refer all future/current disputes to institutional Arbitration of SETLEN should necessarily incorporate an arbitration clause in the agreement, or enter into a post-dispute arbitration agreement or execute a stand-alone arbitration agreement to the effect of mutual consent. A model arbitration clause is indicated below:

“All disputes, claims, differences of any nature arising out of the agreement between the parties shall be finally settled by arbitration in accordance with the Rules of Arbitration of SETLEN, and the Award made in pursuance thereof shall be binding on the parties. Parties have reviewed and have given their respective consent and has no objection to the rules, procedure including the arbitrator appointment process as may be adopted by Setlen for resolution of disputes between the Parties through Arbitration. The Venue of the Arbitration shall be the place where the arbitration agreement has been executed between the parties and the language of the proceedings shall be English.

RULES

Title and commencement:

These Rules, which SETLEN has framed, will apply to all disputes referred to SETLEN

Definitions:

2.1 – In these Rules, the following expressions shall have the respective meaning:

- 2.1.1.1 – ‘Act’ means the Arbitration and Conciliation Act, 1996, or such statutory amendments or re-enactments.
- 2.1.1.2 -‘SETLEN’ means the SETLEN Arbitration and Dispute Resolution Forum (CIN U85499UP2023NPL179154), a not-for-profit company established under provisions of the Companies Act, 2013.
- 2.1.1.3 – ‘Panel of arbitrators‘ means a diverse panel of arbitrators empanelled by SETLEN being retired judicial officers, industry experts, advocates as displayed on the SETLEN website and updated and amended from time to time.
- 2.1.1.4 -“Arbitrator” means a sole arbitrator appointed by SETLEN, at such specific request of any Party to the arbitration agreement, or each arbitrator individually on a multi-arbitrator tribunal.
- 2.1.1.5 – ‘Arbitrator’s Fee’ shall mean an all-inclusive consolidated remuneration payable to the Arbitrator, including the fee for entering reference, conducting proceedings, and passing Award for the case as may be agreed upon by the Parties and Setlen at the time of reference of dispute.”Arbitrator” means a sole arbitrator appointed by SETLEN, at such specific request of any Party to the arbitration agreement, or each arbitrator individually on a multi-arbitrator tribunal
- 2.1.1.6- ‘Administrative Charges’ of SETLEN shall mean an all-inclusive consolidated charge levied by SETLEN for its services for any reference it receives.
  - All other terms not specifically defined herein shall have the same meaning as defined under the Act.

ARBITRATION

Appointment of Arbitrators to the Panel

3.1. As may be authorized by SETLEN’s board, SETLEN will appoint a varied group of people to its Panel, including advocates, industry experts, and retired judges.

3.2. SETLEN will choose and retain a panel of arbitrators from among individuals who are willing to serve as arbitrators generally or in particular fields, and who are skilled, knowledgeable, and experienced in their respective fields of expertise and arbitration law & process.

3.3.Every panelist will have the same standing, and the parties do not have the right to challenge any arbitrator’s appointment on the ground of seniority, experience or status.

Reference to SETLEN for Arbitration

Reference to SETLEN for Arbitration

4.1. Any party to a dispute under an agreement may ask SETLEN to designate an arbitrator from its Panel to preside over arbitration proceedings in accordance with these Rules for adjudication, in accordance with any particular arbitration clause in such an agreement or a stand-alone arbitration agreement. Such Party shall give SETLEN a reference notice by written correspondence.

4.2. The notice must be sent by registered mail, or electronic mail (e-mail). The Notice should be addressed to

Authorised Officer,

SETLEN Arbitration and Dispute Resolution Forum

D-9, Ground Floor, Sector-3, Noida, UP – 201301

arbitration@setlen.co.in

casemanager.delhi@setlen.co.in

The following information must be included in such a reference notice:

5.1. Names, contact information including physical addresses, phone numbers, and email addresses of all Parties to the dispute.

5.2. A copy of the agreement that includes the arbitration clause being relied upon, or a copy of the arbitration agreement if the arbitration agreement is not included in the agreement and a copy of the agreement, or any other document that is relied upon.

5.3. Brief description of dispute, value of the claim and relief sought.

5.4. A formal request for an appointment of Arbitrator to be submitted to the Case Manager / Authorized Officer, SETLEN. Each time one of these appointments occurs, the Arbitrator shall make all disclosures relating to his independence as mandated in the Act when entering reference.

Arbitrator's possible and apparent conflict to be avoided

Arbitrator's possible and apparent conflict to be avoided

6.1. Any and all potential or apparent conflicts with the arbitrator’s relationship to the parties, counsel, the dispute at hand, or his/her direct or indirect interest must be avoided in order to assure compliance and prevent conflicts of interest. The statements made to that effect by the Arbitrator prior to his or her appointment shall be relied upon by the Case Manager / Authorized Officer, SETLEN.

6.2. The Seventh Schedule of the Act’s categories list the potential arbitrator’s relationship to each party, their advocates, or their lawyers, and their interest in the dispute. The Case Manager / Authorized Officer, SETLEN, will take extra care to ensure that the potential arbitrator makes this declaration explicitly clear.

6.3. If any of the disputing parties would like to waive any disqualification or conflict of the arbitrator, they must agree to do so in writing. This waiver to be made after the disputes have arisen in writing and in accordance with section 12(5) of the Act.

6.4. All costs and fees shall be due and payable equally by the parties to the dispute. The reference notice must be accompanied by a payment receipt for a fee equal to the amount due from the Party that referred the dispute, as well as an agreement to pay the full amount in the event that the other party or parties refuse to pay the arbitrator’s fee. Any modification to the pricing schedule requires express consent from SETLEN’s Case Manager / Authorized Officer.

6.5. Any requirement for immediate appointments considering any urgent measure for interim relief must be specified to enable the Authorised Officer, SETLEN, to make an urgent constitution of the Arbitral Tribunal. Such an application should specifically mention such grounds for immediate interim relief. All urgent appointments will be made within 48 working hours of receipt of such application at the sole and absolute discretion of the Authorised Officer, SETLEN.

7. Response to the reference

7.1. Immediately upon receipt of the reference notice, the Case Manager / Authorized Officer, SETLEN, shall endeavour to swiftly, and in any case, within 7 days of receiving the reference notice, payments, and all necessary annexures, establish a tribunal and designate a case management officer, who will notify the parties and the arbitrator of the appointment's specifics. When the Tribunal or any of the parties to the dispute need administrative support, this case management officer will be reachable and available during SETLEN office hours.

Constitution of Tribunal

Constitution of Tribunal:

8.1. Upon receipt of the Notice of Reference, Authorised Officer SETLEN will:

8.1.1. Appoint the Sole Arbitrator from the approved Panel of arbitrators maintained by SETLEN.

8.1.2. Provided that in cases where the arbitration agreement provides for Arbitration by three arbitrators – each party to choose an arbitrator from SETLEN’s empanelled list of arbitrators. However, in the event one of the parties fails to appoint an arbitrator, the Authorised Officer, SETLEN, shall then basis statutory declarations in Section 12(1) read with the Fifth and Sixth Schedules of the Act and availability, choose and appoint the second Arbitrator from SETLEN’s empanelled list of arbitrators. The two arbitrators so appointed shall jointly appoint the third Arbitrator as an Umpire from SETLEN’s empanelled list of arbitrators.

8.1.3. Despite three member arbitration clause, Parties may make a joint request to SETLEN for reference of the dispute for adjudication to a Sole Arbitrator and not by a tribunal of three arbitrators. The parties may also mutually agree upon the person to be appointed as Sole Arbitrator. In case the parties are unable to agree on the sole Arbitrator within 15 days, SETLEN shall appoint any person from the Panel as the Sole Arbitrator. Authorised Officer, SETLEN will consider the request and will take a decision thereon after taking into consideration the availability of the proposed Arbitrator.

8.1.4. In each case, the case management officer, SETLEN, shall inform the parties, by written communication, of the constitution of the Tribunal to all the Parties including the Arbitrators. Such appointment shall be final and binding on all the parties to the dispute.

8.1.5. The case management officer, SETLEN shall also inform the parties and the Tribunal that the arbitration proceedings shall be completed within the time stipulated under section 29A of the Act.

Directions to parties

Directions to parties:

9.1. Within 5 days from the date of its constitution, the Tribunal shall, issue a written notice to the Parties calling for a preliminary meeting to give practice / proceedings directions on:

9.1.1. Filing of any urgent application for interim relief u/s 17 of the Act;

91.2. The venue of the Arbitration Proceedings.

9.1.3. Date of the first hearing of the matter.

9.1.4. Define the time limit for filing statement of claim/counterclaim, supporting Affidavit and service on Opposite Party/s.

91.5. Define the timeline for the Respondents to file their statement of defence along with relevant supporting and simultaneously serve a prior copy to the Claimant and such mode.

9.1.6. Further timelines for the Claimant to file their Rejoinder, if any, on the Defense/Reply as may be filed by the Respondents and serving a copy of the same to the Respondents and such mode.

9.1.7. Filing directions and the manner in which pleadings are to be filed.

10. Arbitration proceedings

10.1 – Natural justice, equity, and fair play are the three guiding principles that the constituted Tribunal would always adhere to while conducting the arbitral proceedings in accordance with the Act.

11. Venue of Arbitration

11.1. Proceedings shall be conducted online / virtually in accordance with the practice directions issued by the constituted Tribunal unless otherwise directed by the Tribunal, where physical hearings are required. In case of requirement of physical hearings, parties shall bear the venue cost in equal proportion.
11.2. The seat for Arbitral proceedings for the purposes of jurisdiction of courts shall be the place as agreed to and defined in the Arbitration Agreement between the parties.

12. English to be the language of the proceedings

English shall be the language used in the conduct of proceedings.

Appearance:

13.1. The parties are free to represent their case in person or through a duly authorised representative or advocate. Any change in the mandate of a representative/advocate should be duly informed in writing to the Arbitral Tribunal at least 24 hours in advance with an intimation to SETLEN.

Conduct of Hearings

Conduct of Hearings:

14.1. The Arbitral Tribunal shall, in consultation with the Parties, set a schedule for the proceedings/hearings during the preliminary hearing.

14.2. The Parties shall comply with such Schedule to ensure timely disposal of the dispute.

14.3. In the event any party, despite notice, fails to appear before the Arbitral Tribunal during proceedings without reasonable cause, the Tribunal shall proceed with the arbitration proceedings and pass an award based on the facts, submissions and pleadings bef

ore it. However, the Tribunal shall endeavour to issue a final notice of its intention to proceed ex-parte before doing so.

Applicable law:

15.1. Unless otherwise specified, the Arbitral Tribunal shall be governed by the applicable laws of India in all respects.

Settlement between parties & Consent Award

Settlement between parties & Consent Award

16.1. The Arbitral Tribunal may record the terms of any settlement reached by the parties as an arbitral award, if they do so, during the arbitral procedures.

16.2. An arbitral award on conditions that have been agreed upon or resolved will be treated with the same standing and weight as any other arbitral ruling regardless of the merits of the case.

16.3. The Arbitral Tribunal’s encouragement of dispute resolution between the parties through any independent and distinct dispute resolution procedure apart from the Arbitral proceedings must not be construed as incongruous.

Award of interest :

17.1. Unless the parties agree differently, insofar as an arbitral award is for the payment of money, the provisions under section 31(7) of the Act shall apply for an Award of Interest.

Award to be delivered to SETLEN

18.1. The Tribunal shall deliver to the SETLEN the original Award on stamp paper if such stamp paper is procured and provided to it by any one of the parties to the dispute. The SETLEN will serve the Original Award to the Party filing the reference and a photocopy to each of the other parties to the dispute subject to full and final settlement on payment of all fees, charges and expenses of Arbitration, including the administrative charges of the SETLEN. Unless otherwise required by the parties, SETLEN shall retain with it a copy of the Award and all the records of the Arbitral proceedings in original for 120 days from the date of the Award and hand over the documents to the Party, making the reference thereafter.

Liability of the Tribunal/SETLEN :

19.1. The Arbitral Tribunal and SETLEN, its directors and employees shall not be liable to any party for an act/ omission done or intended to be done in good faith under these rules, the Act or any rules/ regulations made thereunder.

Fees and Deposits

Fees and Deposits :

20.1. Fees/costs/ charges of the Arbitrator/s and the SETLEN’s fees shall be ascertained in accordance with the Schedule of Fees in force at the time of commencement of the Arbitration.

20.2. Unless otherwise agreed, all such fees/costs/charges shall be paid in advance.

20.3. In the absence of any agreement to the contrary, all such fees/costs/charges shall be shared equally by the parties. On refusal/denial/omission to pay by any one of the parties to the dispute within the time prescribed, unless any/ all other parties bear such cost, SETLEN may, at its sole and absolute discretion, waive such fees in the greater public interest or refuse the reference made to it.

Fees, charges, etc

21.1. SETLEN shall fix the fees, costs, expenses, and administrative charges of SETLEN from time to time. In the absence of any agreement to the contrary, all such fees/ costs shall be shared equally by the parties. On refusal/denial/omission to pay by any of the parties to the dispute within the time prescribed, unless any/ all other parties bear such cost, SETLEN may waive such fees in the greater public interest at its sole and absolute discretion.

GENERAL

Once the dispute is referred for adjudication through SETLEN, the rules for conducting arbitration proceedings shall prevail over the procedure, if agreed by the parties in the Arbitration Agreement.

Statutory provisions relating to Arbitration are to be read harmoniously with these Rules.

SETLEN may revise, amend or alter these Rules/and/or the Schedule of Fees and Charges.

The Arbitral Tribunal shall make the award as expeditiously as possible, preferably within six months, from the date of the reference subject to a maximum limit of twelve months from the date on which arbitral tribunal entered into

The parties mutually agree to waive their right of consent and confer upon the case management officer the right to extend the time for making of an award for a further period of six months, if applied for, by any of the parties, provided such request is found to be reasonable and

If the award is not made within the aforesaid period of 12 months or 18 months, as the case may be, the mandate of the arbitrator shall terminate unless the Court has either prior to or after the expiry of the period further extended the period for passing of

In the event, the arbitrators are substituted by the Court under the Act, the arbitration proceedings may continue from the stage it has reached and on the basis of the evidence and material already on record and the arbitrator(s), so appointed, shall be deemed to have received the said evidence and material. The Arbitral Tribunal, so reconstituted, shall deemed to be in continuation of the previously appointed Arbitral

The arbitrators shall not be entitled to any fees in the event of cancellation of their mandate for not making of the award within the time

GUIDELINES FOR ARBITRATORS AND PARTIES

GUIDELINES

GUIDELINES FOR ARBITRATORS AND THE PARTIES FOR EXPEDITIOUS CONDUCT OF ARBITRATION PROCEEDINGS

The arbitrators and the parties to arbitration are expected to follow these guidelines to ensure expeditious disposal of arbitration cases.

For Arbitrators

1. The arbitrators must take up the arbitration expeditiously on receipt of the request from the Case Manager. Serious efforts should be made to settle arbitration cases expeditiously within a period of 6 months from the date of assignment.
2. When accepting his mandate, the arbitrator shall be able to perform his task with the necessary competence according to his professional qualifications.
3. When giving notice of his acceptance, the arbitrator shall disclose in writing in the printed format as under:
a. Any relationship with the parties or their counsel which may affect his independence and impartiality;
b. Any personal or economic interest, either direct or indirect, in the subject matter of the dispute;
c. Any prejudice or reservation as to the subject matter of the dispute which may affect his impartiality.
4. The arbitrator may at all stages suggest the possibility of a settlement to the parties but may not influence their decision by indicating that he has already reached a decision on the dispute.
5. In the course of the arbitral proceedings, the arbitrator shall refrain from all unilateral contact with the parties or their counsel which is not notified to SETLEN so that the SETLEN can inform the other parties and arbitrators.
6. The arbitrator shall refrain from giving the parties, either directly or through their counsel, notice of decisions in the evidence taking place or on the merits; notice of these decisions may be given exclusively by SETLEN.
7. The arbitrator shall neither request nor accept any direct arrangement on costs or fees with the party which has designated him.
8. The arbitrator shall encourage a serene and positive development of the arbitral proceedings. In particular, he shall decide on the date and manner of the hearings in such a way as to allow both parties to fully participate therein, in compliance with the principle of equal treatment and adversarial proceedings.
9. The first hearing of the arbitral tribunal should be convened within 15 days of the receipt of the complete reply of the Respondent when the arbitral tribunal may issue necessary directions. Issues if any to be framed, may be done at the same or at the next hearing. The arbitrators should hold arbitration hearings during office hours.
10. The parties should be asked to furnish a list of their witness, if any, in advance and they should be asked to file affidavits of witness on the date fixed for evidence preferably within a weeks of the settlement of issues, Cross examination of such of the deponent's witnesses whose presence is demanded by the opposite party should be completed at a hearing to be fixed within 15 days.
11. Arguments preferably should be heard within 15 days of the completion of evidence, to be followed by submission of written arguments, if any.
12. Adjournments of duly fixed hearing should not be granted except for unavoidable reasons which should be spelt out in the adjournment order.
13. The Arbitrator should make the award expeditiously after the close of the hearings, preferably within 15 days.
14. The arbitrator who does not comply with the provisions of these guidelines may be replaced by SETLEN. Where it is not appropriate to replace the arbitrator in order not to cause delay in the arbitral proceedings, SETLEN may also take such action after the conclusion of the arbitral proceedings, by refusing to confirm him in subsequent arbitral proceedings.
15. Arbitration proceedings including all hearings will be conducted virtually through digital platforms, the details of which shall be arranged, shared and communicated by Case Manager, SETLEN to all the parties concerned in advance.
16. Pursuant to disputes being referred to SETLEN for adjudication, all notices, communications, dispatch in connection with or relating to the arbitration proceedings shall be undertaken by SETLEN.

For Parties

1. The Claimant should file the applications or demand for arbitration to SETLEN with all the information and papers as per Rules, full statement of claim and copies of documents as may be relied upon.

2. The Respondent to file reply to the claim with complete information and documents relied upon as early as possible within the prescribed time.

3. Fresh documentation/claims should not be entertained at a later stage of the proceedings unless the arbitral tribunal is satisfied about the reasons for granting such permission.

4. If any party to arbitration, particularly in cases where any arbitrator, advocate or any of the parties has to come from out station to participate in arbitration proceedings, desires to seek adjournment on any valid ground, it must submit a written request to the case management officer SETLEN at least before

5 working days stating the grounds which compel it to request for postponement of the hearing so that the case management officer is in a position to take necessary steps to inform the Parties, Arbitrators and Advocates regarding postponement of the hearing. Parties seeking adjournment will have to pay cost as may be determined by the arbitral tribunal.

6. Parties should deposit arbitration and administrative fees with SETLEN within the stipulated time, as per the Rules and no extension should be sought in this behalf except for compelling reasons.

7. To avoid excessive costs in arbitration proceedings, the parties are advised to choose their arbitrators from the Panel, as far as possible from the place where the arbitration hearings have to be held. In case, a party still chooses an arbitrator from a place other than the place of hearing, the concerned party will bear the entire extra cost to be incurred on stay TA/DA etc. of the arbitrator nominated by it. Take a trivial example which of ever undertakes