Para 10.7.8 - Arbitration Rules | KartavyaDesk
Original Rule Text
i) In cases where the total value of all claims in question added together does not exceed ₹ 50,00,000/- (Rupees Fifty Lakh), the Arbitral Tribunal shall consist of a sole arbitrator. For this purpose, the Appointing Authority will send a panel of at least four (4) names of retired Officer(s) (retired not below the rank of Senior Administrative Grade Officer) empanelled to work as Appointing Authority Arbitrator duly indicating their retirement dates to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the Appointing Authority. The contractor will be asked to nominate to the Appointing Authority at least 2 names of arbitrators. These can be out of the panel suggested by the approving authority or from an approved panel of the Indian Council of Arbitration (ICA – refer sub-para 2 above) within 30 days from the date of dispatch of the request by the Appointing Authority. The Appointing Authority shall appoint at least one out of them as the arbitrator within 30 days from the receipt of the names of the Contractor’s nominees. ii) In cases where the total value of all claims in question added together exceeds ₹ 50,00,000/- (Rupees Fifty Lakh), the Arbitral Tribunal shall consist of a Panel of three (3) arbitrators. For this purpose, the Appointing Authority will send a panel of at least four (4) names of retired Officers (retired not below the rank of Senior Administrative Grade Officer) empanelled to work as Arbitrator duly indicating their retirement date to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the Appointing Authority. The contractor will be asked to nominate to the Appointing Authority at least 2 names of arbitrators. These can be out of the panel suggested by the approving authority or from an approved panel of the Indian Council of Arbitration (ICA – refer sub-para 2 above) within 30 days from the date of dispatch of the request by the Appointing Authority. The Appointing Authority shall appoint at least one out of them as the Contractor’s nominee and shall also simultaneously appoint his nominee arbitrator either from the panel or from outside the panel. The Appointing Authority shall complete this exercise of appointing the Arbitral Tribunal within 30 days of the receipt of the names of the Contractor’s nominees. Two selected arbitrators are free to select a presiding arbitrator (3rd arbitrator) within thirty (30) days from their appointment. The presiding arbitrator may be selected from an approved panel of the procuring organisation or from an approved panel of the Indian Council of Arbitration (as per mutual agreement), which will be approved by the appointing authority within 30 days of receipt of such name.
What This Means
Para 10.7.8 of the Manual for Procurement of Consultancy Services outlines the process for appointing arbitrators when disputes arise between the government and a contractor. Arbitration is like a court case, but it's a private way to resolve disagreements. This rule specifically deals with how many arbitrators are needed and how they are selected, depending on the total amount of money involved in the dispute. It ensures a fair and transparent process for resolving financial disagreements related to consultancy contracts.
If the total claim amount is ₹50,00,000 or less, a single arbitrator will be appointed. If the claim exceeds ₹50,00,000, a panel of three arbitrators is formed. In both scenarios, the government (the 'Appointing Authority') provides a list of retired senior officers to the contractor. The contractor then nominates arbitrators, and the Appointing Authority makes the final selection, ensuring at least one nominee from the contractor's list is chosen. This process aims to provide a balanced and impartial arbitration panel.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Deals with the appointment of arbitrators in consultancy service disputes.
- •Determines the number of arbitrators (one or three) based on the claim amount (₹50,00,000 threshold).
- •The Appointing Authority provides a panel of retired officers for the contractor to nominate from.
- •The Appointing Authority must appoint at least one arbitrator from the contractor's nominees.
- •Specific timelines are provided for each step of the arbitrator appointment process.
Practical Example
The Ministry of Rural Development had a contract with 'Global Consulting' for a rural infrastructure project. A dispute arose, and Global Consulting claimed ₹40,00,000 in unpaid fees. Since the claim is less than ₹50,00,000, the Appointing Authority (in this case, a designated officer within the Ministry) sent Global Consulting a list of four retired Senior Administrative Grade Officers within 60 days of receiving the arbitration demand. Global Consulting then nominated two arbitrators from that list within 30 days. The Appointing Authority then selected one of Global Consulting's nominees as the sole arbitrator within 30 days of receiving the names.
In another scenario, if Global Consulting's claim was ₹60,00,000, the Appointing Authority would follow a similar process, but a panel of three arbitrators would be formed. The Appointing Authority would appoint one arbitrator from Global Consulting's nominees and another from their own panel or outside. The two appointed arbitrators would then select a third, presiding arbitrator, subject to approval by the Appointing Authority.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What happens if the contractor doesn't nominate arbitrators within the stipulated time?▼
Who bears the cost of the arbitration process?▼
What rank should the retired officers be to be on the panel?▼
What is the role of the Indian Council of Arbitration (ICA) in this process?▼
What is the time limit for the two selected arbitrators to select the presiding arbitrator?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Para 10.7.8 of the Manual for Procurement of Consultancy Services, if the total value of claims in question is ₹40,00,000, how many arbitrators will constitute the Arbitral Tribunal?
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