UP-DATED PROCEDURE ORDER AS ON 20 - Indian Railways

UP-DATED PROCEDURE ORDER AS ON 15.06.2018

ARBITRATION-PROCEDURE FOR PROCESSING AND MONITORING OF THE CASES 1.0 In suppression of the previous procedure orders issued vide this office letter No.G-6/30 dt.10.11.2004, 20.10.2005 & 20.7.2012, the following procedure order is issued with immediate effect in regard to the processing of arbitration cases till the final stage of the award. 2.0 Arbitration is a domestic forum for resolution of disputes in Contract Management. An arbitral award is final with respect to the disputes raised and is enforceable in a Court of Law. The new Arbitration and Conciliation Act, 1996 as amended by Act No.3 of 2016 (w.e.f.23.10.2015) which replaced the old Act of 1940, is a piece of legislation which brought in sweeping changes in concept, constitution and procedure of arbitration based on UNCITRAL Model Law on International Commercial Arbitration. To disseminate the changes brought out by the new Act, this procedure order is being issued. As per modification to Clause 64 of GCC-2014 for implementation of arbitration and conciliation (Amendment) Act, 2015 issued by Railway Board vide letter No.2015/CE-I/CT/ARB/18 dated 11.11.2016 3.0 Demand for arbitration:

In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties or any matter in question, dispute or difference on any account or as to the withholding by the Railway Electrification of any certificate to which the contractor may claim to be entitled to, or if the Railway Electrification fails to make a decision within 120 days, then and in any such case, but except in any of the ‘excepted matters’ referred to in CI. No.63 of GCC(contracts governed by GCC) or Cl.No.1.2.54(A) (electrical contract tender conditions), after 120 days but within 180 days of his presenting his final claim on disputed matters, shall demand in writing that the dispute or difference be referred to arbitration [Ref. Clause 64.(1) (i) of GCC]. 3.0(A) The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute or difference, in respect of which the demand has been made, together with counter claims are set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference [Ref. clause 64.(1) (ii) of GCC] 3.0 (B) The arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway [Ref. clause 64.(1) (iii) (a) of GCC] 3.0 (C) The claimant shall submit his claim stating the facts supporting the claims alongwith all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal [Ref. clause 64.(1) (iii) (b) of GCC]. In case of Railway being the claimant: The draft of the plaint for arbitration should be got vetted by obtaining legal and financial advice (GFR 2017 Rule 227). 3.0 (D) The Railway Electrification shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from the Tribunal thereafter, unless otherwise extension has been granted by the Tribunal [Ref. clause 64.(1) (iii) (c) of GCC]. Documents to be filed in the matter of resolution of dispute, if any, should be carefully scrutinised before filing to safeguard Govt. interest. GFR 2017 Rule 227.

3.0(E) Place of arbitration : The place of arbitration would be within the geographical limits of the Division of the Railway where the cause of action arose or the Headquarters of the concerned Railway are any other place with the written consent of both the parties [Ref. clause 64.(1) (iii) (d) of GCC]

3.0 (F) No new claim shall be added during the proceedings by either party. However, a party may amend or supplement the original claim or defence thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard of the law and the delay in making it [Ref. clause 64.(1) (iv of GCC].

3.0 (G) If the contractor(s) does/due do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respect of these claims [Ref. clause 64.(1) (v) of GCC].

4.0 Obligation During Pendency Of Arbitration: Work under the contract shall, unless otherwise directed by the Engineer, continue during the arbitration proceedings, and no payment due or payable by the Railway shall be withheld on account of such proceedings, provided, however, it shall be open for Arbitral Tribunal to consider and decide whether or not such work should continue during arbitration proceedings [Ref. clause 64.(2) of GCC].

5.0 Appointment of arbitrators:

5 (1) Appointment of Arbitrator where applicability of section 12 (5) of Arbitration and Conciliation Act has been waived off in writing subsequent to dispute having arisen between the parties.. [Ref. clause 64.(3) (a) of GCC].

i) As soon as a notice in writing, demanding arbitration is received, the same should be processed for appointment of arbitrators/denial by the RE executive within 60 days as per CI.64 of GCC/ or tender conditions. Aforesaid period should not be allowed to expire.

ii) On receipt of a request for arbitration from the contractor, the case shall be examined very carefully with reference to contract agreement/GCC and other relevant papers/documents, in detail by the executive branch and the items to be referred to the arbitration shall be formulated by the department.

iii) (a) The items of arbitration as included at 4(ii) above along with comments and term of reference shall be put up to GM by the PHOD/CHODs requesting for the appointment of an Arbitrator or rejection, of claims giving the back ground of the case necessitating the Arbitration or rejection and also the items of claims to be referred to the Arbitrators.

(b) The power of acceptance or denial of appointing the Arbitrator(s) lies with GM (not with HOD).

i) While putting up the case to GM, concerned PHOD/CHOD will specifically mention the No. of Arbitrators to be appointed alongwith the details of the case In the prescribed proforma (Annexure-I). The No. of arbitrators in the panel to be sent to contractor will also be indicated in the proposal as per tender conditions.

ii) In cases where the total value of all claims in question added together does not exceed Rs.1,00,00,000/-(Rupees one crore only), in terms of Railway Board's letter No. 2015/CE-I/CT/ARB/18 dated 16.11.16, the Arbitral Tribunal shall consist of a sole Arbitrator shall be a Gazetted Officer of Railway not below JA grade to be nominated by the General Manager within 60 days from the day when a written and valid demand for arbitration is received by General Manager [Ref. clause 64.(3) (a) (i) of GCC].

iii) In cases, not covered by the Clause 64 (3) (a) (i), the Arbitral Tribunal shall consist of a panel of three gazetted RE officers not below JA grade or 2 Railway Gazetted Officers not below JA Grade and a retired Railways Officers, retired not below the rank of SAG Officer, as the Arbitrators. For this purpose, Railway Electrification will send a panel of atleast four (4) names of gazetted Railway Officers of one or more department of RE which may also include the name(s) of retired Railway Officer(s) empanelled to work as Railway Arbitrator to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the General Manager.

Contractor will be asked to suggest to General Manager at least 2 names out of the panel for appointment as contractor’s nominee within 30 days from the date of dispatch of the request by Railway. The General Manager shall appoint at least one out of them as the contractor’s nominee and will, also simultaneously appoint the balance numbers of Arbitrators either from the panel or from outside the panel duly indicating the presiding Arbitrator from amongst the three Arbitrators so appointed. GM shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of contractor's nominees. While nominating the Arbitrators it will be necessary to ensure that one of them is from the Accounts Department. An Officer of Selection Grade of the Accounts Department shall be considered of equal status to the officers in SA Grade of other department of the Railway for the purpose of appointment of Arbitrator. [Ref. clause 64.(3) (a) (ii) of GCC].

iv) However, in case of store contracts governed by IRS conditions only "Retired Railway

officers not below SAG level 3 years after his date of retirement shall be nominated as "Sole Arbitrator" irrespective of value of claim/any dispute within the contract conditions (IRS Conditions para 2900 (a)(ii).

5.2 Appointment of Arbitrator where applicability of section 12 (5) of A&C Act has not been waived off.

(i) The Arbitral Tribunal shall consist of a Panel of three (3) retired Railway Officer, retired

not below the rank of SAG Officer, as the arbitrators. For this purpose, the Railway will send a panel of at least four (4)names of retired Railway Officer(s) empanelled to work as Railway 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 GM.

Contractor will be asked to suggest to General Manager at least 2 names out of the panel for appointment as contractor's nominee within 30 days from the date of dispatch of the request by Railway. The General Manager shall appoint at least one out of them as the contractor's nominee and will also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel duly indicating the presiding arbitrator from amongst the 3 arbitrators so appointed. GM shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of contractor's nominees. While nomination the arbitrators, it will be necessary to ensure that one of them has served in the Accounts Department [Ref. clause 64.(3) (b) of GCC].

(ii) If one or more of the arbitrators appointed as above refuses to act as arbitrator,

withdraws from his office as arbitrator, or vacates his/their office/offices or is/are unable or unwilling to perform his functions as arbitrator for any reason whatsoever or dies or in the opinion of the General Manager fails to act without undue delay, the General Manager shall appoint new arbitrator/arbitrators to act in his/their place in the same manner in which the earlier arbitrator/arbitrators had been appointed. Such

re-constituted Tribunal may, at its discretion, proceed with the reference from the stage at which it was left by the previous arbitrator(s) [Ref. clause 64.(3) (c) (i) of GCC].

(iii) (a) The Arbitral Tribunal shall have power to call for such evidence by way of affidavits

or otherwise as the Arbitral Tribunal shall think proper, and it shall be the duty of the parties hereto to do or cause to be done all such things as may be necessary to enable the Arbitral Tribunal to make the award without any delay. The proceedings shall normally be conducted on the basis of documents and written statements.

(b) Before proceeding into the merits of any dispute the Arbitral Tribunal shall first decide

and pass its orders over any plea submitted/objections raised by any party, if any regarding appointment of Arbitral Tribunal validity of arbitration agreement jurisdiction and scope of the Tribunal to deal with the dispute (s) submitted to arbitration applicability of time limitation to any dispute, any violation of agreed procedure regarding conduct of the arbitral proceedings or plea for interim measures of protection and record its orders in day to day proceedings. A copy of the proceedings duly signed by all the members of tribunal should be provided to both the parties [Ref. clause 64. (3) (c) (ii) of GCC].

6.0 (i) Qualification of Arbitrator (s) a. Serving Gazetted Railway Officers of not below JA Grade level b. Retired Railway Officers not below SA Grade level, three years after his date of

retirement. c. Age of arbitrator at the time of appointment shall be below 70 years [Ref. clause 64.(3)

(a) (ii) of GCC]. (ii) An arbitrator may be appointed notwithstanding the total number of arbitration cases

in which he has been appointed in the past. (iii) While appointing arbitrators(s) under Sub-Clause 64 (3)(a) (i), 64 (3)(a) (ii) & 64(3)(b) of

GCC, due care shall be taken that he/they is/are not the one/those who had an opportunity to deal with the matters to which the contract relates or who in the course of his/their duties as Railway servant(s) expressed views on all or any of the matters under dispute or differences. The proceedings of the Arbitral Tribunal or the award made by such Tribunal will, however, not be invalid merely for the reason that one or more arbitrator had, in the course of his service, opportunity to deal with the matters to which the contract relates or who in the course of his/their duties expressed views on all or any of the matters under dispute. [Ref. clause 64.(3) (c) (iii) of GCC].

(iv) The arbitral award shall state item wise, the sum and reasons upon which it is based.

The analysis and reasons shall be detailed enough so that the award could be inferred therefrom [Ref. clause 64.(3) (d) (i) of GCC].

(v) A party may apply for corrections of any computational errors, any typographical or

clerical errors or any other error of similar nature occurring in the award of a Tribunal and interpretation of a specific point of award to Tribunal within 60 days of receipt of the award [Ref. clause 64.(3) (d) (ii) of GCC].

(vi) A party may apply to Tribunal within 60 days of receipt of award to make an

additional award as to claims presented in the arbitral proceedings but omitted from the arbitral award [Ref. clause 64.(3) (d) (iii) of GCC].

(vii) In case of the Tribunal, comprising of three Members, any ruling on award shall be

made by a majority of Members of Tribunal. In the absence of such a majority, the views of the Presiding Arbitrator shall prevail [Ref. clause 64.(4) of GCC].

7.0 (i) The case shall be put up to G.M. through Dy. GM. The details of the case shall be noted in a register maintained in the office of Dy. GM. (ii) Dy. GM shall then process the case for getting the Arbitrator/ Arbitrators nominated

by G.M.

(iii) After the nomination of the Arbitrator/Arbitrators, the case file shall be sent to the concerned Deptt. who will issue a letter under the signature of an officer not less than JAG/SG for appointment of the Arbitrator/Arbitrators along with the terms of reference to the Arbitrator/Arbitrators under advice to the contractor and others concerned.

(iv) The award shall be made within a period of twelve months from the date of reference

[Ref. clause 29 (A) of Arb. Act, 1996 (as amended 2015]. 8.0 In case of appointment of outside arbitrators following actions must be taken: (a) A application has to be given to the arbitrator indicating non acceptance, in principle, of

appointment of arbitrators against the arbitration agreement. This letter is to be given as per clause 11(8)(a), 12(3), 13(2) and 16(2) of the new Arbitration Act, 1996.

(b) If fixed time limit has been given for completion of the arbitration by GM or by Court,

extension must be approved by the competent Authority avoiding unlimited extensions.

(c) After the claims are seen, a detailed reply covering each and every points of the claims

should be made out from the section and the same may be thoroughly checked up, scrutinized and approved at PHOD/CHOD level and only thereafter the reply should be filed before the arbitrators.

(d) the case should be represented before the arbitrator by minimum at JAG Officer level.

Who should be well conversant with the case only. In case of non availability of JAG officer, JS/SS Officer should be nominated to represent the case. It should also be checked up at PHOD/CHOD level that the persons who are representing the case, properly understood the case and the line of action to be taken on each claim. After each meeting, the officer who has represented the case should brief the PHOD/CHOD concerned about the points discussed and further line of action to be taken.

(e) Before given the letter for closing of arbitration hearing PHOD/CHOD concerned should ensure that all points required to be represented, have been represented properly before the arbitrators.

(f) If necessary, Railway Advocate may be engaged para-wise comments to Railway Advocate should be got approved by CHOD/PHOD/CPD as the case may be. Draft reply prepared by Railway Advocate should be got legally vetted by Law Office before filing in the Arbitral Tribunal.

(g) Where any direction/order/judgment of the Court is received by department for appointment of Arbitrator, the same should be processed for appointment/rejection and process shall be completed within the period specified in the judgment provided

the said direction/order/ judgment of the Court has not been challenged by the department through appeal in higher Court and stay order received.

(h) In case of appointment of railway arbitrator, the amount of honorarium/ contingency

etc. demanded by arbitrators will be within the power of CHOD/PHOD of the respondent department as delegated in terms of para A.2.19 (i) of RE SOP – 2011 and as per Railway Board's letter for the amount prescribed.

9.0 Any request for arbitration by a firm/contractor beyond three years from the date of

payment of final bill or when the amount become due is barred by law of limitation, the arbitrator need not be appointed.

10.0 Scrutiny of Awards:

To scrutinize award given by Arbitrator(s), the following guide lines for the Executive, Accounts as well as Law branch are issued who must scrutinize all the awards in detail before they are cleared for payment. The awards should, however, be examined quickly as the time period of only three months in new Act is available within which an award can be challenged; while in the old Act it is thirty days only. The following points are very pertinent: -

SN ITEMS TO BE SCRUTINISED Action to be taken by

i) Whether the award is governed by the old Arbitration Act or the new Arbitration Act

Exec. & L.O.

ii) What are the grounds in the Acts as per which the award can be challenged.

Exec. & L.O.

iii) Whether the award is in accordance with the terms of reference & contract.

Exec. & L.O.

iv) Whether all items of terms of reference have been covered by the award.

Exec. & L.O.

v) Whether a speaking award has been given for all the items of award

Exec. & L.O.

vi) .Whether the procedure followed has been without bias and it has never been protested regarding bias of the Arbitrator.

Exec.

vii) Whether the Arbitrators have mis-conducted themselves or have mis-conducted the proceedings.

Exec.

viii) Whether the award contains the interest and whether all three elements of interest, i.e. pre-arbitration interest, pendentelite interest and post-arbitration interest, are covered by the contract agreement as well as the relevant law laying down the limit and admissibility of each type of interest.

Exec., L.O. & accounting unit

passing the claim/bill (After sanction/

acceptance of award by CA).

ix) Delays by any of the three scrutinizing and payment arranging agencies, i.e. Executive, Law & Accounts, resulting in delay in challenging the award will be taken very seriously against the concerned officers.

Exec., Law & Accounts

x) Since the period of limitation for challenging an award is three months only from the date of receipt of the award, not only the decision for challenging the award, but also filing of the petition in the competent Civil Court would have to be completed within aforesaid period only. In special circumstances if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months, it may entertain an application within a further period of thirty days, but not thereafter. Hence, top priority should be given in taking a decision for challenging the award.

Exec., Law & Accounts

11.0 (i) The amount of the award, for the purpose of powers of sanction, is the amount found payable by the arbitrator plus the amount of interest awarded by the arbitrator up to the date of the award.

(ii) After the receipt of the award, the concerned department along with its comments on each items of award with respect to terms of reference defence statement of RE, Rejoinder of claimant and relied upon documents shall submit to Law Department after approval and comments of CHOD regarding acceptance or challenge of the award. Necessity for obtaining the opinion of Railway Advocate on the merit of the case will also be indicated by Law Officer if required. Law officer to record its comment on legality of acceptance/ challenge of each item of award.

(iii) After obtaining the legal opinion the financial implication of the award will be calculated by executive (in case exact amount is not possible to calculate because of interest etc. tentative amount to be worked out.

(iv) The award alongwith amount shall be sent to FA&CAO by respective CHOD for concurrence of the same, in case it is proposed to challenge.

(v) If the award is acceptable to PHOD/CHOD under their competency in terms of para A.2.18 of RE SOP, the same shall require to be vetted by finance department. In case the award is proposed to be challenged by PHOD/CHOD, the same shall be put up to GM/CORE for his approval after the finance concurrence.

(vi) For contracts beyond the acceptance of power of PHOD/CHOD, the arbitration award shall be put up to GM also for its acceptance/challenge.

12.0 Record of applications for arbitration(to be maintained by Ex.Deptt.):

All applications received for arbitration must be maintained by concerned department in the following proforma:-

a. Agreement number b. Name of the contractor c. Executive Officer to whom it pertains d. Agreement value

e. Date of application of claims asking for arbitration/date on which entered into reference.

f. Amount of claims. g. Reference of court case, if any. h. Date of appointment of Arbitrators i. Name and Designation of the Arbitrator j. Whether the appointment of Arbitrator is as per old Arbitration Act of 1940 or

new Arbitration Act of 1996. k. Whether Railway Advocate engaged for defending before Arbitrator. l. No. of sittings held with dates m. Amount of arbitration fee paid n. Amount of award

i) Award against claims other than interest ii) Interest upto the date of award iii) Interest from the date of award

o. Whether award accepted by Competent Authority.

p. Whether award being challenged.

q. Whether awarded amount paid, if so, details of payment.

13.0 Record for the appointment of arbitration cases (to be maintained by ‘G’ Branch):

After the appointment of arbitrators by GM or by the Court-its record should be kept by General Branch in the following proforma: a. Agreement number b. Executive officer incharge c. Name of the contractor d. Value of agreement e. Payment made against the agreement (Rounded off in lakhs of rupees) f. Amount of claims

i) Other than interest ii) Interest

g. Name & Designation of the Arbitrator/s h. Date of appointment of Arbitrator/s i. Whether the appointment of Arbitrator/s is as per old Arbitration Act of 1940 or

new Arbitration Act of 1996 j. Date on which entered into reference k. Initial period given to Arbitrator/s by GM/Court l. Number of sittings held m. Amount of Arbitration fee paid n. Amount of award

i) Award against claims other than interest ii) Interest up to the date of award iii) Interest from the date of award

o. Implementation of award with details. 14.0 After the award is scrutinized and accepted by concerned PHOD/CHODs as provided

in para A.2.18 of RE SOP, and its payment, the details of the case shall be sent to General Branch by the executive for information in the proforma as indicated below:-

SN. File

No. Brief

description of

Contract &

its value

Name of cont-ractor

Value of

Claim

Brief description

of the dispute/ points for arbitration

Name of

Arbitrator/ Arbitrators

Whether Arbitration

award is against Rly./

Contractor

Amount awarded

CHOD’s remarks

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

15.0 Concerned Executive shall also send the details of award to the Board in cases:

i) Where payment to a contractor as a result of the arbitrator’s award exceeds by more than Rs.50,000/- of the amount considered due by the Railway Administration before the arbitration proceedings began;

ii) Where deficiencies in the general conditions of contract or of procedure laid down by the Railway Board came to light.

(In terms of item 36 of financial and paragraph 505 of Financial Code Vol. I – 1982 Edition (Reprint 1998)

16.0 The guide lines to be followed by Arbitrators and Departments under New Arbitration Act 1996 as amended Act 2015 are enclosed.

17.0 Time limit for arbitral award – The award shall be made within a period of twelve

months from the date the arbitral tribunal enters upon the reference [Ref. clause 29 (A) of Arb. Act, 1996 (as amended 2015].

18.0 In cases where the Arbitration proceedings are still under process (unless the same are at final stages) under the provisions of the pre-amended Arbitration Act, Railway would send a communication (under acknowledgement) to the Contractor/ Concessionaire to give their consent within the period of thirty (30) days (If office of the concerned Railway Authority remains off on 30th day, then upto next working day after 30th day) of receipt of such communication letter to switch over to the provisions of the Arbitration and Conciliation (Amendment) Act 2015. Such consent should be obtained in the prescribed format (Annexed) by Railway Board vide letter No. 2016/CE-I/CT/ARB/3 (NITI Aayog)Pt.2 dated 31.01.2017.

This issues with the approval of General Manager.

DA : Annexure-I consisting of three pages containing guide lines to be followed by arbitrators and Deptt. under new arbitration Act, 1996 as amended by

act No.3 of 2016 (w.e.f. 23.10.15). (D.K. Srivastava)

Dy. General Manager (G)

No.G-6/30 Pt.V Date: 15.06.2018 Copy for information and necessary action to:-

1) CAO, PCSTE, PCE, PCMM, SDGM, PFA/CORE/ALD 2) CPDs/RE/BBS, UMB, MS, LKO, SC, NJP, JP, DNR, ADI, KKK & JBP, 4) Dy. General Manager (Law)/CORE/ALD.

Annexure-I CORE letter No.G-6/30 Pt.VI dated 16.05.2018

Guidelines to be followed by Arbitrator under New Arbitration Act. 1996 as amended 2015

1. Acknowledge receipt of G.M.’s letter appointing as Sole Arbitrator or Member of the Arbitral Tribunal.

2. After receipt of the appointment letter, the arbitrator should advise the claimant to submit his claim stating the facts supporting the claims along with all relevant documents and the relief or remedy sought against each claim within a period to be specified in the letter. The Railway shall submit its defence statement and counter claim, if any, within the period specified in the letter by the arbitrator, unless otherwise extension has been granted by the Arbitrator. In the letter to be issued by the Arbitrator, there should be a warning that if the claimant fails to appear or submit his claims before the Arbitrator by the stipulated period, the Arbitrator will be at liberty to take exparte action/decision, as the case may be. Since, the award is to be declared ordinarily within four months or a reasonable period, this action is obligatory on the part of the Arbitrator to avoid delay.

Section 12 of the New Act provides the grounds for challenge of an appointed Arbitrator. And section 13 deals with the procedure for the challenge of Arbitrator.

Under section 14 (1) (a) of the Arbitration and Conciliation Act 1996, the mandate of an Arbitrator shall terminate, if he fails to act without undue delay.

Section 15 of the new Act provides for termination of mandate of an Arbitrator under certain circumstances.

Section 16 empowers the arbitral tribunal to give ruling on its own jurisdiction.

Section 17 empowers the arbitral tribunal to order a party to take interim measures of protection on a request being made to it.

Section 18 provides that the parties to the arbitration shall be treated with equality and each party shall be given full opportunity to present his case.

Section 19 provides for determination of rules of procedure for conduct of arbitral proceedings. While the arbitral tribunal is not bound by the code of civil procedure 1908 or the Indian Evidence Act 1872, the parties are given freedom to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

Section 20 deals with the question of determining the place of arbitration. While the parties are given freedom to agree on the place of arbitration, where they fail to agree, the place of arbitration will be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

Section 21 deals with the date of commencement of arbitral proceedings unless, otherwise agreed by the parties the arbitral proceedings in respect of a particular dispute commences on the date on which a request for that dispute to be referred to arbitration is received by the respondent. Section 22 deals with the language to be used in arbitral proceedings. While the parties have freedom to agree upon the language or languages to be used in arbitral proceedings, if they fail to do so, the arbitral tribunal will determine the language or languages to be used in the arbitral proceedings.

Section 23 provides for filing of statement of claims and defence by the parties within the period of time agreed upon by the parties themselves or determined by the arbitral tribunal.

Section 24 provides for hearing and written proceedings before the arbitral tribunal.

Section 25 deals with the consequences of default of a party during arbitral proceedings.

Section 26 provides for appointment of expert by arbitral tribunal.

Section 27 provides for assistance by Court in taking evidence.

Section 29 provides for decision making by arbitrators and provides that unless the parties have otherwise agreed, in all arbitral proceedings with more than one arbitrator, decision making by arbitral tribunal shall be by a majority of all its members. Section 29A provide time limit for arbitral award. Section 29B provide fast track procedure.

Section 30 provides for settlement of disputes during arbitral proceedings by using mediation, conciliation etc.

Section 31 lays down the requirement of the form and contents of arbitral award.

Section 32 lays down the condition and procedure for termination of arbitral proceedings.

Section 33 empowers the arbitral tribunal to make corrections in or give interpretations of awards and for making additional awards under certain conditions. This is to be done within thirty days from the receipt of the arbitral award, by a party, with a notice to the other party and request to the arbitral tribunal.

Section 34 deals with the application for setting aside the tribunal award. The period of limitation for setting aside an award is three months from the date of receipt of the award. If the Court is satisfied that the applicant was prevented by sufficient cause from making an application within the said period of three months, it may entertain the applicant’s application with a further period of thirty days but not thereafter. An award may be challenged on the following grounds:-

(a) Party incapacity (b) Invalidity of arbitration agreement (c) No proper notice of hearing (d) Award dealing with the dispute not contemplated within the terms of arbitration (e) Tribunal composition not according to the agreement with the parties (f) The subject matter of controversy cannot have been decided by the arbitrator

under the law. (g) The award be in conflict with the public policy – fraud, corruption etc. (h) Any other cause as per facts & circumstances of the case.

The award shall be challenged in the Civil Court having jurisdiction through Railway

Advocate. Section 35 provides that an arbitral award shall be final and binding on the parties and persons claiming under the subject to the provisions of part I of the Act.

Section 36 provides that where the time for making an application to set aside an arbitral award has expired, or where such application has been refused by court, the award shall be enforced as if it were a decree of the court. Section 37 provides that an appeal shall be from certain orders. No second appeal will lie from an order passed in an appeal. However, the right to the Supreme Court is not affected. Section 38 deals with deposits to be made by the parties in relation to arbitral proceedings. The arbitral tribunal is empowered to fix the amount of deposit or supplementary deposits or as an advance for the cost of arbitration. Section 39 provides for lien of the arbitral tribunal on the award for any unpaid costs of arbitration. Section 40 provides that an arbitration agreement shall not be discharged by the death of party. Section 41 provides for dealing with situation of Insolvency. Section 42 lays down that only the Court in which an application with respect to an arbitration agreement has been made will have jurisdiction over subsequent proceedings arising out of that agreement. Section 43 provides that the provisions of limitation Act 1963 shall apply to arbitrations as it applies to proceedings in Court. N.B.

(1) In case of any doubt the arbitrator shall refer to the Arbitration and conciliation Act 1996 or Arbitration Act.1940 as the case may be.

(2) While awarding the interest the arbitrator should take care of he provisions of

clause 16(2) of GCC and other similar conditions of the contract on subject of interest.

(3) All correspondence should be addressed to both the parties by Registered post

with Acknowledgment due.

(D.K. Srivastava) Dy. General Manager(G)

CORE/ALD

Annexure-II STANDARD FROM TO BE FILLED IN ALONGWITH THE PROPOSAL FOR

NOMINATION OF ARBITRATORS. 1. Contract Agreement No. and Date :

2. Name of Work :

3. Name of Contractor :

4. Contract signing authority :

5. Contract accepted on :

6. Cost of work as per contract agreement :

7. (a) Date of completion. :

(i) As per agreement :

(ii) Actual :

(b) Period of completion :

(i) As per agreement :

(ii) Actual :

8. Extension granted on- :

Railway' account :

Contractor's account :

9. Dated of payment of final bill :

10. Date refund of S.D. :

11. Whether the contract has been rescinded and whether the balance work has been carried out at the risk and cost. If so, what is the additional expenditure?

:

12. Whether clear 'No Claim' certificate has been signed by the contractor?

:

13. Claim wise reply to the contractor (give ref. of page No.)

:

14. Amount of claim :

15. Items of claims outside scope of contract :

16. Items of claims under 'excepted matters' :

17. Items considered fit for Arbitration. :

18. Whether the applicability of section 12(5) of A&C has been waived off or not waived off. (Proforma enclosed)

19. Summary of claims

Claim No. Amount Category as indicated in SN.15, 16 & 17

i)

ii)

iii)

iv)

v)

vi)

vii)

viii)

ix)

v)

20. Counter claims of Railway if any.

21. Officers who have dealt with this case

A. In Administrative Office Then worked Now working B. In field office C. In Accounts Office 22. Other details like the Judgment/Direction of the court etc. at CP.

¹ãÆ£ãã¶ã ‡ãŠã¾ããÃÊã¾ã ‡ãñŠ¶³ãè¾ã ÀñÊã ãäÌã²ãì¦ããè‡ãŠÀ¥ã

ÔãâØãŸ¶ã ƒÊããÖãºããª - 211001

Headquarters office Central Organisation for

Railway Electrification Allahabad-211001

No.G-6/30 Pt.VII Dated : 20.07.2012 CEE, CE, CSTE, COS, SDGM/CVO/CPO & FA&CAO, CORE/ALD CPMs/RE/BBS, UMB, MS, LKO, GKP, SC, KTT, HJP, NJP. Sub : Arbitration – Procedure for processing and monitoring of the cases. Ref : This office letter of even number dated 20.10.2005 (copy enclosed). - - - - - - The following paras on the above subject issued vide letter under reference have been modified to read as under:-

Para-4 (xv) In case of appointment of Railway arbitrator, the amount of honorarium/contingency etc. demanded by arbitrators will be within the power of PHOD/CHOD of the respondent deptt. as delegated in terms of para-A.2.19 (i) of RE SOP – 2011.

Para-10 (v) After the finance concurrence and vetting of the amount, the case will be put up to PHOD/CHOD for acceptance of the award falling under their competency, in terms of para A.2.18 of RE SOP – 2011. However, if the award is proposed to be challenged, the same shall be put up to GM for his approval.

For contracts beyond the acceptance of powers of PHOD/CHOD, the arbitration award shall be put up to GM also for its acceptance/challenge

Para -13.0 After the award is scrutinized and accepted by concerned PHOD/CHODs as provided in para A.2.18 of RE SOP, and its payment, the details of the case shall be sent to General Branch by the executive for information in the proforma as indicated below:-

This is issued with the concurrence of CORE finance & approval of GM/RE/ALD DA : As above.

(Rajesh Chaturvedi)

Dy. General Manager for General Manager

¹ããè¹ããè-

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- - - - - - ½ãìâ•ããè/‡ãŠãñÀ ‡ãñŠ ‚ã¶ãìÀãñ£ã ¹ãÀ •ãìÊããƒÃ, 2012 ½ãò, ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã (2005) ‡ãñŠ ãä¶ã½¶ã ¹ãõÀã‚ããò ½ãò ÔãâÍããñ£ã¶ã ‡ãŠãñÀ ÊãñŒãã ‡ãŠãè ãäÌã¦¦ããè¾ã ÔãÖ½ããä¦ã †Ìãâ ½ãÖã¹ãÆºãâ£ã‡ãŠ ½ãÖãñª¾ã ‡ãñŠ ‚ã¶ãì½ããñª¶ã Ôãñ •ããÀãè ãä‡ãŠ¾ãã Øã¾ãã ©ãã ý

ÔãâÍããñ£ã¶ã ãä‡ãŠ¾ãã Øã¾ãã ãä¶ã½¶ã ¹ãõÀã ãä•ãÔã‡ãŠãè œã¾ãã¹ãÆãä¦ã ‰ãŠ½ã ÔãâŒ¾ãã-2 ¹ãÀ ÔãâÊãØ¶ã Öõ ý

¹ãõÀã-1 (xv) ¹ãõÀã-10 (v) ¹ãõÀã-13

„½ãìãäºãâ•ããè/‡ãŠãñÀ/ƒÊããÖãºããª ‡ãñŠ ¶ããñ› ãä•ãÔã½ãò ¹ãì¶ã: ÔãâÍããñ£ã¶ã ‡ãŠã Ôãì¢ããÌã Öõ ‰ãŠ½ã ÔãâŒ¾ãã---- ¹ãÀ ‚ãÌãÊããñ‡ãŠ¶ãã©ãÃ ¹ãÆÔ¦ãì¦ã Öõ ý

„½ãìãäºãâ•ããè/‡ãŠãñÀ ‡ãñŠ ‚ã¶ãìÀãñ£ã ‡ãŠãñ £¾ãã¶ã ½ãò ÀŒã¦ãñ Öì† ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã ‡ãñŠ ãä¶ã½¶ã ¹ãõÀã‚ããò ½ãò ¹ãì¶ã: ÔãâÍããñ£ã¶ã/withdraw ¹ãÆÔ¦ãããäÌã¦ã Öõ:

Para-10(iii) After obtaining the legal opinion the financial implication of the

award will be calculated by executive and vetted by Accounts (at HQ

or Project level). In case exact amount is not possible to calculate

because of interest etc. tentative amount to be worked out.

Para-10 (iv) The award alongwith amount shall be sent to FA&CAO by respective

CHOD for concurrence of the same.

Note: This is proposed to be withdrawn.

Para-10 (v) After vetting of the amount, the case will be put up to PHOD/CHOD

for acceptance of the award falling under their competency, in terms

of para A.2.18 of RE SOP – 2011. However, if the award is proposed

to be challenged, the same shall be put up to GM for his approval.

For contracts beyond the acceptance of powers of PHOD/CHOD, the

arbitration award shall be put up to GM also for its acceptance/

challenge through FA&CAO.

‡ãŠãñÀ ÊãñŒãã ãäÌã¼ããØã Ôãñ ‚ã¶ãìÀãñ£ã Öõ ãä‡ãŠ ÌãÓãÃ 2005 †Ìãâ ÌãÓãÃ 2012 ½ãò •ããÀãè ÔãâÍããñ£ã¶ã ‡ãñŠ ‚ãâ¦ãØãÃ¦ã „¹ã¾ãìÃ‡ã‹¦ã ¹ãõÀã‚ããò ½ãò ãä‡ãŠ† Øã† ÔãâÍããñ£ã¶ã ‡ãŠãè ãäÌã¦¦ããè¾ã ÔãÖ½ããä¦ã †Ìãâ

¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã 2005 ãä•ãÔãñ ¹ãì¶ã: Ôã¼ããè ‡ãŠãñ ÔãâÔãîãäÞã¦ã ãä‡ãŠ¾ãã •ãã¶ãã Öõ (‰ãŠ½ã ÔãâŒ¾ãã---) ‡ãŠãè ãäÌã£ããèàãã ¹ãÆªã¶ã ‡ãŠÀò ¦ãããä‡ãŠ ¶ã† ÔãâÍããñ£ã¶ã ‡ãñŠ Ôãã©ã ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã ÌãÓãÃ 2013 ½ãò Ôã¼ããè ‡ãŠãñ ½ããØãÃ ªÍãÃ¶ã Öñ¦ãì •ããÀãè ãä‡ãŠ¾ãã •ãã Ôã‡ãñŠ ý

ÔãÖã¾ã‡ãŠ ÔããäÞãÌã

„½ã¹ãÆ

Ìã„½ã¹ãÆ

ãäÌãÔã½ãìÊãñãä£ã

Arbitration Policy

SN. Para No. of

old policy

Existing stipulation

Proposed stipulation Remarks

1. Para-4 (xv) A.2.14 of RE SOP-2004 A.2.19 of RE SOP-2011

Due to

change in

SOP para

number

2. Para-10 (v) After the finance

concurrence and

vetting of the amount,

the case will be put up

to GM through CHOD

for recommending

acceptance/challenge

of the award. – para

A.2.15 (v) – 2004

After the finance concurrence and

vetting of the amount, the case

will be put up to PHOD/CHOD

for acceptance of the award

falling under their competency, in

terms of para A.2.18 of RE SOP –

2011. However if the award is

proposed to be challenged, the

same shall be put up to GM for

his approval.

For contracts beyond the

acceptance of powers of

PHOD/CHOD, the arbitration

award shall be put up to GM also

for its acceptance/challenge

Due to

change in

delegation

3. Para -13.0 A.2.15 (v) of RE SOP –

2004

A.2.18– of RE SOP - 2011 Due to

change in

SOP para

number

¹ããè¹ããè-


- - - - - - ‡ãŠã.ãä›.-14 ¹ãÀ „½ã¹ãÆ ½ãÖãñª¾ã ‡ãŠãè ãä›¹¹ã¥ããè

‡ãñŠ ‚ããÊããñ‡ãŠ ½ãò Ìã¦ãÃ½ãã¶ã ½ãò ¹ãÆÞããäÊã¦ã ¹ãõÀã †Ìãâ ÔãâÍããñ£ã¶ã ãä‡ãŠ¾ãã •ãã¶ãñ ÌããÊãã ¹ãÆÔ¦ãããäÌã¦ã ¹ãõÀã‚ããò ‡ãŠãñ ¶ããèÞãñ ªÍããÃ¾ãã Øã¾ãã Öõ ý

Existing para


award will be calculated by executive (in case exact amount is not

possible to calculate because of interest etc. tentative amount to be

worked out).



Para-10 (v) After finance concurrence and vetting of the amount, the case will be

put up to GM through CHOD for recommending acceptance

challenge of the award.

Proposed para


award will be calculated by executive and vetted by Accounts (at HQ

or Project level). In case exact amount is not possible to calculate

because of interest etc. tentative amount to be worked out.



Note: This is proposed to be withdrawn.

Para-10 (v) After vetting of the amount, the case will be put up to PHOD/CHOD

for acceptance of the award falling under their competency, in terms

of para A.2.18 of RE SOP – 2011. However, if the award is proposed

to be challenged, the same shall be put up to GM for his approval.

For contracts beyond the acceptance of powers of PHOD/CHOD, the

arbitration award shall be put up to GM also for its acceptance/

challenge through FA&CAO.

‡ãŠãñÀ ÊãñŒãã ãäÌã¼ããØã Ôãñ ‚ã¶ãìÀãñ£ã Öõ ãä‡ãŠ ÌãÓãÃ 2005 †Ìãâ ÌãÓãÃ 2012 ½ãò •ããÀãè ÔãâÍããñ£ã¶ã ‡ãñŠ ‚ãâ¦ãØãÃ¦ã „¹ã¾ãìÃ‡ã‹¦ã ¹ãÆÔ¦ãããäÌã¦ã ¹ãõÀã‚ããò ‡ãŠãè ãäÌã¦¦ããè¾ã ÔãÖ½ããä¦ã ¹ãÆªã¶ã ‡ãŠÀò, ¦ãããä‡ãŠ ‰ãŠ½ã ÔãâŒ¾ãã-69 ¹ãÀ ÔãâÊãØ¶ã ¹ã¨ã Ôã¼ããè ‡ãŠãñ ½ããØãÃ ªÍãÃ¶ã Öñ¦ãì •ããÀãè ãä‡ãŠ¾ãã •ãã Ôã‡ãñŠ ý


„½ã¹ãÆ

Ìã„½ã¹ãÆ


¹ããè¹ããè-


- - - - - - ½ãìãäºãâ•ããè/‡ãŠãñÀ ‡ãñŠ Ôãì¢ããÌã ‰ãŠ½ã ÔãâŒ¾ãã-17 †Ìãâ ãäÌãÔã½ãìÊãñãä£ã/‡ãŠãñÀ ‡ãŠãè ãäÌã¦¦ããè¾ã ÔãÖ½ããä¦ã ¦ã©ãã ãäÌããä£ã‡ãŠ Àã¾ã „¹ãÀãâ¦ã ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã (2005) ‡ãñŠ ãä¶ã½¶ã ¹ãõÀã‚ããò ½ãò ÔãâÍããñ£ã¶ã ¹ãÆÔ¦ãããäÌã¦ã Öõ:

Para-10(iii) After obtaining the legal opinion the financial implication of

the award will be calculated by executive (in case exact

amount is not possible to calculate because of interest etc.

tentative amount to be worked out and vetting of associate

finance as per provisions of para 9(viii) to (x) above, may be

obtained).

Para-10 (iv) The award alongwith amount shall be sent to FA&CAO by

respective CHOD for concurrence of the same, in case it is

proposed to challenge.

Para-10 (v) After finance concurrence in case of challenge or vetting of

the amount in case of acceptance, the case will be put up to

GM through PHOD/CHOD for recommending acceptance or

challenge of the award.

½ãÖã¹ãÆºãâ£ã‡ãŠ ½ãÖãñª¾ã Ôãñ ‚ã¶ãìÀãñ£ã Öõ ãä‡ãŠ ‡ãðŠ¹ã¾ãã „¹ãÀãñ‡ã‹¦ã ¹ãÀ ‚ã¹ã¶ãã ‚ã¶ãì½ããñª¶ã ¹ãÆªã¶ã ‡ãŠÀò ¦ãããä‡ãŠ ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã ÌãÓãÃ 2005 ½ãò ÔãâÍããñ£ã¶ã ‡ãŠÀ¦ãñ Öì† Ôã¼ããè ‡ãŠãñ ½ããØãÃ ªÍãÃ¶ã Öñ¦ãì •ããÀãè ãä‡ãŠ¾ãã •ãã Ôã‡ãñŠ ý ÌãÓãÃ 2014 ½ãò ½ã£¾ãÔ©ã¦ãã Ôãâºãâ£ããè ¹ãÆãä‰ãŠ¾ãã ‚ããªñÍã 2014 •ããÀãè ãä‡ãŠ¾ãã •ãã¶ãñ ÌããÊãã ½ãÔããõªã ¹ã¨ã ‰ãŠ½ã ÔãâŒ¾ãã -20 ¹ãÀ ÔããªÀ ‚ã¶ãì½ããñª¶ãã©ãÃ ¹ãÆÔ¦ãì¦ã Öõ ý


„½ã¹ãÆ

Ìã„½ã¹ãÆ


½ãÖã¹ãÆºãâ£ã‡ãŠ

Para No. Line No. Existing Proposed Reason

1.0 2 10.11.04 20.10.05

3.0 7 & 8 Cl. No. 1.2.54 (a)

(Electrical

contract tender

condition)

relevant Clause(s) of

contract conditions

4.0 (iii)

(b)

2 (Not with HOD) Not with anyone

below

4.0 (xii)

(b)

3 Junior Scale

JS/SS

4.0 (xii)

(b)

6 Lying line

4.0 (xii)

(c)

2 Insure Ensure

4.0 (xiii) 2 CPM/HOD/PHOD CPM/CHOD/PHOD

9.0 1 Arbitrator/s Arbitrator(s)

10.0 (ii) 4 Submitted submit

10.0 (v) 6 Challenged Challenge

14.0 7 item 36 of

Financial Code

Vol.I– 1982 Edition

(Reprint 1998)

(Annexure-II see

paragraph 505

In terms of item 36 of

GM's SOP and

paragraph 505 of

Financial Code Vol. I

– 1982 Edition

(Reprint 1998)

3.1 The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute or difference, in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference. 3.2 The parties may waive off the applicability of sub-section 12(5) of Arbitration and conciliation (Amendment) Act 2015, if they agree for such waiver, in writing after dispute having arisen between them, in the format give under Annexure-XII of these conditions.