Section 4 of the Act deals with the waiver of the right to object. It allows the parties who are choosing arbitration as their dispute resolution method to waive certain objections when they are not raised at the beginning of the arbitration procedure promptly.
This section promotes efficiency in dispute resolution and discourages parties from delaying objections until the later stage. Through Section 4 of the Arbitration and Conciliation Act, parties are encouraged to raise concerns early or risk losing the right to object altogether.
Concept of Section 4 of Arbitration and Conciliation Act 1996
The concept of Section 4 of the Arbitration and Conciliation Act is based on the principle of waiver. According to this section, if a party proceeds with the arbitration process despite being aware of a procedural violation or defect and does not raise an objection without undue delay, that party is deemed to have waived the right to object. This provision is important because it prevents parties from challenging the arbitration proceedings at a later stage based on objections that could have been addressed earlier.
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Section 4 of the Arbitration & Conciliation Act reads as follows:
Waiver of right to object. A party who knows that—
(a) any provision of this Part from which the parties may derogate, or
(b) any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.
This provision aligns with the overall goal of the arbitration, which is a smooth and efficient resolution. It requires the parties to promptly address any concerns they have regarding the arbitration process
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Significance of Section 4 on Arbitration Cases:
The impact of Section 4 on the arbitration process is profound. This section promotes time efficiency and accountability by preventing parties from delaying proceedings by holding back objections until it benefits them. Following are key implications of Section 4:
1. Efficiency and speed: This section helps in efficiency and time-bound proceeding by preventing parties to object in a later stage of the proceeding.
2. Prevents tactical delay: This section prevents the parties from intentionally withholding objections to gain a tactical advantage later in the arbitration.
3. Greater certainty: Once a waiver has been made, the arbitration can proceed without fear of later objections, ensuring the dispute reaches a resolution without unnecessary complications.
4. Fairness: The provision promotes fairness by requiring parties to raise objections at the earliest opportunity.
Get to know What is an Arbitration Agreement?
Recent Case Laws Based on Section 4 of Arbitration & Conciliation Act
1. State of West Bengal & Ors. v. Rajpath Contractors and Engineers Ltd. 2024
In this case, the Supreme Court reiterated that the benefit of section 4 of the Limitation Act is not available if an arbitral award is challenged beyond the three-month limitation. The court held that the 30-day extension period mentioned in the proviso to Section 34(3) of the Arbitration and Conciliation Act 1996 cannot be included in the "prescribed period" in Section 4 of the Limitation Act 1963.
2. Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt. Ltd. 2020.
In this case, the Supreme Court of India held that under Section 4 of the Arbitration and Conciliation Act, 1996, a party waives the right to object if they continue with arbitration proceedings without raising objections in a timely manner. The court emphasized that procedural or jurisdictional objections must be raised promptly, or the party forfeits the right to challenge them later. Since Janardan Nirman participated in the arbitration without raising objections, it was deemed to have waived its rights under Section 4.
3. Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust 2012
In this case, the court affirmed the strict application of this waiver rule, making it clear that parties cannot take advantage of procedural breaches unless they are addressed promptly.
4. ONGC Ltd. v. Western Geco International Ltd. 2014
In this case, the court emphasized that parties must be diligent in raising objections. If a party proceeds with the arbitration without raising an objection, it signifies acceptance of the process, and Section 4 of the Arbitration and Conciliation Act prevents them from challenging the process later.
Conclusion
Section 4 of the Arbitration Act plays an important role as it ensures that arbitration proceedings remain fair, time-efficient, and free from unnecessary delays. The section prevents tactical delays and ensures a smoother dispute resolution process.
FAQs on Section 4 of the Arbitration & Conciliation Act, 1996
Q1. What is Section 4 of the Arbitration and Conciliation Act, 1996?
Section 4 deals with the waiver of the right to object in arbitration proceedings. If a party knowingly participates in proceedings without raising timely objections to any non-compliance of provisions, they are deemed to have waived their right to object later.
Q2. When does Section 4 apply in arbitration?
Section 4 applies when a party becomes aware of a procedural non-compliance or irregularity (e.g., incorrect appointment of arbitrators) but continues to participate in the proceedings without objection. This is considered a waiver of their right to contest the irregularity.
Q3. Can a party still raise objections after knowingly participating under Section 4?
No, under Section 4, a party who proceeds without raising objections within the appropriate time forfeits their right to later contest those irregularities, ensuring fairness and efficiency in arbitration.
Q4. What is the purpose of Section 4 in arbitration?
The provision promotes procedural efficiency and prevents parties from strategically delaying or derailing arbitration by raising objections at later stages after knowingly continuing with the proceedings.
Q5. Does Section 4 apply to all arbitration-related objections?
No, Section 4 applies to procedural irregularities or non-compliance with agreed terms of arbitration. It does not waive rights to object against fundamental issues like jurisdiction or fraud.
