Definitions, and How Far Part I Reaches

In one line

Section 2 says what the words in Part I mean, and one of its sub-sections decides the single biggest question in Indian arbitration: whether Part I applies at all.

In exam wording: section 2(1) of the Arbitration and Conciliation Act 1996 defines the expressions used in Part I, including "arbitration", "arbitral award", "arbitral tribunal", "Court" and "international commercial arbitration", and section 2(2) provides that Part I shall apply where the place of arbitration is in India.

Why a definitions section deserves a chapter

Two of these definitions decide real cases before any other question is reached.

"Court" decides where you file. Get it wrong and the application is returned.

"International commercial arbitration" decides which court, what law the tribunal applies to the substance, and how narrowly an award can be attacked. It is the fork the whole Act turns on.

And section 2(2) decides whether Part I applies at all, which is the question that produced the most important line of arbitration cases India has.

Section 2(1): the definitions

(a) "Arbitration" means any arbitration whether or not administered by permanent arbitral institution.

That short clause carries the distinction between ad hoc and institutional arbitration, and the Act covers both. Ad hoc arbitration is run by the parties and the tribunal themselves. Institutional arbitration is administered by a body with its own rules, a panel of arbitrators and a fee schedule. Indian practice has been overwhelmingly ad hoc, and promoting institutional arbitration is the stated purpose of Part IA and of the India International Arbitration Centre Act 2019.

(b) "Arbitration agreement" means an agreement referred to in section 7. Chapter 230.

(c) "Arbitral award" includes an interim award. An inclusive definition, so an interim award is an award for the purposes of the Act, including for setting aside under section 34.

(d) "Arbitral tribunal" means a sole arbitrator or a panel of arbitrators. So "tribunal" in this Act does not imply plurality.

(e) "Court", and this one must be known exactly, because it is two different things:

• in an arbitration other than international commercial arbitration: the principal Civil Court of original jurisdiction in a district, including the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration had they been the subject matter of a suit; but not any civil court of a grade inferior to that principal civil court, and not any Court of Small Causes;
• in international commercial arbitration: the High Court in exercise of its ordinary original civil jurisdiction having such jurisdiction, and in other cases a High Court having jurisdiction to hear appeals from decrees of courts subordinate to it.