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Section 23 of Arbitration and Conciliation Act, 1996: Statements of Claim and Defence

Section 23 of the Arbitration and Conciliation Act, 1996 governs the principal pleadings in arbitral proceedings. It specifies what the claimant and respondent are required to state, permits the filing or reference of supporting documents, recognizes counterclaims and set-off, allows amendment or supplementation of pleadings subject to delay considerations, and fixes a six-month period for completion of the statement of claim and defence.

Text of Section 23 - Statements of claim and defence

Sub-section (2A) was inserted by the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016), with effect from 23 October 2015. Sub-section (4) was inserted by the Arbitration and Conciliation (Amendment) Act, 2019 (Act 33 of 2019), with effect from 30 August 2019.

Meaning and scope of Section 23

Section 23 deals with the pleading stage of arbitration. Although arbitral proceedings are intended to be procedurally flexible, the provision identifies the basic matters that ordinarily have to be placed before the arbitral tribunal so that the dispute, defence and reliefs are clearly defined.

Section 23(1): What the claim and defence should contain

The parties may agree on the time and required elements of their pleadings. In the absence of such an agreement, the arbitral tribunal may determine the applicable time period. Section 23(1) requires the claimant to state the facts supporting the claim, the points at issue and the relief or remedy sought. The respondent must state the defence concerning those particulars.

The provision therefore preserves party autonomy while ensuring that the tribunal and the opposing party can identify the factual and legal controversy that requires adjudication.

Section 23(2): Documents and other evidence

A party may submit with its statement the documents it considers relevant. Instead of producing every document at that stage, the party may also refer to documents or other evidence that it proposes to submit. The precise procedural timetable for production of documents and evidence may be governed by the parties' agreement or directions of the arbitral tribunal.

Section 23(2A): Counterclaim and set-off

Section 23(2A) expressly permits the respondent to submit a counterclaim or plead a set-off. The important statutory limitation is that the counterclaim or set-off must fall within the scope of the arbitration agreement. Where that condition is satisfied, the arbitral tribunal may adjudicate it as part of the arbitral proceedings.

Section 23(3): Amendment or supplementation of pleadings

Unless the parties have agreed otherwise, either party may amend or supplement its claim or defence during the arbitration. The tribunal may, however, refuse the amendment or supplement when it considers that allowing it would be inappropriate having regard to the delay in making the request.

The provision gives the tribunal flexibility to permit a genuine amendment while also protecting the efficiency of the arbitral process from unduly delayed changes to the case.

Section 23(4): Six-month period for completing pleadings

Section 23(4) requires the statement of claim and defence under Section 23 to be completed within six months from the date on which the arbitrator, or all the arbitrators where applicable, received written notice of their appointment.

This pleading-completion date is also significant for Section 29A. In matters other than international commercial arbitration, Section 29A(1) provides that the arbitral award shall be made within twelve months from the date of completion of pleadings under Section 23(4). For international commercial arbitration, the statute directs that the award may be made as expeditiously as possible and states an endeavor to dispose of the matter within twelve months from completion of pleadings.

Relationship with Section 25 - Default of a party

Section 25 addresses the consequences of a party's default. Subject to the parties' agreement and the statutory conditions, failure by the claimant to communicate the statement of claim in accordance with Section 23(1) can result in termination of the proceedings. Failure by the respondent to communicate the statement of defence does not by itself amount to an admission of the claimant's allegations; the tribunal may continue the proceedings and has statutory discretion concerning forfeiture of the right to file the defence.

Key requirements under Section 23

• The claimant should identify the supporting facts, points at issue and relief or remedy sought.
• The respondent should state the defence to those particulars.
• The parties may produce relevant documents with their pleadings or refer to documents or other evidence to be submitted later.
• A respondent may raise a counterclaim or set-off if it falls within the arbitration agreement.
• A claim or defence may ordinarily be amended or supplemented unless the tribunal considers the delay makes it inappropriate.
• The statement of claim and defence must be completed within the six-month period specified in Section 23(4).

Official statutory reference

The current central legislation can be checked on the Government of India's India Code portal:

Arbitration and Conciliation Act, 1996 - India Code

This page is intended as a general statutory reference. The facts of a particular arbitration, the arbitration agreement, applicable institutional rules and procedural orders of the arbitral tribunal may affect the manner in which pleadings are filed and adjudicated.