Arbitration and Conciliation Act, 1996

Section 4 of Arbitration Act: Waiver of Right to Object

Section 4 of the Arbitration and Conciliation Act, 1996 deals with waiver of the right to object during arbitration. A party that knows of specified non-compliance but continues with the arbitration without raising an objection within the required time may be treated as having waived that objection.

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Section 4 - 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.

Meaning of Waiver Under Section 4

Section 4 is a procedural waiver provision. It prevents a party from knowingly allowing an arbitration to continue despite certain non-compliance and then seeking to rely on that non-compliance later, where the party did not object in time.

The provision applies where the party has knowledge of the non-compliance and nevertheless proceeds with the arbitration without making a timely objection.

Conditions for Deemed Waiver of an Objection

Knowledge The party must know that the relevant provision or arbitration-agreement requirement has not been complied with.
Applicable non-compliance The issue must concern a provision of Part I from which the parties may derogate, or a requirement under the arbitration agreement.
Continuation of arbitration The party must proceed with the arbitration despite knowing about the non-compliance.
Failure to object in time The objection must not have been raised without undue delay, or within the specific time limit where one is prescribed.

When these elements are satisfied, Section 4 states that the party shall be deemed to have waived the right to object to that non-compliance.

Objection Must Be Raised Without Undue Delay

Where no specific time limit has been prescribed for an objection, Section 4 requires the party to raise it without undue delay. Where a time limit is provided, the objection must be made within that period.

Practical point: A party that intends to challenge a procedural departure should ordinarily place its objection on record promptly and clearly. Delay while continuing to participate in the arbitration may attract the waiver rule in Section 4.

Non-Compliance With the Arbitration Agreement

Section 4 expressly covers non-compliance with a requirement contained in the arbitration agreement. Such requirements may concern matters such as agreed procedure, notices, appointment mechanisms, timelines or other procedural arrangements, depending on the terms of the agreement.

The effect of Section 4 should therefore be considered together with the arbitration clause, any incorporated arbitration rules and the procedural history of the particular case.

Relationship With Party Autonomy

The reference in Section 4(a) to a provision of Part I "from which the parties may derogate" is important. The waiver rule is directed at procedural requirements that the parties are legally permitted to vary, as well as requirements arising under their own arbitration agreement.

Section 4 does not convert every statutory requirement into a waivable requirement. Whether a particular provision is derogable must be considered from the scheme and language of the Arbitration and Conciliation Act, 1996.

Official Source

The official text of the Arbitration and Conciliation Act, 1996 is available on India Code. The Act is Act No. 26 of 1996 and is administered by the Ministry of Law and Justice, Department of Legal Affairs.

View the Arbitration and Conciliation Act, 1996 on India Code
Note: This page reproduces and explains Section 4 for legal information and research. Application of waiver in a particular arbitration depends on the arbitration agreement, the relevant procedural history, the nature of the provision involved and the timing and form of any objection.