(1) Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for—
(a) Arbitration;
(b) Conciliation;
ADVERTISEMENTS:
(c) Judicial settlement including settlement through Lok Adalat; or
(d) Mediation.
(2) Where a dispute has been referred—
(a) For arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
ADVERTISEMENTS:
(b) To Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
(c) For judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the disputes were referred to a Lok Adalat under the provisions of that Act;
(d) For mediation, the Court shall affect a compromise between the parties and shall follow such procedure as may be prescribed.]
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ADVERTISEMENTS:
Permissibility of Court as an arbitrator:
The Government or for that matter any party could not compel or obligate a Civil Court to arbitrate the matter between the parties on the strength of an agreement entered into between the parties. The fact that Government was one of the parties to the arbitration agreement made no difference. Courts are created or established by law in his country and function in accordance with the jurisdiction conferred on them by the enactments which confer a jurisdiction and function in accordance with the procedural law that regulates the proceedings of the Court.
Section 89 of C.P.C. could not be resorted to, for interpreting Section 8, Arbitration and Conciliation Act:
Section 89, C.P.C. cannot be resorted to, for interpreting Section 8 of the Arbitration and Conciliation Act as it stands on a different footing and it would be applicable even in cases where there is no arbitration agreement for referring the dispute for arbitration. Further, for that purpose, the Court has to apply its mind to the condition contemplated under Section 89, C.P.C. and even if application under Section 8 of the Act is rejected, the Court is required to follow the procedure prescribed under the said Section.