Search this article on Google: Exploring the Status and Effect of Settlement Agreement under Section 74 of The Arbitration and Conciliation Act
In the complex realm of legal disputes, arbitration carries significant importance, especially in India, where the law often takes a more extended period to afford a verdict. Therefore, the Arbitration and Conciliation Act, 1996 is crucial as it provides an alternative dispute resolution system that can expedite the legal procedure. This article will delve into the intricacies of Section 74 in this Act, focusing on Settlement Agreements, with expert insights from SimranLaw.
Understanding the Settlement Agreement under Section 74
Section 74 of the Arbitration and Conciliation Act, 1996, speaks about the status and effect of the settlement agreement. It clarifies that the settlement agreement reached through conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute.
As per this section:
- The settlement agreement is finalized in writing.
- The agreement is signed by both parties involved.
- The agreement is binding and enforceable, similar to a legal decree by a court of law.
Important Case Laws and Judgments
1. Haresh Dayaram Thakur vs. State of Maharashtra & Ors [(2000) 6 SCC 179]
- An agreement reached through conciliation has the same legal value as an arbitral award or legal decree
- An agreement reached via arbitration or conciliation can be enforced like any other contract under the Indian law
2. Afcons Infrastructure Ltd. and Anr vs. Cherian Varkey Construction Co. (P) Ltd. and Ors [(2010) 8 SCC 24]
This landmark judgment confirmed that:
- Disputes settled through arbitration compounds the offence, as Section 320 of the Code of Criminal Procedure supports
- The judgment stressed the need to resort to arbitration, mediation, or conciliation for the resolution of disputes wherever possible, thus reiterating the importance of such alternative dispute resolution methods
3. Union of India vs. Kishorilal Gupta & Bros [AIR 1959 SC 1362]
This case went a step further in establishing that an arbitral award:
- Is final and binding
- Is non-appealable, except on very limited grounds such as public policy of India
In conclusion, Section 74 of The Arbitration and Conciliation Act, 1996, plays a pivotal role in giving weightage to settlement agreements drawn from conciliation proceedings. The effectiveness of this provision is reinforced by several important judgments across India’s legal history. The experts at SimranLaw are adept at navigating the legal complexities of these alternate dispute resolution strategies to effectively represent their clients’ interests.