Section 41 Arbitration and Mediation Act

Section 41 Arbitration and Mediation Act 2023 is about Default of a party. It is under Part I (Arbitration) of the Act.

(1) Unless otherwise agreed to by the parties, if, without showing sufficient cause –
(a) the claimant fails to state the claim as required under section 36(1) of this Act, the arbitral tribunal shall terminate the proceedings provided that where a respondent has a counterclaim and has evinced an intention to file same, the proceedings shall not be terminated;
(b) the respondent fails to state the defence as required under section 36(1) of this Act, the arbitral tribunal shall continue the proceedings without treating the failure in itself as an admission of the claimant’s allegation;
or

(c) any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make an award on the evidence before it.

(2) Parties may agree on any additional powers of the arbitral tribunal for the proper and expeditious conduct of the arbitration in case of a party’s default.

(3) Unless otherwise agreed by the parties, if, after stating the claim as required under section 36(1) of this Act, the arbitral tribunal is satisfied that there has been inordinate and inexcusable delay on the part of the claimant in pursuing the claim and that the delay –
(a) gives rise, or is likely to give rise, to a substantial risk that a fair resolution of the issues in that claim may not be possible, or
(b) has caused, or is likely to cause serious prejudice to the respondent, the arbitral tribunal may make an award dismissing the claim.

(4) Unless otherwise agreed by the parties, if without showing cause, a party fails to comply with an order or directions of the arbitral tribunal, the arbitral tribunal may make a peremptory order to the same effect, prescribing such time for compliance with it as the tribunal considers appropriate.

(5) Unless otherwise agreed by the parties, where a claimant fails to comply with a peremptory order of the arbitral tribunal to provide security for costs, the arbitral tribunal may make an award dismissing its claim.

(6) Unless otherwise agreed by the parties, where a party fails to comply with any other kind of peremptory order, the arbitral tribunal may-
(a) direct that the party in default is not entitled to rely upon any allegation or material which was the subject matter of the order;
(b) draw any adverse inference from the act of non-compliance as the circumstances justify;
(c) proceed to make an award on the basis of the materials as have been properly provided to it; or
(d) make any order as it deems fit about the payment of costs of the arbitration incurred in consequence of the non-compliance.