Archive for March 2008


There is a trend world over, in particular among companies and corporate not to drag disputes into long drawn courtroom battles. There comes the significance of Arbitration, Mediation, Conciliation and such alternate disputes resolution mechanisms. Here is the added advantage of savings in time as well as the cost of proceedings. Moreover the parties settle the matter in a win- win spirit.

The Arbitration and Conciliation Act, 1996 governs the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards in India. Further it governs the law relating to conciliation. This act has taken into account the UNCITRAL Model Law on International Commercial Arbitration adopted by UN in 1985 and the UNCITRAL Conciliatory Rules (1980).

As per the Arbitration and Conciliation Act, 1996, an arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or it may be a separate agreement. Further an arbitration agreement shall be in writing.

If either of the disputing parties approaches a Court for adjudication of the dispute, in spite of the presence of an arbitration agreement, then the Court has the power to refer the parties to arbitration. The parties to an arbitration proceeding are entitled to approach the jurisdictional court for urgent and interim measures of protection.

The parties are free to determine the number of arbitrators; however the same shall not be an even number. The arbitrator may be a person of any nationality. If there is any justifiable doubt as to the independence or impartiality of an arbitrator, then, he shall not become an arbitrator.

The arbitrational tribunal is also entitled to pass interim measures of protection or to order a party to provide appropriate security. In arbitration proceeding, the parties shall be treated with equality and each party shall be given full opportunity to present his case.

Parties are free to fix the place of arbitration. If there is a disagreement between the parties regarding the place of arbitration, the same shall be decided by the arbitrational tribunal. The proceedings can be conducted in any language as determined by the parties.

Senior Citizens! Know About Reverse Mortgage

With the average life span of Indians on the rise and the mortality rate coming down drastically along with the advancement of modern medicine, the number of senior citizens in the population is on rise. Coupled with this, the disintegration of social fabric, the disappearance of joint family system and the fast pace of modern life, have left many senior citizens economically and socially vulnerable during the fag end of their lives.With the idea to provide some social security measure to senior citizens, the Finance Minister of India formally introduced the concept of Reverse Mortgage in India in the last Union Budget. National Housing Bank has issued certain guidelines in this regard. Many banks like State Bank of India have already introduced this concept.

As per this concept, the senior citizens who own a house can mortgage their property to a banker. The banker will make periodic payments (say monthly) to the borrower, during his life time. The borrower need not repay the loan amount during his life time. After the borrower’s death, the house property is sold and the loan amount together with the interest accumulated is recovered by the bank. If the heirs of the borrower can repay the loan together with interest thereon, then they can release the mortgage and inherit the house property.The scheme is available for senior citizens who are above 60 years of age. Married couples can jointly borrow under this scheme. The borrower shall use the property mortgaged as permanent primary residence. The amount of loan that the senior citizens can avail depends on factors like market value of the property, age of the borrower, rate of interest etc.

The loan amount may be periodic (monthly, ½ yearly) or it can be one lump-sum payment. Normally periodic payments are made for monthly maintenance of senior citizens, while lump-sum payments are made for special purposes like medical expenses, home improvement etc. The maximum period of loan is 15 years. Commercial properties are not eligible under this scheme.

The senior citizens are also given a “right of rescission”, ie, they can cancel the scheme availed within 3 business days of finalizing the scheme. In such cases, the entire loan amount will have to be paid by the senior citizens within this 3 days period.

The loan amount will became due and payable when the last surviving borrower dies or intends to sell the home or when the borrower permanently moves out of the home. The borrower has the right to prepay the loan at any time during the loan tenor, which shall not carry any penalty or charge.