Question

According to Section 25(b) of the Arbitration and Conciliation Act, 1996, where the respondent fails to submit his statement of defence without sufficient cause, the arbitral tribunal shall:

• A. Treat the claimant's allegations as admitted.
• B. Proceed to decide the dispute treating the claimant's case as uncontroverted.
• C. Continue the proceedings without treating such failure as admission.
• D. Terminate the proceedings.

Hint:

In Arbitration Law: Failure to file Defence \(\neq\) Admission of Claim. The claimant must still prove the case before the arbitral tribunal even when the respondent defaults.

Answer 1

The Correct Option is C

Step 1: Know the law.
The Arbitration and Conciliation Act, 1996 gives a fair and quick way to settle disputes. Section 25 deals with default by a party.

Step 2: Focus on Section 25(b).
Section 25(b) covers the situation where the respondent fails to file the statement of defence without sufficient cause.

Step 3: Note the key rule.
The tribunal shall continue the proceedings. But it shall not treat this failure as an admission of the claimant's allegations.

Step 4: Understand the reason.
Arbitration is built on fairness. If silence were treated as admission, unfair awards could be passed. So the claimant must still prove the case.

Step 5: Rule out wrong options.
Option A and B wrongly treat the silence as admission or accept the claim without proof. Option D, termination, applies to claimant default, not this.

Step 6: Final answer.
The tribunal continues the proceedings without treating the failure as admission.
\[ \boxed{\text{Continue the proceedings without treating such failure as admission.}} \]