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Banking Ombudsman Scheme 2002 - Chapter V
Arbitration and Conciliation Procedure
Banking Ombudsman to Act as Arbitrator ( Clause: 21)
Arbitral Proceeding - (Clause: 22)
Any dispute between a bank and its constituents or between a bank and another bank may be referred to a Banking Ombudsman for arbitration if both the parties agree for such a reference provided that the value of the claim in such dispute does not exceed Rupees Ten Lakhs.
The Banking Ombudsman shall assume the office of an arbitrator on such reference of a dispute for arbitration to him, either between a bank and its constituent or between a bank and another bank, provided that the parties submit the disputes to the Banking ombudsman giving their consent by way of an affidavit of undertaking duly stamped and notarised in accordance with Annexure B of the Scheme.
After assuming charge as an arbitrator, in any dispute, if the Banking Ombudsman considers at any stage that he is unable to perform his function independently without having any personal interest, then he shall decline to continue as an arbitrator.
he Banking Ombudsman assuming the charge of an arbitrator shall follow the procedure as laid down under the Scheme read with the provisions of the Arbitration and Conciliation Act, 1996.
The Claim - (Clause: 23)
On reference of a dispute for arbitration as in Clause 21 above, the Banking Ombudsman shall direct his Secretariat to complete the procedural formalities preliminary to arbitration proceedings, as laid down hereunder, within a period not exceeding three months in any case.
The Secretariat of the Banking Ombudsman shall, on being directed as in sub-clause (1) above, call upon the claimant to submit his statements of claims along with the list of documents and list of witnesses, within the period as may be stipulated by
the Secretariat subject to the overall period as stipulated by the Banking Ombudsman for completion of the procedural formalities preliminary to arbitration proceedings.
The secretariat shall send a copy of the claim and the documents annexed thereto to the opposite party as mentioned in the claim for his reply.
The claim will include interalia the following information,
The Reply (Clause: 24 )
the claimant's name and his full address,
statement of claimant's case,
the names of the opposite party and his full address,
the relevant documentation or information as will serve clearly to establish the circumstances of the case and which the claimant may desire to rely upon.
Notification of the First Hearing (Clause:25)
The opposite party shall within 15 days from the receipt of the claim and the documents referred to in clause 22 above, submit a reply setting out his defence supported by relevant documents.
If the opposite party wishes to make a counter- claim, he shall include the same in his reply and file the same within the time as stipulated under sub-clause (1).
It shall be open to the Claimant to file a reply to the counter claim within 15 days from the date after the receipt of the copy of the counter-claim.
On receipt of documents as stipulated in Clauses 22 (2) and 24 above, the Secretariat shall prepare the case for the hearing of the arbitration and seek orders of the Banking Ombudsman for the date of first hearing of the case which shall be intimated to the parties
Pleadings, Notifications or Communications: (Clause: 26)
Terms of Reference (Clause: 27)
All pleadings submitted by the parties, as well as all documents annexed thereto, shall be supplied in triplicate.
All notifications or communications from the Secretariat shall be deemed to have been validly made if they are delivered against receipt or forwarded by registered post to the address disclosed in the pleadings or last known address of the party for whom the same are intended, as notified by the party in question or by the other party as appropriate.
Notification or communication shall be deemed to have been effected on the day when it was received or should, if made in accordance with the preceding paragraph, have been received by the party itself or by its representative
Before proceeding with the preparation of the case, the Banking Ombudsman shall draw up, on the basis of the documents or in the presence of the parties and in the light of their submissions, a document defining his Terms of Reference. This document shall include the following particulars:
Conduct of Arbitral Proceedings (Clause: 28)
the full names and description of the parties.
the addresses of the parties to which notifications of communications arising in the course of the arbitration may validly be made.
a summary of the respective claims of the parties.
definition of the issues to be determined
such other particulars as the Banking Ombudsman may think necessary.
For the conduct of arbitral proceedings, the procedure laid down in Chapter V of the Arbitration and Conciliation Act, 1996 shall apply insofar as it is deemed necessary and appropriate in the opinion of the Banking Ombudsman for the purposes of the Scheme.
New Claims (Clause: 29)
The parties may make new claims or counter- claims before the Banking Ombudsman provided that such new claim or counter-claims remain within the limits of the Terms of Reference.
Award by Consent (Clause: 30)
If the parties reach a settlement, the Banking Ombudsman shall in accordance with the provisions of the Scheme, record it in the form of an arbitral award made by consent of the parties.
Time-Limit for Award (Clause: 31)
Making of Award (Clause: 32)
The time limit within which the Banking Ombudsman must render his award is fixed at six months, from the date of the first hearing under Clause 25 of the Scheme.
The Banking Ombudsman, if need be, on its own initiative or at the instance of the parties, may extend this time-limit if it is necessary so to do, in the interest of justice.
The arbitral award shall be deemed to be made at the place of the arbitration proceedings and on the date when it is signed by the Banking Ombudsman.
Notification and Enforceability of the Award (Clause: 33)
Chapter VI - Miscellaneous
After signing the award the Banking Ombudsman shall forward the same to the Secretariat to notify the same to the parties concerned and make certified copies of the award available to the parties.
For the enforcement of the arbitral Award, the procedure laid down in Chapter VIII of the Arbitration and Conciliation Act, 1996 shall apply.
Removal of Difficulties (Clause:33)
If any difficulty arises in giving effect to the provisions of this Scheme, the Reserve Bank may make such provisions not inconsistent with the Banking Regulation Act, 1949 or the Scheme, as it appears to it to be necessary or expedient for removing the difficulty
Application of The Banking Ombudsman Scheme, 1995 (Clause: 34)
The adjudication of pending complaints and execution of the Awards already passed, before coming into force of the Banking Ombudsman Scheme 2002, shall continue to be governed by the provisions of the Banking Ombudsman Scheme 1995 and instructions of the Reserve Bank issued thereunder