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ADR and Arbitration MCQs for Judiciary

Judiciary ADR and Arbitration questions 1-27 of 55, with answer keys and explanations covering arbitration agreements, tribunals, awards, court intervention, mediation, conciliation, and enforcement.

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Practice judiciary exam MCQs with answers and explanations across substantive law, procedure, evidence, constitutional law, and state judicial service subjects.

  • Arbitral Tribunal5
  • Arbitration Act Fundamentals4
  • Arbitration and Evidence1
  • Award and Challenge6
  • Commercial Courts and ADR2
  • Conciliation under Arbitration Act2
  • Court Intervention in Arbitration5
  • CPC Section 892
  • Drafting and Practice4
  • Foreign Awards2
  • Gram Nyayalayas Act4
  • Legal Services Authorities Act4
  • Mediation Act, 20239
  • Sectoral ADR5
Question 1EasyArbitration Act Fundamentals

Under the Arbitration and Conciliation Act, 1996, which statement best captures the legal character of an arbitration agreement?

  1. A

    It is an agreement by parties to submit present or future disputes arising from a defined legal relationship to arbitration.

  2. B

    It is valid only when executed after a dispute has already reached court.

  3. C

    It is valid only if it names every arbitrator in the original contract.

  4. D

    It is treated as a criminal compromise because it excludes ordinary courts.

View answer and explanation

Correct answer: A. It is an agreement by parties to submit present or future disputes arising from a defined legal relationship to arbitration.

Section 7 treats an arbitration agreement as an agreement to submit disputes to arbitration, whether the disputes are existing or future, and whether the arbitration clause is inside a contract or in a separate agreement. The core requirement is consensus to arbitrate a defined legal relationship.

Source note: Arbitration and Conciliation Act, 1996, Section 7

Question 2MediumArbitration Act Fundamentals

A contract contains an arbitration clause through an exchange of emails and purchase orders rather than a single signed document. Which answer is most accurate?

  1. A

    The clause must fail because arbitration agreements always require one stamped and signed document.

  2. B

    The clause is valid only after the arbitral tribunal signs it.

  3. C

    The clause can still satisfy the written requirement if the exchange records consensus to arbitrate.

  4. D

    The clause becomes a mediation agreement, not an arbitration agreement.

View answer and explanation

Correct answer: C. The clause can still satisfy the written requirement if the exchange records consensus to arbitrate.

Section 7 recognises an arbitration agreement in writing through signed documents, exchange of letters, telex, telegrams, electronic communications, or pleadings where one party alleges and the other does not deny the agreement. A single ceremonial document is not the only route.

Source note: Arbitration and Conciliation Act, 1996, Section 7

Question 3MediumArbitration Act Fundamentals

A party argues that because the main contract is void, the arbitration clause automatically dies with it. What is the best response?

  1. A

    The arbitration clause always survives even where it was itself procured by fraud.

  2. B

    The arbitration clause is treated as separable, so invalidity of the main contract does not by itself invalidate the arbitration agreement.

  3. C

    The arbitration clause is never separable from the main contract.

  4. D

    Only a civil court, and never the tribunal, can examine this issue.

View answer and explanation

Correct answer: B. The arbitration clause is treated as separable, so invalidity of the main contract does not by itself invalidate the arbitration agreement.

The doctrine of separability treats the arbitration agreement as distinct from the substantive contract for jurisdictional purposes. A challenge to the main contract does not automatically destroy the tribunal jurisdiction; the arbitration clause must be attacked on grounds that affect it specifically.

Source note: Arbitration and Conciliation Act, 1996, Section 16

Question 4EasyArbitration Act Fundamentals

The principle of kompetenz-kompetenz under Indian arbitration law means that:

  1. A

    Only the High Court may decide every jurisdictional objection before arbitration begins.

  2. B

    An arbitral tribunal cannot rule on the validity of the arbitration agreement.

  3. C

    The parties must first mediate before raising jurisdictional objections.

  4. D

    The arbitral tribunal may rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement.

View answer and explanation

Correct answer: D. The arbitral tribunal may rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement.

Section 16 gives the tribunal power to decide its own jurisdiction. This supports efficiency by allowing jurisdictional objections to be addressed within the arbitral process, subject to later judicial control at the appropriate statutory stage.

Source note: Arbitration and Conciliation Act, 1996, Section 16

Question 5EasyCourt Intervention in Arbitration

Section 5 of the Arbitration and Conciliation Act, 1996 is best understood as:

  1. A

    A provision allowing courts to supervise every procedural order passed by the tribunal.

  2. B

    A legislative policy that courts should intervene in arbitration only where the Act so provides.

  3. C

    A bar on all judicial review, including review of arbitral awards.

  4. D

    A rule that arbitration clauses are void in consumer and employment contracts.

View answer and explanation

Correct answer: B. A legislative policy that courts should intervene in arbitration only where the Act so provides.

Section 5 reflects minimal judicial intervention. It does not eliminate court powers; it confines intervention to points expressly permitted by the Act, such as interim measures, appointment, assistance in evidence, setting aside, enforcement, and appeals.

Source note: Arbitration and Conciliation Act, 1996, Section 5

Question 6MediumCourt Intervention in Arbitration

A defendant applies under Section 8 after filing a detailed written statement on merits. What is the strongest objection to reference to arbitration?

  1. A

    Section 8 requires the party to apply not later than submitting its first statement on the substance of the dispute.

  2. B

    Section 8 applies only to foreign awards.

  3. C

    Section 8 can be invoked only by the plaintiff.

  4. D

    Section 8 is limited to criminal proceedings.

View answer and explanation

Correct answer: A. Section 8 requires the party to apply not later than submitting its first statement on the substance of the dispute.

Section 8 is designed to refer parties to arbitration where there is a valid arbitration agreement, but the applicant must act at the statutory stage. Submitting the first substantive statement without seeking reference can defeat the request.

Source note: Arbitration and Conciliation Act, 1996, Section 8

Question 7MediumCourt Intervention in Arbitration

Which dispute is most likely to be treated as non-arbitrable?

  1. A

    A claim for unpaid price under a supply contract.

  2. B

    A dispute over calculation of rent under a commercial lease.

  3. C

    A claim for damages for breach of a shareholders agreement.

  4. D

    A criminal prosecution for a serious public offence.

View answer and explanation

Correct answer: D. A criminal prosecution for a serious public offence.

Arbitration is suited to private civil and commercial disputes involving rights in personam. Criminal prosecution, insolvency status, matrimonial status, guardianship and similar public/status matters are generally non-arbitrable because they involve sovereign functions or rights in rem.

Source note: Arbitration and Conciliation Act, 1996 / Indian non-arbitrability doctrine

Question 8EasyCourt Intervention in Arbitration

Before the tribunal is constituted, a claimant fears that the respondent will dissipate assets. Which remedy is most directly relevant?

  1. A

    A request to the police to appoint an arbitrator.

  2. B

    A civil revision against the future award.

  3. C

    An application for interim measures before the court under Section 9.

  4. D

    A Lok Adalat award without consent.

View answer and explanation

Correct answer: C. An application for interim measures before the court under Section 9.

Section 9 allows a court to grant interim measures before, during, or after arbitral proceedings but before enforcement. Typical relief includes preservation of goods, securing amounts in dispute, injunctions, receivers, and other protective orders.

Source note: Arbitration and Conciliation Act, 1996, Section 9

Question 9MediumCourt Intervention in Arbitration

Once the arbitral tribunal has been constituted, why is Section 17 important?

  1. A

    It permits the tribunal to grant interim measures, and post-amendment tribunal orders are enforceable in the manner provided by the Act.

  2. B

    It gives the tribunal criminal contempt powers over strangers.

  3. C

    It converts every interim order into a final award.

  4. D

    It prevents parties from ever approaching a court for urgent protection.

View answer and explanation

Correct answer: A. It permits the tribunal to grant interim measures, and post-amendment tribunal orders are enforceable in the manner provided by the Act.

Section 17 empowers the tribunal to grant interim measures. Amendments strengthened tribunal-ordered interim relief so that parties need not automatically run to court after the tribunal is in place, though court assistance may still be relevant in proper cases.

Source note: Arbitration and Conciliation Act, 1996, Section 17

Question 10HardArbitral Tribunal

In a Section 11 petition for appointment of an arbitrator, the modern judicial approach is generally to:

  1. A

    Conduct a full trial on merits before appointing the arbitrator.

  2. B

    Refer all criminal disputes to arbitration.

  3. C

    Confine scrutiny primarily to the existence of the arbitration agreement and leave deeper issues to the tribunal where appropriate.

  4. D

    Appoint only retired Supreme Court judges in every arbitration.

View answer and explanation

Correct answer: C. Confine scrutiny primarily to the existence of the arbitration agreement and leave deeper issues to the tribunal where appropriate.

The Section 11 stage is not meant to become a full merits trial. Courts generally keep scrutiny narrow, especially after the pro-arbitration amendments, while obvious cases of no arbitration agreement or clear non-arbitrability can still be addressed.

Source note: Arbitration and Conciliation Act, 1996, Section 11

Question 11MediumArbitral Tribunal

An arbitrator fails to disclose a significant professional relationship with one party. Which principle is most directly engaged?

  1. A

    The rule that arbitrators need not disclose anything because arbitration is private.

  2. B

    The requirement of independence, impartiality, and disclosure of circumstances giving rise to justifiable doubts.

  3. C

    The rule that only the winning party may challenge bias.

  4. D

    The doctrine that all unilateral appointments are automatically valid forever.

View answer and explanation

Correct answer: B. The requirement of independence, impartiality, and disclosure of circumstances giving rise to justifiable doubts.

Section 12 and the statutory schedules focus on independence and impartiality. Disclosure allows parties to assess potential bias and supports confidence in the arbitral process.

Source note: Arbitration and Conciliation Act, 1996, Section 12

Question 12HardArbitral Tribunal

A named arbitrator falls within a statutory ineligibility category because of a close relationship with one party. How can this ineligibility ordinarily be waived?

  1. A

    By silence before the dispute arises.

  2. B

    By a unilateral declaration of the interested party.

  3. C

    By the arbitrator stating that he feels neutral.

  4. D

    By an express written agreement made after the disputes have arisen.

View answer and explanation

Correct answer: D. By an express written agreement made after the disputes have arisen.

Section 12(5) read with the Seventh Schedule makes certain relationships ineligible. The proviso permits waiver only by an express written agreement after disputes have arisen, ensuring waiver is informed and dispute-specific.

Source note: Arbitration and Conciliation Act, 1996, Section 12(5) and Seventh Schedule

Question 13EasyArbitral Tribunal

Which statement about arbitral procedure under Section 19 is correct?

  1. A

    The tribunal is strictly bound by the Code of Civil Procedure and the Bharatiya Sakshya Adhiniyam in the same way as a civil court.

  2. B

    The tribunal is not bound by the Code of Civil Procedure or the evidence law and may conduct proceedings subject to the Act and party agreement.

  3. C

    The tribunal cannot decide its procedure even when parties are silent.

  4. D

    The tribunal must always hold oral hearings for every procedural issue.

View answer and explanation

Correct answer: B. The tribunal is not bound by the Code of Civil Procedure or the evidence law and may conduct proceedings subject to the Act and party agreement.

Section 19 gives arbitration procedural flexibility. The tribunal is not bound by CPC or evidence law, though it must follow fairness, equal treatment, agreed procedure, and the mandatory requirements of the Act.

Source note: Arbitration and Conciliation Act, 1996, Section 19

Question 14MediumArbitral Tribunal

A tribunal permits one party to file evidence but denies the other party any meaningful chance to respond. Which statutory value is most clearly violated?

  1. A

    Equal treatment of parties and full opportunity to present the case.

  2. B

    Revenue neutrality.

  3. C

    Doctrine of merger.

  4. D

    Rule against perpetuities.

View answer and explanation

Correct answer: A. Equal treatment of parties and full opportunity to present the case.

Section 18 requires equal treatment and full opportunity to present the case. Breach of natural justice may later support challenge to the award under Section 34 if it affects the fairness of the proceedings.

Source note: Arbitration and Conciliation Act, 1996, Sections 18 and 34

Question 15EasyAward and Challenge

When must an arbitral award normally state reasons?

  1. A

    Never, because arbitration is always informal.

  2. B

    Only in international commercial arbitration seated outside India.

  3. C

    Only where the court later asks for reasons.

  4. D

    Unless the parties have agreed that no reasons are to be given or the award is on agreed terms.

View answer and explanation

Correct answer: D. Unless the parties have agreed that no reasons are to be given or the award is on agreed terms.

Section 31 generally requires reasons in an arbitral award. The key exceptions are where parties agree reasons are unnecessary or where the award records a settlement on agreed terms.

Source note: Arbitration and Conciliation Act, 1996, Section 31

Question 16MediumAward and Challenge

If parties settle during arbitration and ask the tribunal to record the settlement, the tribunal may:

  1. A

    Convert the settlement into a criminal conviction.

  2. B

    Ignore the settlement because tribunals cannot record compromises.

  3. C

    Terminate proceedings or record the settlement as an award on agreed terms if the statutory conditions are satisfied.

  4. D

    Send the matter compulsorily to Gram Nyayalaya.

View answer and explanation

Correct answer: C. Terminate proceedings or record the settlement as an award on agreed terms if the statutory conditions are satisfied.

Section 30 encourages settlement during arbitration. If parties settle, the tribunal may record the settlement as an award on agreed terms, which has the status and effect of an arbitral award.

Source note: Arbitration and Conciliation Act, 1996, Section 30

Question 17MediumAward and Challenge

Which ground is most directly relevant in an application to set aside a domestic arbitral award under Section 34?

  1. A

    The party was unable to present its case due to denial of proper notice or opportunity.

  2. B

    The losing party believes the arbitrator should have written in a more elegant style.

  3. C

    The award is inconvenient for one party business strategy.

  4. D

    The award is older than seven days.

View answer and explanation

Correct answer: A. The party was unable to present its case due to denial of proper notice or opportunity.

Section 34 provides limited grounds such as incapacity, invalid arbitration agreement, lack of proper notice, inability to present the case, excess of scope, improper composition/procedure, non-arbitrability, conflict with public policy, and in domestic awards patent illegality on the face of the award.

Source note: Arbitration and Conciliation Act, 1996, Section 34

Question 18HardAward and Challenge

In a domestic arbitration, patent illegality under Section 34 is best understood as:

  1. A

    A full rehearing on facts because one party dislikes the result.

  2. B

    A ground that permits correction of every minor drafting error.

  3. C

    A narrow ground for serious illegality apparent on the face of the award, not a routine appeal on merits.

  4. D

    A rule available only for foreign awards under the New York Convention.

View answer and explanation

Correct answer: C. A narrow ground for serious illegality apparent on the face of the award, not a routine appeal on merits.

Patent illegality is available for domestic awards but remains limited. Courts do not sit as appellate forums to reappreciate evidence merely because another view is possible.

Source note: Arbitration and Conciliation Act, 1996, Section 34

Question 19MediumAward and Challenge

After the 2015 amendments, filing a Section 34 application ordinarily:

  1. A

    Automatically stays enforcement for ten years.

  2. B

    Does not by itself make the award unenforceable; a separate stay order is required.

  3. C

    Makes the award void without court order.

  4. D

    Transfers the arbitration to mediation.

View answer and explanation

Correct answer: B. Does not by itself make the award unenforceable; a separate stay order is required.

The amended Section 36 removed the old automatic stay approach. A party challenging an award must seek and obtain a stay; mere filing of a Section 34 application is not enough.

Source note: Arbitration and Conciliation Act, 1996, Section 36

Question 20MediumAward and Challenge

Section 37 is important because it:

  1. A

    Creates an appeal from every procedural order of the tribunal.

  2. B

    Allows appeal against every finding of fact in an award.

  3. C

    Abolishes challenges under Section 34.

  4. D

    Provides a limited set of appealable orders under the arbitration statute.

View answer and explanation

Correct answer: D. Provides a limited set of appealable orders under the arbitration statute.

Section 37 lists specific appealable orders, such as refusal or grant of certain interim measures, orders setting aside or refusing to set aside awards, and certain jurisdiction-related orders. Arbitration appeals are intentionally limited.

Source note: Arbitration and Conciliation Act, 1996, Section 37

Question 21HardForeign Awards

A New York Convention foreign award is brought for enforcement in India. Which statement is most accurate?

  1. A

    Indian courts conduct a full appeal on facts and law before enforcement.

  2. B

    Part II allows refusal only on limited convention grounds such as invalid agreement, lack of notice, excess of scope, non-arbitrability, or public policy.

  3. C

    Foreign awards are never enforceable in India.

  4. D

    Foreign awards must first be converted into Lok Adalat awards.

View answer and explanation

Correct answer: B. Part II allows refusal only on limited convention grounds such as invalid agreement, lack of notice, excess of scope, non-arbitrability, or public policy.

Sections 44 to 48 implement the New York Convention framework. Enforcement is not a merits appeal. Refusal grounds are limited and are interpreted with a pro-enforcement approach.

Source note: Arbitration and Conciliation Act, 1996, Sections 44-48

Question 22HardForeign Awards

In foreign award enforcement, public policy review is generally narrower than:

  1. A

    A merits appeal on every factual and legal issue decided by the tribunal.

  2. B

    A check for natural justice and fundamental legal concerns.

  3. C

    A check for whether the award violates basic notions of morality or justice.

  4. D

    A check for non-arbitrability under Indian law.

View answer and explanation

Correct answer: A. A merits appeal on every factual and legal issue decided by the tribunal.

Public policy at the foreign award stage does not permit ordinary appellate review. The court does not re-decide the dispute merely because it may have reached a different result.

Source note: Arbitration and Conciliation Act, 1996, Section 48

Question 23EasyConciliation under Arbitration Act

Which statement best distinguishes conciliation under Part III from arbitration?

  1. A

    Conciliation is an adjudicatory process where the conciliator imposes a binding decision.

  2. B

    Conciliation can occur only after a criminal trial begins.

  3. C

    Conciliation awards are always appealable as decrees.

  4. D

    Conciliation is facilitative; the conciliator assists settlement, while an arbitrator decides the dispute by an award.

View answer and explanation

Correct answer: D. Conciliation is facilitative; the conciliator assists settlement, while an arbitrator decides the dispute by an award.

Conciliation is settlement-oriented. The conciliator assists parties in reaching an agreed resolution, whereas arbitration is adjudicatory and ends in an award if not settled.

Source note: Arbitration and Conciliation Act, 1996, Part III

Question 24MediumConciliation under Arbitration Act

A settlement agreement reached through statutory conciliation under the Arbitration and Conciliation Act has what legal effect?

  1. A

    It is merely a moral promise with no legal value.

  2. B

    It is enforceable only after a fresh civil suit and full trial.

  3. C

    It has the same status and effect as an arbitral award on agreed terms under the Act.

  4. D

    It is void unless signed by a District Judge.

View answer and explanation

Correct answer: C. It has the same status and effect as an arbitral award on agreed terms under the Act.

Under Sections 73 and 74, a properly signed settlement agreement in conciliation has the same status and effect as an arbitral award on agreed terms. This gives conciliation meaningful enforceability.

Source note: Arbitration and Conciliation Act, 1996, Sections 73-74

Question 25EasyMediation Act, 2023

Under the Mediation Act, 2023 framework, a mediation agreement is most closely analogous to:

  1. A

    An agreement to submit disputes to mediation, either as a clause or as a separate agreement.

  2. B

    A unilateral notice that forces the other party into settlement.

  3. C

    A final decree of a court.

  4. D

    A criminal plea bargain.

View answer and explanation

Correct answer: A. An agreement to submit disputes to mediation, either as a clause or as a separate agreement.

Like arbitration, mediation can be based on a dispute resolution clause or a separate agreement. Its function is different: it sends parties to a consensual settlement process rather than adjudication by a tribunal.

Source note: Mediation Act, 2023

Question 26EasyMediation Act, 2023

Which feature is central to mediation?

  1. A

    The mediator decides the dispute by imposing a binding award.

  2. B

    The mediator becomes the appellate authority over civil courts.

  3. C

    The settlement depends on party consent rather than adjudicatory compulsion by the mediator.

  4. D

    The parties lose the right to legal representation in all cases.

View answer and explanation

Correct answer: C. The settlement depends on party consent rather than adjudicatory compulsion by the mediator.

Mediation is consensual and interest-based. The mediator facilitates communication and settlement; the binding force comes from a valid mediated settlement agreement, not from the mediator deciding the case.

Source note: Mediation Act, 2023

Question 27MediumMediation Act, 2023

Why does mediation law identify categories of disputes that are not fit for mediation?

  1. A

    Because all private contracts are illegal.

  2. B

    Because some matters involve public rights, status, serious offences, or statutory functions that cannot be privately compromised.

  3. C

    Because courts are forbidden from encouraging settlement.

  4. D

    Because mediators are treated as criminal judges.

View answer and explanation

Correct answer: B. Because some matters involve public rights, status, serious offences, or statutory functions that cannot be privately compromised.

Non-mediable categories protect public interest and third-party rights. Disputes involving serious criminal allegations, status, minors in certain contexts, or rights in rem may require formal adjudication rather than private settlement.

Source note: Mediation Act, 2023, First Schedule principles

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