Section 23
Statement of Claim and Defence
(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.
[(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.]
(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.
[(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing of their appointment.]
Section 23 outlines the procedural requirements for the pleadings in an arbitration proceeding:
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Filing of Claims and Defences:
Within a time period agreed by the parties or as determined by the Ld. Tribunal, the Claimant must submit a statement of claim. This statement should detail the facts supporting the claim, the issues in dispute, and the relief sought. Similarly, the Respondent is required to submit a defence addressing those points.
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Submission of Supporting Documents:
This section allows both parties to attach documents or refer to evidence that supports their respective positions. This ensures that the tribunal receives a comprehensive record of the dispute early in the proceedings.
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Counterclaims:
An important facet of Section 23 is the provision (2A) that permits the respondent to submit a counterclaim or plead a set-off if it falls within the scope of the arbitration agreement.
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Amendment and Supplementation of Pleadings:
Under Section 23(3), unless the parties have agreed otherwise, either party may amend or supplement their claim or defence during the course of the arbitration. However, the Ld. Arbitral Tribunal has the discretion to refuse such amendments if it finds that they are untimely or if they would cause undue delay in the proceedings.
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Completion of Pleadings within Six Months:
With the insertion of sub-section (4) by the Arbitration and Conciliation (Amendment) Act, 2019, the Act now stipulates that the entire process of filing the statement of claim and defence must be completed within a period of six months from the date on which the arbitrator or all the arbitrators, as applicable receive written notice of their appointment.
Judicial Interpretation
The Hon’ble Supreme Court in the case of State of Goa Vs. Praveen Enterprises (2012) 12 SCC 581 has stated:
“26. Section 23 of the Act makes it clear that when the arbitrator is appointed, the claimant is required to file the statement and the respondent has to file his defence statement before the arbitrator. The claimant is not bound to restrict his statement of claim to the claims already raised by him by notice, “unless the parties have otherwise agreed as to the required elements” of such claim statement. It is also made clear that “unless otherwise agreed by the parties” the claimant can also subsequently amend or supplement the claims in the claim statement. That is, unless the arbitration agreement requires the arbitrator to decide only the specifically referred disputes, the claimant can while filing the statement of claim or thereafter, amend or add to the claims already made.
27. Similarly, Section 23 read with Section 2(9) makes it clear that a respondent is entitled to raise a counterclaim “unless the parties have otherwise agreed” and also add to or amend the counterclaim, “unless otherwise agreed”. In short, unless the arbitration agreement requires the arbitrator to decide only the specifically referred disputes, the respondent can file counterclaims and amend or add to the same, except where the arbitration agreement restricts the arbitration to only those disputes which are specifically referred to arbitration, both the claimant and the respondent are entitled to make any claims or counterclaims and further entitled to add to or amend such claims and counterclaims provided they are arbitrable and within limitation.”
Conclusion
Section 23 sets out the detailed procedural requirements for submitting pleadings in an arbitration. It mandates that the claimant’s statement of claim and the respondent’s statement of defence must clearly set forth the factual basis, the issues in dispute, and the relief sought by each party. Following the 2019 Amendment, the Act now also requires that these pleadings be completed within a six month period from the date the arbitrator(s) receive written notice of their appointment. This time-bound requirement is designed to prevent undue delays and to ensure that the Ld. Arbitral Tribunal has a comprehensive and clear record of the dispute before proceeding. The provision further allows for amendments or supplements, subject to the Ld. Tribunal’s discretion to accommodate emerging facts or legal arguments, though such flexibility must not prejudice the opposing party.
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