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CS Professional · Internal and Forensic Audit · Forensic Audit and Indian Evidence Law

Sharma & Co. is facing arbitration with a supplier over inflated invoices uncovered by a forensic audit. The supplier's lawyer argues that strict rules of the Bharatiya Sakshya Adhiniyam, 2023 must bind the arbitrator. Which statement is correct?

The Adhiniyam does not apply to proceedings before an arbitrator. Its scope covers judicial proceedings in or before courts, including Courts-martial, and expressly excludes affidavits and arbitral proceedings, so the supplier's argument fails.

  1. AThe Adhiniyam applies fully to arbitral proceedings as it does to courts
  2. BThe Adhiniyam applies only to arbitrations seated outside India
  3. CThe Adhiniyam does not apply to proceedings before an arbitratorCorrect
  4. DThe Adhiniyam applies to arbitration only if the award exceeds a prescribed amount

Explanation

Section 1 states the Adhiniyam applies to judicial proceedings in or before any Court, including Courts-martial, but not to affidavits nor to proceedings before an arbitrator. So the arbitrator is not bound by its strict rules, though the forensic findings can still be presented.

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