A respondent in arbitration must file a statement of defence responding to the claim, within the time agreed by the parties or fixed by the tribunal. Under Section 23(2A) of the Arbitration and Conciliation Act, 1996, the respondent may also submit a counterclaim or plead a set-off, which the tribunal will decide if it falls within the scope of the arbitration agreement.
A good defence does more than deny. It responds to each factual allegation, identifies which facts are admitted and which are disputed, raises any jurisdictional objections, and sets out the respondent's own account of events with supporting documents.
Jurisdictional objections — that there is no valid arbitration agreement, that the dispute is outside its scope, or that the tribunal is improperly constituted — must be raised no later than the submission of the statement of defence under Section 16. Raising them late can mean they are treated as waived.
Counterclaims should be raised at the outset. Pursuing a related counterclaim separately risks inconsistent decisions, duplicated costs and limitation problems. Bringing everything before the same tribunal is usually more efficient.
Respondents should also consider limitation carefully. If some or all of the claims are time-barred, that defence should be pleaded clearly, with the relevant dates, so the tribunal can decide it as a preliminary issue where appropriate.