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  • Arbitration requires no introduction in the contemporary era of dispute settlement.
  • It has successfully replaced litigation as the favored method of resolving commercial disputes and has become synonymous with dispute resolution for commercial contracts.
  • Speed, party autonomy, and procedural flexibility—three key factors for 21st-century dispute resolution—are the foundations on which arbitration is built.
  • The constantly developing jurisprudence, particularly the changes the law has seen since the turn of the millennium, is a major factor in the success of arbitration.


One of the several techniques collectively referred to as alternative dispute resolution, or ADR, is arbitration. The aim behind methods of ADR is to offer an alternative to bringing a lawsuit and appearing in court, which is the conventional procedure for settling legal issues, as suggested by the term. The main goal of arbitration and comparable alternatives was to offer a time- and money-efficient way to resolve a legal dispute. We'll look at whether arbitration is a possibility, how it functions, and how it varies from going to court in the sections below. Arbitrations themselves can take many different forms, despite the fact that the term "arbitration" is used generically to denote a kind of alternative conflict settlement. However, in practically every arbitration, the complaining party will notify the opposing party in writing of their decision to submit the issue to arbitration and provide a summary of the relevant facts. Usually, there is a response period, then the choice of arbitrators, and finally the hearing itself.

Sometimes a panel of arbitrators, rather than a single arbitrator, preside over arbitrations. In any case, the contract will usually specify the selection procedure; nonetheless, both parties will usually be asked for some sort of input. Arbitration procedures themselves can have a wide range of rules. In many cases, a contract will outline the procedures and deadlines that will be followed in the event of a disagreement. Although they are often simpler, parties should consult their contract or the rules outlined therein to determine the precise regulations that apply to their disagreement. In these situations, a lawyer with experience in alternative conflict resolution can be quite helpful.


It has been observed that whenever two or more people work together on a project or engage in a transaction, conflicts inevitably arise and need to be resolved. Arbitration is a form of "alternative dispute resolution" where the parties enlist the aid of a third party to resolve their differences outside of court. It is less expensive and results in a resolution of your dispute much more quickly than ongoing court delays. Since the end of the nineteenth century, arbitration has been a thriving legal practice in India. When the Indian Arbitration Act, 1899 was passed, arbitration was officially acknowledged as a mode of dispute resolution in India for the first time. Only the three presidential towns—Madras, Bombay, and Calcutta—were included in it. It was further codified in Section 89 and Schedule II of the Code of Civil Procedure, 1908, as the Act of 1899 did not extend the arbitration rules to various British Indian regions. The Arbitration Act of 1940 was created and repealed the Act of 1899 together with the pertinent sections of the Code of Civil Procedure, 1908 when it was determined that the Act of 1899 and the Code of Civil Procedure, 1908's rules were too technical and inefficient. The English Arbitration Act, 1934 was reflected in the Act of 1940, which was comprehensive law on the subject but only addressed domestic arbitrations because it lacked measures for dealing with the enforcement of foreign rulings. The goal of the Act of 1940 could not be fulfilled because of how poorly it operated.

Although the 1940 Act received harsh criticism and unfavorable comments from the Courts, no revisions were made to enhance the 1940 Act's functionality. Following economic liberalization in 1991, efforts were made to draw in international investment, which necessitated a welcoming business climate and ease of doing business. The Act of 1940 was repealed when the Arbitration and Conciliation Act of 1996 went into effect for the aforementioned reason. It's interesting to note that the Act of 1996, which applied to both domestic and international arbitration, was based on the UNCITRAL Model Law on International Commercial Arbitration, 1985. The Act of 1996 was primarily created to reduce arbitration time. Despite the legislature's best attempts to establish India as a strong center for arbitration, the 1996 Act had a number of issues, including high costs and excessive judicial intervention. Due to the practice of granting an Automatic Stay on the execution of Awards the minute Section 34 was filed, an Award would be rendered inexecutable under the 1996 Act if it was challenged under Section 34. Arbitral proceedings dragged on for years since there was no time limit on when an arbitral ruling might be made. The fact that some arbitrators demanded outrageous fees in violation of the spirit of the 1996 Act was another problem with it.

The 2015 Amendments addressed a wide range of issues, but several issues persisted in the arbitral process. One such issue was that there was no institutional arbitration culture in the nation because the majority of arbitrations were ad hoc. A High-Level Committee to Review the Institutionalization of Arbitration Mechanism in India was established on January 13th, 2017, under the leadership of Justice B.N. Sri Krishna, a retired judge from the Supreme Court of India.

In India, arbitration conflicts are common and business issues are arbitrated more frequently. India is poised to soon become a major centre for international arbitration due to the rise in choice for arbitration and the general decline in desire for litigation.This has been confirmed in practice, as Prime Minister Narendra Modi made explicit in his farewell address at the Niti Aayog conference on "National Initiative towards Strengthening Arbitration and Enforcement in India" the government's goal with regard to arbitration. At a global gathering, the BRICS summit in 2016, the union minister of law and justice reaffirmed the same.India's arbitration industry has advanced significantly over the years. The Indian Government has made great efforts to keep up with the current international consensus on arbitration, even going so far as to revise its Arbitration Act in 1996 to make it consistent with the UNCITRAL Model Law. As a result, even though the Indian Arbitration Law has largely followed the dominant worldwide consensus.


India's economy is expanding quickly, and in order for it to become a center for international arbitration, it needs solid arbitration legislation. Maintaining a balance between keeping the arbitration law current and building arbitration centers capable of effectively resolving and handling commercial disputes is crucial for achieving this goal. The adoption of best practices will become increasingly important in the near future with courts and politicians supporting arbitration and the Amendment Act in place.

Even more steps need to be taken in order to turn India become a hub for international arbitration. Consider signing and ratifying international treaties, such as the ICSID Convention, and expanding the scope of the recognition of arbitral awards to non-reciprocating nations as a first step.As the ease of dispute settlement is regarded as a crucial factor when considering commercial connections, this will enable more parties to engage in commercial transactions in India.

From the 1940 Arbitration Act to the current Arbitration Act of 1996, which has undergone periodic revisions with the most recent occurring in 2019, India's arbitration law has advanced significantly. These Amendments have been quite timely and have contributed significantly to keeping the Indian Arbitration Scheme current with the rest of the globe.

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