This article is written by Shreya Patel. This article emphasises the meaning of arbitration and litigation and the key differences between them. This article further discusses the merits of choosing arbitration over litigation, situations where arbitration is preferred over litigation, factors to consider when choosing between arbitration and litigation, and the overlap between arbitration and litigation.

This article has been published by Shashwat Kaushik.

Introduction 

Who does not want quick and affordable justice? Over the period of time, the desire for a speedy and inexpensive judicial system has increased. Litigation, which is a traditional method of seeking justice, is seen as a burden to the justice system due to its long procedures, which often result in long delays. There was a need for an alternative dispute resolution system that could solve these problems and reduce the burden as well as time on courts in the country. This dispute resolution is known as Alternative Dispute Resolution (ADR). The name itself explains to us the function of ADR, which is an alternative for dispute resolution other than the courts. ADR comprises various techniques, which include arbitration, conciliation, mediation, negotiation, and Lok Adalat. Arbitration is one of the most common and popular alternative dispute mechanisms. 

What does arbitration mean 

Arbitration is one technique among the alternative dispute resolution mechanisms. Arbitration is a process in which a neutral third party is appointed to resolve the matter. The procedures and other frameworks are very similar in both arbitration and litigation. As seen in litigation, in place of a judge, arbitration has an arbitrator who acts as a neutral party.

As per Section 2(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter mentioned as the “A&C Act”), arbitration is arbitration regulated or not regulated by an arbitral institution that is permanent. When parties agree to submit a dispute to one or more arbitrators, wherein the decision made is binding in nature, this is called arbitration as per the WIPO.

Arbitration is a flexible and private dispute settlement resolution mechanism. When the disputed parties prefer to keep the dispute matter private and simultaneously want to avoid the lengthy procedure of litigation in court, they choose arbitration to resolve the dispute. Arbitration is one of the most effective and efficient methods to resolve commercial disputes. Arbitration is a consensual method. In arbitration, the parties decide the place where arbitration proceedings can take place. Arbitration is an outside-the-court settlement option for the parties that do not want to settle the dispute through the national judicial system; it is a private dispute resolution mechanism. All the rules for the arbitration proceeding are decided by the parties themselves, and they also appoint the arbitrator after discussion between them. 

In India, arbitration is governed by the A&C Act. The A&C Act is the principal law for arbitration in India. The A&C Act is primarily adapted from the UNCITRAL model law on international commercial arbitration. India is also a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

An arbitration agreement often acts as a precondition for solving the dispute through an arbitration process. An arbitration agreement can be a whole separate agreement mentioning the details of arbitration, or it can also be a singular clause in the agreement between the parties. The award of arbitration, which is the decision or order of an arbitration proceeding, has a similar effect as the court’s order.

What does litigation mean

Litigation, in simple words, means when a dispute is taken to court by the parties to the dispute. Litigation has various stages in the whole procedure. The legal rights of an individual can be defended as well as enforced in litigation. Each side of the party/parties will present their arguments and evidence in court in a litigation procedure.

The courts in India have a single hierarchy system. The Apex Court of India is the Supreme Court, followed by the High Courts, and then the District and subordinate courts. Litigation is not only bound to civil and criminal matters; it also deals with guardianship disputes, disputes related to taxation, intellectual property disputes, etc. There are specific courts established to deal with some types of disputes pertaining to one law. For example, there are family courts that resolve disputes related to marriage dissolution, custody of children, domestic violence cases, etc.

The litigation proceedings end with one party having the decree in their favour while the other does not. The parties in the litigation are referred to as the plaintiff and the defendant. The parties in the litigation are represented by a legal professional. All the arguments that take place before the judge in court, along with the submission of crucial evidence from both sides of the litigation. The litigation process also includes the examination of witnesses and the recording of their statements.

Advantages of arbitration over litigation

Arbitration, in many ways, fills the gaps present in litigation. Arbitration has its own set of advantages, which make it an easier option for solving disputes than litigation. Some of the reasons why arbitration is more advantageous than litigation are given below:

• In arbitration, the problem is solved by sitting together and reaching common ground. In litigation, there are two opposite parties, and, in the end, one party wins and the other loses. In arbitration, in the end, both parties win, i.e., a decision that is beneficial for both is taken. 
• Arbitration is also more advantageous as it can provide expertise. When there is a dispute related to a specific expertise, the parties to the dispute can hire an arbitrator who specialises in the dispute matter. The decision taken with the aid of this expertise can be considered more just. For instance, in a dispute related to taxes and insolvency, an arbitrator with expertise in taxation can be chosen by the parties. 
• Confidentiality is one of the key reasons why arbitration is more advantageous than litigation. With litigation, only some information can be kept private. In arbitration, the place where arbitration proceedings are conducted, the cause of the dispute, the parties to the dispute as well the decisions in some instances (when exclusively mentioned in contracts), the decisions can be kept private as everything is decided among the parties themselves. There is no involvement of a third party other than the arbitrator, which is chosen by the parties. The parties often, along with the arbitrator, sign a confidentiality agreement, or in some instances, the arbitration agreement itself includes a confidentiality clause. 
• Arbitration is more advantageous than litigation as the evidence is also kept private along with the dispute and the proceedings.
• The consent of the parties on where to conduct the arbitration proceeding, the language in which the arbitration proceeding will take place, etc. are given more importance in arbitration, which makes it more advantageous.
• Arbitration is less expensive than litigation, which makes it a more convenient option. It is important to note that arbitration is not cheap; it is only less costly than litigation. If the clauses related to arbitration are not mentioned precisely, it can be expensive as well.  
• Arbitration is more advantageous than litigation because it is more collaborative as compared to litigation. Communication and the preservation of relationships are encouraged in arbitration. Maintaining and preserving relationships and communication in commercial disputes is beneficial; hence, arbitration is often used to solve commercial disputes. 

Instances of promoting arbitration over litigation

Over the years, the Indian government has taken many initiatives to promote arbitration over litigation. These instances of promoting arbitration over litigation have been put into action to ease the burden on the courts, which has also impacted the efficiency of the courts. The first and key instance of promoting arbitration over litigation was the enactment of the A&C Act, 1996. In order to follow a total dispute resolution mechanism, having a set of established rules and regulations is a must. People will be more aware of the dispute resolution mechanism if there is documentary proof. 

The enactment of the A&C Act acts as legal evidence or documentary proof, which is backed by the government of India. The A&C Act has also been amended time and again. These Amendments are made in order to accommodate the new developments that have taken place and in accordance with the changes that take place in society. The A&C Act contains provisions relating to fixed time limits for deciding arbitration cases. It also contains provisions where the option to fast-track the cases is also there. These provisions act as incentives to choose arbitration for dispute resolution over litigation. 

One of the other initiatives taken to promote arbitration over litigation is that the A&C Act is also compatible with the rules and regulations of international arbitration. To promote arbitration over litigation, the India International Arbitration Centre has also been established, with the aim of providing an independent body solely to open the doors for institutional arbitration. 

When litigation is preferred over arbitration 

Despite having many advantages over litigation, there are some aspects where litigation is preferred over arbitration. The following are the reasons why litigation is preferred over arbitration:

• One of the key reasons why litigation is preferred over arbitration is the need to create a public record. Solving a dispute through litigation means it will be conducted through court proceedings. This will create a public record. Public records are basically documents that are open to everyone. The information in these documents can be seen by anyone and is not considered confidential. When a public record is created, it acts as a legal precedent for future cases. These public records are also used for educational and research purposes for the development of the laws in the country. People can get great transparency from public records. 
• Litigation gives the court an opportunity to set legal precedents. The courts can use these established legal precedents to solve disputes that are similar in nature in the future. These legal precedents can also be used for the legal development of the country. The legal precedents help in bridging the gaps that are found in the legal system. They also help in uploading the rule of law. The parties involved in the dispute can rely on the legal precedents. With legal precedent, the parties can expect the outcome of the proceeding. They also ensure equality in society. 
• Litigation is preferred over arbitration when any of the parties to the dispute are uncooperative. Arbitration cannot be useful if both parties are not ready to compromise and reach a common ground. In litigation, the courts can compel the parties to cooperate. A dispute can have more than two parties; in the case of litigation, it becomes easier to handle the dispute, and proceedings can be held jointly in court.
• In litigation, an appeal can be made if the parties are not satisfied with the decision or they feel they are aggrieved by the decisions made by that particular court. An appeal can be made in a superior court. For example, if a decision is made in the district court, the parties can appeal in a high court and then in the Supreme Court. It is very hard to appeal in arbitration, or you cannot appeal at all if the award is legally binding. 
• Evidence plays the most vital part in the litigation proceeding. All the facts are proved with the aid of evidence. If there is strong evidence, it is indicated as a clear advantage. In the case of arbitration, the evidence is given less importance, as the main motive of arbitration is to solve the dispute by reaching a common ground rather than winning or losing.
• Litigation uses a set of predetermined rules and regulations that are set by the responsible authorities. While in arbitration, there are no clear rules to follow. Because of this, many times litigation is preferred over arbitration.
• With litigation, there is always a result at the end, even if it takes more time than arbitration. The result can be in favour of or against the party, but it will be definitive in nature. 
• The other instance where litigation is preferred over arbitration is when the opposite party is at fault for medical, monetary, or any other kind of damages. In these cases, litigation is often preferred over arbitration. For example, if a car accident has taken place due to the negligence of the other party, which has resulted in economic damages, then in this case litigation is preferred rather than arbitration. 

Differences between arbitration and litigation

The key differences between arbitration and litigation are explained below:

Meaning

Arbitration 

When a dispute is resolved outside the court with a neutral third party, it is known as arbitration. In arbitration, the parties to the dispute decide all these matters amongst themselves. 

Litigation

While litigation is a legal process in which the decision is taken by the court. All the rules for evidence as well as procedural rules such as The Code of Criminal Procedure, 1974, The Code of Civil Procedure, 1908, The Indian Evidence Act, 1872, and various other Acts are similar for all individuals in cases of litigation.

Nature

Arbitration

The arbitration is informal in nature. There is flexibility in the procedure of arbitration. The parties to the dispute can make decisions as per their requirements and needs. There are only a few strict rules that are to be adhered to by the parties in disputes in the proceedings of arbitration. In arbitration, the rules can be changed as per the type of dispute. 

Litigation

Litigation is very formal in nature. There are strict rules and regulations that are to be adhered to by parties to the case, as the law is the same for all at the time of trial. In litigation, there are fixed rules for submitting evidence and documents. The atmosphere of the court is also very formal.

Scope 

Arbitration

The scope of both arbitration and litigation is very different from each other. Arbitration is limited in nature. There are exceptions to the types of disputes that can be referred to arbitration. The scope of appeals is also very limited in arbitration proceedings. 

Litigation

Litigation has a wide scope; all kinds of disputes can be referred to as litigation. In litigation, appeals can be made to the superior courts if the decision of the subordinate court is not satisfactory to the parties. 

Applicability 

Arbitration

Arbitration is applicable in some cases only. There are some disputes that are not referred to arbitration. Parties enter into arbitration either voluntarily or when an arbitration clause is in existence. There are some disputes that are non-arbitral in nature, even if there is an arbitration agreement stating that in the case of any dispute, arbitration can be used to resolve the dispute. In the case of M. Hemalatha Devi & Ors. v. B. Udayasri (2022), the Supreme Court held that, even in the presence of an arbitration agreement, consumers can opt not to choose arbitration. Hence, the Supreme Court declared that consumer disputes are non-arbitral in nature. The consumers can seek redressal from consumer courts, as they cannot be compelled into arbitration, just because there is an arbitration agreement. 

Litigation

Litigation is applicable to all types of disputes. Application of arbitration can be done only when parties agree to it or there is an arbitration clause in the agreement. Litigation is a legal right for people in society. 

Cost-effectiveness 

Arbitration 

The next key difference between arbitration and litigation is cost-effectiveness. Arbitration is generally a less costly option. But this depends on a case-to-case basis. There can be some instances where arbitration can also be expensive, but this rarely happens. The costs depend on the nature of the case and how complex it is. Arbitration is less expensive as it does not include much documentation as compared to litigation, nor does it contain other resources that are involved in a litigation process. 

Litigation

In most cases, litigation is more expensive than arbitration. As litigation procedures often take more time, their costs are also high in comparison to arbitration.

Time-consumed

Arbitration

Arbitration takes less time than litigation. The arbitration proceedings are faster as compared to litigation. Depending on the nature of the case, the arbitration proceedings usually do not take more than one year. Many big corporations and small businesses are now moving towards arbitration to solve their disputes, as it is faster and reaching a common ground is easier. 

Litigation

It is very commonly seen that courts experience backlogs in cases, which can result in slow proceedings. Rescheduling a hearing in case of litigation takes more time, which also makes the litigation process longer. 

Confidentiality

Arbitration

The next vital difference between arbitration and litigation is the level of confidentiality maintained in the ongoing proceeding. In comparison to litigation, arbitration proceedings are found to be more confidential. The demand for arbitration is seen more in commercial disputes, the reason solely being the aspect of confidentiality. While in arbitration, all the conversations and information are kept private and are not discussed with outside parties. If a breach of confidentiality is found, it can lead to various penalties in arbitration. 

Litigation

The litigation proceedings are more public and are often open to the public in many cases. In litigation, only some aspects are kept private, depending on the nature of the case. The litigation proceedings and all the information can be accessed widely by people.

Cooperation and convenience

Arbitration

In the case of arbitration, jurisdiction is not given that much importance, as it totally depends on the discretion of the parties. As arbitration is held in a private place, it is found to be more convenient for the parties who are invalid. In proceedings of arbitration, the parties decide the jurisdiction for the proceedings. One of the main motives of arbitration is to maintain cooperation and amicable relationships between the parties, as the majority of the time the parties in arbitration are business associates. In arbitration, both parties are encouraged to participate. 

Litigation

In litigation, jurisdiction is very important. The litigation is in front of a judge in the courtroom, where the parties involved have to be present as per the dates given by the court. It can be less convenient when the litigation proceedings are taking place in a different jurisdiction. In the majority of cases, the parties in dispute decide to move to litigation when either one of the parties is not cooperating. 

Appeal

Arbitration

Section 34 of the A&C Act states about the setting aside of the award of arbitration. In arbitration, the award is legally binding on both parties and cannot be appealed. There are very few instances where an arbitration award can be kept aside by the courts if the dispute matters; as per the courts, it is non-arbitral in nature.

Litigation

In litigation, appeals can be made in the superior court by the parties. When the parties to the dispute are not satisfied with the decision made by the court, they can appeal to a superior court. For example, in a land dispute between two brothers, the District Court has given the decision in favour of one brother, while the other is still unsatisfied with the court’s judgement. He can appeal to a high court, asking to review the decision made by the subordinate court. 

Presiding Officer

Arbitration

The presiding officer, that is, the arbitrator in the case of arbitration, can be selected by the parties by coming to an agreement. When the parties cannot reach a mutual understanding, each appoints one arbitrator, and then the two arbitrators can appoint a third arbitrator, who will act as a presiding arbitrator as per Section 11 of the A&C Act. It is also stated that if the appointment of the arbitrator by the parties or the appointment of the third arbitrator exceeds thirty days from the date of receipt or from the date of appointment, then a request can be made by the party to either the High Court, the Supreme Court, or the institution that is designated by the court to appoint the same in Section 11 of the A&C Act.

Litigation

The presiding officers in the proceedings of litigation are the judicial officers (judges) who are appointed by the courts themselves. The courts have their own eligibility criteria to choose these judges. The whole appointment procedure is overseen by the authorities at the court. 

Tabular representation of key differences between arbitration and litigation

Basis of Difference	Arbitration	Litigation
Meaning	Arbitration is opting for dispute resolution outside the court in a more private manner. There is a third party that is independent in nature, and the dispute is submitted to them for making a decision by agreement of the parties.	When dispute resolution takes place in a courtroom, it is called litigation.
Nature	Arbitration is flexible, consensual, and informal in nature. Arbitration proceedings can take place as per the requirements of the dispute.	Litigation is rigid and formal in nature. Proceeding in litigation takes place as per the rules prescribed.
Scope	The scope of arbitration is very limited in nature.	The scope of litigation is very wide.  Appeals can be made against the superior court if it is not satisfied.
Applicability	Arbitration is applicable only to some types of disputes. Disputes that require some type of expertise can be resolved through arbitration. Disputes that require confidentiality can also be resolved through arbitration.	Litigation is preferred when the issues are very complex and their outcomes can affect society and the general public. Issues related to policies and public interest are applicable to litigation.
Cost effectiveness	Arbitration is less expensive as compared to litigation.	Litigation can be expensive as it includes costs related to documentation, fees for lawyers and courts, and other expenses.
Time consumed	Arbitration is faster and moves more swiftly than litigation.	Litigation takes more time.
Confidentiality	The arbitration is more confidential in nature, as it is held privately in a closed room. Only the parties to the arbitration are present.	In litigation, confidentiality can be maintained only in some cases; otherwise, all the information is public. People who are not parties to the litigation can also attend the proceedings.
Cooperation	Arbitration proceedings are more convenient and cooperative in nature.	Litigation can sometimes be complex as well as less flexible in nature. Parties may not be as cooperative as compared to arbitration.
Appeal	An arbitration award is final in nature and cannot be appealed in India. The award can be set aside only as per Section 34 of the A&C Act.	The decision made by the lower courts can be appealed in the superior courts if the parties are not satisfied with the result.
Control	In arbitration, the control of the proceeding is in the hands of the parties. They decide the crucial matters themselves.	In litigation, the judge is in control. All the decisions are taken as per legal precedents and established laws.
Presiding officer	In arbitration, the parties to the dispute choose the preceding officer. If the parties cannot come to an agreement, then they can ask an independent body to appoint such an officer. There can be a specific clause regarding the same in the arbitration agreement stating who should be appointed as an presiding officer (arbitrator).	In litigation, the parties do not have any say in selecting the preceding officer. The court chooses the judicial officers. The courts have their own criteria for selecting the judicial officers.

Overlap of arbitration and litigation

An overlap of arbitration and litigation can be seen frequently. Sections 9 and 17 of the A&C Act allow the parties to file an interim relief application with the arbitration tribunal and court. Parties can apply for interim relief when the proceedings of arbitration are going on. Another instance of overlap is seen when arbitral awards are challenged before the courts. There are very limited grounds on which an award can be challenged before the court. But parties can, in some instances, seek the intervention of the judiciary if they feel that the arbitration award is against public policy or that their rights are being violated. 

Despite being two different methods of dispute resolution in India, there are a few situations where both arbitration and litigation overlap due to the requirements of procedures, enforcement mechanisms, etc. There are also some instances where a contract contains clauses related to both arbitration and litigation, or, in some cases, some disputes related to some aspects are to be resolved through litigation while others are by means of arbitration. 

Arbitration vs. Litigation : factors to consider

There are many factors that need to be considered before choosing whether to opt for litigation or arbitration. 

• Many contracts contain a clause where it is stated that, if in the future any dispute arises, the same will be solved using arbitration. This is known as an arbitration clause. In this case, it is mandatory for the parties to proceed with arbitration. 
• The next factor that is to be considered is the preference of the client and the nature of the case. Many times, there can be disputes that are more suitable for arbitration and can be solved through discussions. If the nature of the dispute is more complex, then litigation can be more useful. It is crucial to keep the nature of the dispute in mind and then choose accordingly. There can be instances where arbitration is considered a better option than litigation from an industry point of view. 
• Cost is one of the other vital factors that is considered when choosing between litigation and arbitration. Some parties might find arbitration a better option, as it is comparatively less expensive than litigation. 
• Parties also consider the level of control that they want when choosing between arbitration and litigation. In litigation, the parties do not have control over the proceedings; the court and the judge have the superior power. 
• The next important factor to consider is privacy. There can be circumstances when the parties want to keep the matter extremely private. This can be achieved through arbitration. An arbitration proceeding takes place in a private place, i.e., in a closed room, in the presence of only the parties and the arbitrator. This setting helps in keeping the dispute between the parties themselves. And if someone breaches the same, it will result in a penalty. 
• Expertise is also one of the crucial factors that is taken into consideration at the time of choosing between arbitration and litigation. With arbitration, the parties can appoint an arbitrator who acts as a neutral party with expertise similar to the dispute. For example, if there is a dispute between a hospital and a pharmaceutical company, then they can appoint an arbitrator with medical expertise. This flexibility is not present in the case of litigation. The judges hear cases relating to all general matters rather than one specific area of law. Having industry-specific expertise and knowledge can act as a plus point for the parties to a dispute in arbitration.

Disputes that cannot be resolved by arbitration

Under Indian law, there are some disputes that cannot be resolved by arbitration. Section 8 of the A&C Act refers the parties to arbitration. Section 34(2)(b) and Section 48(2) of the A&C Act state that the arbitration award can be refused or set aside if the nature of the matter is such that a settlement is not capable under the arbitration law. The Supreme Court has, in the recent case of Vidya Drolia v. Durga Trading Corporation (2019), proposed a fourfold test, which can help in determining the issue of arbitration and adjudication of the same. The disputes will not be considered arbitrable if the subject matter and/or cause of action:

1. If the matter is action in rem and no other subordinate action in personam occurs out of it.
2. Are not subject to the law of arbitration under a specific statute, and this is mentioned either explicitly or by implication;
3. Has an impact on the rights of the third parties, or there is a requirement for centralised adjudication as well as mutual adjudication that will not be considered appropriate and/or have an egra omnes effect;
4. Is relating to a sovereign and public interest function which is inalienable, i.e., it is not transferable.

There are some exceptions where the parties are not referred for arbitration, including:

Disputes that are criminal in nature

Criminal offences cannot be referred to arbitration because of the nature of the crime. For example, a murder case cannot be referred for arbitration, as murder is a heinous crime and a non-compoundable offence. Offences related to rape will also not be referred to arbitration. India gives the right to a free trial to everyone; hence, criminal offences are non-arbitration in nature. 

Matrimonial disputes

The disputes related to judicial separation, divorce, custody of a child, and restitution of conjugal rights are all non-arbitration in nature. India does not follow a uniform civil code; all religions have their own personal laws that deal with divorce and custody of children. There are separate courts established for handling family disputes. 

Matters of guardianship

The matters related to guardianship are also non-abrital in nature. These disputes cannot be referred to arbitration. The disputes that arise out of the trust deeds are also not considered arbitral in nature. This was made eminent by the Supreme Court in the case of Shri Vimal Kishor Shah v. Jayesh Dinesh Shah & Others (2016).

Testamentary suits

In India, disputes related to inheritance and wills cannot be referred to arbitration. In the case of Ashwin Maganlal Savani v. Himadri Davda (2022), the Bombay High Court held that the directions in a will would not be construed as an arbitration clause. 

Petitions for insolvency

Matters related to insolvency are also non-arbitral in nature. Litigation is the only way to solve these disputes. There are well-established, time-bound laws to deal with these issues. Insolvency matters are considered non-arbitral in nature in India because the right in rem is exercisable.

Tenancy Matters

The matters related to tenancy or eviction are also non-arbitral in nature. If these disputes arise, they cannot be resolved through arbitration. In the case of Himangani Enterprises v. Kamaljeet Singh Ahluwalia, the judge has given the decision that the dispute between the tenant and the landlord is non-arbitrary in nature because it opposes public policy. 

Conclusion 

Both arbitration and litigation have their own pros and cons. Arbitration is more speedy, less costly, and can be beneficial for disputes that need to be kept private. Litigation, despite being a complex and lengthy process, is essential for some kinds of disputes, like criminal offences. The parties can choose any one after weighing their advantages and disadvantages and selecting the one that proves to be the best as per their circumstances.  It is very vital to choose a dispute resolution mechanism that will be helpful in resolving the dispute. For example, in the case of murder or theft, arbitration cannot be used to resolve the dispute, as these disputes are offences that include one’s right to a fair trial as well as other human rights. In such instances, one party is clearly at fault. Arbitration can be helpful for disputes that can be solved through discussion, and a mutual understanding between both parties can be found to resolve the issues. 

Frequently Asked Questions (FAQs)

What types of cases can be solved through arbitration?

The disputes related to commercial as well as civil matters, which include disputes between business partners, disputes amongst consumers and companies, winding up, disputes related to trust deeds, disputes regarding, etc., can be resolved using arbitration. 

Can an arbitration award be challenged?

An arbitration award cannot be challenged if it is legal and binding in nature. An award can only be challenged when it is non-binding to the parties.

What are the benefits of arbitration?

Some of the key merits of arbitration are that it is less costly, faster than litigation, private in nature, can be more flexible for the parties, is less formal in nature, and is a very effective way to solve disputes. 

Is there a limitation period for arbitration cases in India?

There is a limitation period for arbitration cases in India. The limitation period is a time period during which the dispute can be brought in for a claim.

Is there an average time for cases to get solved through arbitration?

There is an average time for cases to get solved through arbitration. The award is to be made within 12 months from the date since the arbitral tribunal entered into the case, as per Section 29A of the A&C Act.

Which Act governs the arbitration in India?

In India, arbitration is governed under the A&C Act.

What is an arbitration agreement?

The meaning of an arbitration agreement is stated in Section 7 of the A&C Act. In simple words, an arbitration agreement can be described as an agreement that is signed by the parties and states that if any dispute arises, it will be solved using arbitration. The agreement has to be in writing.

Which court has jurisdiction for arbitration cases under the A&C Act?

The original jurisdiction’s principal civil court has jurisdiction for arbitration cases under the A&C Act. This also includes the original jurisdiction’s high courts as well.

Who is an arbitrator?

An arbitrator is a neutral party in the arbitration procedure that helps in solving the dispute between the parties to the proceedings. An arbitrator acts as an umpire between the two parties.

Where can an arbitration proceeding take place?

The arbitration proceeding can take place anywhere, as per the joint decision of the parties. The place can also be mentioned in the arbitration agreement itself. When there is an absence of the same, the arbitrator can decide the place for arbitration proceedings.

In which language will the arbitration proceeding take place?

The parties in arbitration can decide the language in which the arbitration proceeding can take place. 

What is an arbitral tribunal?

When there is more than one arbitrator in the proceeding, it is known as an arbitration tribunal. The whole panel will be responsible for adjudicating the dispute.

What do you mean by an arbitration award?

Similar to a judgement/order in litigation, an arbitration award is the final decision of the arbitration proceeding. The award is decided on the basis of merits in an arbitration.

How can an arbitration proceedings be terminated?

An arbitration proceeding gets terminated when an order is given by the arbitral tribunal or when a final arbitral award is given.

What happens to an arbitration proceeding in case of the death of any party to an arbitration agreement?

When the death of any party takes place, the arbitration proceeding shall not be discharged. The decision will be enforced by or against the legal representatives of the deceased party. 

Does litigation and arbitration adhere to the same set of rules and procedures?

No, both arbitration and litigation have their own set of rules and regulations. The courts handle the litigation, and the rules and procedures related to court proceedings are to be strictly adhered to. While arbitration has its own statutes, rules, and procedures to resolve the dispute.  

References 

• https://www.thklaw.com/wp-content/uploads/2020/04/Arbitration-vs-Litigation-Business-Disputes.pdf
• https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3354674
• https://legal.thomsonreuters.com/blog/arbitration-vs-litigation-the-differences/
• https://www.hchlawyers.com/blog/2021/march/what-is-the-difference-between-arbitration-and-l/#:~:text=Litigation%20is%20a%20legal%20process,then%20make%20a%20binding%20decision.
• https://www.hfw.com/downloads/HFW-client-guide-whether-to-choose-arbitration-or-litigation.pdf