This article is written by Priyanka Kumar, a practising Advocate with the Bombay High Court, Maharashtra. The article has been written with the object of highlighting the present scenario of arbitration in India and how far it has been able to reach its target of being a helpful tool in quick disposal of cases. In doing so, the article covers the developments brought in by the legislature and judiciary over the years and further concludes with a 5-fold suggestion for strengthening the mechanism in the long run.

This article has been published by Shashwat Kaushik.

Introduction

The plight of pending cases has resulted in alternate dispute resolution, a.k.a., the ADR mechanism, which is becoming the most sought after one for resolution of disputes. While ADR stands on the three limbs of arbitration, mediation and conciliation, ‘arbitration’ seems to be the most desirable one, quite so because the outcome of its resolution, i.e., the Award, is placed at-par with the Order/ Judgement of a Civil Court. The characteristics of being a private proceeding ruled by party autonomy inevitably acclaims arbitration as a procedure for speedy disposal of disputes. Having said that, despite the common advantages of arbitration as a procedure, can it be concluded that arbitration is infact really helpful in quick disposal of cases? The answer to this lies in scrutinising how far and how fair the positives of arbitration have gone in practicality. Through this article, the author intends to delve into identifying whether ‘arbitration’ as a mechanism is really helpful in quick disposal of cases in India. 

Download Now

Origin of arbitration in India 

It is pertinent to understand the origin of arbitration in India. Behind the origin of every legislation, there lies an international treaty that was once signed and ratified by a country. In the area of international trade law, the United Nations realised that with growing trade between two nations, it was important to establish some international laws which would make trade free flowing. For this purpose, the UN introduced the United Nations Commission on International Trade Law (UNCITRAL) Model Laws in 1985. The main objective of these Model Laws were to bring all countries on one common platform and help resolve their disputes by adopting the procedure of arbitration. It also opened up the scope of international commercial arbitration for resolving disputes between parties of different countries.  

Not so long ago, a regime began to shape the arbitration laws in India. While the UNCITRAL Model Laws were introduced on the international level, running parallel to this, the Indian Government adopted arbitration as the mechanism for speedy settlement of commercial disputes and introduced the Arbitration and Conciliation Act, 1996. The 1996 Act was the first of its kind to adopt the UNCITRAL Model laws and make provisions for enforcement of arbitral awards passed under international commercial arbitration. 

Thus, the effort was seen in two major phases wherein the former included revamping the Arbitration Act, 1940 into Arbitration and Conciliation Act, 1996 based on the UNCITRAL Model Laws and the latter focused on amending the 1996 Act with some revolutionary revisions in 2015 and soon thereafter in 2019 and 2021. Broadly, the end game has been to build arbitration in India as the most friendly, time-saving, independent, and efficient mechanism, not just domestically but also internationally. 

Attempts made to positively transform arbitration in India

Some of the many practical changes brought about to instill confidence in arbitration as a method for speedy disposal of disputes were seen through the amendments and the precedents set out. The amendments were brought in two major forms in the Arbitration and Conciliation Act, and by other means in various other Acts.

2015 Amendment

The 2015 Amendment ensured that even at the stage of the appointment of an arbitrator, the prerogative of the courts will be to only look into the existence of a valid arbitration agreement, and the rest shall be left to the jurisdiction of the Arbitral Tribunal. The declaration on the part of the arbitrator about his independence and impartiality was made more onerous through the 2015 Amendment. Section 24 of the Amended Act clarified that if the Arbitral Tribunal conducts the oral hearings for the presentation of evidence or oral arguments, the Tribunal shall hold such hearings on a day-to-day basis and not grant any adjournments unless sufficient cause is made out. In addition, the Tribunal clearly also contained the power to impose costs on the party seeking adjournments without sufficient cause. Furthermore, the amended Section 36 provided that no arbitral award being challenged under Section 34 would be stayed by default until and unless the parties had obtained a specific order from the Court to that effect. Otherwise, there would be no automatic stay on the arbitral award. 

2019 Amendment

Following the above, certain additional provisions were introduced by way of the 2019 Amendment. The amendment brought in, most importantly, provided a mandate that the award in domestic arbitration proceedings shall be completed within 12 months from the date of completion of pleadings, whereas the award in international arbitration proceedings may be endeavoured to be completed within 12 months. To make arbitration more flexible and to keep up with international trends, the concept of ‘arbitral institutions’ was given a boost under the 2019 amendment regime vide its inclusion in Section 11, so as to bring it at par with international arbitral institutions such as Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA), Hong Kong International Arbitration Centre (HKIAC), American Arbitration Association (AAA), etc. 

It was very well established that a plethora of arbitration and mediation institutions had been operating for a long time. The 2019 amendment also marked a step towards regularising the conduct of these institutions. A special and separate provision under the head of ‘Part IA- Arbitration Council of India’ was sought to be introduced for ranking and regulating the conduct of all arbitral institutions throughout India. The Council sought to grade arbitration institutions, accredit the arbitrators that get associated with these institutions, and pass arbitral awards. The main objective of the Council is to establish uniform standards for alternate dispute resolution mechanisms, including arbitrations, mediations, and conciliations in India, thereby making India the hub of arbitration globally. 

Following are the important features of this Section: 

  • The Arbitration Council of India (ACI), in Part 1-A of the Act, is formed as a separate legal entity. The headquarters of the ACI shall be situated inDelhi,i and it shall have various offices established in different parts of India. 
  • The Management of ACI shall include full-time as well as part-time members, with the full-time permanent members including – a ‘chairperson’, ‘council’, and ‘member’. All of these persons shall be appointed by the Central Government by notification in the Official Gazette 
  • In particular, the Council shall, for the purpose of promoting and encouraging arbitration in India, do the following act –  
  • framing policies with respect to grading different arbitral institutions throughout India;
  • recognising professional institutes that will help accredit the arbitrators in the arbitral institutions
  • reviewing the grading provided to these arbitral institutions from time to time;
  • holding workshops, training programs and courses with various law colleges, universities, law firms and arbitral institutions in the field of arbitration;
  • framing, reviewing and updating from time to time, the rules and norms to ensure satisfactory level of arbitration and conciliation;
  • making recommendations to the Central Government on various measures to be adopted to make required amendments and changes for smoother functioning of the institutions;
  • to make recommendations on the personnel, training and infrastructure of arbitral institutions
  • to constantly and consistently do all such acts and activities essential to promote institutional arbitration by strengthening arbitral institutions;
  • The ACI shall grade the arbitral institutions in India on the basis of criteria relating to the institution’s infrastructure, quality and calibre of arbitrators, performance, and compliance with time limits for disposal of domestic or international commercial arbitrations.

With the inclusion of the 2019 Amendments, the Arbitration and Conciliation Act, 1996, saw a massive development in order to attract domestic as well as international arbitrations to be dealt with in a systematic and speedy manner. 

Inclusion of arbitration and mediation in other Acts

Aside from the provisions of the Act, the effort to promote arbitration has also been seen through the conduct of the courts. Arbitration has been spread through other special legislations as a prerequisite before initiating legal proceedings, such as the Commercial Courts Act, 2015 and Micro, Small, and Medium Enterprise Development Act, 2006 (the MSME Act). Under Section 18 of the MSME Act, a provision has been inserted for referring disputes to a Micro and Small Enterprise Facilitation Council, which shall act as an Arbitral Tribunal and attempt to resolve disputes under the Arbitration and Conciliation Act, 1996. On the other hand, under the Commercial Courts Act, it is provided that all disputes above the sum of Rs. 3,00,000/- shall be first referred to a mediation, and only once that fails will the disputes be entertained by the commercial courts. Similarly, mediation as a pre-requisite has also been taken very seriously in family disputes and divorce cases. Such practices have popularised arbitration and mediation, along with making them a useful tool in ascertaining the speedy disposal of cases. 

Role of precedents 

Another very important contribution India has seen in the field of arbitration has been through the judgements passed and precedents set by various high courts and the Supreme Court, reiterating the independence of arbitration as an Act and reasonably interpreting the provisions that require the courts to do so. The Indian courts have time and again limited the scope of judicial intervention in Section 34 petitions and tried to maintain the virtue and essence of the arbitral award. The object has been to act as a “supervisory court” instead of an “appeal court” and not indulge in re-examining the plausible view adopted by the arbitrator. Nor can the courts examine the legality of an award or the merits of a claim by entering the factual arena like an appellate court. A narrower interpretation has also been given to the term ‘public policy’ to ensure that every arbitral award does not come under the preview of challenge before the court. The Hon’ble Supreme Court also clarified flexibility in enforcing an arbitral award anywhere in the country, thereby differentiating it from an Order/ Judgement under the CPC. This set an example for the final result of arbitration becoming a convenient one to be easily executed against the Judgement Debtor. 

Application of arbitration in different kinds of disputes

The development of arbitration has been seen as the mechanism that has been given acceptance for resolving different kinds of disputes. Earlier, with the judgement of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. & Others (2011), the Supreme Court laid down the manner to assess whether a particular judgement could be subjected to arbitration or not. However, with the use of arbitration in more cases, owing to several recent precedents, the scope of the use of arbitration has actually expanded to cover many kinds of disputes as ‘arbitrable’. As of today, arbitration is seen as the ‘it’ mode of resolving disputes in –

  • Commercial disputes, including money claims and contractual disputes.
  • Intellectual property disputes
  • Family and divorce matters
  • Landlord-tenant disputes (except the ones covered by the Rent Act)
  • Technology-related disputes
  • Investment treaties, including Bilateral Investment Treaties (BITs)

A branch separate from the categories listed above has been that of criminal matters, which still have not found their way to be resolved by arbitration. The reason for this is that when a dispute involves criminal allegations or any sort of criminal element, it is taken to be an act done against the State and not against an individual, and crimes against the State are always required to be tried before the courts, and the punishment involved could also extend to jail time. This logic was also distinguished in the case of Booze Allen.

In the case of arbitration, the arbitrator, being a neutral third-party, can be from any field of life and not necessarily have a judicial background. Moreover, the arbitral award is at par with a judgement or decree of a court of law, but an arbitrator is not at par with the judges of the courts. Thus, the arbitrator does not have all the powers of a judge of a civil court, except for deciding upon a dispute exclusively concerning individual parties.  

Cases boosting arbitration in India

Shri Lal Mahal Ltd v. Progetto Grano Spa (2013)

Facts: In the case of Lal Mahal, the contract was for the supply of wheat by an Indian supplier to an Italian buyer. The seller raised a dispute with respect to the quality of the wheat not being as per the promise made under the contract. The dispute was referred to the arbitral tribunal formed under the Grain and Feed Trade Association (GAFTA), in London, and the award was passed in favour of the Italian buyer. The buyer sought to enforce the award before the Delhi High Court. The enforcement of the award was opposed by the seller on the ground that the award was contrary to the express provisions in the contract and enforcing such a contract would be against the ‘public policy’ of India. The issue went on appeal before the Apex Court. 

Issue: Whether a foreign arbitral award can be restrained by taking the plea of ‘public policy’ at the stage of enforcement?

Held: The Apex Court, passing the judgement in favour of the Italian buyer, restricted the scope of judicial interference in arbitration awards passed outside India. In addition to this, it ensured that even at the enforcement stage of foreign awards, the grounds for setting aside an award are fairly limited, being only if the foreign arbitral award is contrary to the fundamental policies of India, the interests of India, or justice or morality. 

Sundaram Finance Ltd. v. Abdul Samad & Anr. (2018)

Facts: In the case of Sundaram Finance Ltd. v. Abdul Samad & Anr., the parties had entered into a loan agreement wherein the respondent defaulted in payment of the instruments. As per the agreement, arbitration proceedings were initiated within the jurisdiction of Tamil Nadu, and an ex-parte award was passed. As per Section 36 of the Act, the appellant filed the execution proceedings in the court of Morena, Madhya Pradesh, under Section 47 read with Section 151 and Order 21 Rule 27 of the Code of Civil Procedure, 1908. However, the Trial Court at Morena rejected the execution application for lack of jurisdiction and directed the appellant to file the execution proceedings first before the court of competent jurisdiction in Tamil Nadu and then transfer the decree so obtained to the court of Morena. Aggrieved by this, the appellant approached the Supreme Court.

Issue: Whether, for enforcement of an arbitral award, as per Section 36 of the Act, it is first required that the execution proceedings be filed in the court having jurisdiction over the arbitration proceedings and then obtain a transfer of the decree or whether the enforcement proceedings can straightaway be filed in the court where the assets of the judgement debtor are located. 

Held: The Apex Court held that an application for enforcement of an arbitral award can be filed anywhere in the country where such a decree is executable, and there is no requirement for obtaining a transfer of the decree from the court, which would have jurisdiction over the arbitral proceedings. 

Steel Authority of India v. Primetals Technologies India Pvt. Ltd. (2020)

Facts: The Appellant was a Public Sector Undertaking (PSU), engaged in the manufacture of steel. The Appellants had awarded a contract for the setting up of a coupled pickling line and Tandem Cold Mill at Bokaro Steel Plant to a consortium of three companies. As per the contract, the Respondents were to procure the manufactured goods from the Appellants for a certain fixed sum as stipulated in the contract. In the course of the performance of the contract, a dispute arose as to whether the deduction of a certain CENVAT credit could be made from the gross contract price or from the net contract price. The Respondent invoked arbitration, wherein the award came to be passed in favour of the Respondent allowing all the claims. Thereafter, the Appellants filed a Section 34 petition against the arbitral award. Here, the Ld. Single Judge, relying upon the judgements laid down by the Supreme Court, dismissed the petition on the ground that courts had limited powers and a narrowed scope while hearing a Section 34 petition. An appeal under Section 37 of the Arbitration and Conciliation Act, 1996, was then made to the Delhi High Court, challenging the order passed by the Single Judge of the same Court under Section 34.  

Held: The Court held that the aspect of construction and interpretation of the contractual terms between two parties should be left to be solely determined by the arbitrator, and the same should not be an aspect of interpretation by the courts under the name and head of ‘public policy’. It further clarified the narrow scope of the courts under Section 34 and added that while testing an arbitral award under the head of ‘public policy’, the courts cannot act as a court of appeal. Ultimately, the court upheld the judgement of the Ld. Single Judge and refused to interfere in the arbitral award passed in favour of the Respondent. 

Government of India v. Vedanta Ltd. (2020)

Facts: A product-sharing Agreement was entered into between the parties for the development of petroleum resources in Ravva Gas and Oil Fields, based on a tender. Disputes arose between the parties with respect to the development costs. The dispute was referred to arbitration, with the seat of arbitration being Malaysia. The award was passed in favour of the Respondents. Government of India (GOI), then filed an appeal before the courts at Kuala Lampur on the grounds that the award deals with a dispute that is not contemplated by or does not fall within the reference of arbitration, the award contains matters beyond the scope of reference to arbitration and the award conflicts with the public policy of India. The said appeal was rejected, and the Respondents moved the Delhi High Court for enforcement of the foreign award. Before the Delhi High Court, the GOI opposed the enforcement, but the same was rejected. The appeal was thereafter filed before the Supreme Court. 

Issue: One of the issues was whether the interpretation made by the arbitrator in the arbitral award, if enforced, would act against the public policies of India. 

Held: The Supreme Court, in this case, relied upon the ratio of the Renusagar case and held that ‘public policy’ includes- the fundamental policy, justice, and morality. The Court once again repeated that the enforcement court does not stand in a position to re-appreciate or re-assess the evidence presented in the arbitration. The Apex Court also held that just because the Arbitral Tribunal has erroneously interpreted a contractual provision, it does not entail the arbitral award being challengeable on its merits. 

Procedure for arbitration

The procedure, as provided in the Arbitration and Conciliation Act, 1996, remains very easy and simple. Being an outside court mechanism for the settlement of disputes, the entire process and procedure involve a great deal of flexibility and confidentiality, along with mutual agreement from both parties. 

It is pertinent to understand that, as a party autonomy led mechanism, the rise of ‘arbitration’ happens when the parties include it in their agreement as the method of resolving disputes, present and future. This is called the ‘arbitration clause’. The procedure comes to light when one of the parties has a disagreement so big that they raise a ‘dispute’ against the other. Once the dispute arises, arbitration proceedings are conducted under the following stages, as provided in the Arbitration and Conciliation Act, 1996 :

  • Notice of invocation of arbitration: The party raising the dispute is required to send an intimation of the same to the other party by way of a written notice called the ‘invocation of arbitration notice’. This notice is required to contain the agreement that led to the relations between the parties, the dispute, possibly in detail, and the intention of the sending party to invoke arbitration in order to resolve such dispute between the parties. 
  • Appointment of arbitrator(s): Usually, the party invoking arbitration also indicates the name of the person they wish to nominate as the arbitrator. This indication is made in order to get the consent of the other party. Once both parties agree, a nominated arbitrator is appointed to decide the dispute. If the parties fail to agree, then the parties can apply before the appropriate court and get an arbitrator appointed. 
  • Schedule of arbitration: Once the arbitrator comes to be appointed, the first meeting of arbitration is held for all the parties to meet and mutually agree upon a schedule of filings, documents, and hearings that the parties will have to abide by. This procedure is not a strict one and is instead something that was recently adopted by the arbitrators in order to save time and keep the arbitration procedure systematic and organised. 
  • Statement of Claim: The party raising the dispute and invoking arbitration, also known as ‘the Claimant’ submits his statement of claim which entails his case and the relief sought against the other party, in detail.
  • Statement of Defense: In response to the statement of claim, the opponent, also known as ‘the Respondent/ Defendant’ then files his say in the form of statement of defense wherein he refutes all the allegations put against him in the statement of claim.
  • Hearings: After submission of the statement of claim and the statement of defense, the parties are then given a chance to ‘lead evidence’ and examine and cross-examine witnesses by putting questions to them and building their case. This marks the beginning of the evidence stage and the closure of the pleadings or documentation part of the proceedings. Multiple hearings take place for leading evidence, after which the parties finally present their final arguments, summarising their entire case against each other. 
  • Award: The final stage of the arbitration proceedings is the passing of the award, which the arbitrator(s) does. As per the 1996 Act, they are required to pass the award within twelve months from the date of completion of pleadings. This award is required to be stamped in accordance with the Indian Stamps Act, 1899, and bear the signature of the arbitrator and the parties. With this, the arbitration proceedings come to an end, unless there is any modification or correction to be made to the award. The award passed in an arbitration proceeding is treated as a decree passed by a civil court and is to be enforced before the courts in the same manner as if it were a decree of the civil court. 

The above procedure is usually the one followed in cases of ad-hoc arbitrations. Similarly placed with the procedure under the 1996 Act is the procedure adopted by the arbitral institutions. Arbitral institutions are institutions formulated for the facilitation and management of arbitrations as per their rules. While choosing a particular arbitral institution or its rules, the parties bind themselves to the procedure laid down in the rule book of the respective institution. The procedures laid down in the rules of these institutions can vary depending upon the objectives of that institution; however, they are always in line with the Arbitration and Conciliation Act, 1996. 

Backlashes faced by transformation in arbitration

No doubt the transformation in the field of arbitration, as seen above, has surfaced after detailed comparative study and years of practice, nevertheless, there has been frequent back and forth with respect to the position of these laws and a clash between the views of various courts. Not only that, in the process of conveying these precedents, the burden of arbitration cases is also increasing, hampering the purpose for which the mechanism was adopted in the first place. As a result, the ground reality today is that the practice of arbitration has not escaped backlashes. 

Some of the primary aspects of concern in the Indian arbitral system have been as follows:

Unnecessary applications filed before the courts to seek permission 

  • First and foremost stands the problem of constant interference by the courts, which has also been permitted under the 1996 Act (and subsequent amendments) itself. For instance, in cases where parties fail or default in appointing arbitrator(s) by mutual consent as stated under Section 11 of the Act, the appointment is required to be made by the competent court by way of a Section 11 Application. The Section 11 Application, then gets heard before the court, which takes an additional few months. Even at this stage, the courts examine the validity of the arbitration agreement, which further delays the process of appointment of arbitrator(s). 
  • If the period of one year from the date of completion of pleadings in the arbitration process lapses, the Act mandates an extension of the mandate of the arbitrator by way of an Application before the Competent Court. This requirement has further added to the plight of unnecessary applications, thereby delaying the completion of an arbitration. 

Court interference gives confusing stands on long drawn arbitration principles

  • On the one hand, the courts have held that the Arbitral Tribunals have the power and authority to decide on their own jurisdiction (kompetenz-kompetenz), however, the courts still interfere in interpreting the agreements to ascertain whether the same should be referred to arbitration or not. This clash between deciding the jurisdiction of the arbitral cases regardless of upholding the doctrine of  kompetenz-kompetenz is yet another form of counter stands taken by the courts.
  • Once the Arbitral Tribunal is formed and passes an order with respect to its jurisdiction to try and entertain its case, the recourse available to the party opposing the jurisdiction is to opt for appeal proceedings before the competent court against the order of jurisdiction passed by the Arbitral Tribunal.

Inconsistent judgements

  • The contrary stands taken by courts in first holding certain issues arbitrable and then the contrary have also added to the confusion, due to which the masses do not have faith in the procedure. In the case of McDermott International Inc. v. Burn Std Co. Ltd. (2006), it was held that court intervention into correcting the mistakes of the arbitrators could take place only in circumstances like fraud or bias by the arbitrator. Subsequently, in a 2014 judgment, the Supreme Court eased arbitrability with respect to cases involving allegations of fraud by referring such disputes to foreign seated arbitrations. Further again, in the case of Zee Sports Ltd. v. Nimbus Media Pvt. (2017), the Bombay High Court referred to the McDermott judgment and held that the courts cannot correct the errors of the arbitrator except when it comprises a case of fraud, bias, or violation of natural justice.
  • It has also been observed that while arbitration is made available for certain disputes, such as consumer disputes, the same are also subject to the jurisdiction of consumer forums, again creating a confusing stand taken by the court. 
  • Courts have also seemed to favour mere technical aspects and thereby refused to refer the cases to arbitration. In doing this, the courts have shown their indecisiveness in promoting arbitration as a mechanism for speedy disposal of cases. 

Entertaining challenges to Arbitral Awards 

  • The courts have even sought to adjudicate over arbitral awards at Section 34 stage, even after narrowing down their scope of interference. Not only this, the courts have also entertained challenges to arbitral awards (interim and final) by way of writ petitions, which take a long time to get disposed off, leading to further delay in concluding the arbitration proceedings.
  • The hiccup of “non-responsive respondents” has also not been extinguished yet. Despite the agenda of minimal interference, the courts have entertained challenges against arbitral awards even though the parties abstained from appearing in the proceedings. In the case of Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt. Ltd. (2020), the Court held that if a party fails to appear in the arbitration proceedings and convey his objections, he is estopped from challenging the award passed thereafter. However, despite this, the courts have been seen entertaining the petitions and appeals being made in such cases on the grounds of the award being passed ex-parte. 

No regularisation of the new concepts

  • Newer concepts like third party funding in arbitration, two-tier arbitration, binding non-signatories to arbitration agreements, anti-arbitration injunctions, and emergency arbitrators have crawled their way up with next to fewer legislations to regulate them. Not to forget the complications that come with foreign parties and international arbitrations. 
  • In the case of Raffles Design International India Pvt. Ltd. v. Educomp Professional Education Ltd.  (2016),the Delhi High Court held that since the 1996 Act does not contain any provision for enforcement of emergency/interim award resulting from a foreign seated arbitration, an emergency award was unenforceable in India. Therefore, even after a party has obtained an emergency/interim award in a foreign seated arbitration, the only recourse to have it enforced in India is by way of filing an application under Section 9 (Interim Relief by the Court). 
  • The Delhi High Court in the case of Tomorrow Sales Agency Pvt. Ltd. vs. SBS Holdings Pvt. Ltd. (2023) excused the liability of third party funders in a case of international arbitration, holding that their liability towards the arbitration proceedings did not arise if their funded party lost. In a way, this left the Decree Holder with no fruit even after winning the arbitration, while at the same time leaving the third party funder scott free in the absence of any legislation to regulate it. 

In light of these scenarios, it becomes difficult to rely on the provisions adopted in the Act alone. It also gives an easy way to challenge the provisions and carve out a different interpretation each time. 

Conclusion 

In today’s globalisation-led time, when speaking of arbitration, Indian laws have to be mindful of international standards and not just domestic. The reason the present arbitral environment suffers backlashes is mainly because, while the market caters to parties from all across the globe, the laws are made (and modified time and again) based on Indian calibre. Thus, there is a dual responsibility on the Indian arbitral system to strengthen the quality, quantity, and awareness of arbitration within the country and to incorporate and cater to international needs.  

With this premise, it can be concluded that while arbitration has the ingredients and potential to be helpful in quick disposal of cases and the process has quite begun, some hurdles still need to be crossed so as to keep the pace going systematically. With court interference, the faith of the general public takes a back seat, thereby reducing the seriousness of the arbitration laws of the country. If this were to be the case to be continued, the laws would keep getting more stringent on one hand while drifting away from the people’s belief in this resolution system. 

Five-fold solution to upgrade the system 

In the author’s view, adopting a five-fold conclusion seems to be the ideal antidote, which includes, 

  • Firstly, spreading awareness and educating the masses about arbitration and its benefits over the court system. This will instill the faith of the people in arbitration, and a peaceful approach to dispute resolution will be noticed, which will in turn result in getting one step closer to making arbitration a method for speedy disposal of disputes. 
  • Secondly, making an active attempt at imbibing the culture of mediation in dispute resolution, along with or without arbitration. In a dispute where parties are at loggerheads with each other, getting them across the table can actually curtail the dispute or at least its extent and prevent a whole proceeding, and this itself is the most effective feature of mediation. 
  • Thirdly, ensuring and improving the quality of arbitrators and mediators through training programs so that they are persuasive enough to convince parties to reach a settlement before getting to the point of starting the proceeding. Improving the quality of arbitrators will also assure a detailed award, reducing the chances of court interference. 
  • Fourthly, encouraging a cultural shift from ad hoc to institutional arbitration in people as an attempt to maintain the sanctity of arbitration as a private mode of dispute resolution intact and furthering the intent of minimal court interference. 
  • And lastly, reconsider restricting the courts further from expanding the scope of interfering with arbitral awards in minutest of claims. 

It is evident that what needs to be done to enhance the success rate of arbitration, or ADR in general, is to abridge the gap between the intention with which the laws and amendments are brought into force and conveying and convincing the masses to understand this intention. Even if the presumption of arbitration being the most helpful tool for quick disposal of cases were to be absolutely true today, the real question would be whether there exists a formula to sustain it the same way and is it being utilised? 

Frequently Asked Questions (FAQs)

  1. Are there any existing arbitral institutions in India?

There are many institutions working as arbitration, mediation, and conciliation institutions throughout India. Some of the major ones are- 

  • Mumbai Centre for International Arbitration (MCIA)
  • Indian Council of Arbitration (ICA)
  • International Centre for Alternative Dispute Resolution (ICADR)
  • Bombay Chamber of Commerce & Industry (BCCI)
  • Delhi International Arbitration Centre (DIAC)
  1. What is the major role of arbitration institutions?

As opposed to the ad-hoc form of arbitration, in the institutional form of arbitration, the institution administers and facilitates the proceedings between the parties and ensures the better management of the entire proceedings. In addition, every institution has a set of rules and regulations that lay down the procedure by which the parties are supposed to conduct the arbitration. Once the parties choose a particular institution, they agree to have their arbitration conducted as per the rules of that institution and allow the institution to administer the proceedings.

  1. Why should anyone choose an arbitration institution to resolve their case?

Arbitration institutions, as compared to ad-hoc arbitration, take care of all the procedures, paperwork, and communication between the parties and the arbitrator by acting as the middlemen. The main advantage for which the parties should choose an arbitration institution for resolving their dispute is that, with a third party facilitating the whole procedure, the possibility of a speedy resolution of the dispute becomes assured. 

References

RELATED ARTICLESMORE FROM AUTHOR

LEAVE A REPLY

Please enter your comment!
Please enter your name here