Section 7 of the Arbitration and Conciliation Act, 1996 defines an arbitration agreement as “an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
The Arbitration and Conciliation Act, of 1996, plays a pivotal role in providing a legal framework for resolving disputes outside the traditional court system.
Arbitration is a dispute resolution process outside the traditional court system, gaining prominence in India due to its efficiency and flexibility. The Act governing the arbitration proceedings in India namely “The Arbitration and Conciliation Act, 1996”.
A pending suit can be sent for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. This section states that a party to a case may, at any time after the commencement of the suit, apply to the court for an order referring the dispute to arbitration.
The process is not too tedious and is generally accepted by the court, thus, helping the parties to resolve disputes in a time bound manner.
Individuals and corporates have begun to opt for ‘Arbitration’ as the chosen mode for resolution of their disputes to avoid court delays and other legal hassles of court.
The choice between ‘arbitration’ and ‘litigation’ is not one that can be made in a vacuum. Arbitration can and should be a flexible and efficient procedure for adjudicating disputes.
The enforcement proceedings for the foreign award (under S. 47-48) are the last and final stage where the debtor can resist the award from becoming binding/ enforceable for grounds listed under Section 48 of the Arbitration Act.
There are a number of distinguishing features that often persuade parties to choose arbitration as opposed to court litigation for the resolution of their dispute.
Arbitration is a form of dispute resolution which make both the parties mutually agree on the procedure of arbitration. Arbitration the most efficient form of remedy for settlement of dispute as it saves a lot of time and resources.
The court’s intervention can be justified by saying that it protects the rights of the parties or it puts eyes on the arbitration proceedings to prevent any injustice.
In arbitration, whenever a civil dispute arises between two or more parties it is referred to the sole arbitrator or tribunal or three or more arbitrators, which always will be in odd numbers.
Though arbitration has various advantages over traditional litigation but it is important to consider all of the options when preparing to initiate arbitration.
The resolution of a dispute via an arbitration mechanism saves time and cost. The proceedings are conducted as agreed by the parties or accordingly. However, if the parties are not satisfied with the award, then it can be challenged also.
The issue of existence of a dispute when the application under Section 9 of IBC is filed before the Adjudicating Authority. These actions raise doubt regarding the veracity of the dispute and its pre-existence.
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