Status as on- 12/11/2021



Arbitration is an alternate dispute redressal mechanism which substitutes lengthy proceedings of the court and provides speedy resolution of the disputes between the parties. It is not a very new law as it was in the place since 1940s but after its modification in 1996, it has become very prevalent.

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. This tribunal decides this dispute in time bound manner. Appointment of arbitrators, proceedings etc., all are governed by the Arbitration and Conciliation Act, 1996.

The only limitation of arbitration is that only civil disputes of facts could be referred for arbitration and the complex civil issues involving question of law could only be decided by the Competent Court of Law.


This Act is only applicable when there was an arbitration agreement between the parties among whom the dispute has arose or the parties to the dispute has later agreed to resolve their dispute through arbitration, after the dispute arose.

The proceedings could be initiated by any of the party by sending a written communication, to the other parties, about its intention to refer the disputes to the arbitral tribunal. After the written communication is served on all the parties, it is compulsory for all the parties to participate in the appointment of the arbitral tribunal as per section 11 and in the arbitration proceedings.


Section 11of the Act provides for the process of appointment of the arbitral tribunal. The number of the arbitrators would be as per the arbitration agreement and if the parties fail to mutually agree to the appointment of the arbitrators according to the qualifications and requirements of the arbitrator(s) agreed in the agreement then any party could approach the competent court for appointment of arbitrator.

PROCESS (sitting, laws applicable)

The biggest benefit of arbitration is that it is not bound to follow any traditional procedural law. The procedure to be followed is either agreed in the arbitration agreement or is agreed later during the arbitration proceedings as per the convenience of the parties and the arbitral tribunal.

The language, laws applicable to the proceedings, place of sittings are also agreed in the arbitration agreement or could be agreed as per the convenience of the parties and the arbitral tribunal.


After all due hearing and proceedings, the arbitral tribunal passes it Final Order/Award which is binding on all the parties to the proceedings as it was a decree of the Court. This is the biggest advantage which serves the purpose of the judicial system and the general public as it provides resolution to a dispute and the pressure on the judicial system also decreases. The scope of appeal under section 34 of the Act is also very limited.


It has now become very common to insert arbitration clause into each and every contract/agreement but it is very important to remember that the proceedings should be conducted by an expert so that the proceedings are operated in correct way and right award is passed.

Disclaimer- The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at

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