Arbitration is a paramount and the most sought for medium of alternate dispute resolution which aims at determining disputes between parties to a contract and thereby delivers prompt solution for an effective dispute resolution.
The Indian Arbitration and Conciliation Act, 1996 is the statute governing arbitration law in India. Erstwhile passing of this 1996 Act, the provisions on arbitration law were contained in Arbitration Act, 1940 the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. There was a strong need felt for restructuring the 1940 Act which dealt only with regards to the Domestic Arbitration. Likewise, the 1940 Act was repealed and the present Act was introduced in patronage of rise of India as a Global Economic Power and to further embrace provisions regarding International Commercial Arbitration, Foreign Awards, Conciliation, etc. The Arbitration and Conciliation Act, 1996 is based on the 1985 Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL).
The principal benefit of the Arbitration and Conciliation Act, 1996 is that there is least intervention and reduced supervisory role of courts in the Arbitration Award and Arbitral Proceedings. By means of abundant flexibility with regards to the number of Arbitrators, venue, language, etc. The Act also provides that the Arbitral Tribunal is not bound to follow the Code of Civil Procedure, 1908 or the Evidence Act, 1872 and leaves it to the parties to agree on the procedure to be followed. This alternative dispute mechanism has witnessed virtuous response. The parties prefer also due to its low cost, lesser formalities, expeditious and flexible means of dispute resolution.
Below are the stages of an Arbitral proceedings explained in flowchart :
The Year 2015 brought in notable & momentous amendments in the statute. The one major amendment is by way of insertion of Section 29 B which provides for ‘Fast Track Procedure’ which articulates that the parties to the dispute may agree that their dispute be resolved through fast track procedure with sole arbitrator and also proposes that ‘Award’ in such cases shall be given within six months’ period. Even though with certain shortcomings, Arbitration was the prevailing mechanism for the settlement of commercial disputes and which has now become more robust and desirable due to its accessibility, transparency and cost control arrangements. The 2015 Amendment has hit the right cords and stirred the true spirit of the legislation which shall ultimately lead to prompt disposal of cases and even promote India as a venue for International Arbitration.
Rishabh H. Vakharia, Practising Advocate in Bombay High Court and
Associate Partner with Medialexicon – Solicitors & Attorneys , Mumbai.