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The Role Of Arbitration In Resolving Business Disputes In India

As we all know that Indian Courts are overburden with the pending cases. So if there is any Dispute and you go to court, it might take a very long time to resolve it, maybe years. And that's why if any business agree to enter into agreement with the other party, they put an arbitration clause in the agreement. Because it is known to them that if any dispute occurs in future, they would not want to spend their time, resources and money on the court proceedings which could take years. And that is the reason why they put arbitration clause in the agreement.

Arbitration Process in India

Arbitrator is a private judge appointed by both the parties, who upon hearing both the sides will pass an Arbitral Award, which will be binding upon both the parties as if the court itself passed the award. The first step is to have an Arbitrator clause in the agreement or having an Arbitrator agreement all itself.

Initially, one party will issue a notice to the other party stating what the issue is, and will attach the Arbitration clause from the Arbitration agreement to this notice.

Now the question is who will be the Arbitrator? Both the parties while making Arbitration agreement can specify who will be the Arbitrator. If not, the party while making the notice will specify who they wish to be the Arbitrator.

Once the opposite party receives the notice, they might or might not agree upon the decision of the Arbitrator. This leads to a disagreement between both the parties. Now, in this situation the parties will approach to the High Court under section 11 of the Arbitration act, and the High Court will appoint the arbitrator to resolve this dispute. The documentation put by the claimant is known as Statement of Claim and in the same why the documentation put by respondent is known as Statement of Defence.

The claimant after this has an option of respond to it by filing Rejoinder. Witnesses are sent by both the parties for cross- examination. After everything is done, the Arbitrator proceed and pass the Arbitral Award, which is binding upon both the sides as if the court itself has the order.

If this Arbitral Award is not in your favor, parties can approach District Courts for Domestic Arbitration and High Court in case of International Arbitration under section 34 of the Arbitration Act.

Why is Arbitration Important in India?

Reasons why Arbitration is important in India are:
  1. It is faster and more effective way of resolving disputes compared to litigation. In India, judicial system is overburdened and cases can take years to resolve. However, arbitration proceedings are resolved within 6-12 months, which make it a more effective way of solving disputes.
  2. Arbitration is a confidential process. Unlike litigation, the proceedings are not open to the general public and details of the dispute are not disclosed. This helps the parties to maintain reputation.
  3. Arbitration is a flexible process. Parties can choose the place and time of Arbitration, as well as the language in which the proceeding will be conducted.
  4. Lasty, Arbitration is a cost-effective process. Compared to litigation, the cost of arbitration is lower.
In conclusion, arbitration is an important and effective method of resolving disputes in India. It offers numerous advantages over litigation, such as flexibility, confidentiality, and cost-effectiveness. The case study of Antrix Corporation and Devas Multimedia demonstrates the importance of arbitration in resolving complex disputes in India. As such, parties should consider arbitration as a viable alternative to litigation when faced with a dispute in India.

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