File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

En Route To Dispute Resolution Outside Judiciary: Arbitration In India

Commercial conflicts in India have increased significantly in recent years as the country's economic development has accelerated. As a result, alternative dispute resolution has begun to incorporate arbitration into the process of resolving such disputes. Arbitration has become critical for businesses operating both in and outside of India. The primary objective of the arbitration legislation is to facilitate the resolution of disputes through private arbitration.

The procedure is regarded to be less expensive than bringing a lawsuit in court due to the little expenditures involved. Parties may also select an arbitrator who is knowledgeable about the subject of the dispute. Ad hoc administration is to be administered independently where arbitrators are appointed by the parties itself. The purpose of this paper is to summarise recent amendments to India's Arbitration Act and to analyse the future of online arbitration in the country.

As Lord Langdate once stated:
"Many cases occur, in which it is perfectly clear, that by means of a reference to arbitration, the real interests of the parties will be much better satisfied than they could be by any litigation in a Court of justice" 1. Arbitration is a kind of conflict resolution in which disputes arising out of courts are transferred to a third party for resolution.

The most critical characteristic of arbitration is that the parties expressly agree that any resulting dispute will be referred to the Tribunal for ultimate determination and submission. The parties generally adhere to the processes, which makes the processes more flexible in the sense that some issues include transnational laws, which these tribunals are better equipped to resolve than national courts.2

The Arbitration and Conciliation Act, 1996 was initially enacted through an ordinance as a first step in the world's urgent economic changes prompted by the new economic strategy. And another ordinance, enacted in 2015, amending the 1996 statute to bring it up to worldwide standards, was issued 20 years later. It has been a popular method of resolving commercial issues in recent years. Due to the flaws with the 1996 act, adjustments were suggested that are required to close the gap while minimizing possibilities.

India's economy is expanding at a rapid pace, necessitating the establishment of a trustworthy and well-designed conflict resolution mechanism in order to attract international investment. Due to the fact that Indian courts are already experiencing significant backlogs, business entities both outside and in India have developed a strong preference for resolving disputes through arbitration.

Arbitral Meddling: Putting Reliance On 2020 Amendment

On November 4th, 2020, the arbitration and conciliation statute was revised to make India an arbitration-friendly jurisdiction. 1996 was the year when the initial arbitration and conciliation statute was enacted. This updated statute includes provisions for domestic and international arbitration and establishes guidelines for guiding conciliation hearings.3 The key feature of the amendment incorporates automatic stay on awards.

The 1996 arbitration statute empowered a party to obtain the annulment of an arbitral award rendered during the arbitration process. In 2015, the Act was changed to provide that an arbitral award cannot be automatically delayed just because a judicial application is lodged.

Section 36 has been amended to include a clause requiring the court to give an unconditional stay in the event of fraud or corruption and the chance to execute the unconditional stay will be available. It will apply to all arbitration proceedings, regardless of whether the court procedures occurred before to or afterwards to the arbitration Amendment Act, 2015.4

Additionally, this Ordinance amended section 43 of the act to specify that the qualifications, experience, and standards shall be as established by the act. The act's 8th schedule, which specified the credentials and experience required for appointment as an arbitrator, was removed. However, this law is silent on the rule that would establish standards for arbitrator accreditation. The important point to make here is that the courts will now have to interpret the burden or onus of establishing a prima facie evidence of corruption.

This Ordinance indicated that the arbitration agreement may be delayed even during the pendency of the arbitral verdict if the court determines that it is significant for a transaction inspired by corruption or fraud.

Mitigating Problems Against The Growth Of Arbitration

Courts have limited intervention authority under the arbitration and conciliation acts. While parties may still seek protection from the court under Section 17, the extent of the protection is extremely limited and it may only be provided in restricted circumstances. In the event that any party fails to select an arbitrator within thirty days of the request being filed, the parties may still approach the Court for appointment of an arbitrator.

Courts have continued to hold in situations where they broadened the scope of judicial review by holding that judicial intervention is conceivable in the event of an arbitral award that is inconsistent with the contract itself. 5.

Throughout the country, this notion has mostly gone unacknowledged. According to the Supreme Court, "there appears to be no restriction on other parties financing litigation and being compensated when the case concludes.6

Rather than making repeated modifications to the same concerns, legislators should take a broader view of the major impediments to India being an arbitration hub.

Online Dispute Resolution: A Constructive Move Towards Justice Post Covid-19

The success of arbitration in India is largely attributable to the development of Indian law and the growing knowledge of arbitration throughout time. However, as a result of the ongoing pandemic, the environment is becoming more technologically reliant, and technical improvements have evolved far enough for everyone to see that this poses data and privacy concerns, which are one of the most urgent challenges confronting the globe today. The pandemic has driven all professions, from writers to lawyers, to embrace remote working techniques and rely increasingly on technology.

Additionally, reference must be made to sections 27(1) and 30(6), which establish the rules for online arbitration. Section 27 discusses the Preparation of the Case for Arbitration, stating that "In view of the case's complexity, the arbitral tribunal may hold a planning conference with the parties and their representatives, either in person or by means of telephone or video conferencing."7

Additionally, the OECD Principles for Consumer Protection in the Context of Internet Commerce (1999) should be reviewed, as they provide consumer protection guidelines in the context of electronic commerce. Reference must also be made to paragraph 16 of the law commission report No.246 which states that conscious use of technology such as teleconferencing and videoconferencing should be encouraged because they can easily replace the need for formal sitting and thus contribute to a more efficient and smoother conduct.8

In State of Maharashtra v. Dr. Praful B. Desai the Supreme Court likewise recognised the use of video conferencing technology to record witness testimony 9.

Online arbitration, on the other hand, should establish its own set of norms over time. Although there are various critical aspects that demand trust and fairness, for example it may be difficult for the arbitrator to develop trust without ever meeting the opposing party, howsoever owing to the ongoing epidemic, the reliance on internet arbitration is high.

The use of online video conferences can also help at the international level, but there are legal and technological issues to consider, such as the legal execution of an arbitral awards. The government should also make the appropriate adjustments to the Arbitration Act to allow for virtual hearings through video conferencing, as well as offer model virtual hearing guidelines to all arbitral institutions in India.

The arbitration regime in India has changed significantly over the last several years, although certain areas still require improvement; yet, it has emerged as one of the most effective forums for resolving conflicts in the corporate and industrial realms.

A concerted effort is necessary. Although arbitration has emerged as a preferred method of resolving disputes quickly, a legislative framework and knowledge of how to use technology are required, especially in a country like ours where literacy is slightly low compared to other countries, If the country adheres to the arbitration process appropriately, they will be able to resolve the cases that have overburdened the courts today. The subsequent amendment should almost certainly concentrate on analysing the impact of recent modifications to the arbitration process.

  1. The Earl of Mexborough v. Bower, (1843) 7 Beav. 132.
  2. Christopher R. Drahozal, Commercial Norms, Commercial Codes, and International Commercial Arbitration, VAND. J. TRANSNAT'L L. 79 (2000).
  3. The Arbitration and Conciliation (Amendment) Ordinance, 2020", PRS (November 4, 2020),
  4. Faranaaz Karbhari and Mahafrin Mehta, "India: Arbitration and Conciliation (Amendment) Ordinance, 2020", MONDAQ (NOV. 9,2020), and-conciliation-amendment-ordinance-2020.
  5. Hindustan Zinc Ltd. v. Friends Coal Carbonisation,
  6. Bar Council of India v. A.K. Balaji,
  7. Law Commission, Amendments to the Arbitration and Conciliation Act 1996 (Report no 246, August 2014).
  8. In State of Maharashtra v. Dr. Praful B. Desai, 2003 4 SCC 601

Law Article in India

Ask A Lawyers

You May Like

Legal Question & Answers

Lawyers in India - Search By City

Copyright Filing
Online Copyright Registration


How To File For Mutual Divorce In Delhi


How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Increased Age For Girls Marriage


It is hoped that the Prohibition of Child Marriage (Amendment) Bill, 2021, which intends to inc...

Facade of Social Media


One may very easily get absorbed in the lives of others as one scrolls through a Facebook news ...

Section 482 CrPc - Quashing Of FIR: Guid...


The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of t...

The Uniform Civil Code (UCC) in India: A...


The Uniform Civil Code (UCC) is a concept that proposes the unification of personal laws across...

Role Of Artificial Intelligence In Legal...


Artificial intelligence (AI) is revolutionizing various sectors of the economy, and the legal i...

Lawyers Registration
Lawyers Membership - Get Clients Online

File caveat In Supreme Court Instantly