Process of Arbitration in India

Process of Arbitration in India. In any society dispute is something that frequently occurs and there are many methods to resolve that dispute one is conventional method in which we approach court for the dispute resolution and other is alternative dispute method in which without approaching court we resolve the dispute like Arbitration, conciliation and mediation etc.
Before starting with the evolution of arbitration in India it is very important to understand the term Arbitration.so lets understand that first.
Arbitration
Arbitration refers to a method of resolving conflicts between individuals or parties by facilitating a mutually acceptable agreement, without going through traditional court proceedings.
It is a key component of the Alternative Dispute Resolution (ADR) framework, offering a streamlined alternative for those who wish to avoid the often lengthy and complex court system. In arbitration, disputing parties voluntarily submit their issues to one or more arbitrators, whose decision referred to as an “award” is binding on all involved.
With the growth of global trade, liberalization, and increasing complexity in international business relations, there arose a need for a dispute resolution process that is efficient, adaptable, and less burdensome compared to traditional litigation. Arbitration fulfills this need by offering a cost-effective and time-saving solution.
In India, arbitration law is heavily influenced by English Common Law. The current legal framework is governed by the Arbitration and Conciliation Act, 1996, which is modeled after the 1985 UNCITRAL Model Law on International Commercial Arbitration and incorporates the UNCITRAL Arbitration Rules of 1976.
Types Of Arbitration:
The types of Arbitration is broadly divided on the basis of Jurisdiction and procedural Approaches.
Types of Arbitration based on Jurisdiction
1. Domestic Arbitration
Domestic arbitration refers to the resolution of disputes where both parties are Indian and the arbitration proceedings are held within India. Although the Arbitration and Conciliation Act, 1996 does not expressly define domestic arbitration, it is implicitly covered under Section 2(2). Its main features include:

The arbitration is conducted within India’s territorial boundaries.

Indian procedural and substantive laws are applicable.

The parties have agreed to resolve disputes arising within the country.

Domestic arbitration is frequently employed to settle disagreements in areas such as business contracts, employment arrangements, and property matters within India.
2 International arbitration 
International Arbitration deals with disputes that cross national borders. It takes place outside the domestic jurisdiction for reasons such as:

A contractual agreement that designates arbitration in a foreign country.

The presence of international elements, like parties from different countries or transactions carried out globally.

The governing law whether Indian or foreign varies depending on the specifics of the case.

This form of arbitration offers parties the flexibility to select a neutral location and legal framework, making it well-suited for cross-border transactions and multinational contracts.
Types on the basis of procedure and Rules
1. Ad-hoc Arbitration
Ad-hoc arbitration is the most widely used form of arbitration in India, known for its flexibility and affordability. In this approach:

Disputes are settled through mutual agreement between the parties, without the involvement of an arbitration institution.

The parties themselves determine the rules and procedures to be followed.

The arbitration process is customized to suit the specific requirements of the case.

Relevant provisions under Indian law include:

Section 6: Allows parties or arbitral tribunals to seek administrative support from individuals or institutions.

Section 11: Specifies that arbitrators' fees are fixed by an arbitral institution, as outlined in Schedule 4.

2. Institutional Arbitration 
 Institutional arbitration refers to the resolution of disputes through recognized arbitral organizations that offer structured procedures and access to qualified arbitrators. Notable institutions include:

The Chartered Institute of Arbitrators (UK)

The London Court of International Arbitration

The Singapore International Arbitration Centre

The International Court of Arbitration (Paris)

Procedure:

The parties consent to conduct arbitration in accordance with the institution’s established rules.

Arbitrators are selected from the institution’s panel, based on the nature and needs of the dispute.

3. Fast track Arbitration 
Fast-track arbitration was established through the Arbitration and Conciliation (Amendment) Act, 2015, to overcome delays and streamline the traditional arbitration process. Its main characteristics include:

Strict Timelines: The arbitrator is required to issue the final award within six months from the date the dispute is referred.

Single Arbitrator: A sole arbitrator is appointed by mutual agreement between the parties.

Streamlined Process: Emphasis is placed on written submissions, with oral hearings held only if deemed necessary.

This form of arbitration is governed by Section 29B of the Act and is especially suitable for commercial and trade disputes that demand swift resolution. 
Process of arbitration
Arbitration clause or Agreement
An arbitration agreement is usually a clause within a larger contract, where the parties agree to resolve any future disputes through arbitration rather than going to court. These agreements are commonly found in consumer and employment contracts but can be included in any contract negotiation where one or both sides want to avoid potential litigation.
To minimize legal costs and streamline dispute resolution, businesses often require customers and employees to sign such agreements. However, since arbitration clauses are frequently buried in the "fine print" of lengthy standard contracts, individuals often agree to them without fully realizing it.
In a situation if parties don’t have arbitration clause in the contract, the parties with their mutual consent can also approach and go to resolve their dispute with arbitration.
Doctrine of severability:  In Arbitration there is a concept of Severability which is also known as doctrine of separability according to which arbitration agreement will be considered as separate agreement irrespective of whether the original contract is terminated or invalid.
Notice of Arbitration  
Section 21 of arbitration and conciliation act says that arbitration officially begins when the respondent receives a written notice/request from the claimant seeking to refer the dispute to arbitration.
Notice of Arbitration must clearly indicate the intention to initiate arbitration under the applicable arbitration agreement or clause.
Appointment of Arbitrator
Section 10(1) of the Arbitration and Conciliation Act, 1996 allows parties to mutually decide the number of arbitrators. However, it clearly specifies that the number must not be even. Section 10(2) further provides that if the parties cannot agree on the number of arbitrators as per Section 10(1), then the arbitral tribunal will default to having a sole arbitrator. However, this number must be odd to ensure decisions are not deadlocked. If the parties are unable to agree on the procedure for forming the tribunal or cannot mutually finalize the arbitrators, they can seek recourse under Section 11, which outlines the process for judicial intervention in the appointment of arbitrators.
Generally, the parties to an arbitration agreement jointly decide on who will act as the arbitrator. The arbitration clause should ideally name or provide a process for appointing the arbitrator. If mutual agreement on the appointment is not possible, Section 11 allows either party to approach the court to request the appointment of an arbitrator through a legal mechanism.
Statement of claim
Section 23 – Statement of Claim and Defence
According to Section 23 of the Arbitration and Conciliation Act, the claimant is required to present the facts supporting their claim, the specific issues involved, and the relief sought, all within the time frame agreed upon by the parties.
Each party must submit a statement of claim, which should be accompanied by all relevant documents and evidence supporting the facts and issues raised in the arbitration.
It is important to note that the claim may be amended or modified during the proceedings, provided both parties consent to the change. However, the arbitral tribunal also has the authority to reject any such amendments if it deems them inappropriate or unjustified. 
Hearing of Parties
Steps Involved in the Hearing Process:

Preliminary Hearing and Information Exchange Stage: Once the arbitrator is appointed and confirmed, the arbitration process begins with a preliminary hearing. During this meeting, the parties and the arbitrator coordinate to set a schedule for the proceedings. Key issues in the dispute are identified, and the parties exchange relevant information. A date for the next hearing is agreed upon, during which the arbitrator will typically issue a formal document known as a scheduling order.

Hearing Stage: In this phase, both parties present their case to the arbitrator. This can be done in person, over the phone, or through the submission of written documents, including arbitration agreements and the relevant procedural rules. Following the hearing, the arbitrator may request written submissions or arguments from the parties.

Award Stage: Once all evidence has been submitted and the hearing is concluded, the arbitrator will officially close the hearing. A date is then set for issuing the final decision, referred to as the arbitral award.

Arbitral Award
An arbitral award refers to the final decision issued by the arbitrator at the conclusion of the arbitration proceedings. This award may involve monetary compensation from one party to another or could take the form of non-monetary remedies—for example, reinstating employment benefits or halting specific business practices.
Key Elements of an Arbitral Award
The following are the essential requirements for a valid arbitral award:

The award must be in writing and must bear the signatures of either all arbitrators or a majority of them.

It must clearly state the date and the location where the award was made.

The rationale for the decision should be included, unless the parties have agreed to waive this requirement or the award reflects a mutual settlement between the parties.
Challenging an Arbitral Award in Court
To challenge an arbitral award, the party in whose favor the award has been granted must wait for a period of 90 days. During this time, the opposing or aggrieved party has the right to file a challenge against the award.
Under Section 34 of the Arbitration and Conciliation Act, a court may set aside an arbitral award on the following grounds:

One of the parties was under legal incapacity at the time of entering into the arbitration agreement.

The arbitration agreement itself was not valid under the law applicable to the parties.

The party applying for arbitration failed to provide the other party with a fair opportunity to participate in the appointment of the arbitrator.

The award addresses disputes that were not submitted to arbitration or includes issues beyond the scope of the arbitration agreement.
Enforcement of Arbitral Award
After the arbitral tribunal issues its final award, the opposing party has the right to challenge it in court by filing an application to set aside the award.
The court may annul the arbitral award under the following circumstances:

If any party involved in the dispute is legally incapacitated.

If the arbitration agreement is found to be invalid under the applicable law chosen by the parties.

If a party was not properly notified about the appointment of the arbitrator.

If the award addresses matter that fall outside the scope of the arbitration agreement.

Enforcement of Domestic Arbitral Awards
For domestic awards, enforcement can only proceed after a waiting period of 90 days from the date the award is issued. During this time, the award can be challenged under Section 34 of the Arbitration and Conciliation Act, which outlines the procedure for setting aside an arbitral award. If no challenge is made within this period, the award becomes final and enforceable like a decree of a civil court.
Enforcement of Foreign Arbitral Awards
The enforcement of foreign arbitral awards is primarily governed by the New York Convention, adopted on 10 June 1958 by the United Nations Diplomatic Conference. This convention aims to facilitate the resolution of disputes arising from legal relationships whether contractual or otherwise through arbitration.
Under both the New York Convention and the Geneva Convention, a foreign arbitration agreement must be in writing, but it does not need to follow a specific format.
For a foreign arbitral award to be enforceable:

It must be legally valid and based on a binding arbitration agreement.

The award should be clear, definite, impartial, and capable of resolving the dispute

It should not suffer from any procedural or substantive defects that could make it unenforceable in the enforcing jurisdiction.

Conclusion
Arbitration has emerged as a vital component of the legal system in India, offering an efficient, cost-effective, and less adversarial alternative to traditional court litigation. As a key pillar of the Alternative Dispute Resolution (ADR) framework, arbitration plays a critical role in ensuring timely resolution of both domestic and international disputes, especially in the rapidly evolving commercial and trade sectors.
The Arbitration and Conciliation Act, 1996, guided by the UNCITRAL Model Law, provides a robust legal structure to regulate the arbitration process in India. From the formulation of the arbitration agreement to the enforcement of arbitral awards—whether domestic or foreign—the law outlines detailed procedures that emphasize party autonomy, neutrality, and judicial minimalism.
With the introduction of fast-track arbitration and judicial support in arbitrator appointments and enforcement, India continues to align itself with global arbitration practices. As a result, arbitration today stands not just as an alternative, but as a preferred mechanism for resolving complex disputes efficiently and equitably.
In conclusion, arbitration in India serves the dual purpose of reducing the burden on the judiciary while providing a fair, speedy, and enforceable remedy to disputing parties, making it an essential part of modern dispute resolution. 
Frequently asked question
Q1. What is arbitration?
Ans. Arbitration is an alternative dispute resolution (ADR) method where disputes are resolved outside of court by a neutral third party known as an arbitrator, whose decision (called an arbitral award) is binding on the parties.
Q2. Which law governs arbitration in India?
Ans. Arbitration in India is governed by the Arbitration and Conciliation Act, 1996, which is based on the UNCITRAL Model Law on International Commercial Arbitration.
Q3. What are the main types of arbitration in India?
Ans.  Domestic Arbitration: Between Indian parties, conducted within India.

International Commercial Arbitration: Involves at least one foreign party.

Ad-hoc Arbitration: Parties manage the proceedings themselves.

Institutional Arbitration: Managed by a recognized arbitral institution.

Fast-track Arbitration: Expedited process introduced under Section 29B of the Act.

Q4. What is an arbitration agreement?
Ans. It is a written agreement between parties to submit disputes to arbitration rather than going to court. It can be a separate agreement or a clause within a larger contract.
Q5. When does the arbitration process officially begin?
Ans. According to Section 21 of the Act, the process begins when one party sends a written Notice of Arbitration to the other party.
Q6. How are arbitrators appointed?
Ans. Parties can mutually decide the number and identity of arbitrators. If they fail to do so, they can approach the court under Section 11 of the Act for appointment.
Q7. What is a Statement of Claim and Defence?
Ans. Under Section 23, both parties must submit their claims and defences along with supporting documents within the time limit agreed upon.
Q8. What is the final decision in arbitration called?
Ans. The final decision given by the arbitrator(s) is known as the Arbitral Award. It is binding and enforceable like a court decree.
Q9. Can an arbitral award be challenged in court?
Ans. Yes, under Section 34 of the Act, an aggrieved party can challenge the award within 90 days on specific grounds like incapacity, invalid agreement, or violation of natural justice.
Q10. How is an arbitral award enforced in India?
Ans. If not challenged within 90 days, a domestic arbitral award is enforceable as a civil court decree under Section 36 of the Act.
Q11. How are foreign arbitral awards enforced in India?
Ans. Foreign awards are enforced under Part II of the Act, primarily through the New York Convention and the Geneva Convention, provided the award meets certain enforceability criteria.
Q12. What is the Doctrine of Severability in arbitration?
Ans. It means that the arbitration clause in a contract is treated as an independent agreement and remains valid even if the main contract is terminated or found invalid.
Q13. Is oral hearing mandatory in arbitration?
Ans. Not necessarily. Arbitrators can rely solely on written submissions unless oral hearings are requested or considered necessary.

In any society dispute is something that frequently occurs and there are many methods to resolve that dispute one is conventional method in which we approach court for the dispute resolution and other is alternative dispute method in which without approaching court we resolve the dispute like Arbitration, conciliation and mediation etc.

Before starting with the evolution of arbitration in India it is very important to understand the term Arbitration.so lets understand that first.

Arbitration

Arbitration refers to a method of resolving conflicts between individuals or parties by facilitating a mutually acceptable agreement, without going through traditional court proceedings.

It is a key component of the Alternative Dispute Resolution (ADR) framework, offering a streamlined alternative for those who wish to avoid the often lengthy and complex court system. In arbitration, disputing parties voluntarily submit their issues to one or more arbitrators, whose decision referred to as an “award” is binding on all involved.

With the growth of global trade, liberalization, and increasing complexity in international business relations, there arose a need for a dispute resolution process that is efficient, adaptable, and less burdensome compared to traditional litigation. Arbitration fulfills this need by offering a cost-effective and time-saving solution.

In India, arbitration law is heavily influenced by English Common Law. The current legal framework is governed by the Arbitration and Conciliation Act, 1996, which is modeled after the 1985 UNCITRAL Model Law on International Commercial Arbitration and incorporates the UNCITRAL Arbitration Rules of 1976.

Types Of Arbitration:

The types of Arbitration is broadly divided on the basis of Jurisdiction and procedural Approaches.

Types of Arbitration based on Jurisdiction

1. Domestic Arbitration

Domestic arbitration refers to the resolution of disputes where both parties are Indian and the arbitration proceedings are held within India. Although the Arbitration and Conciliation Act, 1996 does not expressly define domestic arbitration, it is implicitly covered under Section 2(2). Its main features include:

The arbitration is conducted within India’s territorial boundaries.
Indian procedural and substantive laws are applicable.
The parties have agreed to resolve disputes arising within the country.

Domestic arbitration is frequently employed to settle disagreements in areas such as business contracts, employment arrangements, and property matters within India.

2 International arbitration

International Arbitration deals with disputes that cross national borders. It takes place outside the domestic jurisdiction for reasons such as:

A contractual agreement that designates arbitration in a foreign country.
The presence of international elements, like parties from different countries or transactions carried out globally.
The governing law whether Indian or foreign varies depending on the specifics of the case.

This form of arbitration offers parties the flexibility to select a neutral location and legal framework, making it well-suited for cross-border transactions and multinational contracts.

Types on the basis of procedure and Rules

1. Ad-hoc Arbitration

Ad-hoc arbitration is the most widely used form of arbitration in India, known for its flexibility and affordability. In this approach:

Disputes are settled through mutual agreement between the parties, without the involvement of an arbitration institution.
The parties themselves determine the rules and procedures to be followed.
The arbitration process is customized to suit the specific requirements of the case.

Relevant provisions under Indian law include:

Section 6: Allows parties or arbitral tribunals to seek administrative support from individuals or institutions.
Section 11: Specifies that arbitrators' fees are fixed by an arbitral institution, as outlined in Schedule 4.

2. Institutional Arbitration

Institutional arbitration refers to the resolution of disputes through recognized arbitral organizations that offer structured procedures and access to qualified arbitrators. Notable institutions include:

The Chartered Institute of Arbitrators (UK)
The London Court of International Arbitration
The Singapore International Arbitration Centre
The International Court of Arbitration (Paris)

Procedure:

The parties consent to conduct arbitration in accordance with the institution’s established rules.
Arbitrators are selected from the institution’s panel, based on the nature and needs of the dispute.

3. Fast track Arbitration

Fast-track arbitration was established through the Arbitration and Conciliation (Amendment) Act, 2015, to overcome delays and streamline the traditional arbitration process. Its main characteristics include:

Strict Timelines: The arbitrator is required to issue the final award within six months from the date the dispute is referred.
Single Arbitrator: A sole arbitrator is appointed by mutual agreement between the parties.
Streamlined Process: Emphasis is placed on written submissions, with oral hearings held only if deemed necessary.

This form of arbitration is governed by Section 29B of the Act and is especially suitable for commercial and trade disputes that demand swift resolution.

Process of arbitration

Arbitration clause or Agreement

An arbitration agreement is usually a clause within a larger contract, where the parties agree to resolve any future disputes through arbitration rather than going to court. These agreements are commonly found in consumer and employment contracts but can be included in any contract negotiation where one or both sides want to avoid potential litigation.

To minimize legal costs and streamline dispute resolution, businesses often require customers and employees to sign such agreements. However, since arbitration clauses are frequently buried in the "fine print" of lengthy standard contracts, individuals often agree to them without fully realizing it.

In a situation if parties don’t have arbitration clause in the contract, the parties with their mutual consent can also approach and go to resolve their dispute with arbitration.

Doctrine of severability: In Arbitration there is a concept of Severability which is also known as doctrine of separability according to which arbitration agreement will be considered as separate agreement irrespective of whether the original contract is terminated or invalid.

Notice of Arbitration

Section 21 of arbitration and conciliation act says that arbitration officially begins when the respondent receives a written notice/request from the claimant seeking to refer the dispute to arbitration.

Notice of Arbitration must clearly indicate the intention to initiate arbitration under the applicable arbitration agreement or clause.

Appointment of Arbitrator

Section 10(1) of the Arbitration and Conciliation Act, 1996 allows parties to mutually decide the number of arbitrators. However, it clearly specifies that the number must not be even. Section 10(2) further provides that if the parties cannot agree on the number of arbitrators as per Section 10(1), then the arbitral tribunal will default to having a sole arbitrator. However, this number must be odd to ensure decisions are not deadlocked. If the parties are unable to agree on the procedure for forming the tribunal or cannot mutually finalize the arbitrators, they can seek recourse under Section 11, which outlines the process for judicial intervention in the appointment of arbitrators.

Generally, the parties to an arbitration agreement jointly decide on who will act as the arbitrator. The arbitration clause should ideally name or provide a process for appointing the arbitrator. If mutual agreement on the appointment is not possible, Section 11 allows either party to approach the court to request the appointment of an arbitrator through a legal mechanism.

Statement of claim

Section 23 – Statement of Claim and Defence

According to Section 23 of the Arbitration and Conciliation Act, the claimant is required to present the facts supporting their claim, the specific issues involved, and the relief sought, all within the time frame agreed upon by the parties.

Each party must submit a statement of claim, which should be accompanied by all relevant documents and evidence supporting the facts and issues raised in the arbitration.

It is important to note that the claim may be amended or modified during the proceedings, provided both parties consent to the change. However, the arbitral tribunal also has the authority to reject any such amendments if it deems them inappropriate or unjustified.

Hearing of Parties

Steps Involved in the Hearing Process:

Preliminary Hearing and Information Exchange Stage: Once the arbitrator is appointed and confirmed, the arbitration process begins with a preliminary hearing. During this meeting, the parties and the arbitrator coordinate to set a schedule for the proceedings. Key issues in the dispute are identified, and the parties exchange relevant information. A date for the next hearing is agreed upon, during which the arbitrator will typically issue a formal document known as a scheduling order.
Hearing Stage: In this phase, both parties present their case to the arbitrator. This can be done in person, over the phone, or through the submission of written documents, including arbitration agreements and the relevant procedural rules. Following the hearing, the arbitrator may request written submissions or arguments from the parties.
Award Stage: Once all evidence has been submitted and the hearing is concluded, the arbitrator will officially close the hearing. A date is then set for issuing the final decision, referred to as the arbitral award.

Arbitral Award

An arbitral award refers to the final decision issued by the arbitrator at the conclusion of the arbitration proceedings. This award may involve monetary compensation from one party to another or could take the form of non-monetary remedies—for example, reinstating employment benefits or halting specific business practices.

Key Elements of an Arbitral Award

The following are the essential requirements for a valid arbitral award:

The award must be in writing and must bear the signatures of either all arbitrators or a majority of them.
It must clearly state the date and the location where the award was made.

The rationale for the decision should be included, unless the parties have agreed to waive this requirement or the award reflects a mutual settlement between the parties.

Challenging an Arbitral Award in Court

To challenge an arbitral award, the party in whose favor the award has been granted must wait for a period of 90 days. During this time, the opposing or aggrieved party has the right to file a challenge against the award.

Under Section 34 of the Arbitration and Conciliation Act, a court may set aside an arbitral award on the following grounds:

One of the parties was under legal incapacity at the time of entering into the arbitration agreement.
The arbitration agreement itself was not valid under the law applicable to the parties.
The party applying for arbitration failed to provide the other party with a fair opportunity to participate in the appointment of the arbitrator.

The award addresses disputes that were not submitted to arbitration or includes issues beyond the scope of the arbitration agreement.

Enforcement of Arbitral Award

After the arbitral tribunal issues its final award, the opposing party has the right to challenge it in court by filing an application to set aside the award.

The court may annul the arbitral award under the following circumstances:

If any party involved in the dispute is legally incapacitated.
If the arbitration agreement is found to be invalid under the applicable law chosen by the parties.
If a party was not properly notified about the appointment of the arbitrator.
If the award addresses matter that fall outside the scope of the arbitration agreement.

Enforcement of Domestic Arbitral Awards

For domestic awards, enforcement can only proceed after a waiting period of 90 days from the date the award is issued. During this time, the award can be challenged under Section 34 of the Arbitration and Conciliation Act, which outlines the procedure for setting aside an arbitral award. If no challenge is made within this period, the award becomes final and enforceable like a decree of a civil court.

Enforcement of Foreign Arbitral Awards

The enforcement of foreign arbitral awards is primarily governed by the New York Convention, adopted on 10 June 1958 by the United Nations Diplomatic Conference. This convention aims to facilitate the resolution of disputes arising from legal relationships whether contractual or otherwise through arbitration.

Under both the New York Convention and the Geneva Convention, a foreign arbitration agreement must be in writing, but it does not need to follow a specific format.

For a foreign arbitral award to be enforceable:

It must be legally valid and based on a binding arbitration agreement.
The award should be clear, definite, impartial, and capable of resolving the dispute
It should not suffer from any procedural or substantive defects that could make it unenforceable in the enforcing jurisdiction.

Conclusion

Arbitration has emerged as a vital component of the legal system in India, offering an efficient, cost-effective, and less adversarial alternative to traditional court litigation. As a key pillar of the Alternative Dispute Resolution (ADR) framework, arbitration plays a critical role in ensuring timely resolution of both domestic and international disputes, especially in the rapidly evolving commercial and trade sectors.

The Arbitration and Conciliation Act, 1996, guided by the UNCITRAL Model Law, provides a robust legal structure to regulate the arbitration process in India. From the formulation of the arbitration agreement to the enforcement of arbitral awards—whether domestic or foreign—the law outlines detailed procedures that emphasize party autonomy, neutrality, and judicial minimalism.

With the introduction of fast-track arbitration and judicial support in arbitrator appointments and enforcement, India continues to align itself with global arbitration practices. As a result, arbitration today stands not just as an alternative, but as a preferred mechanism for resolving complex disputes efficiently and equitably.

In conclusion, arbitration in India serves the dual purpose of reducing the burden on the judiciary while providing a fair, speedy, and enforceable remedy to disputing parties, making it an essential part of modern dispute resolution.

Frequently asked question

Q1. What is arbitration?

Ans. Arbitration is an alternative dispute resolution (ADR) method where disputes are resolved outside of court by a neutral third party known as an arbitrator, whose decision (called an arbitral award) is binding on the parties.

Q2. Which law governs arbitration in India?

Ans. Arbitration in India is governed by the Arbitration and Conciliation Act, 1996, which is based on the UNCITRAL Model Law on International Commercial Arbitration.

Q3. What are the main types of arbitration in India?

Ans. Domestic Arbitration: Between Indian parties, conducted within India.

International Commercial Arbitration: Involves at least one foreign party.
Ad-hoc Arbitration: Parties manage the proceedings themselves.
Institutional Arbitration: Managed by a recognized arbitral institution.
Fast-track Arbitration: Expedited process introduced under Section 29B of the Act.

Q4. What is an arbitration agreement?

Ans. It is a written agreement between parties to submit disputes to arbitration rather than going to court. It can be a separate agreement or a clause within a larger contract.

Q5. When does the arbitration process officially begin?

Ans. According to Section 21 of the Act, the process begins when one party sends a written Notice of Arbitration to the other party.

Q6. How are arbitrators appointed?

Ans. Parties can mutually decide the number and identity of arbitrators. If they fail to do so, they can approach the court under Section 11 of the Act for appointment.

Q7. What is a Statement of Claim and Defence?

Ans. Under Section 23, both parties must submit their claims and defences along with supporting documents within the time limit agreed upon.

Q8. What is the final decision in arbitration called?

Ans. The final decision given by the arbitrator(s) is known as the Arbitral Award. It is binding and enforceable like a court decree.

Q9. Can an arbitral award be challenged in court?

Ans. Yes, under Section 34 of the Act, an aggrieved party can challenge the award within 90 days on specific grounds like incapacity, invalid agreement, or violation of natural justice.

Q10. How is an arbitral award enforced in India?

Ans. If not challenged within 90 days, a domestic arbitral award is enforceable as a civil court decree under Section 36 of the Act.

Q11. How are foreign arbitral awards enforced in India?

Ans. Foreign awards are enforced under Part II of the Act, primarily through the New York Convention and the Geneva Convention, provided the award meets certain enforceability criteria.

Q12. What is the Doctrine of Severability in arbitration?

Ans. It means that the arbitration clause in a contract is treated as an independent agreement and remains valid even if the main contract is terminated or found invalid.

Q13. Is oral hearing mandatory in arbitration?

Ans. Not necessarily. Arbitrators can rely solely on written submissions unless oral hearings are requested or considered necessary.