Arbitration refers to Alternative Dispute Resolution [1](ADR) which is method for resolving disputes outside of the official judicial mechanisms. Arbitration is a procedure which the parties in the agreement can decide the output of the procedure whether the oral arguments are to be heard or oral evidence is to be heard or by documents they can decide the arbitral proceedings. If the parties said that they don’t want to lead any evidence, willing there to doesn’t to put any witness then the arbitrator can decide the case by the documents that are present before the arbitrator.

Commercial Arbitration means settling disputes by a neutral person i.e., an arbitrator. The commercial arbitration in India is under the law, as amended by the 2019 Amendment, on an application by a party to a dispute, the appointment of an arbitrator under section 11of the Arbitration and Conciliation Act, 1996 shall be made by the institution designated by the Supreme Court or the relevant High Court. The arbitral institution we required to dispose of the application within 30 days from the date of service of notice on the opposite party.


The Arbitration and Conciliation Act, 1996 applies Section 41 of the Act itself provides that the provisions of C.P.C shall apply to all proceedings before the court. There is no provision in the act so as to take away the provisions of order XXII C.P.C from being applied to applications filed under section 34 of the Act in a suit[2].

And the rules applicable to substance of dispute is where the place of arbitration is situate in India, in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India; in commercial arbitration, the arbitral tribunal shall decide the dispute accordance with the rules of law designated by the parties as applicable to the substances of the dispute.


The Arbitration and Conciliation (Amendment) Act, 2019 has been introduced the definition of ‘Arbitral Institution’ in section 1(ca) of the act as an arbitral institution designated by the Supreme Court or a High Court the Act[3]. The arbitral institutions play role in the arbitration proceedings. In India there are more than 35 arbitral institutions. Some of the Indian Arbitral Institutions are: –

  • India Council of Arbitration (ICA)- New Delhi
  • LCIA India- New Delhi
  • ICC Council of Arbitration- Kolkata


The jurisdictional issues of Arbitration and Conciliation Act, 1996 is not necessary to frame issue but the Tribunal or the bench may do so far, the sake of expediency in particular case. In Pure Helium India Pt. Ltd vs Oil and Natural Gas Commission[4], where arbitrators were called upon to decide legal issue like interpretation of contract it was held that it cannot said that acted without jurisdiction or beyond jurisdiction is making the award. In Lalit Kala Academy vs Svapan Coast[5] it was held. That the objection as to jurisdiction and validity of arbitration agreement to be considered by the Arbitral Tribunal before deciding claims on merits. Th liberty to raise all issues by appointment of Arbitrator by Chief Justice or his nominee- Not amendable to writ jurisdiction. Arbitrator appointed by nominee judge after hearing both parties. Correctness of the said order cannot be questioned. Parties are at liberty to raise all issues including counter claim before Arbitrator who had already entered upon reference.[6]


Section 7 of the Arbitration and Conciliation Act, 1996 deals with ‘Arbitration Agreement’ and Section 2(1)(b) of the act defines the term arbitration agreement. Where a clause doesn’t contain any express or implied reference toa arbitrator it is difficult to spell out existence of arbitration agreement. While dealing with what is an agreement in K.K. Modi vs K.N. Modi, it was held.

Among the attributes which must be present for an agreement to considered as an arbitration agreement are:

  • The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement.
  • That the jurisdiction of the tribunals to decide the rights of parties must derive either from the consent of the parties or from an order of the court or from a statute, the terms of which make it clear that the process is to be an arbitration
  • The agreement must contemplate those substantive rights of parties will be determined by the agreed tribunal


The arbitrators are appointed under Section 11 of Arbitration and Conciliation (Amendment) Act, 2015. Application for appointment of an independent Arbitrator- General Condition of Contract, clauses 63, 64(1)(i) and 64(1)(ii). No merit therefore in the contentions raised by respondent authorities. Application allowed appointing a sole arbitrator[7] for adjudication of the dispute between the parties. The arbitrator is at liberty to fix up his fee. The parties are at liberty to raise all issues before the arbitrator[8].


Though the procedure is distinct from the system of court litigation, arbitration fulfils the same purpose as adjudication of disputes in the court system. Moreover, the arbitral award is enforceable in the same manner as that of a decision given by a court.


[1] The Arbitration and Conciliation Act, 1996 [act no. 26 0f 1996], India

[2] RMC Dill vs Gowri Shanker, 1991 (2) S.C.C. 548

[3] The Arbitration and Conciliation(Amendment) Act, 2019 [act no. 33 of 2019], India

[4] Pure Helium India Pvt. Ltd vs Oli Natural Gas Commission: AIR 2003 SC 4519: 2003(8) SCC 593: 2003(8) Supreme 264: 2003(8) Scale 553: 2003(supp-2) JT 596: 2003(3) Arb.LR 409

[5] Lalit Kala Academy vs Svapan Coast: (2005) 83 DRJ 292: AIR 2006 NOC 32 (Del.)

[6] General Manager, South Central Railway vs Ch. Kotaiah, Railway Contractor: 2002(1) ALT 401

[7] R.P. Agarwal vs General Manager, S.C. Railway, Seunderabad: 2002(6) ALT 703

[8] M/s. Shri Engineering Contractors, Vijyawada vs Union of India: 2002(2) An. W.R.209(A.P)

Aishwarya Says:

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