AN OVERVIEW OF ARBITRATION AND CONCILIATION ACT

INTRODUCTION

When disagreeing parties are not satisfied with the judgement passed by the Court via litigation, Alternative Dispute Resolution (ADR) comes in play to save the day. ADR is an external dispute resolution method which is used to settle disputes between two parties or more, with the help of a third party. It has a wide range of dispute resolution processes and techniques. The techniques in ADR are:

  1. ARBITRATION
  2. CONCILIATION
  3. MEDIATION
  4. MEDIATION- ARBITRATION
  5. MINI TRIAL.

 The Arbitration and Conciliation Act, 1996 deals with law relating to arbitration. It is an act deals with domestic arbitration in India. However, this act also gives provisions for International Commercial Arbitration and also enforcement of foreign Arbitral awards. The Arbitration and Conciliation Act, 1996 came into force on 25th day of January, 1996.

NATURE OF THE ARBITRATION AND CONCILIATION ACT, 1996

This Act is based on the UN model law so as to correspond with the law adopted by the United Nations Commissions on International Trade Law (UNCITRAL). [i]

The nature of this Act can be taken to be that of consolidating and amending. From the preamble of the Act, it can be interpreted that it is an act to amalgamate and amend the law relating to Domestic arbitration, International Commercial Arbitration and enforcement of foreign arbitral award. Also, the laws relating to conciliation are also connected therewith.

OBJECTIVES OF THE ARBITRATION AND CONCILIATION ACT

The principal objective of this Act is to extensively consolidate and amend laws relating to domestic, International Commercial Arbitration and enforcement of foreign arbitral award and same for the laws relating to conciliation matters. The main objectives can be summarized as Liberalization, Privatization and Globalization (LPG). Objective of Arbitration can be considered as to obtain a fair resolution of disputes by an impartial third party without any unnecessary expense or delay. This Act lays down the rules and procedures for the arbitral tribunal to function but within the limits of their jurisdiction.

DISPUTES REFERRED TO IN THE ARBITRATION AND CONCILIATION ACT

The disputes that can be referred to this Act are both the procedural and substantial laws, such as Family Disputes, Industrial Disputes, Civil Procedure Code, Negotiable Instruments Act, Hindu Marriage Act, Motor Vehicle Claims. Usually, all the disputes where the civil rights of a citizen are infringed and the dispute falls under civil matter can be referred to arbitration. However, disputes related to public policy, morality, status and religious rights are not arbitrable in India.

TYPES OF ARBITRATION PROCEEDINGS

Arbitration can be divided into two categories:

  • On the basis of jurisdiction.
  • On the basis of procedure and rules (in India).

ON THE BASIS OF JURISDICTION:

  1. Domestic Arbitration.
  2. International Arbitration.
  3. International Commercial Arbitration.

ON THE BASIS OF PROCEDURE AND RULES:

  1. Ad-hoc Arbitration.
  2. Institutional Arbitration.
  3. Fast track Arbitration.

PROCEDURE OF ARBITRATION[ii]

Chapter V of the Arbitration and Conciliation Act, 1996 deals with the Conduct of arbitral proceedings.[iii] Along with that Chapters VI, VII and VIII also plays important role in the arbitration procedure. The arbitration procedure can be summarized into the following steps:

  1. Filing and initiation of the arbitration clause or agreement.
  2. Selection of arbitrators in accordance with the Section 10 and 11 of the Arbitration and Conciliation Act, 1996 by the parties.
  3. A drafted statement of claim has to be presented by the respondent and a drafted counterclaim has to be presented by the defendant.
  4. After the statement of claim is been by both the parties, the hearing of the parties and their evidences is initiated by the arbitral tribunal.
  5. The arbitral tribunal, after hearing the parties, shall pass their decision, known as ‘Award’, which shall be binding upon the parties. There are two types of arbitral award: Interim and Final Award.
  6. After the award has been passed by the arbitral tribunal, it has to be executed in favor of the parties and the party has to file for the execution and enforcement of the same.
  7. According to Section 34 of the Arbitration and Conciliation Act, 1996, the other party has a right to challenge the awards in Court within 90 days of the passing of the award.

CONCLUSION

It can be concluded and well-agreed that Arbitration has developed and evolved significantly in the history of Indian law and its importance and use keeps growing with each passing day. An arbitration clause is nowadays included in most of the contracts or agreement done by parties as a dispute resolution method without the intervention of court. Hence, it is of great importance to clearly interpret the decisions and provisions of this act in order to provide a smooth arbitration experience.

SOURCES


[i] Abhipsha Mohanty, All about Arbitration and Conciliation Act, 1996, LATESTLAWS.COM (Nov 27, 2021, 7:56 PM),  https://www.latestlaws.com/.

[ii] Dignath Raj Sehgal, The Arbitration and Conciliation Act, 1996: an overview, IPLEADERS, (NOV 27, 2021, 7:05 PM), https://blog.ipleaders.in/.

[iii] The Arbitration And Conciliation Act, 1996.

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