Section 21 of the Arbitration and Conciliation Act, 1996 provides the rules governing the commencement of proceedings. It gives the parties the freedom to agree and decide when the arbitration process can officially begin. But in the absence of such an agreement or when the parties fail to reach an agreement, the trial may begin when one party issues a notice to the other party, in writing, indicating its intention to transfer the dispute to the settlement of an arbitration.
Therefore, in the case of a dispute, the arbitral proceedings begin on the date on which the request for the dispute is referred to the other party. In order to determine the acquisition date, the provisions of Section 3 of the Act must be considered.


The following are the stages of the arbitration process: –

  • Terms of Arbitration- An agreement or clause specifically states that if a dispute arises between the parties, they will resolve it through arbitration.
  • Notice of arbitration- In the event of a dispute and the party decides to follow the arbitration process then the party to which the failure was made will send a compensation notice to compensate for the steps of the arbitration process between the parties.
  • Appointment of Arbitrator- After receiving notification from both parties the parties will appoint arbitrators in the manner specified in the compensation agreement or arbitration clause.
  • Claim of Statement- The next step in the arbitration process in India is to write a statement of claim. The statement of claim contains the dispute between the parties, the events leading up to the dispute and the compensation claimed from the offender. The other party may include a statement of opposition and a response to the application. Receive your claim statement, respond to a claim statement or counter-claim using top arbitration lawyers.
  • Hearing of Parties- The Arbitral tribunal will hear both parties and their testimony.
  • Award- After hearing the parties, the arbitral tribunal will make the decision. The court decision is known as the ‘Award’ and is binding on those involved. However, an appeal against an arbitral award may be lodged with the Supreme Court.
  • Execution of Award- Once the award has been approved by the tribunal to be executed. The party to which the award is awarded must apply for a waiver or be compelled to enforcement of award with the help of a good arbitrator.


The Limitation Act, 1963 applies to the Arbitration and Conciliation Act, 1996 unless it is excluded from the Arbitration and Conciliation Act. Any remedial action initiated within a period of three years from the date on which the cause of the action occurred will be withheld.
The parties have the right to amend their own set of rules for arbitration. If the parties do not have such an agreed procedure, the court is authorized to conduct the trial as it deems fit. The court will not apply any of the provisions of the Civil Procedure Code, 1908 and the Evidence Act, 1872. In an arbitration contract, the arbitration must be managed by the arbitration center and the rules for that arbitration must form part of the negotiating clause in. If the proceeding is in an ad-hoc arbitration, such parties must formulate a set of rules of procedure.
Amendments to the Arbitration and Conciliation Act require that the daily hearing of evidence or oral argument and not be postponed unless sufficient reason is provided. The court may impose an exemplary cost on the party seeking a postponement or for a reasonable date.
The various views of the arbitrator are permitted under the Arbitration and Conciliation Act. The opinion of the arbitrators will prepare a separate award sheet or give their opinion on the same sheet containing the award for the majority of the tribunal. However, this alternative view or award is not part of the majority decision and is not binding.
Local Courts can intervene in domestic arbitration proceedings that include the power to issue interim orders, order to give evidence directly to the hearing panel and appoint arbitrators.


SECTION 34 of the Act, provides that the court has power to set aside any arbitration award, when it is conclusively proved that;

  1. Any person involved in the settlement has a problem of incapacity during the proceedings;
  2. Any compensation agreement used to obtain an arbitral award, is invalid, if the agreement fails to review any reference made under that law, the parties to which it has been made are subject to it;
  3. Procedures for arbitration of any arbitration award, in which case the trial did not follow fair legal procedures and proved by either party that one of the parties was not given proper notice of the appointment of the arbitrator;
  4. If all parties to the dispute are not provided with appropriate information on arbitration procedures;
  5. If all parties are not given a fair and just opportunity to present their case, before the arbitrators and when any party has lost its right to justice;
  6. If the arbitral award relates to any matter, which could not be considered in the arbitration agreement;
  7. If the terms of the reference, made in the arbitration agreement were not properly understood, misrepresented or ignored when the compensation award was presented;
  8. If the composition of the arbitration tribunal is not in accordance with the agreement between the parties to the arbitration settlement;
  9. If the arbitration award makes decisions on such matters, which is beyond the scope or course of settlement to the arbitration. In such a case, only that part of the arbitral award, which is out of context or reference, may be set aside;
  10. If the process of arbitration is not in accordance with the agreed procedure between the parties;
  11. If the process for arbitration is in conflict with the legal policy framework;
  12. The court will also intervene if it concludes that the subject of any compensation agreement is, cannot be determined or resolved through arbitration proceedings;
  13. The arbitration award given is contradictory or contrary to the Public Policy;
  14. Any award as presented, influenced, or imported for fraud or corruption or for breach of any provision of the law;
  15. If any arbitration award violates any important policy of Indian law;
  16. If any award is contrary to the basic policy of ethics, justice, or impartiality;
  17. An arbitral award that does not come from International Commercial Arbitration, may be set aside by a competent court if the court finds that the award is improperly subordinate to the law or violates the rules of law, as it may appear unlawful in the face of the award.


Our Judiciary has suffered a number of cases pending trial. Judicial Procedures in India are time consuming and expensive. We know that in a better business environment and development, we need a faster dispute resolution system. Arbitration is one of the best ways to resolve disputes, and the parties to the Arbitration Agreement refer all their disputes to arbitration. In furtherance of the arbitration there must be an Arbitration Agreement or Arbitration Clause in the main agreement which clearly states that all disputes will be referred to arbitration arising out of breach of the terms and conditions of the principal agreement. The parties to the agreement will nominate the Arbitrators and the award of arbitrators is binding on both parties and is enforceable under a court of law. But in some cases, when there is injustice in one party, the award is against public policy, the arbitration agreement is not properly adhered to, one suffers more than the other because a competent court award may intervene and set aside the Arbitration Award.


Aishwarya Says:

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