Arbitration refers to a practice of private dispute resolution for resolving disputes between the parties, without moving towards the National Courts of a country. The methodology of arbitration is controlled by law of every country. The Arbitration and Conciliation Act 1996 is a procedural law that governs the arbitration in India. The main aim of arbitration is to give expedient powerful solution for resolving commercial disputes without moving toward the courts of the country.
Despite the fact that there are numerous causses behind the popularity of arbitration universally, in India it is generally utilized for the following reasons: –
- Expert Arbitrators
- Expedient conclusion of disputes
- Undue delay in disposal of cases by the courts
The Courts in India are over-loaded because of the pendency of immense number of cases and as a result, the speed in discarding the cases seriously get influenced, in spite of the fullest endeavors of the Judges. Due to the said overburdening of the courts, a normal litigation takes around four to six years to accomplish conclusiveness. Such a circumstance can’t go on without serious consequences by any corporate organization or a business foundation. An arbitration in India must be finished within a time lag of eighteen months from the date of formation of the arbitral tribunal. Besides if the losing party is desirous of challenging the arbitration award, it needs to deposit about seventy five percent of the award sum for acquiring stay of the execution proceedings. The winning party is likewise permitted to withdraw out the said sum after giving the bank guarantee. Therefore, the procedure of arbitration is much effectual dispute resolution procedure in India.
Every commercial venture has certain commercial practices , fundamental innovation and so forth. So, an arbitrator r having experience in a similar field of action can comprehend the disputes between the parties more successfully and resolve the matter all the more proficiently. Such an aptitude can’t be anticipated from a national court judge but an arbitrator can be selected by the parties with the ideal qualification and experience. For instance an arbitrator having an accounting experience can resolve the accounting disputes more proficiently. Therefore, an arbitration is the best strategy for settlement of commercial disputes. For resolving disputes by the method of arbitration, the parties have to enter into an arbitration agreement indicating their intention to resolve all the disputes between them by the procedure of arbitration. Parties can enter into a separate independent arbitration agreement or incorporate an arbitration clause in the main contract between the parties. Once the parties entered in to an arbitration agreement, then the national courts cannot entertain any litigation between the parties.