Article by Vijay Pal Dalmia, Advocate, Supreme
Court of India and Delhi High Court, Partner & Head of
Intellectual Property Laws Division, Vaish Associates Advocates,
All Disputes, which are of civil nature, may be resolved at any
of the following two forums i.e. the formal system of redressal
through conventional system i.e. Courts and Tribunals, or Alternate
Dispute Resolution (ADR) i.e. Mediation, Conciliation and
Arbitration. Keeping in view the state of the formal judicial
process, it shall always be preferable to opt for ADR. India has a
codified law on ADR i.e. the Arbitration & Conciliation Act,
19961 which conforms to Model law on International Commercial
Arbitration in 1985 by the United Nations Commission on
International Trade Law2 (UNCITRAL). These Model laws and Rules
make significant contribution to the establishment of a unified
legal frame work for the fair and efficient settlement of disputes
arising in international commercial relations. Keeping in view the
above, the (Indian) Arbitration and Conciliation Act, 1996 was
enacted by India wherein provisions have been made recognizing
arbitration agreement, composition of arbitration tribunal,
procedures for conduct of arbitration, making of awards, recourse
against arbitral awards, finality of arbitral awards and their
enforcement, enforcement of foreign awards etc. Both New York
Conventions Awards (Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, New York, 19583) and Geneva Convention
Awards, 19274 are recognised under the Indian Act.
One of the best features of Indian Arbitration and Conciliation
Act, 1996 is that parties to the arbitration agreement have no
option except to go for arbitration in case of any dispute.
Further, the parties can choose their own law, Indian or foreign,
on the basis of which arbitration will be conducted, place and
forum of arbitration, within or outside India, adopt their own
procedures or the procedure of any internationally recognized
arbitral forums. The essence of the above is that the parties are
free to resolve their disputes in any manner, whatsoever, as may be
agreed which is free from the shackles of the traditional system of
It is further important to note that all awards passed by the
Arbitrator are final and binding, subject to some reasonable
exceptions and the same are enforceable as a final decree of the
The above process considerably reduces the time, which is
usually taken by the conventional system of judicial redressal, and
cost for resolution of dispute between the parties without adhering
to the strict procedural laws. Under the Indian Arbitration &
Conciliation Act, 1996, the courts are also empowered to pass
orders for interim measures like preservation, interim custody or
sale of any goods, securing the amount in dispute, the detention,
preservation or inspection of the property. Courts are also
empowered to pass any interim injunction or appoint receivers for
protection of the subject matter of the dispute and enforcement of
the arbitral award.
The flexibility of the law and the procedure for arbitration in
India makes it a preferred option for resolution of any dispute as
it provides speedy and effective remedy. Presently, ADR is the
preferred mode of dispute resolution among the Government agencies
as well as private parties.
It is strongly recommended that Alternate Dispute Resolution
(ADR) i.e. Mediation, Conciliation and Arbitration should be
adopted as a mode of dispute resolution and for the said purpose
care should be taken to:
Put a specific clause providing for resolution of disputes by
ADR in all agreements.
Exclude the jurisdiction of the Courts
Arbitration clause should provide for preferred laws applicable
to the dispute.
Preferred Forum, procedure and place of Arbitration should also
be properly defined in the contract.
The content of this article is intended to provide a general
guide to the subject matter. Specialist professional advice should
be sought about your specific circumstances. The views expressed in
this article are solely of the authors of this article.
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