There is a trend world over, in particular among companies and corporate not to drag disputes into long drawn courtroom battles. There comes the significance of Arbitration, Mediation, Conciliation and such alternate disputes resolution mechanisms. Here is the added advantage of savings in time as well as the cost of proceedings. Moreover the parties settle the matter in a win- win spirit.
The Arbitration and Conciliation Act, 1996 governs the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards in India. Further it governs the law relating to conciliation. This act has taken into account the UNCITRAL Model Law on International Commercial Arbitration adopted by UN in 1985 and the UNCITRAL Conciliatory Rules (1980).
As per the Arbitration and Conciliation Act, 1996, an arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or it may be a separate agreement. Further an arbitration agreement shall be in writing.
If either of the disputing parties approaches a Court for adjudication of the dispute, in spite of the presence of an arbitration agreement, then the Court has the power to refer the parties to arbitration. The parties to an arbitration proceeding are entitled to approach the jurisdictional court for urgent and interim measures of protection.
The parties are free to determine the number of arbitrators; however the same shall not be an even number. The arbitrator may be a person of any nationality. If there is any justifiable doubt as to the independence or impartiality of an arbitrator, then, he shall not become an arbitrator.
The arbitrational tribunal is also entitled to pass interim measures of protection or to order a party to provide appropriate security. In arbitration proceeding, the parties shall be treated with equality and each party shall be given full opportunity to present his case.
Parties are free to fix the place of arbitration. If there is a disagreement between the parties regarding the place of arbitration, the same shall be decided by the arbitrational tribunal. The proceedings can be conducted in any language as determined by the parties.