INTRODUCTION  

In today’s fast-paced commercial world, disputes are an inevitable part of business. Traditionally, resolving these disputes or conflicts often involves navigating the time-consuming process of court-based litigation. However, for those seeking a more efficient, flexible, and often confidential alternative, arbitration has emerged as a preferred method of dispute resolution.  

It is a voluntary process where parties agree to submit their disagreements to an impartial third party, known as an arbitrator or an arbitral tribunal. This has been treated in here, both sides of the argument examine evidence and render A binding decision, which is known as an artificial award. The primary objective of arbitration is to provide a swift and conclusive resolution to disputes, avoiding the unnecessary delays often associated with traditional litigation, where cases can sometimes linger for generations.  

ARBITRATION: An alternative to court 

Arbitration is a voluntary dispute resolution process wherein the awards (decisions) are binding on the parties as against the court-based litigation process. It is an alternative to a lengthy process of litigation where cases are not adjudicated till the lifetime of the parties. As per the provision of the Arbitration and Conciliation Act, the process could be divided into three phases, which are  

1. Pre- arbitration stage 
2. Arbitration stage 
3. Post-arbitration stage 

Pre-arbitration phase 

Arbitration clause: The parties enter into a contract after negotiations, in writing. They add an arbitration clause to their contract. An arbitration clause refers to a clause that states that ‘in case of any dispute or confusion relating to the terms of the contract, the parties shall refer to the arbitration for their dispute resolution and it shall be binding on the parties.’ The parties, through this clause, can decide the arbitration place and arbitrator (s).  

Invocation of arbitration: Section 21 of the Act provides for the commencement of arbitral proceedings. It states that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. 

Arbitration Stage 

Appointment of arbitrator: The parties have rights under section 10 of the Act to determine the number of arbitrator(s), which shall not be even. In case the parties fail to determine the number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator. 

Section 11 deals with the appointment of an arbitrator. The parties have the freedom to decide and appoint their arbitrator. Failing which, the Constitutional courts, such as the Supreme Court and High Court, reserve the power to appoint the arbitrator for the disputing parties.  

As per Section 12 of the Act, the arbitrators must be impartial and independent. 

Statement of claim and defence: Section 21 states that within the time agreed by the parties, are determined by the Tribunal, the claimant and the respondent shall submit the facts, the issues, and relief remedies sought and the defence in respect of these particulars, respectively. If the parties want to submit the documents supporting their claim or want to add a reference to the documents, they are at full liberty to do so. Additionally, the parties have full authority to amend or supplement the claim or defense during the course of the arbitral proceeding unless the tribunal considers such addition or amendment inappropriate. The statement of claim and defence must be made within six months from the date on which arbitrators are appointed. 

Hearings: Section 24 lays down the procedure for hearings and the written procedure. According to the section, the tribunal shall decide the place and time for oral hearings and should conduct the oral argument on a day-to-day basis without grounding any adjournments unless there exists any reasonable cause. The tribunal is advised to impose costs on the party seeking such adjournments. 

Interim Measure: Parties may seek interim relief such as preservation of assets or an interim injunction, from either the court as per Section 9 or from the arbitral tribunal itself during the arbitral proceeding as per Section 17. These measures help protect the party’s rights and the subject matter of the dispute. 

Arbitral Award: Section 31 of the Act lays down that the arbitral award shall be made in writing and shall be signed by the members of the Arbitral tribunal. The arbitral award shall contain the decisions on the basis upon which the decision is taken, unless otherwise agreed by the parties. This section also provides for the interim arbitral award, which is given at any time during the arbitral proceedings on a matter with respect to which it may make the final award. This award shall be delivered to both parties. Section 29A provides for the time limit in which the arbitral award must be given, which is twelve months from the date of completion of pleadings, in the case of domestic arbitration. This award is binding on the parties unless challenged in court on the grounds mentioned under section 34.  

Post-arbitration stage 

Setting aside the award: Section 34 provides for the grounds on which an award can be set aside in the court of law. The grounds include incapacity of the party, invalidity of the arbitration agreement, lack of proper notice or opportunity to present a case, the award dealing with matters beyond the scope of the arbitration agreement, and the composition of the arbitral tribunal. For the arbitral procedure not being in accordance with the agreement, the subject matter of the dispute not being arbitrable under Indian law, and the award being in conflict with the public policy of India. 

Finality and enforcement of the award: Section 35 states that if no application to set aside the award is made within the prescribed period or if such an application is rejected, the arbitral award becomes final and binding on the parties.  

CHALLENGES IN ENFORCEMENT  

The award is generally set to be final and enforceable to prevent delays as in litigation; however, in practice, this process is also not as expeditious as it was meant to be. The provision under the said act provides for challenging the award in the court of law. Although the grounds are limited under section 34, some of them, such as ‘public policy’, are not defined anywhere, which makes them broad. In the infamous Ghreulal Parakh case, the bench placed reliance upon Lord Atkin’s statement that public policy is an unruly horse and should only be used as a last resort, as it is highly subjective in nature. What may be in accordance with public policy to one may not be to another. 

Moreover, if the challenged award gets rejected by the court, it is still appealable to the higher courts under section 37 of the Arbitration and Conciliation Act. The grounds on which it could be challenged include refusing to refer the parties to arbitration under Section 8; Granting or refusing to grant any measure under Section 9, setting aside or refusing to set aside an arbitral award under Section 34. Additionally, a second appeal can be made, but only in the Supreme Court of India. This process is not only time-consuming, but it also attacks the very idea of arbitration as an alternative. 

CJI GAVAI’S REMARKS 

In the LCIA International arbitration Symposium in London, the Chief Justice of India, BR Gavai, expressed his wishes to bring out 4 major changes in the arbitration system in India. 

1. Finality of arbitral awards. There are provisions in the Act that provide for challenging the award in the original. Jurisdiction as well as the appellate stage. This makes the process time-consuming and similar to that of litigation. He said that arbitration is not meant to be the first lap of a marathon disguised as a Sprint. The award should be the last word, not an invitation to round 2 in court, except in those cases where there is manifest injustice. 
2. Institutional arbitration should be the norm and not an exception. Institutional arbitration is a method of resolving disputes where a specialized institution administers and supervises the arbitration process according to predefined rules. Hearing the parties submit the dispute to an institution that manages various aspects, like appointing an arbitrator, setting fees, managing timelines, etc. 
3. The removal of delays and tactical stalling in arbitrary proceedings. Although the time limit is prescribed for the arbitral award to be 12 months, any or both the parties submit any reason or excuse, with the intention to delay the arbitration from proceeding. These delaying tactics are contrary to the goal of arbitration. 
4. Expanding the pool of arbitrators to bring in diversity in delivering justice.  

CONCLUSION 

CJI Gavai views highlight the crucial necessity for reforming India’s arbitration framework although the arbitration and conciliation act of 1996 seeks to resolve dispute quickly and conclusively, the real world will obstacles such as those posed under section 34, ensuring appeals frequently etc. make this goal unattainable transforming sprints into marathons A vital road map is his emphasis on finality of verdicts, the advancement of institutional arbitration, the removal of tactical delays and the diversification of arbitrators pool. By putting these improvements into operation, the arbitration will become more efficient, lessen the load on judges. And solidify its standing as a really successful substitute for traditional litigation. This will bring India’s arbitration system into line with international practices. 

AUTHOR: KAVYA GUPTA