Arbitration , according to the definition, is the practice of assisting parties in reaching a compromise to resolve a disagreement.
Arbitration Law is a component of the Alternative Dispute Resolution (ADR) process. This is helpful to parties that prefer to forego the customary drawn-out dispute resolution process through the local courts. It is a legal process for resolving disputes outside of the courts in which the parties submit the matter to one or more individuals, specifically arbitrator(s), by whose judgment (the 'award') they agree to be bound.
The development of a flexible, reasonable, advantageous, and speedy technique of resolving conflicts without subjecting the parties to the rigorous, resource-intensive, and time-consuming process of the traditional justice delivery system was required by the advancement, liberalization, and globalization of international commercial contacts.
Arbitration is conducted by the tribunal under the rules previously agreed upon by the parties. Or per the rules established by the tribunal in the absence of agreement between the parties. Ad hoc arbitration allows for better control over the arbitration process, flexibility in determining the method, and cost-effectiveness. However, the success of ad hoc arbitration is guaranteed only if the parties agree.
Arbitration administration is in line with an institution's process regulations. The same governs fundamental parts of arbitration, including the nomination of arbitrators, the management of the arbitration process, and the selection of sites for arbitration hearings. Many of these Indian arbitrations are overseen by international arbitral institutions. These international arbitral institutions such as the International Chamber of Commerce's Court of Arbitration, the Singapore International Arbitration Centre, and the London Court of International Arbitration.
In India, there are now 35 arbitral institutions for the following purposes:
c) public sector undertakings
d) Trade and merchant organizations
e) City-specific chambers of commerce and industry.
Such institutions have their regulations or are controlled as per the UNCITRAL norms. This type of arbitration assists in obtaining a clear set of arbitration rules, a defined timeframe for conducting the arbitration, a panel of arbitrators to pick from, and aid from highly qualified personnel when parties lack sufficient understanding regarding arbitral procedures.
The effectiveness of this style of arbitration is usually hampered by a lack of creditworthy institutions, governmental backing, and legislative support. No autonomy of parties over the arbitration process, delays in Indian courts, and excessive interference and involvement in procedures, all of which discourage international participants.
As a result, the Indian judiciary is currently going to great lengths to streamline the proceedings in situations of International Commercial Arbitration. Furthermore, the alteration in Section 36 has given the Act more teeth, since now to dispute an award under Section 34 of the Act, the stay is not automatic, as it was in the pre-amended Arbitration and Conciliation Act 1996 before its revision in 2015, and conditions analogous to Order 41 Rule 5 of the Code of Civil Procedure have to be imposed by the Court adjudicating the correctness of the Award. These criteria would also eliminate superfluous challenges to an Arbitration Award, following the Act's intent and authoritative court dicta on the subject.
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