The Arbitration and Conciliation act 1996 states that “it is an act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto”.
Alternative dispute resolution (ADR; known in some countries, such as India, as outside of court dispute resolution) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to a win-win position to prevent the lengthy process of litigation. It is a collective term used for the ways that parties can settle disputes, with the help of a neutral third party.
N k Acharya in his book “Law relating to Arbitration and ADR” mentions the history of the Arbitration of India from the time of the East India company in the Regulating acts. He mentions the emergence of arbitration without the intervention of the court in the Civil Procedure Code. Then subsequently clause relating to the choosing of independent, uninterested arbitrators was added.
The Civil Procedure Act of 1857 was amended in 1882 and later India solely for Arbitration clauses was established in the Arbitration and Conciliation Act 1996.
At the international level, the UNICTRAL prepared the Model Law of Arbitration, Arbitration Rules and Conciliation Rules. Based on these ground norms India adopted and enacted the Arbitration and Conciliation Act,1996. The Government of India introduced the Arbitration and Conciliation ( Amendment ) Bill, 2001 so that it becomes suitable to contemporary times.
The Arbitration and Conciliation act 1996 states that “it is an act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto”
The formation of a separate arbitration act had started long back with the Civil Procedure Code 1857. Later owing to the successful trials of alternative methods of dispute resolution the British government drafted two separate acts – The British Arbitration Act 1889 and the Indian arbitration act 1899.
As the number of cases in arbitration increased, the British government found it necessary for increasing the scope of Arbitration through the Arbitration (Protocol and Convention) Act, 1937. By this time in the international community, the arbitration emerged as an important form of resolving disputes which further led to the increase in awareness about Arbitration. The Foreign Awards (Recognition and Enforcement) Act, 1961, mentioned the rules to be followed with regards to the foreign awards in arbitration.
The Arbitration act of 1940 was drafted. Justice D.A Desai proposed the need for a consolidated “Arbitration Act”. The famous case which further strengthened the need for a separate Arbitration Act along the lines of the International Arbitration Laws was M/s Guru Nanak Foundation v. M/s Rattan Singh & Sons(1 981 ) 4 SCC 634).
India became a signatory to the UNICTRAL model in 1980. 3 ordinances were promulgated by the president known as the Ordinance Raj. Ultimately this led to the creation of the Arbitration and conciliation Act 1996.
Notable Features of the Act
The act is divided into 4 parts and 3 schedules. It is applicable to only civil cases. The arbitral tribunal is not subjected to the CPC or Indian Evidence Act. It is inclusive of the whole of India.
The arbitration award is not subject to appeal in the Civil court. The award is given the judge of the Civil court who passes it as an order of the court. This act is applicable for both the domestic as well as international arbitration.