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The Advent of Arbitration in India


Joseph Grynbaum.

Apart from the traditional court system, there exist alternatives for people to solve their disputes. As the assembly system is ineffective, 2 major surrogate procedures such as mediation and arbitration were introduced. Alternative Disputes Resolution also known as ADR refers to settling of the disputes outside the court. Due to the cumbersome and lengthy process of litigation, various parties have opted for arbitration as a means of settling disputes due its many benefits.


India’s long lore of arbitration and the notion of non -judicial dispute resolution runs back to 1100BCE. The works of Yajnavalka refers to certain special arbitration courts in ancient India. According to the Hindu Law, Brahadarnayaka Upanishad stresses about the various types of arbitral bodies which consists of 3 primary bodies namely ‘Puga’ the local courts, ‘Srenis’ the people engaged in the same business or profession and the 'Kulas', who were members concerned with the social matters of a particular community and all these three bodies were cumulatively known as Panchayats. The members of the same were the Panchas, the then arbitrators, used to deal with the disputes under a system, we now refer to as Arbitration

The development of ARBITRATION IN INDIA HAS THREE REGIMES - i) The pre-1940 phase ii) The 1940-1996 phase iii) The post 1996 phase

i) THE PRE-1940 PHASE:

The first enactment came into light due to the passing of Indian Arbitration Act, 1899.This law was restricted only to the Presidency Towns Of Calcutta, Bombay and Madras.

ii)THE 1940-1996 PHASE:

The 1899Act and the groundwork of the Code of Civil Procedure, 1908 were found to be imprudent and more technical and thus, Arbitration Act, 1940 came into existence and revoked the Act of 1899 along with the relevant provisions of the Code of Civil Procedure, 1908. The Act of 1940 was a reflection of the English Arbitration Act, 1934. The Act 1940 could not achieve its purpose , Justice raised his voice against uneasiness of the Indian courts and the infeasible running of the 1940 Act in Guru Nanak Foundation v Rattan Singh (1981) clearly stated “Interminable , time consuming , complex and expensive Court procedures impelled jurists to search for an alternative forum , less formal , more effective and speedy for resolution of disputes , avoiding procedural claptrap and this led them to Arbitration Act , 1940 .However , the way in which the proceedings under the Act are conducted and without exception challenged in Courts , has made Lawyers laugh and legal philosophers weep”.

iii)THE POST 1996 PHASE:

The 1940 regime was considered to be a converse to the development that India was witnessing post the economic liberalisation. However, a brand new regime was implemented that would contribute to the growth of our country and attract foreign investors. The Conciliation Act of 1996 was utterly based upon the UNCITRAL model law on International Commercial Arbitration. On the longer run, this law faced some issues which were difficult to solve.


Later Amendments of 2015 and 2019 were enforced. The 2015 Amendment although revamped a new lease of life to arbitration , it instantly failed to abet institutional arbitration in India .The 2019 Amendment Act was executed with a specific aim on promoting institutional arbitrations in India .The Amendment Act gave way for the birth of an apex body for arbitration , the Arbitration Promotion Council Of India (‘APCI’) , comprising of various stakeholders , for the purpose of promoting and monitoring arbitration in India .These variations and the creation of APCI are yet to be informed .

The arbitration regime in India underwent multiple changes since its conception and further evolves constantly.
This well evolved fruit, arbitration is now been wielded by PrivateCourt in a professional and in an efficient fashion to solve disputations without any turmoil.

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Source: Barand Bench

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