Alternative Dispute Resolution in India

Author: Yamina Malek,GLS Law College


It has been noted that misunderstanding and conflict generally  arise whenever two people get together for a  sale or  business. Similar misreading and conflict need resolution,  which should be quick and effective. Piecemeal from action,  there are other indispensable  styles of  disagreement resolution which  are quick and effective in nature. Arbitration is one  similar   system.  

Unnaturally, Arbitration is a disagreement resolution medium  through which the parties to sort out their  disagreement through a  third person called an arbitrator. Arbitration as a means of  resolving  controversies along with other mechanisms has come  before the society as a way through to bring the disputing parties  to an  outgrowth which is  respectable to both and is having  enforceability as that of an order passed by the court. In India,  the mindset of the people in  respects to resolving a  disagreement or   penetrating justice is only by the means of courts rather than  going for arbitration for resolving the same. They don’t trust  the third person, indeed if it bring them times of hustle in the  court proceeding to get justice. The conception of arbitration in  India is arising with the changing trends in the society,  farther  justifying the characteristics of law that says “ law is dynamic  in nature ”..

In India, the relation among the society is given more preference and hence a dispute is supposed to be solved within closed doors and with care to protect each other’s respect in the society. Alternative Dispute Resolution (ADR) is same but with some rules and regulations. ADR gives the parties in the dispute a chance to maintain their relationship and opt for a cheaper, faster and easier resolution method. Types of ADR methods can be: Mediation, Conciliation, Negotiation, Arbitration & Lok Adalat. The development of this ADR mechanism in Indian Legal filed in going on for over centuries to reduce the overburden of the judicial courts and provide easy justice to the people. 


Arbitration has a long history in India. Back in the time, people would often voluntarily submit their disputes to a group of selected men deemed to be wise of the community—called the Panchayat—for a binding resolution 

The first Arbitration law in India was the Arbitration Act 1899 which was based on the English Arbitration Act 1899. 

Thereafter, the Arbitration Act, 1940 was enacted in India with the intention to consolidate and amend the law relating to arbitration effective from 1st of  July 1940 

In the year 1940, a consolidated law related to arbitration was enacted which repealed the existing laws related to arbitration. The Arbitration Act, 1940 was based on the English Arbitration Act, 1934 and was a complete code for domestic arbitrations. However, the Act did not contain any provisions related to enforcement of foreign awards. Foreign awards were enforced in India through two separate legislations viz. (i) the Arbitration (Protocol and Convention) Act, 1937 (for Geneva Convention Awards) and (ii) the Foreign Awards (Recognition and Enforcement) Act, 1961 (for New York Convention Awards).

The arbitral regime in India, under the 1940 Act and ancillary enactments, was far from satisfactory and was severely criticized before different fora. It failed to accomplish its desired intention of providing a hasty and efficacious dispute resolution mechanism. The working under the regime was slow, complex, expensive, hyper-technical and fraught with judicial interference. 

The 1940 regime was recognized as an antithesis to the growth that India was witnessing post the economic liberalisation. Thus, a new statutory regime was the need of the hour, a statutory regime which would complement such growth and attract foreign investors in the country. 

In this backdrop, the watershed moment in the Indian arbitration law was the enactment of Arbitration and Conciliation Act, 1996 (“the Act”). 

The Arbitration and Conciliation Act was again faced modification in 1996 with  the plan and the objective to give effect to the UNCITRAL Model Laws  as adopted by the United Nations Commission on 21 June 1985. 

Amendment of 2015

The first attempt to amend the Act was made through the Arbitration and Conciliation (Amendment) Bill 2003. However, several concerns were raised about the proposed amendments which led to the Bill being withdrawn from Parliament.The key changes brought about by the 2015 amendment act can be broadly classified under the following categories:

  1. Restricting Judicial Intervention:
  2. Expediting the process of arbitration
  3. Improving the overall functioning of arbitration:

Amendment of 2019

Even though the 2015 Amendment Act, brought a new lease of life to arbitration, it failed to promote institutional arbitration in India and make it a hub for international commercial arbitration. Institutionalized arbitration in India is still lacking and it has led to parties electing foreign seats like Singapore, Hong-Kong for arbitration. 

The 2019 Amendment Act was introduced with a precise focus on promoting institutional arbitrations in India. To promote institutional arbitration, the Act vested the power of appointing  arbitrators solely with arbitral institutions designated by the Supreme Court or the High Court of India. The Amendment Act also created an apex body for arbitration, the Arbitration Promotion Council of India (” APCI”), conforming of different stakeholders, for the purpose of monitoring and promoting arbitration in India.

Amendment of 2020

On 4th November 2020 the Arbitration and Conciliation  Correction) constitution, 2020 was  announced, further  revising the Act. Two  emendations redounded as a result of this  An unconditional stay on the enforcement of an India- seated  arbitration award( including both domestic and  transnational  arbitration awards) until the challenge to the award is resolved,  where the court concludes prima facie that the arbitration  agreement or contract on which the award is grounded, or the award  itself, was  convinced or  fulfilled by fraud or corruption.  The  important-  batted  qualifications, experience, and  morals for  adjudicator  delegation established in the Arbitration Act’s  Eighth Schedule have been removed.  The correction to the enforcement of an arbitration award  that has been tainted by fraud or corruption has been  retroactively applied, meaning that it’ll apply to all court  cases involving arbitral processes, whether they began before  or after 23rd October 2015.  Since its foundation, India’s arbitration  governance has  experienced   colorful  adaptations and continues to evolve regularly. Recent   variations in 2015 and 2019, as well as several judicial  rulings over the  former five times, have  vastly  contributed to the rise of arbitration as an effective  volition  to traditional court action. Certain areas,  similar as institutional  arbitration, still bear attention, but given the present trend,  we may be auspicious that these difficulties will be handled  sooner rather than  latterly.  


In the society in India, the citizens are of the mindset that if  any  disagreement arises among any of the  individualities,  also the courts  are the only resort to the resolution of their  disagreement. The conception  or the statement  over is true as it shows the  establishment belief of  citizens in the judicial system or the legal protection available  in India by the Constitution under its part III which prescribes  the Abecedarian rights to all the citizens.  Since the law is dynamic thereby the  system to achieve the  legislative intent of avoiding mischief also needs to be  streamlined  with that of the  energy of society. In India, if observe the  supreme law of the land i.e., the Constitution of India depicts  that “ law is for the people and by the people ”, which shows  that any law of the land is successfully executed only when the  citizens give it their support,  as the hefty cases pilled in the courts and  wanting a speedy justice people are looking upon arbitration  as a revolution in judicial medium for the redressal for their   controversies. also, people wanted that  further  stimulant  should be given for arbitration so that the  controversies get resolved  in time, further an emotional angle was there wherein an  individual responded that in traditional action  numerous  generations pass by but the  disagreement doesn’t get resolved, to  which arbitration comes as a  result.  


  1. Arbitral Tribunal cannot go further than the terms in the contract between the parties.

In BCCI v. Deccan Chronicle Holdings Ltd, 2021, the Bombay HC set aside an arbitral award that went beyond the agreement terms agreed between the parties in dispute. The Bombay HC held that the arbitrator’s jurisdiction is limited to the agreement and can pass an order which may be the subject matter of reference, unless the parties,

by mutual consent agree to facilitate the arbitrator to settle a dispute by applying what they consider is ‘fair and reasonable.

  1. Emergency Arbitration awards are enforceable in India.

In NV Investment Holdings LLC v. Future Retail Ltd. (passed on 06 August 2021) the Supreme Court of India held that an award by an emergency arbitrator in an India-seated arbitration constitutes an order under the Arbitration Act and will be enforceable in India.

  1. SC issues directions must be followed by all courts executing decrees to expedite the execution of decrees.

In Rahul S Shah v. Jinendra Kumar Gandhi and Ors. (Passed on22 April 2021),the SC issued directions that are required to be followed by all executing courts to execute decrees expeditiously and while issuing such directions observed that an executing court must set out of the execution proceedings within 6 (six) months from the date of filing which may be extended only by recording reasons in writing for such delay.

  1. By mutual agreement, parties to arbitration can modify the seat of arbitration.

In Inox Renewables Limited v. Jayesh Electricals Limited (passed on 13 April 2021), the SC held that a change in the ‘venue’ of the arbitration proceeding as mutually agreed by the parties will amount to a change in the juridical ‘seat’ of arbitration.


ADR is helping the Indian Legal system in providing faster justice and reducing the overburden of courts. ADR in India is still developing, but now at faster rate. People are opting ADR against case proceedings to save their image and maintain their image in the society. But also for certain cases were fast redressal is needed ADR comes handy like ADR in Matrimonial Cases, MACT, etc. ADR in India is still intervened by the judiciary and enforcement of the award is hard, but with upcoming developments this will hopefully be solved. The need of ADR is not just to help the Indian Judiciary but to provide a easy accessible dispute resolution platform for the International and Domestic Market. Embracing ADR can lead to more efficient and satisfactory dispute resolutions trust in justice system, benefiting individuals, commercial transactions, international business, promote a culture of cooperation and consensus in resolving conflicts and the overall legal system in India.


Difference between seat and venue

Venue is a geographical location for the arbitration proceedings but a seat determines the legal jurisdiction governing the proceedings.

Who can be an arbitrator?

Anyone the parties agree to can become an arbitrator.

Scope in International Arbitration?

Arbitration is a growing around the globe as business and diplomatic relations are growing with time. The scope in International Arbitration is also wide for law students and others.

Alternative Dispute Resolution in India

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