Commercial conflicts in India have increased significantly in recent years as
the country's economic development has accelerated. As a result, alternative
dispute resolution has begun to incorporate arbitration into the process of
resolving such disputes. Arbitration has become critical for businesses
operating both in and outside of India. The primary objective of the arbitration
legislation is to facilitate the resolution of disputes through private
The procedure is regarded to be less expensive than bringing a lawsuit in court
due to the little expenditures involved. Parties may also select an arbitrator
who is knowledgeable about the subject of the dispute. Ad hoc administration is
to be administered independently where arbitrators are appointed by the parties
itself. The purpose of this paper is to summarise recent amendments to India's
Arbitration Act and to analyse the future of online arbitration in the country.
As Lord Langdate once stated:
"Many cases occur, in which it is perfectly clear,
that by means of a reference to arbitration, the real interests of the parties
will be much better satisfied than they could be by any litigation in a Court of
justice" 1. Arbitration is a kind of conflict resolution in which disputes arising
out of courts are transferred to a third party for resolution.
The most critical characteristic of arbitration is that the parties expressly
agree that any resulting dispute will be referred to the Tribunal for ultimate
determination and submission. The parties generally adhere to the processes,
which makes the processes more flexible in the sense that some issues include
transnational laws, which these tribunals are better equipped to resolve than
The Arbitration and Conciliation Act, 1996 was initially enacted through an
ordinance as a first step in the world's urgent economic changes prompted by the
new economic strategy. And another ordinance, enacted in 2015, amending the 1996
statute to bring it up to worldwide standards, was issued 20 years later. It has
been a popular method of resolving commercial issues in recent years. Due to the
flaws with the 1996 act, adjustments were suggested that are required to close
the gap while minimizing possibilities.
India's economy is expanding at a rapid pace, necessitating the establishment of
a trustworthy and well-designed conflict resolution mechanism in order to
attract international investment. Due to the fact that Indian courts are already
experiencing significant backlogs, business entities both outside and in India
have developed a strong preference for resolving disputes through arbitration.
Arbitral Meddling: Putting Reliance On 2020 Amendment
On November 4th, 2020, the arbitration and conciliation statute was revised to
make India an arbitration-friendly jurisdiction. 1996 was the year when the
initial arbitration and conciliation statute was enacted. This updated statute
includes provisions for domestic and international arbitration and establishes
guidelines for guiding conciliation hearings.3 The key feature of the amendment
incorporates automatic stay on awards.
The 1996 arbitration statute empowered a party to obtain the annulment of an
arbitral award rendered during the arbitration process. In 2015, the Act was
changed to provide that an arbitral award cannot be automatically delayed just
because a judicial application is lodged.
Section 36 has been amended to include a clause requiring the court to give an
unconditional stay in the event of fraud or corruption and the chance to execute
the unconditional stay will be available. It will apply to all arbitration
proceedings, regardless of whether the court procedures occurred before to or
afterwards to the arbitration Amendment Act, 2015.4
Additionally, this Ordinance amended section 43 of the act to specify that the
qualifications, experience, and standards shall be as established by the act.
The act's 8th schedule, which specified the credentials and experience required
for appointment as an arbitrator, was removed. However, this law is silent on
the rule that would establish standards for arbitrator accreditation. The
important point to make here is that the courts will now have to interpret the
burden or onus of establishing a prima facie evidence of corruption.
This Ordinance indicated that the arbitration agreement may be delayed even
during the pendency of the arbitral verdict if the court determines that it is
significant for a transaction inspired by corruption or fraud.
Mitigating Problems Against The Growth Of Arbitration
Courts have limited intervention authority under the arbitration and
conciliation acts. While parties may still seek protection from the court under
Section 17, the extent of the protection is extremely limited and it may only be
provided in restricted circumstances. In the event that any party fails to
select an arbitrator within thirty days of the request being filed, the parties
may still approach the Court for appointment of an arbitrator.
Courts have continued to hold in situations where they broadened the scope of
judicial review by holding that judicial intervention is conceivable in the
event of an arbitral award that is inconsistent with the contract itself. 5.
Throughout the country, this notion has mostly gone unacknowledged. According to
the Supreme Court, "there appears to be no restriction on other parties
financing litigation and being compensated when the case concludes.6
Rather than making repeated modifications to the same concerns, legislators
should take a broader view of the major impediments to India being an
Online Dispute Resolution: A Constructive Move Towards Justice Post Covid-19
The success of arbitration in India is largely attributable to the development
of Indian law and the growing knowledge of arbitration throughout time. However,
as a result of the ongoing pandemic, the environment is becoming more
technologically reliant, and technical improvements have evolved far enough for
everyone to see that this poses data and privacy concerns, which are one of the
most urgent challenges confronting the globe today. The pandemic has driven all
professions, from writers to lawyers, to embrace remote working techniques and
rely increasingly on technology.
Additionally, reference must be made to sections 27(1) and 30(6), which
establish the rules for online arbitration. Section 27 discusses the Preparation
of the Case for Arbitration, stating that "In view of the case's complexity, the
arbitral tribunal may hold a planning conference with the parties and their
representatives, either in person or by means of telephone or video
Additionally, the OECD Principles for Consumer Protection in the Context of
Internet Commerce (1999) should be reviewed, as they provide consumer protection
guidelines in the context of electronic commerce. Reference must also be made to
paragraph 16 of the law commission report No.246 which states that conscious use
of technology such as teleconferencing and videoconferencing should be
encouraged because they can easily replace the need for formal sitting and thus
contribute to a more efficient and smoother conduct.8
In State of Maharashtra v. Dr. Praful B. Desai
the Supreme Court likewise
recognised the use of video conferencing technology to record witness testimony
Online arbitration, on the other hand, should establish its own set of norms
over time. Although there are various critical aspects that demand trust and
fairness, for example it may be difficult for the arbitrator to develop trust
without ever meeting the opposing party, howsoever owing to the ongoing
epidemic, the reliance on internet arbitration is high.
The use of online video conferences can also help at the international level,
but there are legal and technological issues to consider, such as the legal
execution of an arbitral awards. The government should also make the appropriate
adjustments to the Arbitration Act to allow for virtual hearings through video
conferencing, as well as offer model virtual hearing guidelines to all arbitral
institutions in India.
The arbitration regime in India has changed significantly over the last several
years, although certain areas still require improvement; yet, it has emerged as
one of the most effective forums for resolving conflicts in the corporate and
A concerted effort is necessary. Although arbitration has emerged as a preferred
method of resolving disputes quickly, a legislative framework and knowledge of
how to use technology are required, especially in a country like ours where
literacy is slightly low compared to other countries, If the country adheres to
the arbitration process appropriately, they will be able to resolve the cases
that have overburdened the courts today. The subsequent amendment should almost
certainly concentrate on analysing the impact of recent modifications to the
- The Earl of Mexborough v. Bower, (1843) 7 Beav. 132.
- Christopher R. Drahozal, Commercial Norms, Commercial Codes, and
International Commercial Arbitration, VAND. J. TRANSNAT'L L. 79 (2000).
- The Arbitration and Conciliation (Amendment) Ordinance, 2020", PRS
(November 4, 2020), https://prsindia.org/billtrack/the-arbitration-and-conciliation-amendment-ordinance-2020.
- Faranaaz Karbhari and Mahafrin Mehta, "India: Arbitration and
Conciliation (Amendment) Ordinance, 2020", MONDAQ (NOV. 9,2020), https://www.mondaq.com/india/arbitration-dispute-resolution/1002868/arbitration-
- Hindustan Zinc Ltd. v. Friends Coal Carbonisation,
- Bar Council of India v. A.K. Balaji,
- Law Commission, Amendments to the Arbitration and Conciliation Act 1996
(Report no 246, August 2014).
- In State of Maharashtra v. Dr. Praful B. Desai, 2003 4 SCC 601