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Analysis of the emerging scope of arbitration


Arbitration is justice blended with charity.

Nachman of Breslov

Arbitration is an effective form of Alternate Dispute resolution. It is the form in which the parties by an agreement between them choose a forum other than the court of law to resolve the dispute. The reason behind the choosing arbitration is to minimize the burden of the courts and to provide a speedy recovery to the parties.

The word Arbitration has not been clearly defined in the Arbitration and Conciliation Act,1996 as well as in the act of 1940 . Section 2[1] (a) of the Arbitration and Conciliation Act,1996 defines arbitration – any arbitration whether or not administered by permanent arbitral institution.

In Arbitration, two parties which are in a dispute use an independent, impartial third party who serves the dispute ,often by making a decision that they both may agree upon . It deals only with the certain types of civil right issues. The parties who are in the arbitration agreement ,are only liable to the contract. In case, if there is any future dispute arising out of the contract, the parties can insert an arbitration clause in the relevant contract.


Arbitration is no more and less than litigation. It is a civilized way of resolving the issue to avoid the court proceedings. It shall not affect any of the other law for the time being in force in India . An Arbitrator is called upon, to conclude the facts, apply the law and to grant a remedy to the disputed parties. In India , the scope of arbitration have emerged due to the growth of the trade and commerce and the economic liberalization which created the need for the effective implementation of the economic reforms.

The foreign countries and India wherein the parties agree or have agreed for the arbitration in the case of dispute which could be arising out of the commercial activity and it has to be settled down in accordance with the Arbitration and Conciliation Act, 1996 and the rules which are being framed under. Any kind of commercial activity may be arbitral which can be provided in accordance with the agreement between the parties.

During the industrial revolution, there was a rapid growth in the trade and commerce that can arise the conflicts and to keep them away from the litigation, arbitration seems as the preferred resolution mechanism. It keeps the dispute private and provides speedy remedy to the disputed parties. To come up within the scope of Arbitration three conditions must be fulfilled- 1) An agreement must be in writing.

2) There must be definite parties.

3) Parties must have the intention to settle the dispute through the process of Arbitration.

Emerging Scope

Being a global economic powerhouse and in the interest of the integrating with the global business community , the scope of Arbitration law has emerged within recent years. The laws are being amended to keep the country at par with the legal regimes in other leading commercial law jurisdictions. Whenever there is a purpose of transaction or business, there is misunderstanding and conflict that commonly arises whenever two people get together. And such conflicts and misunderstanding needs an effective and quick resolution.

In 2019 , the Indian law was amended and had provided a framework for the Institutional Arbitration in India . It makes it mandatory to create Arbitration Council of India , which is having the duty to take all such measures which are necessary to promote and encourage the arbitration and for that purpose it is made obligatory to frame policies and guidelines for the establishment , operation and maintenance of uniform professional standards in respect of all matters that are related to the arbitration.

In the amendment of 2019, a tiered system of referring the disputes to the arbitral institutions has been introduced. The arbitral institutions are to be graded by the Arbitration Council of India. The grading of the arbitral institutions has to be done on the basis of the criteria in relation to the infrastructure, quality and stature of the arbitrators and the performance and the dispute adherence in the time limit for the disposal of the disputes, in the manner which is provided by the regulations.

The recent amendment, seeks the reduction of the intervention of the courts in the matters of the arbitration to increase the effectiveness of the procedure in terms of the time.

In foreign countries like Singapore, which had recently passed am amendment in their Civil law Act to legalize the third party funding for arbitration and it’s associated proceedings. Similarly in Hongkong , Paris the amendment are made to legalize the third party funding . But in India there is no such provision, however the Supreme Court had issued a statement clarifying that the “there appears to be no restriction in third party funding in litigation and getting repaid after the outcome of the litigation.”

The scope of Arbitration has been widened with the introduction of emergency arbitrator provision which provides an urgent relief ,being provided during the pandemic . The LCI in its 246th report had recommended to recognize the concept of the emergency arbitrator by widening the definition of the arbitral tribunal.


With the advent of the ADR ,there is a new way to settle the disputes. Arbitration process is a cost – effective and less time consuming procedure. It is finalised by providing an arbitral award . The present status of the Arbitration has provided that the population had understood the pure concept of this concept and it’s viability in the enforcement of the law through and alternate point of view with the aim to increase the sustainability more significant in the life of the people as well as the society. The process of Arbitration has reduced the burden of the courts and it also keeps the dispute private and provides a quick and effective remedy to the parties in the dispute. In India , the Arbitration is still in its growing ageto touch the ends. Slowly but steadily India is taking the steps to establish an arbitration friendly country as per the emerging need of the arbitration.

This article is written by Kiranjot Kaur of Teerthanker Mahaveer College Of Law And Legal Studies.

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