So arbitration is one of the forms of India where in two persons who have a dispute they come together and they get the dispute resolved outside the court through a person who is called an arbitrator and that person views the documents and the bleedings and convention of both the parties and thereafter arrive at the decision and that decision is called an arbitration award and arbitration award is binding to go on the both the parties and that can be legally enforced through the court as well
why to choose arbitration over the court procedures?Arbitration is normally cost effective procedure wherein the time taking process is much lesser than the process in the court, and as we all know that the time involved in Indian Court is a lot and the dates are really long and that is why all the commercial parties prefer arbitration rather than going to the code because it is a time effective and cost effective.
The two ways to conduct arbitration are ad hoc arbitration and the other is the institutional arbitration, the ad hoc arbitration is the most traditional form of arbitration wherein a person is appointed he's normally judge retired judge or a jurist having a lot of experience in arbitration and that arbitration is appointed by the parties with with the consent of both the parties and that arbitrator after going through the documents and the evidences on record passes in arbitrator word where as in the institutional arbitration an institution who is specifically dealing with arbitrations has a group of panel impaneled arbitrators who decides the matter and in a more professional way like in a professional way they conduct the arbitration and they have a norms set norms which are being followed and accordingly and institutional arbitration administers that arbitration process on its own set of rules and the framework of arbitration is a little more professional in that way .
Their have been a lot amendment made in arbitration And India being a very global economy right now it is on the boom of starting to have arbitrations in a lot of matters so to the 2019 amendment specifically incorporated the term institutional arbitration the institutional arbitration was there before 2019 amendment within the operational conservation act and with the 2019 amendment section 21 ca was incorporated where in an institutional arbitration was defined in the arbitration conciliation on 9th of August 2019 So what does institutional arbitration has been defined in the official conciliation act is basically any institution which has been designated by the Supreme Court or the High Court so such institution is called the arbitration institution as per the arbitration and conciliation act.
The need to Strength the institutional arbitration and the arbitration process was considered by Justice BN shree Krishna committeeI this committee had suggested the reforms and agenda of this committee was basically to recognise the need and the lacunas which were lacking to make the arbitration process in India strong and do make give us guidelines as to how the institutional arbitration dream can be made a very in a very strong manner and in a very strength manner .so justice BN shree krishna committee reviewed the challenges faced by the institution arbitration india and recommended that they there is a need to dissolve the international council for arbitration dispute resolution which is icadr and once that organisation was dissolved a new organization was set up which is now the operation council of India and accordingly a new institution was also enacted by the way of the New Delhi international Arbitration Act that is the NDIAC.
See as we all know that India at present is an exam is on the path of becoming an economic power and the boom in the business and the commercial transactions the World Bank forum in the recent report submitted that India stands on the 100th hundredth number in the ease of doing business and therefore there was a lot of countries who wanted to start business with the Indian companies and win the Indian organization and therefore there was a need that the arbitration or the dispute resolution mechanism needs to be also strengthen. at present there are approx 35 institutional arbitration in India which are functioning, the prominent ones we as we all know is nani palkhivala arbitration centre or the mumbai international arbitration centre.
So there was a need that India should strengthen its application regime moreover this also a study which was found out that London court of international arbitration center which is in Europe so they the cost effective London quote with transferred a lot of matters in India because of the cost and because of the time the cost as compared as according to economic survey it was found that in India the cost for resolving a dispute before the Internet in the arbitration regime comes to thirty one percent of the dispute amount whereas previously in the other Country need it comes to around nine percent to thirty three percent ,let us consider an example so dispute for 1 crore if disputed is resolved through and Indian arbitration institution the amount of cost dispute will come to around 22 lacs whereas in Europe the same amount will come to 33 lac so its around like 10 lacs difference so lot of matters were transferred from london court of International Arbitration to India. And in such institutions the matter were dealt in a short period of time. India arbitration conciliation act specifies the time limit which is of one year and extendable for six months so one and a half years is the time within which the disputes have to be resolved of course but there are certain limitations to this also because certain times that the matters are not decided there after the court have been abroad for extension of time but that also putwrong impression of the arbitrators and therefore the arbitrators also these days try to complete the matters within the time frame as specified. So that are the reason why many matters were transferred. So this is the reason why India is considered as a new hub for institutional arbitration.
However there are certain lacking that need to be redressed
