Indian Arbitration Practices in India – An Overview

Indian Arbitration Practices
Arbitration agreement and gavel on a desk.

Author of the Article:

Shatakshi Dixit and Tanmay Tripathi


Indian Arbitration Practices – A phenomenal growth in the domestic trade and international trade has been marked in India. This has witnessed marvelous opportunities and high risks which lead to various disputes. Arbitration in India is helping India to combat these disputes and ensure an easy transition of the trading system internally as well as across borders.

ARBITRATION is preferred over other remedies available to compute the disputes. This is because our judiciary system is lagging behind. It is not at all unusual for our judiciary system to get clogged because of overburdened cases. It is very common that a case remained pending for almost a decade, mostly when the cases are complicated or involve huge amount of money. To avoid such time taking procedures, companies nowadays make it a standard to include a clause related to arbitration in almost all contracts involving huge amounts. Various government entities make it mandatory for the parties to involve arbitration as a remedy for solving dispute, while engaging in any transaction with the government.


Arbitration is a process in which both the parties, with mutual consent come to arbitrator with their dispute, in search of solution. The decision made is binding on both the parties; they have to abide by it. Non compliance with any decision will make that party to go through certain bad consequences. Arbitrator assigned/hired can be one or more. When the clients opt for arbitration then they switch to a private dispute redressal, from visiting the court. Arbitration is an online dispute resolution which is independent, clients can choose their own arbitrator but the decision should be consensual. Arbitrators are not inclined towards any party and there is no chance of being biased or having favoritism. Any decision made by the arbitral tribunal is totally fair and easy to enforce.  People prefer arbitration because here their data remains confidential and safe which is not the same if they do visit the courts.


India is adopting various measures to enhance the performance of arbitrators and ensuring the smooth functioning of the same. Various moves have been taken to improve the position of arbitration in India. Amendments have been made in the act, some of them are:

  • Application of restriction of time.
  • Measures were taken to encourage the institutional arbitration.
  • Interference of the court was reduced.
  • Negative applications regarding arbitral awards were discouraged.[1]

In the recent judgments given, judges have mitigated the level of intervention of the courts in the matters related to arbitration. There are various advantages and some disadvantages of arbitration, when practiced. Those are as follows-


  • It is labor saving and well planned and it reduces the amount of time involved in solving disputes and other matters. The procedures involved in court are very prolonged and seem never ending at times.
  • Arbitration is very helpful when the case is complex as in this parties can set their own block dates for the next trial or upcoming hearing. Here arbitration has an edge over courts as their failing to appear can lead the case to continue till a decade where the same case is heard and temporary solution is provided by different judges.
  • Better judgment delivery is experienced in the case of any technical matter, as the parties are at discretion to choose their arbitrator. At times people find themselves standing in front of the courts that do not have sufficient knowledge regarding the technicalities of the matter.


  • Intervention of the court. This has been a problem for long time, but is recently remedied by the various amendments made in the INDIAN ARBITRATION ACT 1996.
  • Inadequate arbitration department. This implies that hearing of the arbitration related cases were made sometimes after the court hour, sometimes in the weekends, etc. This would take the case, too long to wind up. But now the restrictions are imposed and the problem is solved.
  • Transcription facilities in India are substandard and this makes the procedure works in a comparatively slower manner. But all this reduces cost and saves time on the whole.


In a survey conducted, most of the companies state that the future of arbitration in India is assured; even 43% of the companies assert that it is very likely that arbitration will gain popularity very soon. Among all the companies who have experienced arbitration earlier, 82% of those assure to adopt the same procedure further.  46% of those companies who have not used arbitration yet are willing to use the same in the future[2]. After analyzing the difficulties faced by the companies and their learning it is suggested that the following measures should be taken to escape the previously faced challenges:

  • A full-bodied arbitral institution is needed to overcome the challenge of selection of arbitrators.
  • Benefit of the seat of arbitration should be discerned.


[1] Arbitration procedures and practice in India: Overview

[2] Compared Attitudes and Practices towards Arbitration in India


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