Arbitration is a dispute resolution process outside the traditional court system, gaining prominence in India due to its efficiency and flexibility. The Act governing the arbitration proceedings in India namely “The Arbitration and Conciliation Act, 1996”. A proceeding under arbitration goes through the following stages as the above-mentioned act:
- Stage I- Agreement of Arbitration
The process begins with parties agreeing to settle their dispute through arbitration. This agreement is usually made by the addition of an arbitration clause in the contract or can also be made by a separate arbitration agreement.
- Stage II- Notice for Arbitration
The party against whom the default has been committed will send an arbitration notification for triggering the arbitration process steps between the parties in the event that a dispute has arisen and the party has chosen to follow the arbitration procedure.
- Stage III- Appointment of an Arbitrator
Once a dispute arises and the notice for arbitration is served, the parties select an arbitrator or a panel of arbitrators in the manner agreed as per the arbitration clause or the arbitration agreement, as the case may be. If the parties cannot agree, the court can intervene in making the appointment.
- Stage IV- Preliminary Hearing
A preliminary hearing is held by the appointed arbitrator mainly to discuss the arbitration process, timelines, and procedural matters. This helps in streamlining the arbitration process.
- Stage V- Submission of Claims and Defences
Both parties present their case including claims and defenses, along with any supporting documents or evidence. Statement of claims carries the events which lead to a dispute between the parties and the relief claimed from the party in default. The defaulting party also has to file a statement of defenses or counter-claims, replying to the statement of claims. Also, the parties exchange their written statements outlining their position and arguments, allowing each side to understand each other’s perspective.
- Stage VI- Hearing and Evidence
An arbitration proceeding takes place before an Arbitral Tribunal, where a hearing takes place and both parties present their arguments and evidence. In this stage, witnesses are also examined and cross-examined.
- Stage VII- Interim Measures
During the arbitration process, parties can request the arbitrator for any interim measures, such as an injunction or freezing of assets, to preserve their rights. Such a measure is passed just for the time till the arbitration proceedings are going on.
- Stage VIII- Passing of an Award
After considering all the evidence and arguments, the arbitrator issues an arbitral award which is a binding decision on both the parties, resolving the dispute. An arbitral award is in writing and is signed by the arbitrator.
- Stage IX- Challenge to Award
Parties have the right to challenge the arbitral award by appealing in the High Court. However, there are limited grounds for challenging the arbitral award, such as procedural irregularities or public policy violations.
- Stage X- Enforcement of Award
Once an award becomes final, it can be executed and enforced like a judgment. If a party refuses to comply, the other party can approach the court for enforcement of such arbitral award.
Note that in certain cases, the court may set aside an arbitral award if there are serious procedural or substantive flaws. Arbitration in India offers parties a more efficient and less formal alternative to litigation. The process is guided by the principles of neutrality, party autonomy, and speedy resolutions.
CONCLUSION:
From the initial agreement to arbitrate to the enforcement of the final arbitral award, each stage is designed to ensure a fair and impartial process that respects the parties’ autonomy and upholds the principle of speedy resolution. The stages of arbitration in India offer a well-defined pathway to resolving disputes. As the Indian economy and legal environment evolve, arbitration is poised to play an even more significant role in shaping the future of dispute resolution.
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