Arbitration and Mediation Law
Arbitration and Mediation Law
The traditional methods of dispute resolution are time-consuming, expensive, and often lead to delays in the resolution of conflicts. Courts are overburdened with pending litigation while new matters are being filed daily. Though there are several areas of law that require the use of conventional methods of dispute resolution, for other spheres of law alternate dispute resolution (ADR) mechanisms are quick and cost-effective methods to resolve disputes.
ADR is a process that allows to parties to resolve disputes without engaging in the traditional methods of dispute resolution, i.e. courts of law. It offers several advantages to parties. The process is less formal and involves the parties playing a crucial role in influencing the procedure and result, leading to adoption of creative solutions for resolution of their issues which would not be possible before courts of law. Further, it is less adversarial than a court proceeding, which in turn encourages the parties to reach an amicable resolution. The ADR process also allows parties the benefit of confidentiality by allowing them to keep their dispute private. However, the biggest advantage of ADR process lies in the fact that it saves the parties time, effort, and cost. Indian courts have, time and again, acknowledged the advantages of ADR mechanism in reducing the burden on the courts.
There are various types of ADR processes such as arbitration, mediation, conciliation, and negotiation. They may be of binding or non-binding nature. Further, some laws mandate the use of ADR prior to approaching the courts.
Arbitration is a form of ADR whereby parties agree to submit their dispute to an unbiased neutral third party called an arbitrator for resolution. The arbitrator hears all parties involved and makes a determination on the dispute based on the applicable laws. The arbitral award is binding on the parties. It is one of the most popular non-judicial methods of dispute resolution especially for commercial disputes. In India, arbitrations are governed by the Arbitration and Conciliation Act, 1996, as amended from time to time. The Arbitration and Conciliation Act, 1996 was drafted taking into account the Model Law on International Commercial Arbitration adopted in 1985 by the United Nations Commission on International Trade Law (UNCITRAL). The Act lays down the law pertaining to domestic arbitrations, international commercial arbitrations as well as enforcement of foreign arbitral awards. An arbitral award can only be challenged on limited grounds as set out in the Arbitration and Conciliation Act, 1996.
Mediation, on the other hand, is more informal than arbitration. A mediation proceeding involves parties working with a facilitator, called the mediator, to reach an agreement. The mediator assists the parties in finding a solution acceptable to all parties helping them maintain their relationships due to the non-adversarial nature of the process. A major difference between arbitration and mediation is that mediation is not binding on the parties. Several laws in India mandate an attempt to resolve disputes by mediation before approaching the courts for adjudication of a dispute, such as, Commercial Courts Act, 2015. A Mediation Bill, 2021 has been introduced in the Parliament to codify laws regarding mediations and is currently under consideration by the Parliament.
A&A is reputed for its dispute resolution practice which has been growing and expanding ever since its inception 42 years ago by efforts of the founding partner, Mrs. Avnish Ahlawat. Ahlawat and Associates is one of the prominent law firms in India known for its arbitration and mediation practice. A&A’s alternate dispute resolution practice not only involves advisory work but also includes successful representation of clients in high-value commercial arbitral proceedings. A&A has successfully handled multi-million dollar claims for its clients through alternate dispute resolutions mechanisms such as arbitration and mediation.
A&A has built its reputation of being one of the most sought-after firms for arbitration and mediation services across various industries. A&A’s ADR-focused team consists of experienced lawyers prepared to handle complex disputes while also assisting clients in obtaining necessary court orders, such as, arbitrator appointments, interim relief, challenging awards etc.
A&A’s approach on arbitration and mediation is to focus its efforts to synchronize case strategy and client’s commercial interests, while ensuring cost-effective and timely resolution of issues. A&A aims to achieve the best possible results for their clients by developing case specific strategies using the expertise of their highly-skilled lawyers from other practice areas ensuring that clients receive appropriate issue and sector-specific guidance. A&A is committed in its support of alternative dispute resolution mechanisms and aligns itself with the views of the Courts in India promoting ADR. The Firm’s vast litigation experience gives it a unique advantage in understanding the complexities of the matter at hand as well as the ability to identify the elements that would lead to successful results.
1. What are the requirements of an arbitration agreement under the law?
As per the provisions of the Arbitration and Conciliation Act, 1996, an arbitration agreement means a written agreement by which the parties agree to submit to arbitration their disputes that may have arisen or may arise in respect of their legal relationship. It is important to note that it need not necessarily be in the form of a separate agreement but may even be clause in a contract. Arbitration agreements can also be inferred from an exchange of letters or other means of communication that could provide a record of agreement, documents signed by the parties, or an exchange of statement of claims and defence where existence of the agreement is alleged by one party and the same is not denied by the other. Case laws in this field have expanded the ambit of the term “arbitration agreement”. Further, the Supreme Court of India has time and again held that an arbitration agreement needs to be in writing, however, it does not need to be signed.
2. Can an arbitration agreement be ignored to commence court proceedings directly?
The provisions of the Arbitration and Conciliation Act, 1996 make it very clear that if any action is brought before a judicial authority and such action is subject to an arbitration agreement, then such authority shall refer the parties to arbitration. This does not apply where the judicial authority determines that no valid agreement exists.
3. How is arbitration different from other forms of alternate dispute resolution mechanisms?
Arbitrations in India are governed by the Arbitration and Conciliation Act, 1996. The parties are free to decide whether they wish to refer their disputes to arbitration, the number of arbitrators, the seat of such arbitration, and the procedure of arbitration. However, the final arbitral award is binding on them with only a limited scope of challenge. Mediation, conciliation and other forms of alternate dispute resolution mechanisms are more informal and allow the parties to reach a solution together with the help of their chosen facilitator without such solutions being binding.
4. Can parties decide to mediate their disputes?
Usually, parties are free to decide and mutually opt for mediation voluntarily. No party can be forced to mediate. A mediator can be selected by the parties to settle the differences and reach an amicable solution. There are certain statutes that require the parties to undergo mandatory mediation before a case may be instituted in the courts, to encourage settlement. One such law is the Commercial Courts Act, 2015 which requires the parties to go through pre-institution mediation before instituting an action in the court with limited exceptions.
Get in touch with us today
We can be reached at