Arbitration in a common context relates to anything done or acted without any prescribed or particular frame work on a dispute. Before the emergence of judicial systems in the formal form of the country, the decisions taken upon several disputes during early time in an informal way was arbitrary in nature. Provincial State rules did not have uniform State rule strategy during pre independence era in India. During this time the arbitral proceedings were subjected to the Arbitration act of 1940. After independence the fundamental document of the land, The constitution of India was framed in 1950, that envisaged several articles ensuring proper functions of administrative systems. Article 323-B confers the power to set up Tribunals for other matters without altering the basic structure of the power put forth by the Constitution. The Arbitration Act of 1940 was exercised till the new enactment in 1996. The emergence of the Arbitration and Conciliation Act 1996, was the result of the sluggish arbitrary proceedings followed in accordance with the Act of 1940, that didn’t give any fruit in the commercial disputes and resulted only in the ineffective and worthless adjudication where court had to intervene in adjudication on several arbitrary disputes.
The new Act of 1996, is a modified contribution from the United Nations Commission on International Trade Law Model and Arbitration Rules of the United Nations Commission on International Trade Law 1976. The main object of the Act was to give liberty to Arbitral proceedings and Adjudication and thereby to provide an independent status. The decree or the judgment of an arbitration proceedings need to be treated and implemented in the same manner of a Court decree as per the new Act. The new Act deals with the domestic, international commercial arbitration, enforcement of foreign award and conciliation as specified in Part I and II. The conciliation proceedings are formulated based on the UNICITRAL Conciliation Rules of 1980. The main purpose of the enforcement of the Act is to have an effective mercantile or commercial trade relation with the rest of the countries in the world. Any aspects in the dispute between countries regarding commercial arbitration, domestic arbitration matters need to be freed from the intervention of the courts was enunciated in this act for the speedy adjudication that is unlike in the normal court proceedings. In this modern time of Globalization, speedy adjudication is an important factor that will determine the international trade relations that are inevitable in the progress of economy of the country.
In the current Scenario of economy of the country, features in the Act that is applicable to all type of arbitration irrespective of being statutory or non statutory, if it is arbitrary in nature with a proper agreement that is subject to the provisions of the act of 1996.
The arbitration agreement should be in writing as per the provisions of the Act with a record of the agreement in any telecommunication mode or by exchange of letters. The Act also states that the relation of the parties in the agreement need not be in a contractual capacity and signature is not required unlike other usual agreements and the conduct of the parties in the agreement shall be treated as valid. This is a unique feature of arbitration unlike the laws of the land that insists on the signature of the relevant parties of an agreement.
The act gives the Arbitration Tribunals to adjudicate any dispute regarding the arbitration agreement and does not promote the Court Intervention except in certain exemptions provided in the Act. The Judicial Authority can interfere in arbitral proceedings according to section 11,for appointing arbitrators, provide assistance in seeking evidence as per section 27 and to give proper ruling if the arbitrator fails to perform his duties and terminated according to section 14(2) of the Act. An appeal shall lay on a decree form the tribunal to the court.
Though the arbitration Act seems to be liberal and independent, the disputes regarding agreements are not conclusively subject to act as the Judicial authority of India always have an indisputable upper hand in determining the final adjudication.