TIME BOUND ARBITRATION PROCEEDINGS - A BIG REFORM IN ARBITRATION LAW

The chief attribute of dispute resolution through “Arbitration” is speedy and inexpensive. However, both Arbitration Act, 1940 and Arbitration and Conciliation Act,1996 have belied the expectations as the arbitration proceedings have become long winding, delayed and expensive. It is by way of the Arbitration and Conciliation (Amendment) Act,2015 and Arbitration and Conciliation (Amendment) Act,2019 that the Government of India has effectively addressed the issue of delay and introduced several salutary provisions in the Arbitration and Conciliation Act,1996 to make arbitration proceedings time bound. This is a right step in the direction of ease of doing business in India as enforcement of commercial contracts would be speedy.

- Hareesh Kumar Kolichala

A dispute can be resolved through (1) Adjudication by courts, (2) Arbitration, (3), Mediation and (4) Conciliation. A resolution of a dispute in any other mode other than adjudication by a court of law is called as Alternate Dispute Resolution (ADR).

“Arbitration” is being used the world over for resolution of Commercial disputes which is both speedy and inexpensive. Arbitration is an informal, quick and easy alternative mode of adjudication of disputes by agreement of the parties.

In the case of Centrotrade Minerals and Metal Inc. vs. Hindustan Copper Limited [(2006)11SCC245], the Hon’ble Supreme Court observed as under:

“Lord Mustill had once said that “The great advantage of arbitration is that it combines strength with flexibility.... Flexible because it allows the contestants to choose the procedure which fit nature of the dispute and the business context in which it occurs.” Arbitration was meant to be a speedy, expeditious and cost-effective method of dispute reconciliation. So, the primary object of ADR movement is avoidance of vexation, expense and delay and promotion of the ideal of access to justice”.

Protracted, time consuming, expensive and complex court procedure compelled the commercial-world to an alternative, less formal, more effective and speedy mode of resolution of disputes by an arbitrator of choice of the parties which culminated into passing of an Arbitration Act. “Arbitration” as a method of dispute resolution, especially resolution of commercial disputes, emerged as an effective and efficient alternative to traditional dispute resolution through Court.