When different traders undertake business transactions, they certainly have good intentions to carry out their deals faithfully and smoothly to earn a well- deserved profit. However, in spite of best efforts, disputes do arise during performance of business contracts which upsets its successful completion. In order to arrive at amicable and quick settlement of disputes, the business contracts shall include comprehensive and precise terms and conditions on all important aspects of the trade deal. Incorporating an arbitration clause in the contract itself is more expedient than entering into an arbitration agreement after a dispute arises.

  • What is arbitration?

Arbitration is a streamlined legal procedure to resolve legal disputes efficiently and at low cost, which is governed by the Arbitration & Conciliation Act, 1996. which also governs the law relating to international arbitration.

Arbitration is known as an alternative dispute resolution mechanism whereby parties can resolve their disputes privately, instead of filing a case in a court.

  • How does arbitration work?

Arbitration often is contractual: two parties agree to use arbitration to resolve a dispute. The parties can refer their case to an arbitral tribunal, the forum where arbitration proceedings are conducted. The arbitral tribunal will consider the questions over which the parties are in conflict. Thereafter, the parties have to exchange the relevant information.  The arbitrator then hears both sides, studies the case and arrives at a decision which is known as an ‘award’ and legally binding on the parties.

Arbitration procedures are very similar to court, but without hurdles of the strict rules of procedure or law of evidence. The process, being faster and less complicated, costs less.

  • What kind of matters cannot be referred to arbitration?

As per general practice, matters involving moral questions or questions of public law cannot be resolved by arbitration. For instance, the following matters are not referred to arbitration:

  • Matrimonial matters, like divorce or maintenance;
  • Insolvency matters, like declaring a person as an insolvent;
  • Criminal offences;
  • Dissolution or winding up of a company.
  • How much does an arbitration cost?

The party bringing the case is responsible for paying a nominal filing fee. The proceeding is much cheaper compared to court process, taking into account the time advantage.

  • Can a party recover its fees if it wins in arbitration?

The winning party can request and be awarded the fees and costs it expended in the arbitration. The Act provides for such a relief.

  • How long does an arbitration take?

The length of an arbitration depends on a number of factors, including the types of claims being brought, the number of parties involved, and the ability to work with the schedules of the parties and their advocates. Most arbitrations can be completed within three to six months, when the same can take years or decades together in courts.

  • Can international disputes be resolved by arbitration in India?

Yes. International disputes can be arbitrated in India and it is advantageous to have India as the venue for international arbitration, if the resultant award is to be executed in India.

  • Indian Council of Arbitration established in 1965 is the apex arbitral organisation and based in New Delhi(
  • Indian Institute of Arbitration and Mediation, non-profit organization was formed by a group of professionals and businessmen in the year 2001, having administrative office in Bangalore (
  • There are list of arbitrators in Mumbai, Chennai, Calcutta, Delhi (