Arbitration and Conciliation Act

Arbitration and Conciliation Act

11-Aug-2021 | Article by Legal White Official

 The government of India in the year 1996 passed a law by the name Arbitration and Conciliation Act 1996 to regulate domestic arbitration in the country. This act came to be effective from 25th January 1996. To make it more effective and preferred, the law was further amended in 2015. This law works in tandem with the law which was adopted by the United Nations Commission on international Trade Law (UNICTRAL). This law was introduced in order to unburden the courts with regards to the number of cases filed. Arbitration is a part of ADR or Alternative Dispute Resolution. Since its inception, it has gained popularity in terms of people choosing arbitration instead of the usual court procedure. Unlike the court case wherein the losing party has the privilege to appeal their case in a higher court, the decision of the arbitration is final and binding and has a very little scope for appeal.

Liberalization, Privatization and Globalization were the main triggers for the Arbitration and Conciliation Act. The law provides guidelines and the procedure for the arbitration process. It ensures that the arbitration process is smooth, fair and effective. It encourages that all the resources and processed are used in order to provide an acceptable resolution for the dispute between parties. The process of arbitration is a lot less formal as compared to the process of litigation. It is also usually cheaper if it is compared to court case. One of the most important factors regarding arbitration is that, one doesn’t need a lawyer to present his or her case in front of the tribunal. Arbitration and Conciliation Act has also laid procedures for the execution of the decision or what is commonly called “award” once it has been passed.

The act gives a free hand to the disputing parties to appoint the arbitrators. The parties can mutually appoint their arbitrators however they have to be in odd numbers. In case the parties do not agree on the arbitrators, the high court or the Supreme Court appoints them for the case. The act also encourages the companies to incorporate a clause for arbitration in the business contracts between them.

As for the disputes are concerned, all disputes of civil nature can be referred to the arbitrational tribunal. Disputes such as property, contract, non-fulfilment of the clause, business related disputes etc. can be taken for arbitration. 


In order to conclude, it should be understood that the Arbitration and Conciliation Act is a small step towards the process of arbitration. We might need several amendments to make the act more efficient. Efforts must be made to remove some of the drawbacks which has been observed pertaining to this law. The entire process has to be made time bound to ensure that the resolution is faster. The longer the time of the arbitration, it is less likely to yield the desired results. Disputes of the various other types should also be brought under the umbrella of the act.

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