Key Features of Arbitration
The Arbitration and Conciliation Act, 1996, provides a quicker remedy compared to traditional litigation. Here’s why arbitration is often considered a preferred mechanism for dispute resolution:
- Speedy Resolution: Arbitration proceedings are generally faster than court cases, with time limits for the completion of proceedings set under the Act (e.g., 12 months for arbitration awards, extendable by 6 months with parties' consent).
- Cost-Effectiveness: While it might seem expensive at the outset (arbitrator's fees, administrative costs), arbitration can save costs in the long run by avoiding prolonged litigation.
- Flexibility: Parties have the freedom to choose procedural rules, arbitrators, and the venue, ensuring a tailored approach to dispute resolution.
- Confidentiality: Unlike court proceedings, which are public, arbitration maintains the confidentiality of the dispute and its resolution.
- Enforceability: Arbitral awards are binding and enforceable in the same manner as a court decree, as per Section 36 of the Act.
- Neutrality: Parties can choose arbitrators who are neutral and experts in the subject matter, ensuring an informed decision-making process.
Scope for Quick Remedy
The amendments in 2015 and 2019 to the Act further emphasize expeditious disposal of disputes by introducing timelines and ensuring minimal interference by courts. For example:
- Section 29A: Mandates time limits for delivering arbitral awards.
- Section 34: Ensures that court intervention in setting aside arbitral awards is limited and time-bound.