Arbitration Agreement under Indian Law: An Overview
An arbitration agreement is a legal contract between two parties that states that any disputes between them will be resolved through arbitration rather than through litigation in court. In India, the law governing arbitration is the Arbitration and Conciliation Act, 1996. This act was enacted to provide for the settlement of disputes through arbitration in India, to make provisions for the enforcement of foreign arbitration awards, and to define the law relating to conciliation.
The Indian Constitution provides for the right to access to justice, and the Arbitration Act allows parties to resolve their disputes quickly, efficiently, and cost-effectively. The act applies to all arbitrations in India, including international arbitration where the seat of arbitration is in India.
The arbitration agreement must be in writing and must be signed by both parties. The agreement can be in the form of a separate agreement or can be included as a clause in the main contract. The agreement must also specify the number of arbitrators and the procedure for appointing them. If the parties are unable to agree on the number of arbitrators, the default number is three.
The Arbitration Act provides for the appointment of an arbitrator by the parties, or by a third party appointed by the parties. If the parties are unable to agree on the appointment of an arbitrator, the court can make the appointment. The arbitrator must be impartial and must disclose any conflicts of interest.
The arbitration proceedings are governed by the rules agreed upon by the parties or by the rules prescribed by the Arbitration Act. The proceedings are conducted in private, and the award is final and binding on the parties. The award can be enforced by the court, as if it were a decree of the court.
The parties can challenge the award if there are errors of law on the face of the award, or if the award is against the public policy of India. The court can also set aside the award if the arbitrator has exceeded his or her jurisdiction or if there has been a procedural irregularity.
In conclusion, the Arbitration and Conciliation Act, 1996, provides for an efficient and cost-effective way of resolving disputes in India. An arbitration agreement under Indian Law must be in writing, specify the number of arbitrators, and provide for the procedure for appointing them. The proceedings are conducted in private, and the award is final and binding on the parties. The parties can challenge the award only on limited grounds.