Settlement of Commercial Disputes through Conciliation, Mediation and Arbitration in India.
The Chief Ministers and the Chief Justices of States in a Conference held in New Delhi on December 4, 1993 adopted the Resolution under the Chairmanship of the then Prime Minister of India and presided over by the Chief Justice of India.
“The Chief Ministers and Chief Justices were of the opinion that Courts were not in a position to bear the entire burden of justice system and that a number of disputes lent themselves to resolution by alternative modes such as arbitration, mediation and negotiation. They emphasized the desirability of disputants taking advantage of alternative dispute resolution which provided procedural flexibility, saved valuable time and money and avoided the stress of a conventional trial”.
In present scenario, the Arbitration has become a preferred option to settle commercial disputes globally as well as in India. In India, the provisions relating to settlement of dispute by way of arbitration and conciliation are contained in the Arbitration and Conciliation Act, 1996. Urgent steps can be taken to facilitate timely enforcement of contracts, easy recovery of monetary claims, reduce the pendency of cases in courts and hasten the process of dispute resolution through arbitration, so as to encourage domestic contracts as well as the foreign investment by projecting India as an investor friendly country having a sound legal framework and ease doing business in India.
Steps and Procedure for settlement of Dispute through Arbitration:
1. Arbitration Agreement: To refer a dispute for settlement through Arbitration, there must be an Arbitration Agreement between the parties to settle the disputes arisen or may arise between them. The Arbitration Agreement may be a separate agreement or a clause in any contract / agreement to settle the disputes through arbitration.
2. Notice for Arbitration: Where a dispute has arisen between the parties to an agreement, a party shall send a arbitration notice / notice for arbitration to the defaulting party for invoking arbitration clause / arbitration agreement.
3. Appointment of Arbitration: Upon receipt of arbitration notice by defaulting party, both parties shall appoint the Arbitrators / Sole Arbitrator in the manner as agreement between them in Arbitration Agreement / Arbitration clause of the Agreement.
4. Statement of Claim: As a next step the party invoking the arbitration agreement / arbitration clause, shall draft and submit to Arbitral Tribunal (appointed Arbitrators / Sole Arbitrator), Statement of Claim containing the dispute between the parties and compensation claimed from the Defaulting Party.
5. Statement of Counter Claim: Upon receipt of copy of Statement of Claim, the defaulting party shall submit Statement of Counter Claim along with reply to the statement of claim before the Arbitral Tribunal.
6. Hearing of Parties: Thereafter, the Arbitral Tribunal will hear both the parties and their evidences.
7. Award: After hearing of both the parties to the dispute, arbitral tribunal will pass the decision in the form of an “Award” which is binding on the parties.
8. Appeal against the Award: The party not satisfying with the Award may prefer an Appeal to the High Court on the ground specified in Section 34 of the Arbitration and Conciliation Act, 1996.
9. Enforcement / Execution of Award: Award can be enforced / executed in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.
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