Hello Bandi Suryanarayana,

In India, Arbitration is governed by the Arbitration and Conciliation Act, 1996. Prior to this, there were other separate acts (Arbitration Act, 1940 for Arbitration) which governed the subject matter of Arbitration and Conciliation separately. Recently, the parliament has passed the Arbitration and Conciliation (Amendment) Ordinance, 2015 amending various provisions of the 1996 Act.

Arbitration is one of the procedures of Alternative Dispute Resolution. Many people term it as ‘Out of the Court Settlement Procedure’.

Generally Arbitration arises out of a Contract in which it is mentioned as one of the ways of resolving the dispute before or instead of going directly to the Court. The whole procedure as to how many Arbitrators shall be there to decide and resolve the said dispute, what laws shall govern this arbitration proceeding (the 1996 Act, or some foreign law of any other nation), in what language the proceedings shall occur, at what place this proceeding shall occur and how the cost is to be borne upon by the parties is already mentioned in this clause of the contract. Sometime the name of the Arbitrator or who (as in the Director of some company, or any specific institution etc.) is supposed to be an Arbitrator in case of any dispute arising in between the parties finds its place already mentioned in the clause in advance.

The procedure followed in an Arbitration proceeding is similar to that of the Court and it (procedure) is governed as per the 1996 Act. The final awards and the interim awards passed by the Arbitrator (Arbitral Tribunal in technical terms) are legally binding upon the parties as per Chapter VIII – Finality and Enforcement of Arbitral Award (Section 35 and 36).

In case any party is dissatisfied with the Arbitral Award then he/she can appeal the award before the regular courts of India under section 34 of the 1996 Act.

Besides this, sometime the Hon’ble Courts also direct the contesting parties to resolve their dispute by way of arbitration or conciliation or mediation. In these situations the Hon’ble Courts direct the parties to appear before the Arbitration Centre or the Mediation Centre or the Conciliation Centre (applicable as per the directions) established by the Court itself. The concept of directing the contesting parties to Mediation Centre to amicably resolve the dispute is very prevalent in the Family Courts of India.

*Attribution - This answer is written as per the law of the land in simple language for better understanding.

.

Hope this helps...

Thank you and all the best...