Arbitration- Simplifying the Legal Battles

Introduction to Arbitration

Arbitration has become a buzzword in today’s commercial contracts. The law gives the parties the option of entering into commercial agreements knowing that if there is a dispute, they can refer it to this easy, quick, convenient, and cost-effective approach rather than going through the complex and lengthy proceedings of a court. Both domestic and international arbitration are covered by the Act. This article focuses on domestic issues that also apply to major aspects of international arbitration.

Advantages of Arbitration

Alternative Dispute Resolution (ADR) includes arbitration. ADR procedures have a number of advantages, including-

• Lower costs
• Procedural flexibility
• Increased confidentiality
• Increased possibility of settlement
• Choice of forum
• Choice of remedies

and so on. Arbitration, on the other hand, is one of the most well-known and widely used kinds of ADR.

Arbitration in India

Since its beginnings in 1940, India’s arbitration law has been on the rise. The current arbitration legislation is a compilation of many proclamations and ordinances issued by the Indian government in response to the country’s ongoing economic changes. The Act of 1996 is the fundamental source of Indian arbitration law. An Act that was passed to unify the laws governing local and international arbitration, as well as its enforcement.

Some substantial revisions were implemented in the years 2015 and 2019 in an endeavor to make arbitration a favored form of resolving commercial disputes and to make India a center of international commercial arbitration. The current law is made up of multiple similar revisions, the most recent of which were enacted in 2019.

Landmark Judgements

1. Amazon. Com NV Investment Holdings LLC v. Future Coupons Private Limited & Ors

The concept of an emergency arbitrator is based on party autonomy, according to the Court, because the legislation affords the parties complete authority to appoint an arbitrator or arbitral institution. Furthermore, the emergency arbitrator is a full-fledged arbitrator. The emergency arbitrator’s order is binding on the parties, but not on the arbitral tribunal that is later formed, which has the right to reconsider, modify, terminate, or nullify the emergency arbitrator’s decision/award. Finally, the emergency arbitrator’s order was found to be an order under Section 17(1) of the Act and enforceable as an order of the Court under Section 17(2) of the Act.

2. M/S NN Global Mercantile Pvt. Ltd v. M/S Indo Unique Flame Ltd & Others

The Supreme Court ruled that the arbitration agreement is a separate contract between the parties that is exempt from stamp duty. The arbitration clause would not be nullified if the commercial contract’s stamp duty was not paid because it has its own existence. Furthermore, the Court stated that the judgement in SMS Tea Estates and Garware that failure to pay stamp duty on a commercial contract would render the arbitration agreement null and void is incorrect in law, and referred the case to a bigger court.

Conclusion

Arbitration is versatile and useful, especially when the dispute involves a highly technical subject, hence, arbitrators with the right level of competence must be selected. It is the most discreet method that functions if both the parties have given their assent to it. Such a technique saves a significant amount of time that would otherwise be spent in other court proceedings and is simple to implement.