Q. Feature of Arbitration and Conciliation Act, 1996. Discuss the main causes of its  enactment. Scope and development of arbitration law 

1. Arbitration is considered as an alternative dispute resolution procedure under which mediation  and conciliation are also included. It is considered as International commercial arbitration where  two parties from two different countries approach an international arbitrator either by their  mutual consent or through an arbitration institution and dissolve their dispute accordingly. The  alternative dispute resolution procedure has gained importance in the last few years due to the  increase in commercial market dispute and also it is a speedy, cost-effective and efficient way of  settlement. The United Nations have given due recognition to Model Law of International  Commercial Arbitration and Conciliation rules given by the United Nations Commission on trade  and law ( UNCITRAL). The model law and rules have played a significant role in the settlement of  commercial disputes and provided rules to various other countries. These can be adapted and made  according to their municipal laws as earlier there was no unified law related to trade and its need  was felt with globalization which further gave rise to disputes related to it. 

Based on UNCITRAL model law, India enacted the Arbitration and Conciliation Act, 1996 further  amended in 2015 which deals with domestic and international commercial arbitration in India. The  amended Act especially emphasizes minimizing the role of judiciary court in arbitration  proceedings and further to consider every arbitration order or award as a decree as it is been  considered in civil procedure code. The Act is categorized in two, Part I deals with significant  provisions which deal with domestic and International commercial arbitration procedure to be  conducted in India irrespective of nationality and Part II talks about enforcement of foreign  arbitration award. 

2. Main causes of enactment of Arbitration Act 

• With a view to consolidate and amend the law relating to domestic arbitration,  international commercial arbitration, enforcement of foreign arbitral awards and also to  provide for a law relating to conciliation and related matters, a new law called Arbitration  and Conciliation Act, 1996 was passed. 

• The new Law is based on United Nations Commission on International Trade Law  (UNCITRAL), model law on International Commercial Arbitration.  

• The Arbitration and Conciliation Act, 1996 aims at streamlining the process of arbitration  and facilitating conciliation in business matters.  

• The Act recognizes the autonomy of parties in the conduct of arbitral proceedings by the  arbitral tribunal and abolishes the scope of judicial review of the award and minimizes the  supervisory role of Courts. 

• A significant feature of the Act is the appointment of arbitrators by the Chief Justice  of India or Chief Justice of High Court. The Chief Justice may either appoint the  arbitrator himself or nominate a person or Institution to nominate the arbitrator. 

• The autonomy of the arbitral tribunal has further been strengthened by empowering  them to decide on jurisdiction and to consider objections regarding the existence or  validity of the arbitration agreement. 

3. Scope & development 

Needless to say, arbitration has a long history in India. In ancient times, the mechanism called  “Panchayat” acted as an arbitrator in several matters for a binding resolution .Modern  arbitration law in India was created by the Bengal Regulations in 1772, during the British rule.  The Bengal Regulations provided for reference by a court to arbitration, with the consent of  the parties, in lawsuits for, inter-alia, accounts, partnership deeds, and breach of contract.  Until 1996, the law governing arbitration in India consisted mainly of three statutes: (i)  Arbitration (Protocol and Convention) Act,1937 (1937 Act) (ii) Indian Arbitration Act,1940  (1940 Act), and (iii) Foreign Awards (Recognition and Enforcement) Act, 1961 (1961 Act). The  1940 Act was the general law governing arbitration in India along the lines of the English  Arbitration Act of 1934, and both the 1937 and the 1961 Acts were designed to enforce  foreign arbitral awards. The 1961 Act implemented the New York Convention of 1958. 

The main objectives/scope of the Act are as follows: 

a. To ensure that rules are laid down for international as well as domestic arbitration  and conciliation. 

          b. To ensure that arbitration proceedings are just, fair and effective.

c. To ensure that the arbitral tribunal gives reasons for its award given.

          d.  To ensure that the arbitral tribunal acts within its jurisdiction. 

e. To permit the arbitral tribunal to use methods such as mediation and conciliation  during the procedure of arbitration. 

f. To minimize the supervisory role of courts. 

g. To ensure that an arbitral award is enforceable as a decree of the court.

          h.  To ensure that the result of conciliation proceedings may be treated as arbitral  awards on agreed terms.

i. To treat awards given in a foreign country to which any one of the two international  conventions apply as followed by India as being a foreign arbitral award. 

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