Arbitration, an alternative dispute resolution (ADR) method, does not require court involvement in arbitrator selection or award issuance. The pace of judicial administration in India and legislative support for ADR must be examined to understand this assertion.

The National Judicial Data Grid reports about 4.47 lakh cases waiting in courts from the highest to the lowest institutional level. Ironically, 85 per cent of these cases are in district courts. Over six lakh of these cases have been languishing for over 20 years, and 95,000 for over 30. As much as 1.10 million civil lawsuits and 3.33 million criminal cases are pending. This has led policymakers to consider alternative justice delivery methods or ADR mechanisms.

A major statute

The Arbitration and Conciliation Act, 1996 is a major ADR statute. It has some roots in the 1940 Arbitration Act. From 2015 through 2021, the 1996 statute was amended to make arbitration available to anybody who desired to resolve disputes outside of court. Arbitration aims to give arbitrators’ rulings the same weight as a court’s judgment. Section 7 of the Act requires parties to freely agree to arbitrate. Both disputing parties should go to an Arbitration Institution to find a mutually agreed arbitrator. Arbitrators hear cases like courts do and make awards. A conventional court case, where only one aggrieved party goes to court and the court summons, collects evidence, hears, and passes the judgment, does not require mutual consent. Sometimes the other party is unaware that a court will summon it for any act that requires judicial action to resolve the disagreement. The difference between mediation and arbitration is minimal. In mediation, disputing parties choose a mediator/mediation institution, consult them, and resolve the conflict on their own with the mediators’ expert advice, while in arbitration, parties give the arbitrator decision-making power with mutual consent. Then the arbitrator passes an award that is enforceable legally.

Arbitral procedures are never interrupted by courts. Arbitrators need not be court-appointed. The parties are free to agree on a procedure for appointing the arbitrator(s), but if they fail to do so, the court will appoint an arbitrator, according to Section 6(2) of the Act. Section 5 of the Act confirms that no judicial authority shall interfere except as authorised in this Part in matters controlled by this Part.

The courts can intervene four more times at the parties’ request. One, to refer parties to arbitration under Section 8 if there is an arbitration agreement. Two, to grant interim measures under Section 9, if requested by the parties. Three, under Section 11, if the parties cannot agree on a tribunal appointment method or cooperate in making appointments. The fourth intervention is to set aside the award under Section 34 of the Act at the parties’ request if the arbitrator did not follow the procedure, there is no agreement, the arbitrator was unilateral, the parties were incompetent, or a conflict of interest existed. Otherwise, courts have no role in appointing arbitral tribunals or passing awards.

Ignorance about arbitration as a non-court conflict resolution method is a big issue. The government revised the Act in 2021 and established the Arbitration Council of India (ACI) to regulate institutional arbitration, although ACI has not yet been operationalised.

Required advocacy initiatives have not been run to reach more people. Private arbitration firms are targeting high-end and multinational clients. Some State governments have signed MoUs with private arbitration institutions to allocate all their cases, which violates the basic principle of arbitration, which requires mutual consent through an arbitration agreement. Using an arbiter without other disputant’s consent is illegal. Arbitration institutions must be notified immediately pending ACI development to govern arbitration justice. Thus, courts can focus on serious criminal cases and reduce case backlog.

The writer is former Senior Advisor, United Nations

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