Arbitration is a private way of resolving disputes outside the regular courts. The parties agree to refer their dispute to one or more neutral arbitrators, whose decision — the award — is binding and enforceable like a court decree. For commercial parties it is often faster and more confidential than litigation. Our arbitration and ADR lawyers advise and represent clients at every stage.

The governing law

Arbitration in India is governed by the Arbitration and Conciliation Act, 1996, which is based on the UNCITRAL Model Law. The Act has been significantly updated by the amendments of 2015, 2019 and 2021, which tightened timelines, limited court interference and addressed the conduct of arbitrators.

The arbitration agreement

Everything begins with a valid arbitration agreement (Section 7). It must be in writing and can be a clause within a larger contract or a separate agreement. Most commercial contracts now include an arbitration clause specifying the number of arbitrators, the seat, and the governing rules.

Not every dispute can be arbitrated — matters such as criminal offences, matrimonial disputes, insolvency and certain tenancy matters remain with the courts.

Appointing the arbitrator

The parties are free to agree on the procedure for appointing arbitrators. If they cannot agree, a party may apply to the High Court or Supreme Court under Section 11 for an appointment. The number of arbitrators must be odd (commonly one or three). An arbitrator must remain independent and impartial and disclose anything that affects this (Sections 12 and the Fifth/Seventh Schedules introduced in 2015).

Interim protection

Either party can seek urgent interim relief — for example, to preserve assets or property — from a court under Section 9 or from the arbitral tribunal under Section 17. Since 2015, a Section 17 order of the tribunal is enforceable like a court order.

Conducting the arbitration and the timeline

The tribunal decides its own procedure, holds hearings and receives evidence. A key reform is the timeline in Section 29A: the award must generally be made within 12 months from the completion of pleadings, extendable by the parties by a further 6 months; any further extension requires the court. A consensual fast-track procedure (Section 29B) allows an award within 6 months.

The award

The tribunal’s decision is the arbitral award. It must be in writing, give reasons (unless the parties agree otherwise), and is final and binding on the parties.

Challenging an award

An award can be challenged only on the limited grounds in Section 34 — such as incapacity of a party, an invalid agreement, denial of a fair hearing, the award going beyond the reference, or conflict with the public policy of India. The application must be filed within three months of receiving the award (the court may condone a further 30 days, but no more). Courts do not re-hear the dispute on merits.

Enforcing an award

Once the time to challenge has passed (or a challenge has failed), the award is enforced as a decree of the court under Section 36. Importantly, since the 2015 amendment, merely filing a challenge under Section 34 does not automatically stay enforcement — the court must grant a separate stay, and may require the award-debtor to deposit the amount.

Arbitration vs litigation

	Arbitration	Court litigation
Privacy	Confidential	Public record
Speed	Time-bound (Section 29A)	Often slower
Choice of decision-maker	Parties choose the arbitrator	Court-assigned judge
Appeal	Very limited (Section 34)	Multiple appeals
Cost	Arbitrator + venue fees	Lower court fees

Disclaimer: This is general information, not legal advice. The right approach depends on your contract and dispute. Please consult our lawyers before acting.

Arbitration in India: A Guide to the Arbitration & Conciliation Act 1996