Arbitration: Meaning and Overview

Meaning

Arbitration is a private, judicially recognized alternative to litigation where disputing parties agree to resolve their disputes by referring them to an impartial third party, called the arbitrator. The
arbitrator’s decision, known as an arbitral award, is binding on the parties and enforceable as a court decree. Arbitration is based on the principle of party autonomy, which allows parties to decide the procedure, rules, and location of the arbitration.

Legal Framework

In India, arbitration is governed by the Arbitration and Conciliation Act, 1996 (ACA), which incorporates modern arbitration principles based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985. The Act aims to:
1. Reduce court intervention in arbitration proceedings.
2. Ensure quicker and cost-effective dispute resolution.
3. Promote party autonomy in choosing arbitrators and procedural rules.

• Key Section: Section 2(1)(a) of the Act defines arbitration comprehensively: