How arbitration works under the Arbitration and Conciliation Act, 1996. General legal information only.
Drafting the clause
- Say clearly that disputes will be referred to arbitration.
- Fix the seat and venue, the language, the number of arbitrators and how they are appointed.
- State the governing law of the contract.
- Consider an escalation step, such as negotiation or mediation, before arbitration.
If a dispute arises
- Send a written notice invoking arbitration under the clause.
- If the parties cannot agree on an arbitrator, apply to the High Court or the Supreme Court under section 11, as the Act provides.
- The tribunal fixes the schedule, hears the parties and passes an award.
Interim relief
A party can ask the court for interim measures such as protecting assets under section 9, before or during the arbitration, in the situations the Act permits.
After the award
- A party can apply to set aside the award under section 34 on limited grounds, within three months from receipt of the award, extendable by a further 30 days at most.
- If no application is made or it fails, the award is enforced as a decree of the court.
Government and MSME disputes
Special procedures apply in some cases, such as references to the MSME Facilitation Council. Check the clause and the statute before proceeding.
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Important disclaimer: This article is general legal information, not legal advice. It does not create a lawyer-client relationship and is not an advertisement or solicitation under Bar Council of India rules. Verify current statutes, rules and judgments before relying on it.
