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Dispute Resolution in India

The Dispute Resolution process in India mainly involves the following:

• Litigation

• Arbitration

• Conciliation

• Mediation

Litigation in India

The litigation process in India is based on common law. It is largely based on English common law because of the long period of British colonial influence during the British Raj.

There is a single hierarchy of courts in India. Much of contemporary Indian law shows substantial European and American influence. Various acts and ordinances first introduced by the British are still in effect in modified form today. During the drafting of the Indian Constitution, laws from Ireland, the United States, Britain, and France were all synthesized to get a refined set of Indian laws as it currently stands. Indian laws also adhere to the United Nations guidelines on human rights law and environmental law. Certain international trade laws, such as those on intellectual property, are also enforced in India.

Each state drafts it own laws, however all the states have more or less the same laws. Laws directed by the central government and the Supreme Court of India via judicial precedent or general policy directives are binding on all citizens of each state. Each state has its own labor laws and taxation rates.

India's judicial system is made up of the Supreme Court of India at the apex of the hierarchy for the entire country and twenty-one High Courts at the top of the hierarchy in each State. These courts have jurisdiction over a state, a union territory or a group of states and union territories. Below the High Courts are a hierarchy of subordinate courts such as the civil courts, family courts, criminal courts and various other district courts.

The High Courts are the principal civil courts of original jurisdiction in the state, and can try all offences including those punishable with death. However, the bulk of the work of most High Courts consists of Appeals from lowers courts and writ petitions in terms of Article 226 of the Constitution of India. The precise jurisdiction of each High Court varies.

Each state is divided into judicial districts presided over by a 'District and Sessions Judge'. He is known as a District Judge when he presides over a civil case, and a Sessions Judge when he presides over a criminal case. He is the highest judicial authority below a High Court judge. Below him, there are courts of civil jurisdiction, known by different names in different states.

Arbitration in India

The Applicable Arbitration Law

The Indian Arbitration and Conciliation Act, 1996 the governing arbitration statute in India. It is based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985.

Previous statutory provisions on arbitration were contained in three different enactments, namely, the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Arbitration and Conciliation Act, 1996 has repealed the Arbitration Act, 1940 and also the Acts of 1937 and 1961.

International Conventions on Arbitration

India is a party to the following conventions:

• the Geneva Protocol on Arbitration Clauses of 1923

• the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927; and

• the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. It became a party to the 1958 Convention on 10th June, 1958 and ratified it on 13th July, 1961. 

There are no bilateral Conventions between India and any other country concerning arbitration.

The Types of Arbitrations

The Indian Arbitration and Conciliation Act, 1996 applies to both domestic arbitration in India and to international arbitration. Section 2(1)(f) of the Act defines "International Commercial Arbitration" as arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India where at least one of the parties is: 

1. an individual who is a national of, or habitually resident in any country other than India; or 

2. a body corporate which is incorporated in any country other than India; or 

3. a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or 

4. the Government of a foreign country.

Requirements of an Arbitration Agreement

• Section 7(3) of the Act requires that the arbitration agreement must be in writing.

• Section 7(2) provides that it may be in the form of an arbitration clause in a contract or it may be in the form of a separate agreement.

• Under Section 7(4), an arbitration agreement is in writing, if it is contained in : (a) a document signed by the parties, (b) an exchange of letters, telex, telegrams or other means of telecommunication, providing a record of agreement, (c) or an exchange of claims and defense in which the existence of the agreement is alleged by one party and not denied by the other.

•  In section 7(5), it is provided that a document containing an arbitration clause may be adopted by "reference", by a contract in writing. 

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