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The business owners and various construction based corporate entities, in a way prefer that disputes to be submitted to arbitration. Others contend that since arbitration lacks elements of court litigation’s procedural and legal framework, only conventional litigation can guarantee a result that is genuinely focused on the facts and law. These views are also affected in either forum by favourable, or more possibly, negative experiences. Litigation typically corresponds to the acts disputed by the Court, which include a lawsuit, a dispute and the use of a particular entity, i.e. the Court of Justice, in order to settle the dispute or dispute. Whereas on the other hand, arbitration is a process in which, by consent of the parties, a dispute is referred to one or more arbitrators who make a binding decision on the dispute. By choosing arbitration, instead of going to court, the parties opt for a confidential dispute resolution process.


A Complete Overview on Alternative Dispute Resolution (ADR)


Litigation generally, proceed through distinct steps – pleadings, discovery, trial and possibly an appeal. Broadly, a suit passes through the following five steps –

  1. Institution of a Civil Suit (Plaint, Written Statement, Replication, etc.)
  2. Framing of issues.
  3. Summoning and attendance of witnesses.
  4. Hearing of Suit and Examination of Witness.
  5. Decree/Order and the Judgment.

Stages of Civil Suit –

  1. Presentation of Plaint under (Order 7): The first stage or starting point of all the pleadings in a case in India is the presentation of the plaint in court. Under civil law, the entire justice system was set in motion by the filling of the plaint.
  2. Service of summons on defendant (Order 5): The service of summons on the defendant is the second stage of the civil action. Summons is a form used by the court to call the person whose name is identified as a defendant in the plaint. It is a way of telling the person against whom the civil proceedings have started and who is expected to put his defence before the court. It is a procedure for a proper officer of the court to inform the named individual that he is expected to appear on a named day and respond to the claim in such action.
  3. Appearance of parties: The next stage of the civil action, which is the deposition of the parties before the court on the day set, started when the summons were properly served to the defendant. The tribunal can proceed ex-parte if the defendant does not appear on the date set in the summons. In the case of the plaintiff, the lawsuit will be dismissed if he is absent. The court may dismiss the suit when neither party appears.
  4. Ex-party Decree (Order 9): As noted above, if the defendant does not appear on a fixed date in the summons, the court can proceed ex-parte. If the plaintiff appears and the defendant does not appear when a case is called for a hearing and summons are properly served, the court may make an order under Order 9 of the CPC 1908 that lawsuits will be heard ex-parte.
  5. Filing of written statement by the Defendant (Order 8): We should know, first of all, what a written statement is. In fact, in the response to the plaint lodged by the plaintiff against him, it is a plea by the defendant. It is the defendant’s response argument in a case expressly denying the claims contained in his accusation against him by the plaintiff. Under Order 8 of the Code of Civil Procedure, 1908, a provision relating to a written statement was issued.
  6. Production of documents by parties (plaintiff and defendant): The next step of the suit is the development of records by the parties after the written statement by the defendant is completed. Both parties have to file papers in court at this point that are in their possession or control. In such a case, if the parties depend on such a document which is not in their possession, the parties must apply to the court for a summons to the competent authority or to the persons in whose possession such documents are kept. In such a case the parties must pay the court costs for the processing of such records.
  7. Examination of Parties: The essential process, which is the review of the parties, starts after the completion of the written declaration, the production of the documentation and the presentation of the parties. The court decides from each side or its pleader at the first hearing of the suit whether it admits or refuses such claims of fact as are made in the complaint and written statement. These admissions and refusals must be registered.
  8. Framing of issues by the Court (Order 14): The framing of issues is the next aspect of the civil suit. It is the court’s responsibility to fix problems with framing. The provision relating to framing issues is provided by Order 14 of the CPC.
  9. Summoning and Attendance of Witnesses (Order 16): Following the framing of the issues, the parties shall send a list of witnesses to the court that they plan to call either to produce evidence or to produce records. Such a list shall be made available to the court on the day appointed and not later than 15 days after the date of the resolution of the issues.
  10. Hearing of suits and examination of witnesses: The next step of the civil case is the trial of the cases and the questioning of witnesses after the summoning of the witnesses begins. The first right to begin is the right of the plaintiff unless the defendant accepts the facts alleged by the plaintiff and claims that the plaintiff is not entitled to any portion of the relief either in point of law or on certain additional facts alleged by the defendant, in which case the defendant has the right to begin.

The plaintiff has to apply the proof that was earlier marked if any evidence was not marked earlier then it will not be accepted by the court. And the defendant’s counsel will cross-examine the plaintiff and all the witnesses that are on the side of the claimant. And the defendant also presents his side of the story backed by his witnesses and his side’s facts, and the defendant was also cross-examined by the plaintiff’s counsel.

  1.  Argument: The case is held for the next point i.e., argument, as soon as the stage of the hearing of grievances and the questioning of witnesses is over. When the evidence has been presented and the cross-examination is carried out by both parties, a summary of the argument and evidence will be submitted to the judge at the final session by both sides.
  2. Judgment: Judgment is the next stage of the civil action, which implies the statement made by the judge on the basis of which a decree is passed.
  3. Preparation of Decree: If the judgement has been delivered, the next step is the preparation of the Order, which is to be prepared by the clerk concerned.
  4. Execution of Decree: At this point, the decree-holder pressures the judgment-debtor, as the case may be to outsource the mandate of the decree or decree or order. It is the mechanism by which the fruits of the judgement are recovered by a decree-holder. When the judgement creditor or decree-holder collects money or other items awarded to him by judgement, decree or order, the execution is complete.
  5. Discovery – For any good prosecution, comprehensive case planning is important. The process by which parties obtain relevant information from each other or from third parties is Discovery. Law analysis, record review and organisation, and witness interviews help clients determine the merits of charges and defences as well as their attorneys. The degree to which these and other measures are necessary is decided by the problems of the case.


Arbitration is a process in which, a dispute is referred to one or more arbitrator, who make a binding decision on the dispute. And this all is done with the consent of the parties and work on the basis of “Party Autonomy Principle”. By choosing arbitration, instead of going to court, the parties opt for a confidential dispute resolution process. It is legally defined as a “consensual, private dispute resolution technique regulated by law by which a reasonable and judicially acting impartial tribunal makes a judgement binding on the parties (but only the parties)”. 

The Government of India took into account international treaties such as the Geneva Protocol on Arbitration Provisions, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the United Nations Commission on International Trade Law (UNCITRAL) Model on Co-operation on 4 December 1993 at a conference chaired by the Prime Minister of India, P.V Narasimha Rao. The Arbitration and Conciliation Act, 1996 was born as a consequence of this conference. 

The Arbitration and Conciliation Act, 1996 (Principal Act) is a self-contained Code that includes 86 parts and aims to achieve the objectives of consolidating and amending current domestic arbitration laws, defining conciliation, implementing UNCITRAL, creating a uniform arbitration and conciliation regulatory structure and providing a coherent legislative framework for effective settlement of dispute. 

In 2005 and 2019, changes to the Principal Act were made to strengthen the arbitration process in India and make it fast and expeditious, minimising costs and wasting time in turn. The amendments further reinforced the arbitrator’s impartiality and independence and held him accountable for any delay in the arbitration process in an effort to integrate characteristics of self-discipline and responsibility into them. In addition, with the formation of the Arbitration Council of India (ACI) by the Amending Act of 2019, there is now an institution to ensure that during the arbitration process in India, uniform and professional standards are upheld.

The arbitration procedure in India starts with an arbitration clause or arbitration agreement, just like the process in other countries as set out in the Geneva Protocol on Arbitration Clauses. The arbitration agreement is a clause in a contract or an agreement between parties specifying that any conflict will be referred to arbitration proceedings and it must include the following information: subject matter of dispute, timing of dispute (past/present/future), number of arbitrators, qualifications of arbitrators, jurisdiction and composition of tribunal.

If a conflict occurs and an arbitration provision is present in an agreement between the parties, in order to initiate the arbitration process, the party against whom a mistake has been made must give an arbitration notice to the other party and this is the next step.  

If the notice has been issued, according to the specifications specified in the arbitration clause or agreement, all parties may have to nominate an arbitrator or arbitrators. The parties to a dispute shall be able to select the number of arbitrators as long as it is not an even number, but only one arbitrator shall be named if a number is not stated in the arbitration provision or arbitration agreement.

Often if parties wish to nominate three arbitrators but do not define the process for their selection, each party will select one arbitrator and the third arbitrator who will be on the panel will be appointed by the two party-chosen arbitrators. If one of the parties fails to appoint an arbitrator within the defined time, the other party may request the appointment of an arbitrator, as per the 2019 Amendment, to the designated Arbitral Institutions. Furthermore, the section 11 of the Act has evolved over the years starting from the judgments in Konkan Railways to Central Railways, the latter being recently passed by the Indian Supreme Court. The Hon’ble court held that Schedules V and VII, since the Amendment Act of 2015, make it clear that an individual with a direct interest in the conflict as such should not act as an arbitrator. The court also held that – “The ineligibility referred to was a consequence of the operation of the law, in that a person with an interest in the dispute or in the result or judgement of the dispute must not only be unable to serve as an arbitrator, but must also not be qualified to nominate someone else as an arbitrator, and that such person cannot and should not have any part in drawing up any path for the resolution of the dispute by getting the power to someone as arbitrator”. 

After the appointment of the arbitrators, the party that has been wringed must file a statement of claim setting out the facts of the conflict: the circumstances leading up to the dispute, the reasons for the dispute, and the claim for compensation or relief. As an answer to the statement of argument, the other party also has the option of filing a counterclaim.

The arbitration tribunal will hear the parties and consider the facts presented to them after the statement of claim and counterclaim have been filed.

The arbitrators will pass a decision after all sides have been heard and the evidence has been reviewed, and this decision is known as an arbitral award. An arbitral award in a court of law is definitive and enforceable. The party in whose favour the award has been passed must file for the enforcement of the award if the award must be executed.

The procedure is abbreviated and is less formal than a tribunal. Arbitration mostly proceeds from private negotiation, but certain courts also compel the parties to smaller conflicts to explore arbitration as an alternative to trial. Parties who agree to resolve their dispute using binding arbitration typically cannot appeal the arbitrator’s decision to a judge.



Courts are an essential institution without which society would end up in chaos. Their significance cannot be adequately stressed, since many of the conflicts that occur between individuals or organisations are such that they can be resolved without the intervention of the judicial authorities. Instead, such disputes, which do not include the legal system, need a clear set of structured rules in order to reach their conclusion. Dispute resolution settles disputes between persons or organisations that arise. The judicial workload is diminished, in turn.

More commonly, the issue before an individual in a dispute resolution is whether to arbitrate or litigate in court?

For several years, the conventional wisdom had been that as a dispute resolution mechanism, arbitration has proposed and promised to be preferable to a Court of Litigation because of the factors like – supposed cost savings, confidentiality, results, and more versatility.

Factors favouring the adjudication of a public court (in certain instances) include the value of the right to a plenary appeal, concerns about the competence of the arbitrator pool, concerns about the propensity of some arbitrators to be timid or to compromise ends, the freedom to join other/newer parties (required to decide the subject-matter in question), interim relief is simpler, strict rules of proof are regulated, trials are carried out in an open court, etc.

Similarly, the general flexibility in both domestic and foreign arbitrations in the right to choose arbitrators from a pool of arbitrators, the seat, place and timetable of arbitration proceedings, and the facilitation of recurring potential arbitration proceedings are some considerations taken into consideration when opting for arbitration over public court proceedings (as is the case in litigation); confidentiality in terms of confidential commercial or scientific information; reservations about the credibility of the company/parties; preventing the disclosure of such market or litigation strategies; not disrupting (potential and existing) consumers with a public show of counterparty issues, etc. Furthermore, in cases of transnational/international contracts, a lawyer will normally presume at the start that in foreign legal systems, international arbitration is favoured over adjudication.

The flexibility that also allows parties to be accommodated more easily than in public courts is one of the other benefits of arbitration. But at the same time in order to equate apples to apples and not to oranges, it is necessary to be accurate when balancing the advantages and disadvantages of the two conflict resolution mechanisms. There may be less problems with crowded criminal and civil schedules in some court systems than in others, and if one were to litigate, there may possibly be a quicker resolution of the conflict.

Arbitration statements will differ considerably. For compensatory claims such as expropriation, a state may be taken to arbitration or may itself initiate arbitration proceedings with other states over claims such as those relating to international borders. It would be reasonable to conclude that arbitration is a deliberate effort by the parties to prevent delay and thus an unequal or inefficient means of achieving judicial resolution. 

Neutrality and Mutuality were the greatest advantage in settling conflicts by Arbitration over Court proceedings. This may be in respect of –

The expenses paid by the parties to the dispute in the arbitration include the compensation of the arbitrator, the rent for the venues of the arbitration, the legal costs and the fees of the members of the parties and witnesses and in most cases, less than the costs of litigation.

As it is typically less costly than litigation, arbitration is favoured over court trials. Via a flexible time schedule and simplified procedures, it allows for swift dispute resolution. 

Arbitration includes crucial protections that cannot be offered during trial. There is a benefit in many cases that the arbitrator or arbitral tribunal is a specialist in the area of the conflict, so that the whole procedure can be handled without the intervention of lawyers or other officials, with substantial time and economic benefits.

Decisions on conflict resolution are highly subjective and depend on several variables. There are a variety of benefits over litigation which arbitration can have. It is necessary, however to carefully analyse each presumed advantage in the sense of each individual transaction/disputed subject-matter.



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