Arbitration act 1996 and object of adr
Arbitration in India started from 1859 Act, then 1940 Act, and now Arbitration and Conciliation Act 1996. SC in S.B.P. & Co. Vs. Patel Engineering Ltd 2006 AIR SC 450 explained that 1996 Act was brought to provide fair, efficient procedure for domestic and international arbitration. UNCITRAL Model Law was basis. Purpose was to reduce court pendency and avoid CPC technicalities. But in practice, many feel arbitration is not always speedy. Cases drag like civil suits. Impartiality of arbitrator, frequent adjournments, and sitting fees become issues. For high stakes corporate disputes arbitration works, but for common man cost and delay remain concerns. Therefore reforms are needed.
Section 11 appointment and sbp co judgment
Section 11 deals with appointment of arbitrator by Chief Justice when parties fail. In SBP Co, SC held this is judicial function, not administrative. Reason was to decide jurisdiction, existence of arbitration agreement, and qualified arbitrator at threshold. This avoids parties spending time and money before tribunal only to challenge award later under section 34. SC said judicial scrutiny at stage 11 reduces disputes and gives finality. However, this also burdens Chief Justice and causes delay in appointment. Debate continues whether administrative route was better for speed, but judicial route protects party from being forced into arbitration without valid agreement.
One sided appointment and ioc vs raja transport
Big problem is arbitration clause giving right to one party to appoint arbitrator, or naming employee of one party as arbitrator. SC in Indian Oil Corporation Ltd. Vs. Raja Transport 2009 8 SCC 520 clarified. Arbitration is voluntary. If party signs contract knowing arbitrator will be officer of other party, he cannot later object. There is no bar under Act to employee-arbitrator. But apprehension arises if arbitrator was dealing authority in contract. Senior officers not connected to contract can be independent. Rule is to follow agreement. Court under section 11(8) should refer to named arbitrator unless there is reasonable apprehension of bias. Ignoring named arbitrator is exception. This balances party autonomy with fairness.
Delay and cost issues in arbitration
Arbitration is assumed speedy, but delay tactics exist. Parties file interim applications, challenge interim orders under section 34, and seek adjournments. Since procedure is flexible and depends on arbitrator, it can be misused. Cost is another issue. Sitting fees, counsel fees for full time engagement make arbitration expensive. Court appointed arbitrators under section 11 have regulated fees, so people prefer that. For common man, civil court with reforms may be more affordable. Arbitration is better for companies and high value disputes. To make ADR effective, arbitrators must be committed to timelines, limit interim applications, and have reasonable fee structure.
Conclusion
Appointment of arbitrators arbitration act 1996 affordable requires balance. Section 11 judicial appointment protects rights but must be fast. One sided appointments should be allowed with safeguards against bias. Delay tactics and high cost must be curbed. Arbitration cannot replace courts for all, but with reforms it can be real alternative. SC judgments in SBP Co and IOC give framework. Now practice must ensure arbitration is truly speedy, impartial and affordable for litigants.
