Arbitration is a quasi judicial process of settlement of dispute between the trading members and clients, in respect of trades done on the Exchange. Arbitration aims at quicker legal resolution for the disputes.
When one of the parties feels that the complaint has not been resolved satisfactory either by the other party or through the complaint resolution process of the Exchange, the parties may choose the route of arbitration.
Arbitration in a common context relates to anything done or acted without any prescribed or particular frame work on a dispute. Before the emergence of judicial systems in the formal form of the country, the decisions taken upon several disputes during early time in an informal way was arbitrary in nature.
Provincial State rules did not have uniform State rule strategy during pre independence era in India. During this time the arbitral proceedings were subjected to the Arbitration act of 1940. After independence the fundamental document of the land, The constitution of India was framed in 1950, that envisaged several articles ensuring proper functions of administrative systems.
Article 323-B confers the power to set up Tribunals for other matters without altering the basic structure of the power put forth by the Constitution.
The Arbitration Act of 1940 was exercised till the new enactment in 1996. The emergence of the Arbitration and Conciliation Act 1996, was the result of the sluggish arbitrary proceedings followed in accordance with the Act of 1940, that didn’t give any fruit in the commercial disputes and resulted only in the ineffective and worthless adjudication where court had to intervene in adjudication on several arbitrary disputes.
Though the arbitration Act seems to be liberal and independent, the disputes regarding agreements are not conclusively subject to act as the Judicial authority of India always have an indisputable upper hand in determining the final adjudication.