History of development of law of Arbitration in India

In India, an alternative system is available to the disputing parties including Arbitration, Conciliation, Mediation, Negotiation etc. 

Arbitration was very popular and prevalent in ancient India and awards were known as decisions of panchayat, which were binding in nature. 

During the British Rule in India, the panchayat system was not abrogated. 

In West Bengal Regulation of 1772, a provision for arbitration was made and subsequent Regulations also provided for arbitration in certain matters. 

The Legislative Council for India came into existence in 1834 and Civil Procedure Code, 1859 was enacted which also dealt with law of arbitration. 

The next Code of Civil Procedure of 1882 repeated the same provisions about arbitration. Indian Arbitration Act was enacted in 1899 on the lines of English Arbitration Act, 1889. It made provision for reference of disputes, present as well as future, to arbitration without intervention of the court. 

The Indian Arbitration Act, 1940 consolidated and amended the laws relating to domestic arbitration very exhaustively. 

There were two more Arbitration Acts in India in relation to foreign awards namely - the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961, which were enacted in compliance of International Conventions to which India was a party. 

Thus, the law of arbitration was scattered in three enactments. 

The Arbitration and Conciliation Act, 1996 had amended and consolidated the law of arbitration and repealed all the three enactments. 

The 1996 Act is based on the Model Law on International Commercial Arbitration recommended by United Nations Commission on International Trade Law (UNCITRAL).