Critical Analysis Of The Impact Of Narrowing Scope Of Judicial Interference Under Section 34

Critical Analysis Of The Impact Of Narrowing Scope Of Judicial Interference Under Section 34 Of Arbitration & Conciliation Act, 1996 On Compulsory Statutory Arbitration

Adv Shaad Mirza, Central India College of Law

ABSTRACT

In current times, arbitration has become a preferred mode of dispute resolution; almost every commercial contract has an arbitration clause. Party autonomy is a cardinal principle of the law of arbitration. According to the principle, parties to such an agreement can decide the mode of settlement of disputes and the procedure involved therein.1 In an effort to build and project India as a pro- arbitration hub, the Indian courts have made this rule the norm in almost all cases.

However, there are certain statutes wherein the law provides a fixed procedure for resolving disputes, which includes statutory references to arbitration. Distinct from consensual arbitration, statutory arbitration is conducted in accordance with special statutes wherein the law provides for a fixed procedure of deciding disputes of a certain class, that is, provisions of special Act providing for arbitration in respect of disputes ascending on matters covered by that Act. In statutory arbitration, the reference and the arbitration procedures stem from the statute and not from the agreement between the parties.

This mechanism is often employed in specific sectors or industries to expedite the resolution of disputes and reduce the burden on the overburdened court system. The rationale behind compulsory arbitration lies in its potential to promote dispute resolution efficiency, cost-effectiveness, and expertise in specialised matters. By mandating arbitration, parties are compelled to resolve their disputes through a private and neutral forum, fostering quicker resolution and reducing the backlog of cases in the courts. Recent amendments and judicial interpretations have narrowed the scope of judicial interference, raising concerns over the effectiveness of compulsory statutory arbitration. This research article critically examines the impact of these developments on the enforceability and legitimacy of arbitral awards, focusing on the practical implications for compulsory statutory arbitration.