Pre-British Period
In Ancient times, in India there existed a system of arbitration. This was in the form of Panchayats presided over by the Sarpanch. The panches were ordinarily elected according to their wealth, social standing and influence in the community. The binding authority behind their decision was the fear of excommunication from the community and also from the religious services.
After the advent of the British in India , attempts were made to regulate the judicial system in the country. Thus, regulation and acts were passed to formulate the system of arbitration in India , which would in consonance with British jurisprudence.
Arbitration is the most prominent among the alternate dispute resolution (ADR) system in the world. PARTY AUTONOMY, limited judicial intervention, kompetenz-kompetenz , and fair procedure and impartiality of the arbitrational tribunal are some of the important internationally accepted principles in international arbitration jurisprudence. In this globalize era, the Indian arbitral jurisprudence needs to be synchronized with international arbitral jurisprudence if India has to emerge as one of the global leaders in international commercial arbitration. The first step in this direction was taken by the Indian parliament by enacting the Arbitration and Conciliation Act, 1996 a year after India joined the World Trade Organization. To achieve the above avowed object that has been modeled after the UNICTRAL model law on arbitration and has encapsulated the above basic principles.
Though the 1996 Act had repealed 1940 Act, awards made under the 1940 Act still continue to be the subject matter of the challenge and court decisions.