Originally from World Arbitration Reporter (WAR) - 2nd Edition

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I.  INTRODUCTION: HISTORY AND CURRENT LEGISLATION ON ARBITRATION

A. History of Arbitration in India

Arbitration law in India has evolved considerably, both in content and scope, across the years. In order to keep abreast of the ever changing economic landscape and commercial demands of users, India’s arbitration regime has witnessed a long string of variations and amendments, finally culminating in the Arbitration and Conciliation Act, 1996, which has been subsequently amended on three occasions.

The practice of arbitration has been prevalent throughout Indian history from medieval, British, post and pre independence periods. In ancient times, the Nyaya Panchayats  under the Panchayati Raj system, village or tribal councils administered justice in accordance with their social norms and practices which preceded the legal reforms of British India. Arbitration law was first recognized in the Bengal Regulations of 1772. The Bombay Regulation VII of 1827  provided for arbitration through the intervention of the Court. Notably, the Regulation also provided that awards under the Regulation have the force of decrees. Meanwhile, the Indian Contract Act, 1872, which provided that contracts in restraint of the right to sue would be void  carved out agreements to arbitrate as an important exception. However, the first substantive legislation on arbitration in India was the Indian Arbitration Act, enacted in 1899 (the 1899 Act)  which was modelled on the English Arbitration Act, 1889.