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Arbitration, Mediation and Lok Adalat FAQs
This page explains key Indian-law issues arising in arbitration agreements, tribunal constitution, interim relief, award challenge and enforcement, mediation, Lok Adalat and Permanent Lok Adalat proceedings, with emphasis on forum, limitation, evidence and enforceability.
Important scope note. These FAQs provide general educational information under the Arbitration and Conciliation Act, 1996, the Mediation Act, 2023, the Commercial Courts Act, 2015 and the Legal Services Authorities Act, 1987. Seat and appointment clauses, limitation dates, the commencement status of Mediation Act provisions, forum, interim relief and current binding precedent are matter-specific and should be verified before reliance or action.
A. Arbitration Agreement, Scope and Interim Relief
Arbitration is a consensual dispute-resolution process in which parties submit disputes covered by an arbitration agreement to an arbitral tribunal instead of having those disputes finally decided through an ordinary civil trial. The tribunal ordinarily issues a binding arbitral award, subject to the limited supervisory, challenge and enforcement framework of the Arbitration and Conciliation Act, 1996.
Section 7 of the Arbitration and Conciliation Act, 1996 requires an arbitration agreement to be in writing and to record the parties’ agreement to submit all or specified disputes arising from a defined legal relationship to arbitration. It may be contained in a contract, a separate agreement, an exchange of communications, or a valid incorporation by reference. Clear drafting of the scope, juridical seat, applicable rules, number of arbitrators and appointment method reduces later jurisdiction and procedure disputes.
Arbitrability depends on the nature of the rights and relief, the governing statute and whether the dispute is reserved to a public or special forum. Under the Supreme Court’s Vidya Drolia framework, matters involving rights in rem in the relevant sense, sovereign or public functions, criminal prosecution, matrimonial status, insolvency or winding-up, testamentary matters and disputes made non-arbitrable by necessary statutory implication may fall outside private arbitration. The inquiry is category- and statute-specific; allegations such as fraud do not, by themselves, make every dispute non-arbitrable.
Where an action is brought before a judicial authority in a matter covered by an arbitration agreement, Section 8 requires referral to arbitration if the statutory conditions are met and the application is made not later than the date of submitting the first statement on the substance of the dispute. The applicant must comply with the statutory requirements concerning the arbitration agreement or its duly certified copy. At the referral stage, current Supreme Court authority confines judicial scrutiny to the limited inquiry permitted by the Act rather than a full trial of contested merits.
No. The seven-judge decision in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 holds that non-stamping or insufficient stamping does not make the arbitration agreement void or non-existent. A stamp-duty defect can still affect admissibility of the underlying instrument and must be cured under the applicable stamp law, but it should not ordinarily defeat referral or appointment at the threshold merely because the instrument is unstamped or insufficiently stamped.
The seat is the juridical home of the arbitration and ordinarily identifies the legal system and courts exercising supervisory jurisdiction under Part I of the Arbitration and Conciliation Act. A venue may simply be the physical or virtual place where hearings take place. The parties should identify the seat expressly where possible because an ambiguous city or venue reference can generate jurisdiction disputes and may require interpretation of the arbitration clause as a whole.
Unless the parties agree otherwise, Section 21 provides that arbitral proceedings in respect of a particular dispute commence when the respondent receives a request that the dispute be referred to arbitration. Section 43 applies the Limitation Act, 1963 to arbitrations as it applies to court proceedings. Invocation should therefore identify the dispute and be served within the applicable limitation period; the existence of an arbitration clause does not suspend limitation indefinitely.
Section 9 empowers the court to grant interim measures before arbitral proceedings, during them and, in specified circumstances, after the award but before enforcement. Section 17 empowers the arbitral tribunal to grant interim measures once constituted, and qualifying Section 17 orders are enforceable in the same manner as court orders. After constitution of the tribunal, Section 9(3) ordinarily directs the court not to entertain an application unless the Section 17 remedy would not be efficacious. The appropriate route therefore depends on timing, urgency, the relief required and whether an effective tribunal is available.
In Amazon.com NV Investment Holdings LLC v. Future Retail Ltd., the Supreme Court held that, where parties to an India-seated arbitration adopt institutional rules providing for an Emergency Arbitrator, the emergency order can qualify as an order under Section 17(1) and be enforced under Section 17(2). The result depends on the parties’ agreement and the institutional framework; an ad hoc arbitration does not automatically acquire an emergency-arbitrator mechanism unless the parties validly provide for one.
B. Tribunal Appointment, Jurisdiction and Procedure
Independence, impartiality and equal treatment are central to tribunal constitution. Section 12, read with the Fifth and Seventh Schedules, regulates circumstances giving rise to doubts about impartiality and legal ineligibility. Supreme Court authority also restricts appointment mechanisms that give an interested party an impermissible unilateral power over the tribunal. The appointment clause, proposed arbitrator’s relationships and disclosures, eligibility and any valid post-dispute waiver should therefore be checked before constitution.
In Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), decided on 8 November 2024, the Constitution Bench held that the principle of equal treatment applies at the stage of appointing arbitrators and rejected appointment structures that give an interested party an impermissible unilateral advantage, including unilateral appointment of a sole arbitrator. The judgment also addressed one-sided curated-panel mechanisms for three-member tribunals and declared the relevant appointment rule prospective for arbitrators appointed after the judgment date. A specific clause should therefore be assessed against the tribunal structure, date of appointment and the precise current precedent rather than treated by label alone.
Section 11 provides a court-assisted appointment mechanism when the agreed procedure breaks down, a required appointment is not made, or a person or institution fails to perform an entrusted appointment function. The Supreme Court or High Court competence depends on whether the arbitration is an international commercial arbitration and on the statutory jurisdictional framework. An application should establish the arbitration agreement, valid invocation, failure of the agreed mechanism and any material eligibility or impartiality objection.
Potentially, but not merely because it belongs to the same corporate group. In Cox and Kings Ltd. v. SAP India Pvt. Ltd., the Supreme Court Constitution Bench treated the Group of Companies doctrine as a consent-based inquiry. Relevant considerations may include conduct, participation in negotiation or performance, the relationship to the subject matter and the composite nature of the transaction. Separate corporate personality remains relevant; the question is whether the non-signatory objectively manifested consent to be bound.
Section 16 embodies the competence-competence principle and permits the tribunal to rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement and the scope of the reference. A plea that the tribunal lacks jurisdiction should ordinarily be raised no later than the statement of defence, while an objection that the tribunal is exceeding its authority should be raised as soon as that issue arises. A later plea may be admitted if the tribunal considers the delay justified.
For arbitrations other than international commercial arbitration, Section 29A generally requires the award within twelve months from completion of pleadings under Section 23(4). The parties may by consent extend that period by up to six months; further extension requires the court on sufficient cause and appropriate terms. The statute permits court extension before or after expiry, and where a Section 29A(5) extension application is pending the mandate continues until that application is disposed of. International commercial arbitration is subject to the statutory endeavour to proceed expeditiously rather than the same mandatory twelve-month termination rule.
Pleadings, document production, witness and expert evidence and hearings should follow the Act, the agreed institutional rules and the tribunal’s procedural directions. Relevant originals, electronic records, metadata and contemporaneous communications should be preserved from the outset. Section 42A imposes confidentiality on the arbitrator, arbitral institution and parties, except where disclosure of the award is necessary for its implementation and enforcement. Contractual or institutional confidentiality duties may impose additional requirements.
Section 31A gives the court or arbitral tribunal discretion to determine whether costs are payable, the amount and when they are to be paid. The statutory general rule is that the unsuccessful party should ordinarily pay the successful party’s costs, but conduct, partial success, frivolous claims or defences, reasonable settlement offers and other circumstances can justify a different order. Tribunal fees, institutional charges, legal fees, expert costs and other recoverable items should be supported where claimed.
C. Award, Challenge and Enforcement
Section 34 provides a limited setting-aside remedy, not a general appeal on facts or law. The statutory grounds include specified defects in the arbitration agreement or process, lack of proper notice or opportunity, decisions beyond the submission to arbitration, improper tribunal composition or procedure, non-arbitrability and conflict with the public policy of India. For qualifying awards arising from arbitrations other than international commercial arbitrations, Section 34(2A) adds patent illegality appearing on the face of the award, but does not permit re-appreciation of evidence merely because another view is possible.
A Section 34 application must ordinarily be made within three months from the date on which the applicant received the arbitral award, or from disposal of a qualifying Section 33 request where applicable. The court may allow a further period of up to thirty days if sufficient cause prevented filing within the initial period, but not thereafter under the ordinary statutory rule. The actual receipt date and any Section 33 proceedings should therefore be recorded immediately.
On a party’s request and where the circumstances justify it, the court may adjourn the Section 34 proceeding for a period it determines to give the arbitral tribunal an opportunity to resume proceedings or take other action that may eliminate the grounds for setting aside. Section 34(4) is not a general rehearing or appellate remand and does not authorise rewriting the merits of the award. Its availability depends on the nature of the alleged defect.
Only in the limited manner recognised by the Supreme Court’s Constitution Bench majority in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. The majority recognised limited power to sever an invalid portion where the award is genuinely severable, correct clerical, computational, typographical or similar manifest errors without a merits review, and modify post-award interest in the circumstances identified by the judgment. Sections 34 and 37 do not create a general appellate power to recalculate claims, re-appreciate evidence or substitute the court’s own merits decision.
No. Section 36 provides that filing a Section 34 application does not by itself make the award unenforceable; a separate stay application is required and the court may impose conditions and record reasons. There is a statutory fraud-or-corruption proviso requiring an unconditional stay where the court is satisfied that a prima facie case is made out that the arbitration agreement or contract forming the basis of the award, or the making of the award itself, was induced or affected by fraud or corruption. Once enforceable and not stayed, a domestic award is enforced in accordance with the Code of Civil Procedure as if it were a decree.
Section 37 permits appeals only from specified orders. These include an order refusing to refer parties to arbitration under Section 8, orders granting or refusing interim measures under Section 9, and orders setting aside or refusing to set aside an award under Section 34; it also permits appeals from specified tribunal orders under Sections 16 and 17. The provision does not create a general appeal against every procedural or interlocutory order, and a second appeal is barred subject to the Supreme Court’s constitutional jurisdiction.
Section 33 provides limited post-award mechanisms. Subject to the parties’ agreement, a party may seek correction of computational, clerical, typographical or similar errors and, where the parties have so agreed, interpretation of a specific point or part of the award. A party may also request an additional award on claims presented in the arbitration but omitted from the award. These mechanisms are time-sensitive and are not substitutes for a Section 34 challenge.
Yes, where the statutory requirements are met. Under the New York Convention regime in Part II, Chapter I of the Arbitration and Conciliation Act, the award must fall within Section 44, including the notified-territory and commercial-relationship requirements. Enforcement may be refused only on the limited grounds in Section 48. If the court is satisfied that the foreign award is enforceable, Section 49 deems it to be a decree of that court. The applicable convention regime, notified territory, documents and any Section 48 objection should be checked for the particular award.
D. Mediation — Current Statutory Position
The Mediation Act, 2023 has been enacted but remains only partly in force. As of this review, the official consolidated text records the 9 October 2023 commencement of Sections 1, 3, 26, 31 to 38, 45 to 47, 50 to 54 and 56 to 57. Core provisions governing the mediation agreement and process, pre-litigation mediation, mediated settlement agreements, their enforcement and challenge, limitation and online mediation have not been brought into force by that notification. A later commencement notification should therefore be checked before relying on any uncommenced provision in a live matter.
No. Section 5 of the Mediation Act has not been brought into force and, in its enacted text, is structured around voluntary pre-litigation mediation by mutual consent. This must be distinguished from Section 12A of the Commercial Courts Act, 2015, which separately requires pre-institution mediation for qualifying commercial suits that do not contemplate urgent interim relief.
A mediated settlement should clearly identify the parties and their authority, the disputes resolved, payment or performance obligations, timelines, default consequences, interest where relevant, treatment of pending proceedings, confidentiality, releases, return or preservation of documents, tax or statutory consequences where applicable and the intended enforcement route. Its legal effect depends on the mediation framework actually used. Until the relevant Mediation Act enforcement provisions are in force, parties should not assume that every private mediated settlement automatically has the decree-like enforcement status contemplated by the uncommenced provisions of that Act.
Yes, where mediation is available by consent, contract, court process, institutional rules or another applicable legal framework. What should not be assumed is that the uncommenced procedural and enforcement provisions of the Mediation Act, 2023 automatically govern that process. The governing agreement, institutional rules, court order or other operative law should therefore identify the process, confidentiality obligations, authority to settle and route for recording or enforcing any settlement.
E. Lok Adalat and Permanent Lok Adalat
A Lok Adalat is a settlement forum organised under the Legal Services Authorities Act, 1987 for pending cases and eligible pre-litigation disputes. Its ordinary function is to facilitate compromise or settlement rather than adjudicate a contested dispute on the merits. A matter relating to an offence that is not compoundable under law cannot be settled through Lok Adalat.
Under Section 21 of the Legal Services Authorities Act, a Lok Adalat award is deemed to be a decree of a civil court or, as applicable, an order of another court. It is final and binding on the parties, and no appeal lies against it under the ordinary statutory route. In a referred court case, court-fee refund may follow in accordance with the statutory provision. Because the award is settlement-based, the authority of the persons consenting and the exact terms should be verified before consent is recorded.
An ordinary Lok Adalat cannot force a compromise or decide a contested dispute merely because the matter was referred to it. If settlement is not reached, a pending case returns to the referring court for continuation in accordance with law, while an unresolved pre-litigation dispute may be pursued through the appropriate legal remedy. Parties should not sign incomplete or ambiguous terms merely to secure disposal.
State, District, Taluk and other Lok Adalats are organised by Legal Services Authorities for settlement of eligible matters within their jurisdiction. A National Lok Adalat is a coordinated nationwide settlement exercise held on notified dates across courts and legal-services institutions. The scale and scheduling differ, but a valid settlement award derives its legal effect from the same statutory Lok Adalat framework.
A Permanent Lok Adalat under Chapter VI-A of the Legal Services Authorities Act is a specialised pre-litigation mechanism for disputes concerning notified public utility services. It first attempts conciliation, but if settlement fails it may, subject to the statute, decide the dispute on merits. It has no jurisdiction over a dispute relating to an offence that is not compoundable. NALSA currently states the pecuniary jurisdiction as up to ₹1 crore, so subject matter, valuation and the precise public-utility category should be checked before filing.
F. Choosing and Drafting the Appropriate ADR Route
The route should match the dispute and the outcome required. Arbitration is suited to disputes covered by a valid arbitration agreement where a binding adjudicatory award is needed. Mediation is suited to negotiated outcomes in which the parties retain control over settlement. Lok Adalat is useful where an eligible matter can genuinely be compromised, while Permanent Lok Adalat is confined to its statutory public-utility jurisdiction. Urgency, limitation, assets, evidence, enforceability, confidentiality, cost, relationship preservation and interim-relief needs should be assessed before choosing the route.
A clause should clearly identify the disputes covered, juridical seat, governing law where necessary, language, institutional rules or ad hoc procedure, number of arbitrators, a legally neutral appointment mechanism, required qualifications where justified, notice method and any agreed provisions on emergency relief, consolidation, joinder or multi-party disputes. It should avoid appointment mechanisms inconsistent with current law, internally inconsistent forum provisions and ambiguous wording that leaves the seat uncertain.
No. Arbitration can offer procedural flexibility, specialist decision-makers and privacy, but cost and duration depend on tribunal fees, institutional charges, hearings, document and expert evidence, interim applications, appointment disputes, Section 34 proceedings and enforcement. Poor drafting or unnecessary procedural complexity can make arbitration slower or more expensive. Forum selection should therefore be based on the dispute profile rather than an assumption that arbitration is automatically the quickest or cheapest option.
Related Information
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Last reviewed: 12 September 2026