INTRODUCTION
Dispute resolution is a fundamental aspect of any legal system, serving as a mechanism to resolve conflicts between individuals, businesses, and the state. The choice between litigation and arbitration as methods of dispute resolution has significant legal, economic, and procedural implications. Litigation, which involves adjudication through courts, has historically been the default dispute resolution mechanism in most jurisdictions, including India. However, the increasing burden on courts, delays in adjudication, and the costs associated with litigation have necessitated the exploration of alternative dispute resolution (ADR) mechanisms, with arbitration emerging as a preferred alternative. Arbitration, a process wherein parties agree to resolve disputes outside of traditional courtrooms through a neutral arbitrator or a panel of arbitrators, has gained prominence due to its flexibility, confidentiality, and efficiency[1].
The conceptual framework of arbitration and litigation is essential to understanding the distinctions, legal principles, and procedural aspects governing both mechanisms. This chapter explores the fundamental nature of litigation and arbitration, tracing their historical development, legal frameworks, and comparative advantages. The increasing preference for arbitration, particularly in commercial disputes, signifies a paradigm shift in the global and Indian legal landscape. Arbitration is often regarded as a more business-friendly dispute resolution mechanism, particularly in international trade and investment disputes, owing to its enforcement mechanisms under treaties such as the New York Convention, 1958.[2]
However, while arbitration offers several advantages, it is not without challenges. Judicial intervention, enforcement issues, high costs, and procedural uncertainties continue to hinder its universal adoption[3]. Similarly, litigation, despite its formalized structure and binding nature, suffers from procedural delays, backlog of cases, and accessibility issues. The legal framework governing both arbitration and litigation in India is shaped by statutory enactments such as the Arbitration and Conciliation Act, 1996, the Civil Procedure Code, 1908, and judicial precedents that have played a critical role in shaping the dispute resolution landscape.
This chapter provides an in-depth analysis of the theoretical underpinnings of litigation and arbitration, their legal characteristics, and their procedural frameworks. It also discusses the emerging preference for arbitration in India, assessing the implications of recent legislative reforms, judicial trends, and institutional developments aimed at making India an arbitration-friendly jurisdiction.
[1]Haritha T, “A Study on Judicial Intervention in Arbitration”, International Journal of Research and Analytical Reviews, Vol. 7, Issue 4, 2020, pp. 321–326.
[2]Anita Yadav, Environmental Crimes and Judicial Response in India: An Analysis, 20 ILI Law Review (2014).
[3] Amandeep Singh, “Anita Kushwaha v. Pushap Sudan: A Case Comment” (2016) 2(1) Rostrum’s Law Review.