Arbitration is one of the oldest methods of settling civil disputes between two or more persons by reference to the dispute to an independent and impartial third person instead of litigating the matter in the usual way through the Courts.
In Union of India Vs D.P. Wadia & Sons, A.I.R. (1977) Bom. 10, it was observed that “arbitration is a domestic forum. It is a forum other than a Court of law for determination of disputes and differences, after hearing both the sides, in a judicial manner”. The law relating to arbitration is contained in the Arbitration Act, 1940.
The person appointed to adjudicate upon the difference is called an arbitrator.
Section 2(a) defines that an “Arbitration Agreement means a written agreement to submit, present or future differences to arbitration, whether an arbitrator is named therein or not”.