Given that third-party financing of disputes and arbitration proceedings is not common in India, the question of whether third-party financing costs can be recovered under arbitration remains undecided. In recent years, the Indian government has recognized that its judicial system, particularly with respect to trade disputes, must keep pace with India`s economic growth. Although the Indian Arbitration and Conciliation Act of 1996 (“Act”) is based on the principles of the CNUDCI, the court decisions had virtually destroyed the original intent of the legislation and seriously undermined its stated objective of expediting dispute resolution. In fact, in some types of agreements, the author had begun to advise his clients not to incorporate arbitration clauses. The Indian Arbitration Act is largely based on English common law. India`s arbitration is governed and regulated by the Arbitration and Conciliation Act of 1996, which builds its base on the 1985 UNCIR model on international commercial arbitration and the 1976 UNCI Arbitration Regulations. Taking into account the general principles of the concept of transfer in arbitration proceedings, it is necessary to check whether the situation for the award remains at different stages of arbitration (pre-arbitration, during the arbitration process and after the adoption of the award). ” (6 BIS) The Supreme Court or, if applicable, the High Court, which considers an application for subsection 4 or subsection (5) or subsection (6), is limited to examining the existence of an arbitration agreement, regardless of a court`s judgment, adoption or decision.” The Delhi High Court in Kotak Mahindra Bank v. S. Nagabhushan – Ors., 2018 SCC OnLine Del 6832, when deciding on the application under Section 34 was faced with the question of whether this is a valid assignment of the arbitration agreement or not. The arbitrator decided that, since the applicant is not a signatory to the arbitration agreement, the issue cannot be decided by a decision. The Court found, however, that the loan agreement was, by its very nature, terminatable. The Court found that the Commission had held that once the rights to the loan contract had been transferred to the petitioner, the rights conferred by the arbitration agreement were merely an appeal to assert those rights and, in this case, were duly ceded in favour of the petitioner by the assignment agreement.
The Court followed Bestech India Private Ltd. v. MGF Developments Ltd. (2009) 161 DLT 282 and found that when a contract can be surrendered, a compromise clause follows the assignment of the contract. The concept of “arbitration procedure” is the process of resolving a dispute between individuals by helping them to agree on an acceptable solution Arbitration is part of the alternative dispute resolution mechanism that benefits parties who wish to avoid the normal long-term use of local courts for dispute resolution. It is a legal method of resolving disputes outside the courts, with the parties to the dispute referring them to one or more persons, namely arbitrators, whose decision (the “price”) commits them. “It will be noted that the “validity” of an arbitration agreement is therefore, apart from its “existence”. A controversial issue that therefore arises and which must be decided in an authoritarian manner by a bank of three trained judges is whether the word “existence” would include excessive arbitration clauses in agreements that indicate that the object is not arbitrated. The term “assignment” is defined as the transfer by a portion of all rights to a type of property, usually intangible property, such as the rights to a lease, mortgage, sales contract or partnership.