Fast Track Arbitration is a time-bound dispute resolution mechanism provided under the Arbitration and Conciliation Act, 1996 (as amended in 2015). This mode of arbitration offers an accelerated process with limited hearings and strict timelines for rendering the award.
It is especially useful in:
- Commercial contracts
- Small and medium-scale disputes
- Cases where parties seek speedy, confidential, and cost-effective resolution
Legal Framework: Section 29B of the Arbitration Act, 1996
Fast Track Arbitration is governed by Section 29B of the Arbitration and Conciliation Act, 1996 (inserted through the 2015 Amendment).
Key Provisions:
- Parties must mutually agree in writing to opt for fast track procedure.
- Tribunal shall decide the dispute based on:
- Written pleadings
- Documents and submissions
- Only one or limited oral hearing (if necessary)
- The award must be made within six months from the date the arbitral tribunal enters upon reference.
- Arbitrators are incentivized to deliver awards within the time frame.
- The tribunal must provide reasons in writing for the award unless parties agree otherwise.
Objectives of Fast Track Arbitration
- To reduce pendency of arbitration cases.
- To cut down procedural delays.
- To minimize legal costs.
- To strengthen India’s position as a hub for alternate dispute resolution.
- To promote ease of doing business by ensuring contract enforcement.
Salient Features of Fast Track Arbitration
- Time-Bound Process: Final award within 6 months.
- Single Arbitrator: Usually presided by one arbitrator unless parties decide otherwise.
- Limited Oral Hearings: Only if requested and allowed by tribunal.
- Document-Based Adjudication: Heavy reliance on written submissions.
- No Interim Measures: Procedural simplicity often excludes interim applications.
- Cost-Effective: Shorter timelines reduce legal expenses significantly.
- Confidentiality Maintained: As with traditional arbitration, proceedings remain private.
Advantages of Fast Track Arbitration
- Expeditious Disposal: Quick resolution of disputes improves business continuity.
- Lower Costs: Fewer hearings and quicker awards save legal and administrative costs.
- Flexibility: Parties can customize procedural rules.
- Enforceability: Awards have the same enforceability as regular arbitral awards under Section 36.
- Court Intervention is Limited: Promotes autonomy and reduces litigation.
Challenges in Fast Track Arbitration
- Complex Disputes May Not Fit: Intricate or multi-party matters may not be suitable.
- Limited Time May Impact Evidence: Fewer hearings can limit fact-finding opportunities.
- Dependence on Party Cooperation: The success depends heavily on mutual consent and collaboration.
- Less Scope for Interim Relief: Urgent legal remedies may require separate court action.
Fast Track Arbitration vs. Regular Arbitration
| Feature | Fast Track Arbitration | Regular Arbitration |
|---|---|---|
| Time for Award | 6 months | 12 months or more |
| Number of Hearings | Minimal / Limited | Multiple and detailed |
| Arbitrators | Usually one | One or more |
| Costs | Lower | Comparatively higher |
| Oral Arguments | Limited | Extensive oral submissions |
Recent Trends and Use Cases
- Increasingly used in commercial disputes, supply contracts, construction projects, and infrastructure disputes.
- Adopted in government contracts and international business to ensure speedy recovery and reduce litigation backlog.
- Encouraged in India’s National Arbitration Policy and Ease of Doing Business initiatives.