Does The Winner-Take-All In Arbitration? Understanding The Regime Of Costs Under Arbitration And Conciliation Act, 1996

Alternative dispute resolution (ADR) methods like arbitration, mediation, and negotiation are increasingly popular due to their flexibility, cost-effectiveness, and efficiency. Arbitration, in particular, allows disputes to be resolved through a structured yet informal process. \r

The 2015 Amendment to the Arbitration and Conciliation Act, 1996, aimed to reduce judicial intervention, expedite processes, and align with international practices. Section 31A of the Act introduced a regime for determining costs in arbitration, considering factors like party conduct and success in claims. \r

However, arbitration can be expensive due to high fees. To address this, the 2015 Amendment capped arbitrators' fees. The award of costs is crucial and should be judiciously applied to ensure fairness and encourage arbitration over litigation.