In the present time, the arbitration is governed by the law of arbitration

which is provided under the Arbitration and Conciliation Act, 1996.

Earlier to this Act, there were 3 Acts that governed the law of arbitration
in India These Acts were repealed by the Arbitration and Conciliation
Act 1996. The Act also derives authority from the UNCITRAL Model law
on International Commercial Arbitration and the UNCITRAL rules on
conciliation. the act came in order to consolidate and amend the already
existing laws relating to domestic arbitration,enforcement of foreign
arbitral awards and rules regarding conciliation.

Main objective of Arbitration and Conciliation Act, 1996

The main objective of the Act are as follows –

1) To ensure that rules are laid down for international as well as domestic
arbitration and conciliation.
2) To ensure that arbitration proceedings are just, fair and effective.
3) To ensure that the arbitral tribunal gives reasons for its award given.
4) To ensure that the arbitral tribunal acts within its jurisdiction.
5) To permit the arbitral tribunal to use methods such as mediation and
conciliation during the procedure of arbitration.
6) To minimize the supervisory role of courts

7) To ensure that an arbitral award is enforceable as a decree of the court.

8) To ensure that result of conciliation proceedings will have the same
status and effect as an arbitral award.
9) To provide that for the purpose of enforcement of foreign awards, every
arbitral award made in a country which is one of the parties to the
international conventions i.e. the New York Convention and the Geneva
Convention will be treated as a foreign award.

Salient features of the Arbitration and Conciliation Act, 1996

Some of the important salient features of Act are as follows –
1. A more comprehensive statute: The Arbitration and Conciliation Act,
1996 is more comprehensive than the earlier Act of 1940. It consists of
86 sections divided into 4 parts.
 2. Arbitral award treated at per with a decree: Another notable feature
of the Act of 1996 is that the arbitral award and settlement arrived at
during conciliation proceedings have at per with the decree of the court.
In other words the arbitral award is enforceable in the same manner as
a decree of a law court.
3. Curtailment of the courts process: The power of the court under the
Act of 1996 has been considerably curtailed as compared with the
earlier Arbitration Act of 1940. The arbitrator has been endowed with
absolute powers and he is completely immune from the court’s control
during the arbitration proceedings.
4. Abolition of the Umpire system: Another important feature of the Act
of 1996 is the abolition of the umpire system. The earlier Act of 1940
provided that where an even number of arbitrators were appointed and
such arbitrator failed to make an award within the specified time, or
where there was difference of opinion between two arbitrators, the
umpire should enter on the reference instead of the arbitrators.
But now under the new Act of 1996, the number of arbitrators to determine
the dispute has been left to the parties, the only limitation being that an even
number of arbitrators shall not be appointed. The arbitrators so appointed
shall appoint a third arbitrator called the Presiding Arbitrator(umpire).
5. Qualification of the arbitrator: There were no qualifications for
appointment as an arbitrator as prescribed in the earlier Arbitration Act
of 1940. But now the Act of 1996 provides for qualification of the
arbitrator. Since nowadays a large number of disputes arising between
the parties are of technical nature, therefore such disputes can properly
be decided only by the arbitrators who are competent and well versed in
such matters.
6. Assistance of court in certain matters: the Act of 1996 provides for
taking assistance from the court only in certain specific matters, the
Arbitral tribunal or a party may seek assistance from the court in taking
evidence. The court may therefore order the witness to provide
evidence to the arbitral tribunal directly. But the act does not confer any
power on the Arbitral tribunal to summon witnesses. Therefore, the
Arbitral tribunal or a party with the approval of the arbitral tribunal may
apply to the court for assistance in taking evidence.
7. Empower to pass interim orders: another notable feature of the Act of
1996 is the provision relating to the interim measures, which empower
 the arbitrator or arbitral tribunal to pass interim orders in respect of the
subject matter of the dispute at the request of the party.
8. Arbitral award in conflict with public policy is void: the new Act of
1996 provides that an Arbitral award which is in conflict with the public
policy in India shall not be valid in law being null and void and can be
set aside by the court.
9. International Commercial Arbitration defined: The Act of 1996
specifically defines the term “International Commercial Arbitration”
under Section 2(1)(f), it means an arbitration relating to disputes arising
out of legal relationship whether contractual or not, considered as
commercial under the law in force in India and where at least one of the
parties whether an individual, body corporate or a company is having
business or residing abroad and in case of Government, the
government is of a foreign country.
Note: the other party to the dispute mentioned above should be a foreigner,
foreign company, or foreign government.
10.Scope of conciliation more wide: Part III of the Act of 1996 deals with
a new international approach to conciliation and explains its application
scope. Thus making the scope of conciliation more wide.
11.Arbitrator to give reasons for the award: The Act 1996 under sub-
section 3 of section 31 provides that an arbitral tribunal must state
reasons for its award. However, where the parties themselves have
agreed in writing that no reasons are to be given or where the award is
in terms of a settlement reached between the parties, the requirement
of a reasoned award may be waived off.
12.Enforcement of foreign awards: The Act of 1996 provides for
enforcement of certain foreign awards made under the New York
Convention and Geneva Convention respectively as contained in Part II
of the said Act as a decree of the court. The countries which have
neither adopted the New York convention nor the Geneva convention
are outside the scope of Part II of the Act and therefore their awards are
not enforceable as foreign awards in India.

Conclusion
In the present, the arbitration and other Alternative Disputes Resolution
mechanisms have gained more importance than the traditional judicial
method because it takes less time and has a smooth process and the
Arbitration and Conciliation Act,1966 has tried to simplify the procedures for
dealing with the cases.