Arbitration is a widely used alternative dispute resolution mechanism in India. It is a process by which parties to a dispute agree to resolve their differences outside of court, with the help of a neutral third party called an arbitrator.

The legal framework for arbitration in India is governed by the Arbitration and Conciliation Act, 1996. The Act provides for the appointment of arbitrators, the conduct of arbitration proceedings, the enforcement of arbitral awards, and the challenge of arbitral awards.

If a dispute arises between the parties, the first step is usually to refer the matter to arbitration. The parties can either agree on a sole arbitrator or a panel of arbitrators, depending on the complexity of the dispute. Once the arbitrator(s) have been appointed, they will conduct a hearing and consider the evidence presented by both parties.

After hearing both sides, the arbitrator(s) will issue an arbitral award, which is a legally binding decision that resolves the dispute between the parties. The award can be enforced through the courts in India, and it has the same legal force as a court judgment.

In case one party is not satisfied with the arbitral award, they can challenge it in court. The challenge can be made on limited grounds such as if there was a procedural defect, or if the award is against the public policy of India.

Arbitration has become a popular method of resolving disputes in India, especially for commercial disputes. It offers a more efficient and cost-effective way of resolving disputes compared to litigation.