Disputes are an inevitable part of business. The question is how best to resolve them. While litigation (court proceedings) has been the traditional route, arbitration and other forms of Alternative Dispute Resolution (ADR) are gaining prominence.

Litigation in India

Litigation involves formal court proceedings before judges. It is suitable for:

• Complex legal issues.

• Cases requiring strong enforcement.

• Matters involving public interest.

Advantages: Binding judgments, clear procedures, strong enforceability.
Disadvantages: Time-consuming, costly, and prone to delays.

Arbitration in India

Arbitration allows disputes to be resolved outside of courts through arbitrators. It is popular for commercial contracts and international business.

Advantages: Faster resolution, confidentiality, flexibility in procedures.
Disadvantages: Arbitrator’s fees may be high, limited appeal rights.

Arbitration vs Litigation: Which to Choose?

• For Speed: Arbitration is better.

• For Confidentiality: Arbitration ensures privacy.

• For Enforcement: Litigation ensures state-backed judgments.

• For Business Contracts: Arbitration clauses are highly recommended.

Conclusion

The choice between arbitration and litigation depends on the dispute’s nature. For businesses, including an arbitration clause in contracts ensures flexibility, while litigation remains crucial for enforcement-heavy disputes.