Section 74 of ACA : Section 74: Status And Effect Of Settlement Agreement

Explanation using Example

Example Application of Section 74 of The Arbitration and Conciliation Act, 1996:

Imagine a scenario where two businesses, Company A and Company B, are involved in a commercial dispute over a breach of contract. They decide to resolve their dispute through arbitration. During the arbitration proceedings, they manage to come to an amicable settlement through negotiation.

Their settlement agreement is then put in writing, and as per Section 74 of The Arbitration and Conciliation Act, 1996, this settlement agreement is treated with the same legal standing as if it were an arbitral award. This means that the agreement is binding and enforceable in a court of law, just like an arbitral decision made by the arbitrators. Therefore, if either company fails to comply with the terms of the settlement, the other company can enforce the agreement in court as though it were an arbitral award.