Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 2 does two jobs. Sub-section (1) defines the terms used through Part I of the Act, and sub-sections (2) to (9) say where and to what Part I applies and how a few expressions are to be read. Almost every later section depends on these definitions, especially "Court" and "international commercial arbitration".
Part I applies where the place of arbitration is in India, and, subject to the section 2(4) rule, to arbitrations under other enactments as if the other enactment were an arbitration agreement. "Court" means different courts for domestic and international commercial arbitration. An award made under Part I is a domestic award. Agreement by the parties includes any arbitration rules their agreement refers to. This reading is as per the India Code consolidated text consulted.
How to read this section
We read section 2 as per the India Code consolidated text consulted. Section 2 is the first section of Part I, which the text heads "ARBITRATION", and it opens Chapter I, "General provisions". Provisions that section 2 names but that belong to other articles of this series, such as section 37, sections 40, 41 and 43 and Part II, are linked below and not explained here. If a dispute turns on a definition, an arbitration support review of your clause against the official text is a sensible first step.
Three footnotes are printed for this section, and each cites Act 3 of 2016, s. 2, with effect from 23-10-2015: one for the substituted clause (e), one for words omitted from clause (f)(iii) and one for the proviso inserted in sub-section (2). We name no other amendment to this section, because the text consulted shows none; later amendments should be checked.
Sub-section (1): the definitions
Sub-section (1) opens "In this Part, unless the context otherwise requires", so each meaning below gives way where the context of a provision points elsewhere. The text consulted prints eight clauses, (a) to (h).
| Clause | What it defines | Plain reading |
|---|---|---|
| (a) | "arbitration" | Any arbitration, whether or not administered by a permanent arbitral institution |
| (b) | "arbitration agreement" | An agreement referred to in section 7 (see our section 7 post) |
| (c) | "arbitral award" | Includes an interim award |
| (d) | "arbitral tribunal" | A sole arbitrator or a panel of arbitrators |
| (e) | "Court" | See below |
| (f) | "international commercial arbitration" | See below |
| (g) | "legal representative" | A person who in law represents the estate of a deceased person, any person who intermeddles with the estate, and, where a party acts in a representative character, the person on whom the estate devolves on that party's death |
| (h) | "party" | A party to an arbitration agreement |
Sub-section (1) ends with clause (h). Other provisions of the Act use the expressions "arbitral institution", "prescribed" and "regulations", for example in Part IA on the Arbitration Council of India (see sections 43-I, 43J and 43K), but section 2(1) as printed in the text consulted carries no definition of those words.
"Court" in clause (e)
Clause (e) has two limbs. The footnote shows the clause as substituted by Act 3 of 2016, s. 2, with effect from 23-10-2015.
- Arbitration other than international commercial arbitration: the principal Civil Court of original jurisdiction in a district, including the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if it had been the subject-matter of a suit. It does not include a Civil Court of a grade inferior to that principal Civil Court, or a Court of Small Causes.
- International commercial arbitration: the High Court in exercise of its ordinary original civil jurisdiction having that jurisdiction, and in other cases a High Court having jurisdiction to hear appeals from decrees of courts subordinate to it.
The footnote records only that the clause was substituted; it does not reproduce the earlier wording, so no comparison is made here. In both limbs the test is the same: the court must be one that could have decided the questions forming the subject-matter of the arbitration had they been raised in a suit. For the general rules on civil court jurisdiction, see our guide to jurisdiction of civil courts. The Commercial Courts Act cluster deals with which court hears arbitration applications in a commercial dispute: see section 10 of the Commercial Courts Act, 2015.
State amendments. The text consulted prints no State amendment entry under section 2. Whether a State has its own version of clause (e) is therefore outside this article; check the law of the State concerned before choosing the court. Section 42, which fixes the court for later applications once one application has been made, is explained in our section 42 article.
International commercial arbitration in clause (f)
It means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, where at least one party is:
- an individual who is a national of, or habitually resident in, a country other than India;
- a body corporate incorporated in a country other than India;
- an association or a body of individuals whose central management and control is exercised in a country other than India; or
- the Government of a foreign country.
In item 3 the text shows asterisks before "an association"; the footnote says the words "a company or" were omitted by Act 3 of 2016, s. 2, with effect from 23-10-2015. For the extent and commencement of the Act as a whole, see our section 1 article.
Sub-section (2): where Part I applies
Part I applies where the place of arbitration is in India. A proviso, shown as inserted by Act 3 of 2016, s. 2, with effect from 23-10-2015, says that, subject to an agreement to the contrary, "the provisions of sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37" also apply to international commercial arbitration even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of the Act. Section 37 has its own article: see section 37 on appealable orders. For Part II see section 44 on foreign awards and our guides on international commercial arbitration under Part II and enforcing a foreign arbitral award.
Sub-sections (3) to (5): other laws and other enactments
- (3) Part I does not affect any other law in force by virtue of which certain disputes may not be submitted to arbitration.
- (4) Part I, except section 40(1), sections 41 and 43, applies to every arbitration under any other enactment as if the arbitration were pursuant to an arbitration agreement and the other enactment were an arbitration agreement, except so far as the provisions of Part I are inconsistent with that enactment or its rules. The provisions carved out here are explained in our articles on sections 40 and 41 and section 43. Statutory arbitration of this kind is how, for example, delayed-payment disputes under the MSMED Act reach arbitration; see our post on section 18 of the MSMED Act, 2006 (arbitration).
- (5) Subject to sub-section (4), and save as otherwise provided by any law or by any agreement in force between India and other countries, Part I applies to all arbitrations and all proceedings relating to them.
Sub-sections (6) to (9): rules of reading
- (6) Where Part I, except section 28, leaves the parties at liberty to determine an issue, that liberty includes the right of the parties to authorise any person, including an institution, to determine it.
- (7) An arbitral award made under Part I "shall be considered as a domestic award".
- (8) Where Part I refers to the parties having agreed, or to an agreement of the parties, that agreement includes any arbitration rules referred to in it.
- (9) Where Part I, other than clause (a) of section 25 or clause (a) of section 32(2), refers to a claim, it also applies to a counter-claim, and a reference to a defence also covers a defence to that counter-claim.
Need help with reading a definition against your contract?
Which court counts as the "Court", whether your counterparty makes the dispute international, and whether a statute supplies the arbitration are questions that turn on facts. Our arbitration support team can walk through your agreement and tell you what to verify in the official text.
Key takeaways
- "Court" has two limbs: domestic arbitrations and international commercial arbitrations are treated differently.
- Clause (f) turns on the nature of a party, such as a foreign national or body corporate, and on the matter being commercial under Indian law.
- Part I applies where the place of arbitration is in India, with a proviso on certain sections for international commercial arbitration seated abroad.
- Statutory arbitration under another enactment brings in Part I as sub-section (4) provides.
- Parties' agreement includes the arbitration rules it refers to.
- Section 2(1) as printed has eight clauses, (a) to (h); the three footnotes to the section all cite Act 3 of 2016, with effect from 23-10-2015.
Read next
- Section 1: short title, extent and commencement
- Sections 5 and 6: judicial intervention and administrative assistance
- Section 8: power to refer parties to arbitration
- Section 10 of the Commercial Courts Act, 2015: arbitration matters
Disclaimer: Based on the India Code consolidated text of the Arbitration and Conciliation Act, 1996, whose footnotes show amendments up to Act 3 of 2021 and a latest date of 12 October 2023, as consulted on 2 October 2026. Rules, regulations and notifications under the Act, later amendments and the commencement of the Mediation Act, 2023 should be checked. This article is general information, not legal advice; check the official text before acting.