Arbitration- its meaning and scope

Arbitration is a method of dispute resolution which involves the judicial determination of the dispute outside the court by one or more independent third patry(ies) called "arbitration" whose called "arbitral award" is final and binding upon the parties.
As per indian Arbitration and Conciliation Act, 1996 section 2 (1) (a) "arbitration" means any arbitration whether or not administered by permanent arbitral institution.
The scope of arbitration is hidden in section 7 (1). That defines the arbitration agreement. Section 7 (1) says "in this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. " Thus it is clear that only dispute can be the subject matter of the arbitration proceeding. Parties may give their consent regarding arbitration proceeding before the dispute has been arisen.

Requirement of arbitration agreement:
Sec.7(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommuni­cation which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract