In order to give effect to the UNICITRAL model law on arbitration and due to radical change in the economy as a result of the new economic policy of 1991 the Arbitration and Conciliation Act, 1996 was enacted. This act provided a pragmatic legal basis for resolution of the commercial disputes outside the courts. It circumscribes the orders, the laws and consolidates the many legal norms pertaining to arbitration. On the other hand, parallel litigation is a dispute which generates multiple law suits. In this paper, the author has dealt with various aspects of both in detail. Although the two are often confused to be similar by a layman, these concepts are rather different. For the purpose of understanding these differences, the analysis here includes the meaning of these two concepts, the various types of arbitration, the amendment of 2016 to the Arbitration Act which brought about major changes in the field and the situations which can lead to a parallel litigation. At the end of this paper, any reader would be able to develop a proper understanding of what these two concepts are and how they are different from one another.