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Arbitration Short

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14 views

Arbitration Short

Uploaded by

ginnyandgeorgia30.09
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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8.

The Arbitration Act of 1996 does not prescribe any time-bound procedure
for making of an arbitral award.
9. The Arbitration Act of 1996 does not provide for an opportunity for a
second appeal. This unique provision reflects the legislature’s intention
that they wish to have a speedy process so that there is no waste of time.

The Arbitration and Conciliation Act takes into consideration all the essential
ingredients necessary foe providing an easy and unambiguous procedure for
dispute resolution.

MEANING OF ARBITRATION:

“Arbitration is a form of Alternative Dispute Resolution (ADR)”.

• The concept of arbitration means resolution of disputes between the parties


at the earliest point of time without getting into the procedural
technicalities associated with the functioning of a civil court.
• The dictionary meaning of Arbitration is “hearing and determining a
dispute between the parties by a person or persons chosen by the parties”.
• In an English judgement named Collins v. Collins, 1858 28 LJ Ch 184: 53
ER 916 the court gave a wide definition to the concept of Arbitration which
reads as follows:” An arbitration is a reference to the decisions of one or
more persons either with or without an umpire, a particular matter in
difference between the parties”. It was further observed by the court that
proceedings are structured for dispute resolution wherein executives of the
parties to the dispute meets in presence of a neutral advisor and on hearing
both the sides and considering the facts and merits of the dispute, an
attempt is made for voluntary settlement.
• Arbitration can be a voluntary one i.e., agreed between the parties or it can
be ordered by the court.
• Unlike litigation, arbitration proceeding takes place out of the court and the
arbitrator’s decision is final and the courts rarely re-examine it.

• But Arbitration is considered as an important Alternative Dispute


Resolution mechanism and is been encouraged in India due to the high
pendency of cases in the courts.

General principles of arbitration

Following are the general principles of the arbitration:

• Arbitration is Consensual: Arbitration is a mutual process that requires the


consent of both parties. Arbitration can only be initiated, if parties have
agreed to initiate it. Parties can insert any arbitration clause if it is relevant
utilizing a submission agreement between parties. The parties are also not
allowed to unilaterally withdraw from the arbitration.
• Arbitration is Neutral: Arbitration is a neutral process hence it provides
equal opportunity to the parties such as; Arbitrator, Arbitration Panel,
applicable law, language, and venue of the arbitration. This also ensures
that no parties should enjoy the home-court advantage.
• Arbitration is a confidential procedure: The arbitration rule specifically
protects the confidentiality of the matter. The arbitration process provides
privacy and restricts unnecessary controversies regarding the case and
parties. Any disclosure made during the procedure may result in decisions
and awards. In some circumstances, the parties are allowed to restrict the
access of trade secrets and other confidential information submitted to the
arbitration tribunal.
• The parties choose the arbitrator: Each party has the right to choose their
arbitrator to whom they think will fit to handle their case. If the parties have
chosen a three-member arbitration tribunal, then each party appoints one
of the arbitrators. Then the two selected arbitration shall agree on the
presiding arbitrator. The center can also suggest the potential arbitrator
with relevant expertise or may directly appoint members of the arbitration
tribunal.
• The decision of the arbitral tribunal is final and easy to enforce: The
decision of the arbitral tribunal is final and known as Award. The decision
of the arbitration tribunal must be final and binding on both parties.
Arbitration awards can be easily enforced in other nations than court
proceedings.

Classifications of arbitration

The two Acts together provide the legal framework governing arbitration in India.
Stated as the Arbitration and Conciliation Act, 1996 read with the Indian Contract
Act, 1872. Recently, Arbitration and Conciliation Act, 1996 has been amended
vide the Arbitration and Conciliation (Amendment) Act, 2015.

Since the arbitrators have limited powers, they cannot act ultra – vires of their
powers under the code. The act has established a higher authority to keep checks
and balances on the practices of the arbitration. The arbitration clauses leading to
the original type of jurisdiction are classified under two categories: Domestic
Arbitration and International Commercial Arbitration.

The jurisdiction of International Commercial Arbitration was granted to the


Supreme court. The code entails the Supreme Court to be designated the authority
for appointing an arbitrator in cases of International Commercial Arbitration.
Meanwhile, the jurisdiction of Domestic Arbitration was given in the hands of
high courts. The code entails the High Court to be designated the authority for
appointing an arbitrator in cases of Domestic Arbitration.
However, arbitration procedures can be varied to suit the needs of the parties.
There are more specific types of Arbitration:

• Commercial Arbitration is the most common in solving a dispute


between two commercial enterprises.
• Judicial Arbitration is not at all arbitration, but merely a court process
that refers to itself as arbitration, which is usually the arbitration of a small
claim.
• Consumer Arbitration deals with disputes between a consumer and a
supplier of goods or services.
• Labor Arbitration involves the settlement of employment-related
disputes and is divided into two main categories: Rights Arbitration and
Interest Arbitration.

Meaning of arbitrator

‘An arbitrator is the person who has been officially chosen to decide between
two people or groups who do not agree’. In other words, an arbitrator can be
defined as a person who acts as a neutral dispute resolution authority, in deciding
the issues between the parties in a dispute. The arbitrator acts as a supreme
authority in the process of arbitration and holds the same position as that of a
judge. Hence, he is bound to follow the principles of natural justice, and act in a
just way in providing justice to the parties.

Qualifications of an arbitrator

The Indian legislation does not specify the qualifications required to become an
arbitrator. Under the Arbitration and Conciliation Act, the person can only be
appointed as an arbitrator if he is not a minor and is of sound mind. The arbitrators
in India are appointed by the arbitral institutions and associations, which includes
a panel of experts who appoint arbitrators on their understanding.

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