ARBITRATION- AN EFFICIENT ALTERNATIVE

AUTHOR- Urvashi Bhargava

EDITOR- Riya Luhadia

WHAT IS ARBITRATION?

Arbitration is a legal way in which parties decide on a plan of action for their disagreements and contentions through an alternative resolution method. In Arbitration, the parties in conflict appoint a common third party called an arbitrator, or it could include a bench including two or more arbitrators to resolve their disputes in private proceedings, and the award delivered by the 3rd party will bound the parties involved. Parties to conflict can enter an arbitration agreement, can include arbitration as a clause in the contract, or can agree mutually and opt for arbitration. “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 regarding a defined legal relationship, whether contractual [1]. Essential of arbitration includes-

● Consent–There should be a mutual agreement between the parties if they want to resolve their issues through arbitration as their resolution method.

● The decision is to be followed mandatorily by both parties- When parties resolve to arbitration, the verdict of the arbitrator remains mandatory to honor for parties involved, and no appeal lies against such arbitral award; exception includes some grounds under which the decision can go for an appeal before the competent authority, but they become limited.

● Appointment of the deciding authority- Here, the authority delivered to the award as “arbitral tribunal,” which means a single arbitrator or may include a panel with two or more arbitrators[2]. An individual of any nationality may be an arbitrator unless otherwise agreed by the parties[3]. The liberty to appoint an arbitrator is with the parties, but they should mutually agree to decisions between them.

SCOPE OF ARBITRATION

● DOMESTIC ARBITRATION

Domestic arbitration means arbitration procedure will come under Indian law. In India, it governed arbitration under Arbitration and Conciliation Act, 1996, which is formed in conformity with UNCITRAL Model Law. It includes rules for both the domestic besides disputes related to international arbitration. The award decided in resolving the dispute as a “domestic award” in compliance with Arbitration and Conciliation Act, 1996.

● INTERNATIONAL ARBITRATION

In International Arbitration, cross-border disputes are resolved. Although countries have legislations of their own for arbitration proceedings, most of them have their rules in congruence with UNCITRAL Model Law and UNCITRAL Rules 1976.

● AD HOC ARBITRATION

In Ad hoc arbitration, parties handle the arbitration proceedings. All the decisions, from the appointment of the arbitrator to determining the rules and procedure, the parties to the conflict, determine all [4].

● INSTITUTIONAL ARBITRATION

Institutional arbitration involves a process where a specified institution is responsible for making the decisions in place of their clients for smooth completion of the proceedings. There are policies decided by them for administering these arbitration proceedings. These organizations are available at both domestic along with international levels.

❖ India- Delhi International Arbitration Centre (New Delhi), Mumbai Centre for International Arbitration, etc.

❖ International institutions, including the International Court of Arbitration at the International Chamber of Commerce, The Singapore International Arbitration Centre, etc.

● INSTITUTIONAL ARBITRATION

Institutional arbitration involves a process where a specified institution is responsible to take the decisions in place of their clients for smooth completion of the proceedings. There are policies decided by them for administering these arbitration proceedings. These organizations are available at both domestic along with international levels.

❖ India- Delhi International Arbitration Centre (New Delhi), Mumbai Centre for International Arbitration, etc.

❖ International institutions, including the International Court of Arbitration at the International Chamber of Commerce, The Singapore International Arbitration Centre, etc.

PROS AND CONS OF PURSUING ARBITRATION AS A CAREER

ADVANTAGES OF ADOPTING ARBITRATION ARE –

Arbitration as a rapid method involves a speedy solution to disputes. For example- disputes, when tried in court, carried on for decades as the judgment comes, but arbitration saves time for parties. In arbitration, no appeal lies before the court unless it falls under specific grounds mentioned; this helps to avoid appeals and prevents wastage of resources and time. Arbitration involves less paperwork and formalities, making it easier to go for. Its importance is growing in the modern world. Another advantage of arbitration is parties being independent of appointing a competent authority with specialized knowledge regarding disputes in certain areas. This helps parties to place a firm belief in the decisions, including the process.

They have burdened our judicial system with so many backlogs of cases; arbitration helps in speedy solutions for these cases where disputes can be solved through alternative methods. It saves both parties from such difficulties. It is less costly than going for litigation. Arbitration proceedings happen privately, which helps parties to decide and keep the evidence and conflicts private. It is a liberal process where parties have choices related to every decision and rule involved.

CONS OF PURSUING ARBITRATION

In arbitration, the decision is final and has to be mandatorily followed. Even if one party feels aggrieved or feels that decision is unfair, there is very little ground for challenging an arbitration award. In arbitration, it does not fix the rules such as that an arbitrator should act in line with the law specified and rules, making it less consistent for example, the cases where an arbitrator, rather than just following the law, consider the unfairness of the situation and decides. There is uncertainty related to evidence presented as sometimes the court may or may not allow certain evidence presented, but the arbitrator would. This leads to decisions that are uncertain and right, as per the court.

In arbitration, one puts his trust upon the arbitrator to get just and right decisions, but the lack of crosses examination and transparency in proceedings sets down parties in difficult positions when there are chances that the arbitrator is partial. If arbitration as a resolution is pre-agreed in the contract having binding, arbitration clauses the parties do not have a choice of whether to go for arbitration, and it becomes a mandate. Sometimes arbitration is rather more costly than litigation as some arbitrators specialized in their fields may demand more money, or in non-binding arbitration, if parties decide to appeal it in court, it would become expensive.

NOW THE QUESTION IS, HOW WILL ONE START?

To enter the arena of arbitration, one should first identify his area of interests and strengths during his study in law school or later first. By reading various blogs and articles about arbitration, testing your skill sets by taking part in various competitions related to arbitration, one should also be in touch with the community in the arbitration to improve in this field. One to succeed here should start from keeping connected to the community by involving yourself in various conferences organized by institutions of arbitration mentioned earlier and understanding the proper procedures of arbitration. It requires an understanding of areas through research of the process [5].

CONCLUSION

Arbitration is being widely accepted and seen as one of the most growing career options in the law field and a growing practice area. With the growing world, conflicts grew too, and arbitration has made this process timely, efficient, and less expensive. Arbitration is an efficient and widely recognized ADR method, with various amendments towards the improvement of the legislation governing arbitration. There is still a need for awareness and an increase in the influence of arbitration. It has been significantly helping us to determine the solutions for disputes and has led us to solve our conflicts amicably. It gives a choice to parties, provides a convenient and cost-effective option for resolution, and saves them from complicated procedures of the court. Arbitration has gone through several changes and has grown and developed, and taking measures to make more people aware regarding arbitration will help it grow and develop.

REFERENCES [1] THE ARBITRATION AND CONCILIATION ACT, S.7, ACT No. 26 OF 1996, (India). [2] THE ARBITRATION AND CONCILIATION ACT, S.2 (d), ACT No. 26 OF 1996, (India). [3] THE ARBITRATION AND CONCILIATION ACT, S.11 (1), ACT No. 26 OF 1996, (India). [4] Jagdeep Singh Bakshi, Arbitration law in India: Everything you want to know, the statesman, (23 July 2021) https://www.thestatesman.com/india/arbitration-law-in-india-everything-you-want-to-know-1502757528.html [5] Abhyudaya Agarwal, Is it possible to become an arbitrator even if you are not a retired judge?, ipleaders (23 July 2021) https://blog.ipleaders.in/possible-become-arbitrator-even-not-retired-judge/

*The Author is a 2nd-year B.A.LLB (Hons) student at Jagran Lakecity University, Bhopal.

Disclaimer: The opinions and views in this article are personal and independent opinions of the author. VAIDHA does not hold any liability arising out of this article.