Arbitration – Arbitration Agreement Process Steps
Arbitration is an ADR (alternative dispute resolution) method where the disputing parties involved present their disagreement to at least one arbitrator or a panel of personal, independent and qualified third party “arbitrators.” The arbitrator(s) determine the result of the case. While it’s going to be less costly and more accessible than trial, the arbitration process has well-defined disadvantages. a number of disadvantages include the danger losing, formal or semi-formal rules of procedure and evidence, also because the potential loss of control over the choice after transfer by the parties of decision-making authority to the arbitrator. By employing arbitration, the parties lose their ability to participate directly within the process. additionally, parties in arbitration are confined by traditional legal remedies that don’t encompass creative, innovative, or forward-looking solutions to business disputes.
During arbitration, parties present cases during a similar manner as they might during a court case to the panel of arbitrators who were chosen by the parties themselves by mutual assent. While arbitration generally proceeds during a less formal manner than a court case, all sides feature a chance to supply evidence, call witnesses, and provides testimony, a bit like during a court case. Both parties generally are represented by arbitration lawyers who make sure that the case goes as smoothly as possible. Once all sides have presented their case, the arbitrators debate and rule. Outcomes handed down by arbitrators are binding—although in some cases they will be appealed.
Usually, all the disputes during which the civil rights of a citizen are infringed and therefore the disputes falling within the jurisdiction of civil court are often mentioned arbitration. But the disputes which are associated with morality, public policy, status and non-secular rights aren’t arbitrable in India.
Arbitration and Conciliation Act, 1996
The arbitration is governed by the law of arbitration which is mainly provided under the Arbitration and Conciliation Act, 1996. Before this Act, there were 3 Acts that governed the law of arbitration such as:
The Arbitration (Protocol and Convention) Act, 1937.
The Arbitration Act, 1940.
The Foreign Awards (Recognition and Enforcement) Act 1961.
The Act of 1996 aims at consolidating the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and rules regarding conciliation. Arbitration and Conciliation Act of 1996 is the main governing law for arbitration in India.
Arbitration Law in India
Arbitration Law in India is primary contained in the Act of 1996. THis Act was passed to consolidate the laws relating to domestic, international arbitration and its enforcement.
Types of Arbitrations
The voluntary arbitration provision allows the parties, after a civil lawsuit is filed, to elect to resolve their dispute by arbitration. If one of the parties does not agree, the lawsuit remains in the civil court system. If the parties elect arbitration, certain arbitration rules apply, such as discovery limits, a limit on the number of experts, and a process that generally results in a final decision within one year from the date the lawsuit is commenced. Voluntary arbitration may be specifically needed for disputes arising under agreements.
The voluntary arbitration provision allows the parties, after a civil lawsuit is filed, to elect to resolve their dispute by arbitration. If one of the parties does not agree, the lawsuit remains in the civil court system. If the parties elect arbitration, certain arbitration rules apply, such as discovery limits, a limit on the number of experts, and a process that generally results in a final decision within one year from the date the lawsuit is commenced. Voluntary arbitration may be specifically needed for disputes arising under agreements.-
Other Types of Arbitrations
- Domestic arbitration
- International arbitration
- Institutional arbitration
- Ad hoc arbitration
Role of An Arbitrator - What an Arbitrator Does?
The arbitrator’s function is to render a decision on the issues. During arbitration, both parties are given the opportunity to present their case to the arbitrator, which can include the introduction of evidence and testimony of the parties and/or witnesses. The arbitrator than issues an arbitration award, which can only be contested under certain circumstances. Arbitration ends when the arbitration award is finalized. Due to the arbitrators role as decision maker, the arbitrator is precluded from engaging in settlement discussions with the parties.
Process of Arbitration
- Appointment of arbitrator
- Hearing & Notice for commencement of arbitration
- Statement of claim and defense
- Hearings and written proceedings
- Arbitral award
- Enforcement of arbitral award
Benefits of Arbitration
Arbitration tends to promote respect between the parties, reducing any rancor and sometimes even preserving a productive relationship between them. The outcome of arbitration is often private, as are the proceedings. This can allow each side to protect confidential information, while encouraging them to be candid with each other. However, some people view this privacy as a lack of transparency, which creates a risk that one party may manipulate the proceedings.
An arbitration agreement is the justification for existence of an arbitration proceeding. It is only through an arbitration agreement that parties can submit their issues to be decided by the arbitral tribunal. An arbitration agreement not only provokes an arbitral tribunal but also gives shape to it. Therefore, it is crucial to understand the position of the arbitration agreement under the statute.
In short, an arbitration agreement is formed when two parties enter into a contract and agree in writing that any disputes arising between them out of that contract will have to be resolved without going to the courts and with the assistance of a neutral person: a third party appointed by both of the parties, known as the Arbitrator, who would act as a judge and whose decision will be binding upon the parties.
Things To Remember While Drafting Arbitration Agreement
- Seat of arbitration is considered to be a place where arbitrations are held even if the place of hearings differ. Place of hearings don’t by any means affect the chosen seat of arbitration.
- Procedure for Appointing Arbitrators – Section 11 of the Arbitration and Conciliation Act talks about the appointment of arbitrators. It provides that a person of any nationality may be appointed as an arbitrator, unless otherwise agreed by the parties.
- The language of arbitration in the agreement itself. Especially, in a country like ours, where Hindi and English aren’t the only two languages spoken, it would get very difficult to decide and settle the disputes.
- Number and Qualifications of Arbitrators, According to Section 10 of the Arbitration and Conciliation Act of 1996, parties can determine the number of arbitrators.
- Parties can choose between Institutional or Ad hoc arbitrations. If the parties choose the former, then they have to be bound by the rules of the arbitration institutions. All these institutions have their own set of rules for arbitration and these rules would be applicable to arbitral proceedings conducted by them.
- The law that governs the main point of contention between the parties to a dispute. It is even known as the substantive law. The parties should mention the law they want to be governed by.
- Mention the name and address of the arbitration facility in clear and unambiguous words. Such inadvertent mistakes can lead to the nullification of the arbitration clause.
Advantages of Processing an Arbitration Agreement
- Arbitration is usually faster and less expensive than litigating a case in court.
- Arbitrations are confidential, which means that you will not have to publicly testify. The specifics of your dispute will not be in the public court records.
- In arbitration, you can choose who will decide your dispute. This can be particularly helpful if you want a decision maker who has specialized technical knowledge or experience in your industry.
- Some employers will not hire you if you refuse to sign an employment arbitration agreement.
- Arbitration awards cannot be appealed. You must accept the arbitrator’s decision as final.
- You cannot have a jury trial. This can lead to a worse result if you have an employment dispute because juries are often sympathetic to employees.
- The parties’ exchange of information is more limited in arbitration. This can make it harder to develop your case in an employment arbitration or in any other situation where the other party has most of the information and documents.
- If you are asked to agree to arbitration before you even have a dispute, you may not know whether you want to arbitrate or not. If you sign the agreement and decide later that you would rather pursue a claim in court, you won’t be able to – or you will rack up legal fees trying to invalidate the arbitration agreement.
- Like all contracts, arbitration agreements can be one-sided in favor of the party who wrote the agreement. You should be on the lookout for this and make sure the agreement gives you an equal voice in choosing the arbitrator, does not limit the remedies available to you, and does not deny you the right to an attorney.
- Arbitration agreements are a way to limit litigation costs and keep disputes confidential. But signing an arbitration agreement also means giving up important rights. Before signing, it pays to read arbitration clauses and reject or renegotiate anything that you’re uncomfortable with.
Arbitration Meaning in
Arbitration Meaning In Hindi – मध्यस्थता | Arbitration Meaning In Tamil – நடுவர்
Arbitration Meaning In Telugu – మధ్యవర్తిత్వO | Arbitration Meaning In Kannada – ಮಧ್ಯಸ್ಥಿಕೆ
Arbitrator Meaning In Hindi – मध्यस्थ | Arbitrator Meaning In Tamil – நடுவர்
Arbitrator Meaning In Telugu – మధ్యవర్తి | Arbitrator Meaning In Marathi – लवाद
Arbitrary Meaning In Hindi – मनमाना
*Above few details are useful to understand Arbitration, It is better to Consult Arbitrator to proceed Arbitration.