Arbitration

Jay Shree Ram! You are welcome to this blog as you want to know about various laws in Bharat. The objective of this blog is to know about arbitration in Bharat. Here is short discussion meaning and process of arbitration. Also further types of arbitration are given. Read till the end and increase your knowledge. 

Arbitration

Meaning:

Arbitration is a term derived from the nomenclature of Roman law. Arbitration is a private arrangement of taking disputes to a less adversarial, less formal and more flexible forum and abiding by judgment of a selected person instead of carrying it to the established courts of justice. [1]

Process of arbitration

Arbitration can be chosen by the parties either by way of an Arbitration Agreement or through the reference of the Court. The parties in an arbitration have the freedom to select a qualified expert known as an arbitrator. The process of dispute resolution through arbitration is confidential, and hence arbitration is popular especially for commercial disputes where business secrets revealed during the process of dispute resolution are protected and preserved. Also due to this confidentiality the companies can maintain their commercial reputation, as they can prevent the general public or their customers from discovering the details of their on-going legal disputes. [1]

The decision rendered by an arbitrator is known as an arbitral award. Similar to a judgment given by a judge, the arbitral award is binding on the disputing parties. Once an arbitral award is rendered, it is recognised and enforced like a court pronounced judgment or order. In addition to an arbitral award, the arbitrator also holds power and authority to grant interim measures, like a judge in the court. These interim measures are in the nature of a temporary relief and may be granted while the legal proceedings are on-going in order to preserve and protect certain rights of the parties, till the final award is rendered. Therefore, an arbitral award holds several similarities with a court order or judgment. However, unlike a judgment rendered by a judge in the court, the award does not hold precedential value for future arbitrations. Arbitrators are free to base their decisions on their own conception of what is fair and just. Thus unlike judges, they are not strictly required to follow the law or the reasoning of earlier case decisions. [1]

Types of Arbitration

Domestic Arbitration - An arbitration with Indian parties, where the place of arbitration is in India and rules applicable are Indian. [1]

Foreign Arbitration - An arbitration where proceedings are conducted in a place outside India and the award is required to be enforced in India. [1]

Ad-hoc Arbitration - An arbitration which is governed by parties themselves, without recourse to a formal arbitral institution. It may be domestic or international in character. [1]

Institutional Arbitration - An arbitration where parties select a particular institution, which in turn takes the arbitration forward by selecting an arbitrator and laying out the rules applicable within an arbitration, e.g., mode of obtaining evidence, etc. There are several institutions to govern arbitration. Examples of prominent institutions of arbitration include, The London Chamber of International Arbitration (LCIA) which has its offices across the world, including New-Delhi, Bharat. [1]

Statutory Arbitration - An arbitration which is mandatorily imposed on the parties by operation of a particular law or statute, applicable to them. For example, the Defence of India Act, 1971 is one such legislation that mandates a recourse to arbitration in case of any dispute arising within the Act. [1]

International Commercial Arbitration - An arbitration in which at-least one of the disputing parties is a resident/body corporate of a country other than India. Arbitration with the government of a foreign country is also considered to be an international commercial arbitration. This form of arbitration has been defined specifically under section 2(1)(f) of the Arbitration and Conciliation Act, 1996. [1]

Reference:

1) CBSE Class XII Legal Studies