Arbitration – The better problem solver- BY Aman Arun Singh

Arbitration Article, Lex Bona Fide, Best Law Journals

“I will see you in court!”

We always hear people saying this to end debate and resolve the dispute by moving to Courts. But, here, what we really should shift our attention towards, is that, whenever there is an infringement of the rights of an individual or a disagreement per se, he immediately feels the need to drag the other person to the Court with a mindset that a Court is the only place where justice can be served. While, there is no ambiguity on the stated fact that a Court does serve justice, but it is “not the only option” to seek justice. More than 3 crore cases are pending in the Courts of India, and we can only assume the load of such mammoth number of cases which are inflicted upon the courts, not to overshadow the litigation costs which sometimes, in a developing country like India where the poverty level is low, even costs the livelihood of such underprivileged people leaving them with a long time emotional trauma. Though Arbitration is one of the “alternative” to the dispute resolutions, I feel, that it should not be considered merely as an alternate option but should be formally considered as a mandatory one, in the minds of people wanting to resolve the disputes and drag the cases to Courts. Though the awareness of an alternative to Litigation is not quite known to the people, yet to avoid paying the huge litigation costs and the inflicted emotional trauma during the whole lengthy process starting from filing the case with a hope to win the same to its trials being conducted till the final verdict is pronounced after ages, I suggest people are made more aware about such an alternative and are encouraged to resolve whatever be the dispute outside the Courts, not only for a speedy trial of cases which satisfies both the party’s needs but also to bring down the burden of more pending cases from the shoulders of the Courts. Arbitration has proved to be a better option; as, unlike litigation where the parties have no right to decide upon which Judge may or may not hear their case, arbitration allows the parties involved to select an arbitrator of their choice. And, to mention again, Arbitration is more flexible in working and not only covers minimal costs in comparison to litigation but also is less time-consuming. Hence, making an analytical deduction, I think Arbitration through an alternative should be a mandatory option for the aggrieved people to choose, as it is not just an alternative but also always a better option.

 

EVOLUTION OF ARBITRATION IN INDIA

 

As we all know that Arbitration is the mechanism of dispute resolution with the intervention of the third party (can be more than that) but without the involvement of the court. According to historical references, arbitration has been in places even before the times of Christ. Even according to the Hindu law, it is given that one of the earliest known treatises about arbitration is “Brhadaranayaka Upanishad”. It basically tells about the various types of arbitral bodies which were there at that time primarily named as ‘Puga’ the local courts, ‘Srenis’ the people engaged in the same business or the profession and the ‘Kulas’ who were the members concerned with the social matters of a particular community and these bodies together known as Panchayats.

The first Indian Arbitration Act was formed on 1st July 1899 which was fundamentally based on the British Arbitration Act, 1899. The Arbitration Act of 1940 faced a lot of criticisms and lacked in quite a lot of areas when it came to implementation in the real sense. Although the act brought uniformity in law across the nation, which was needed to be replaced by The Arbitration and Conciliation Act 1996, which came into force from 22nd August 1996. Arbitration in India is still evolving. The main objectives of the 1996 Act were to achieve the twin goals of cheap and quick resolution of disputes, but the current scenarios indicate that these goals are yet to be achieved. It is evident that arbitration has evolved over the years as the ideal tool or mechanism for the resolution of disputes between the parties which saves the time and it is also a quick remedial measure. Basically, every arbitration is based on the insightful application of law and its evolution is the proof of its significance in actual proceedings. Thus, arbitration has come out to be the most preferred platform for resolution for disputes in the industrial and corporate world.

ARBITRATION vs LITIGATION

As we are in the era of globalization which has shown has some opportunities and several challenges in which arbitration has played a key role in resolving legal disputes. In this era even the life system has undergone a paradoxical change, people want to do their things quickly and effectively. India is known as one of the fastest-growing economies in the world, where there is a high rate of economic growth, which means there is an increase of income, improvement of purchasing power, which ensures to the growth of effective demand and supply and a better standard of living. As we know all know the record of pending cases in the courts and we cannot wait for resolving some dispute through some suit in the court as it is a wastage of time and money. So, for that matter, arbitration comes in the screen. The Civil Procedure Code, 2000 Amendment and 2002 Amendment of the Legal Services Authority Act empower the courts to refer the parties for Alternate Dispute Resolution including Arbitration, Negotiation, Reconciliation and Mediation with an option.

Arbitration is promoted as a way of efficiently disputes resolving mechanism which is better than litigation in various ways. Below you can see some of the main points which makes arbitration better than litigation: –

  • The arbitration process is more of a private settlement meeting between the parties whereas the litigation is done in an open courtroom.
  • The arbitration process is a speedy one. Once an arbitrator is selected the case can be heard and resolved while in litigation you have to wait until the court has time to hear it.
  • Arbitration is a cost-effective process as it the cost of arbitration is limited to the arbitrator fees whereas the cost of litigation includes attorney fees and court costs which can be high.

 

PROCESS OF ARBITRATION

The arbitration may be a kind of different dispute resolution (ADR), utilized in place of judicial proceeding (going to court) within the hope of settle a dispute while not the price and time of a court confine judicial proceeding may be a court-based procedure that has an alternative that’s authoritative on the gatherings and a procedure of participating the selection. The variations between arbitration and judicial proceeding involve the processes themselves and also the results of selections on the dispute. Both area unit formal procedures, but arbitration, as a rule, is a smaller amount immoderate and leads to shorter settlement at times. The arbitration may be a procedure during which a dispute is submitted, by agreement of the parties, to at least one or additional arbitrators by an agency build binding selections on the dispute under the “WIPO Arbitration Rules” the gatherings will select along with it. On the off likelihood that they likely to have a three-part mediation court, every gathering name one in every one of the authorities; those 2 individuals at that time deliberate to the managing intercessor. The WIPO rules specifically defend the confidentiality of the existence of the arbitration, any disclosures created throughout that procedure, and also the award should not be allowed. However, in spite of the principles and laws used some key problems to be generally self-addressed that what is going to be the numbers of arbitrators, however, arbitrators are going to be chosen, timelines for arbitration, evidence, awards and also the confidentiality and records for the establishing rules and procedures in arbitrations. However, that creates the stages in arbitration process first the case initiation stage then the intercessor invite stage, intercessor appointment stage and also the last stage is a preliminary hearing and knowledge exchange stage. Then further when arbitrators are appointed they require the involvement of the parties which include some procedure to be followed that are requesting party files for arbitration, then the screening and registration of the request for arbitration, tribunal members are appointed then the tribunal members they held the first session with the parties with all these it leads to furthermore process i.e. written procedure, oral procedure, deliberations and at the last award that is the disposal of the case. Arbitration has helped numerous individuals in settling disputes and has gained a great position by which it has become a priority over judicial proceeding for many of the individuals. Thus, arbitration has come out to be the most preferred platform for resolution for disputes in the industrial and corporate world.

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