ALTERNATE DISPUTE RESOLUTION

ARBITRATION
GENERAL OUTLINE
 INTRODUCTION
 DEFINITION
 GENERAL EXPLANATION
 KINDS OF ARBITRATION
 ESSENTIALS OF AN ARBITRATION AGREEMENT
 COMMON ELEMENTS INCLUDED IN THE ARBITRATION AGREEMENT
 DUTIES OF ARBITRATOR
INTRODUCTION
Arbitration is a process in which a dispute is submitted to an impartial outsider
who makes a decision which is usually binding on both the parties. The
arbitrator enforces his own point of view on the contending parties and the
opinions of the participants are not given any predominance. Arbitration is a
judicial process. The award of the arbitrator is binding and rests on equity and
justice, i.e. there is no scope for compromise.
DEFINITION
Arbitration is defined as an “agreement by the parties to refer to arbitration all
or some disputes which have arisen or will arise on a future date between them
with reference to a defined legal relationship, whether contractual or not.”
GENERAL EXPLANATION
An Arbitration agreement is formed when any two parties entering into a
contract and a dispute arises between them with regard to the contract
agreement has to be solved, without going to the Courts and with the
assistance of an Arbitrator who would act like a judge. The agreement
ordinarily should mention who should select the arbitrator, regarding the kind
of dispute the Arbitrator should give decisions on, the place of arbitration, and
other aspects of the procedure.
The parties are also mandated to sign an Arbitration Agreement the decision of
which is always binding on the parties. In the event that one is a party to any
contract and if the individual seeks to resolve any disputes with the help of an
Arbitrator, without going to court, then one should make this agreement.
KINDS OF ARBITRATION
Voluntary Arbitration
Implies that the two contending parties, unable to compose their differences
by themselves agree to submit the conflict/dispute to an impartial authority,
whose decision they are ready to accept.
Compulsory Arbitration
It is where the parties are required to accept arbitration without any
willingness on their part. When one of the parties to an industrial dispute feels
aggrieved by the act of the other, it may apply to the appropriate government
to refer the dispute to an adjudication machinery.
ESSENTIALS OF AN ARBITRATION AGREEMENT
Written Agreement
An arbitration agreement must be in writing. An arbitration agreement is
considered to be in writing, if it is:
1. Signed by the parties and is in the nature of a document;
2. It can also be an exchange of letters, telex, telegrams or other means of
telecommunication the essential feature is that it should provide a
record of the agreement; or
3. An exchange of statements of claim and defence in which the existence
of the agreement is alleged by one party and not defined by another.
Intention
Intention of the parties is of extreme importance and forms the crux of the
agreement. There is no prescribed manner of making an arbitration agreement
and it has been stated nowhere that term like arbitration, arbitrator are
essential prerequisites in an arbitration agreement. The Supreme Court has
recently clarified its stance on in this subject, the intention of the parties to
refer their dispute to arbitration should be clearly discernible from the
arbitration agreement.
Signature
The signature of the parties is essential to constitute an arbitration agreement.
It can be in the form of a signed document by both the parties and comprises
all the terms or it may also be a signed document by one party, which contains
the terms and an acceptance signed by the other party. It will be sufficient if
one party puts her signature in the written submission and the other party
accepts that.
COMMON ELEMENTS INCLUDED IN THE ARBITRATION AGREEMENT
Seat of Arbitration
This clause states what will be the seat or place of arbitration. The seat of
arbitration is important especially in international commercial arbitrations
since it determines the procedural laws that govern the arbitration procedure.
It need not be the same as the place of hearings. Seat of arbitration is
considered to be places where arbitrations are taking place even if the location
of the hearings differs. The Place where the hearings take place don’t affect
the chosen seat of arbitration.
Procedure for Appointing Arbitrators
The procedure for the same has been provided in the Act. It provides that a
person irrespective of her nationality may be appointed as an arbitrator, unless
otherwise agreed by the parties. The parties can themselves agree on a
procedure for appointing the arbitrator(s).
Language of Arbitration
It is important to decide what is the language of arbitration in the agreement
itself. Especially, in a country like India, where Hindi and English aren’t the only
two languages spoken, it can get extremely difficult to decide and settle the
disputes. Picking the language of arbitration is additionally very cost effective,
because it would save you from paying exorbitant fees to the translators.
Number and Qualifications of Arbitrators
The Arbitration and Conciliation Act of 1996 allows parties to determine the
number of arbitrators, provided that the number is an odd number. In the
event that they are unable to determine the number of arbitrators, the arbitral
tribunal shall consist of a sole arbitrator.
Type of Arbitration
Parties have a choice between Institutional or Ad hoc arbitrations. If the parties
choose institutional arbitration, then they have essentially agreed to be bound
by the rules of the arbitration institutions. All such institutions have their own
set of rules for arbitration and these rules would be applicable to arbitral
proceedings conducted by them. On the other hand, in case of Ad-hoc
arbitrations, arbitrations are both agreed to and arranged by the parties
themselves. No help whatsoever is sought from the arbitral institutions in Ad-
hoc arbitrations.
Governing Law
This is the law that will decide the primary points of contention between the
parties to a dispute. It is also called the substantive law. It is essential that the
parties mention the law they want to be governed by, failing which this might
be a huge cause of concern for future disputes.
Name and Address of the Arbitration Institution
If the parties to the dispute wish to refer their disputes to an arbitration
centre, then it is essential that they should mention the name and address of
the arbitration facility in clear and unambiguous words. Such mistakes can
make the arbitration clause void.
DUTIES OF ARBITRATOR
 To administer oath to the parties and witness appearing.
 To act judicially and impartially.
 To put necessary interrogatories to any party to the dispute.
 To determine by and to whom the costs of reference and the award shall
be paid.
 To award interest.
 To fix amount, time and mode of payment.

ASSIGNMENT BY TEAM 2
HEMALATHA V
PRAMOD H D
VARALAKSHMI R
KASHISH R
CLASS: 5 YEARS [Link] VIII SEM
SUBJECT: ALTERNATE DISPUTE RESOLUTION (ADR)
TOPIC: ARBITRATION
INFORMATION SOURCE: INTERNET