INTRODUCTION:
Study of a Non-Profit Organization ‘Daksh’ in 2017 having the title of ‘Tipping Scales: Strengthen System to Access Justice’. It aimed at bringing attention to improvement in the quality of justice mechanisms towards the weaker section of society. ‘Access to Justice’ by everyone is one of the ‘Sustainable Development Goals’ to be achieved by 2023. Through the study, it was shown that courts and the police are the least preferred to resolve disputes. It is believed that the System of Justice through courts and police is too expensive and too slow. A survey shows about 70% of people would prefer to resolve the dispute via Alternative Dispute Resolution (ADR).
ALTERNATIVE DISPUTE RESOLUTION:
The alternative Dispute Resolution (ADR) Mechanism is considered to be a substitute for the traditional court system. The system offers to resolve all types of disputes that vary from industrial to family matters. ADR provides for a third neutral party that allows parties to discuss & communicate differences ultimately resolving disputes. It plays an important role in lowering the burden of courts by way of various modes of settlement. Various forms of ADR include arbitration, conciliation, mediation, negotiation, and Lok Adalat. ADR helps in the resolution of disputes in a lesser period of time than the traditional court system. It further provides parties to freely express their opinions, maintain good relations, and preserve the interests of parties.
ARBITRATION:
The delay in resolving disputes between two parties would cost loss to both parties. Arbitration provides parties privacy, confidentiality, speedy and amicable. Arbitration in layman’s terms is referring to a disagreement between two parties to 3rd neutral party for resolving disputes. Such 3rd neutral party is called an ‘Arbitrator’ and his decision is binding on the parties. Section 2 (1) (a) of the Arbitration and Conciliation Act, 1996 talks about any arbitration by a permanent arbitration institute or not. Arbitration awards have rights of review and appeals are subjected to certain limitations.
TYPES OF ARBITRATION—
Institutional Arbitration: It provides for a permanent center that performs the functions of aiding & administer the process of arbitration as provided.
Ad hoc Arbitration: Party themselves determines various aspects like the number of arbitrators, manner of arbitration, and process of arbitration. Also, providing a cheaper and more flexible mechanism for the administration of the arbitration.
Domestic Arbitration: The cause of Action, Rights, and Liabilities of parties arises in India and is governed by Indian Laws regarding the subject matter.
International Commercial Arbitration: The arbitration may or may not take place in India depending upon the subject matter being foreign.
PROCEDURES OF ARBITRATION:
With the drafting of a contract for employment, lease, or any kind of financial agreement between two or more parties. Such a contract shall have a clause or agreement for arbitration in case of a dispute between parties to the contract.
Arbitration and Conciliation Act, 1996:
Section 10: It mentions that parties are free to appoint any number of arbitrators but the same shall not be in even numbers. If parties fail to decide the number of arbitrators within 30 days, then Arbitration Tribunal has the power to appoint a single arbitrator.
Section 11: The appointment of arbitrators must be mutually decided by both parties. Parties may mention the name of the arbitrator who will resolve the dispute.
Section 21: The communication of arbitration commences when the request for dispute referred for arbitration is received by the respondent. From the date of receiving such communication to the time period specified in the notice reply must be given.
Section 23: within the time period fixed by the parties the claimant shall file the facts that support the claim. The claim is amendable if agreed upon by both parties or when the arbitration tribunal considers a claim as inappropriate.
HEARING IN ARBITRATION:
When the appointment of an arbitrator completes, the parties may call an arbitrator to fix their meeting. In the first meeting, the information and issues are addressed between the parties, and the next date is scheduled. On the next date, the arbitrator may issue a ‘Scheduling Order’. During the further stages, parties may present their part of the case to the arbitrator. The presentation of the case may take place physically, over a video call, over the telephone, or by way of submitting documents. The presenting of the case must be done in a manner as stated by the arbitrator appointed. After, the completion of the hearing arbitrator may issue the award on the date fixed. The arbitrator submits a written award and written outcome of the case and sent a copy to the parties.
Arbitral Award:
Arbitral Award is the final decision made by the arbitrator after hearing both parties. It is equal to the court judgment. The award granted via the arbitrator may be monetary or non-monetary in nature. It may be in form of relief leading to substantive fulfillment of terms of the contract. Section 31 (3) provides that any award passed must be reasoned unless the parties state no reasons to be recorded. Arbitration Award must be in written form, duly signed by the arbitrator, and shall contain reasoning for the award, date & place of arbitration that took place.
ARBITRAL AWARD CAN BE CATEGORIZED AS—
Domestic Award: This award is governed under Part 1 of the Arbitration & Conciliation Act, 1996, Section 2 to 43. These awards are the outcome of domestic arbitration. The parties should have birth or nexus of Indian territory.
Foreign Award: This award is governed under Part 2 of the Arbitration & Conciliation Act, 1996 Section 44. It is an outcome of foreign arbitration. The parties choose the Foreign Arbitration Institute for the settlement of disputes. The award issued in such arbitration shall be known as the ‘Foreign Award’.
When the application to set aside the arbitral award has expired. Then such award shall be enforced by way mentioned in Civil Procedure Code, 1908 for decree passed by the court. If the application was filed for setting aside an arbitral award under Section 34 of the Arbitration & Conciliation Act, 1996. The same must be granted an order of stay on operations to set aside the such award.
CONCLUSION:
In the conference of ‘Arbitrating Indo-UK Commercial Disputes’ in London, UK on 5th July 2022. The 48th Chief Justice of India, N.V. Ramana said ‘the arbitration is best suited for settlement of commercial disputes.’ He suggested for establishment of more commercial courts that deals with arbitration and experts in the field. The Arbitration & Conciliation Act, of 1996 has been amended over a period of time to meet changing trends. Yet, it needs more steps to become an International Hub of Arbitration.
