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Shrestha Das
Part I: INTRODUCTION
1. Concept Of Arbitration
2. Historical Background Of Arbitration In India
3. Types Of Arbitration
● Domestic, Foreign and International Arbitration
● Institutional and AD HOC Arbitration
Advantages of Arbitration and
Issues Pertaining To Arbitration
INTRODUCTION
Let us say that conflict is a journey. Albeit, a journey that is more well known for it's obstacles
and the trying emotions that it makes it's undertakers feel than anything else. However, the end
goal of this journey is the same as any other journey: peace. In legal terms this peace will
translate to justice and the rendering if which is primary objective of every legal system.
Therefore alternative dispute resolution, a.k.a. ADR, is the four wheel drive that makes this
journey much smoother and easier to undertake.
The 16th president of the United States of America and great statesman and lawyer once said
“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to
them how the nominal winner is often a real loser— in fees and waster of time. As a peacemaker,
the lawyer has a superior opportunity of being a good man. There will still be business enough.”
Disputes are an inexorable part of any organisation or relationship but litigation is not the only
way to resolve them. Hence, ADR, in very simplistic terms, refers to sundry dispute resolution
mechanisms that predominantly act as alternatives to litigation. They are generally conducted
with the assistance of a neutral and independent third party. Given that the disputing party form a
legal contract to uphold them, the ADR decisions and awards will rarely be overturned by the
public courts. However the courts do have a power to review the validity of the ADR methods.
There are various ADR mechanisms like early neutral evaluation, negotiation, conciliation,
mediation, and arbitration, the most eminent being mediation and arbitration.
India is a vast country with a rapidly growing population. Therefore ‘access to justice for all’ in
India is, to this date, an unfulfilled dream. Advent of ADR, in it's contemporary modern
incarnation, became the solution to facilitate this, relatively, slow justice delivery system of
India.
The Legal Services Authorities Act, 1987 and the Arbitration and Conciliation Act, 1996 and
most importantly the introduction of section 89 into the Code of Civil Procedure, 1908 by the
Code of Civil
Procedure (Amendment) Act, in 2002, were some of the major measurements that the Indian
judicial system took to ensure the advent of ADR.
ADR is an effective instrument
for clearing the judicial dockets. It also steers clear of rigidity and
complexity and offers an additional economical and expeditious remedy for resolution of
disputes, a remedy which is fairly appropriate in the given state of affairs (cited. Saurabh
Kulshreshtha, ALTERNATIVE DISPUTE RESOLUTION MECHANISM: A CASE STUDY
OF DELHI, shodhganga- inflibnet (Aug,2012), https://www.alternative dispute resolution
mechanism: a case study of delhi - ShodhgangaPDFshodhganga.inflibnet.ac.in).
The origin of ADR in india can be traced back go to as early as the Vedic ages. The earliest
known treatise is the Bhradarnayaka Upanishad, in which various types of arbitral bodies like the
Puga, the Sreni, the Kula are referred to. These arbitral bodies were known as panchayats in
ancient India and they dealt with an assortment of conflicts which were contractual, marital and
even criminal in nature. The authority of the panchayats were as revered as any other legal
institution during those times. ADR was also practiced in India during the Muslim rule, as is
evidenced by the inclusion of terms such as ‘Tahkeem’ and ‘Hakam’, which mean arbitration
and arbitrator respectively, in the Hedaya. The Hedaya was the book containing the muslim laws
in era of their rule in India.
This research paper will therefore ascertain and analyse the concept of Alternative dispute
resolution and it's mechanisms with special emphasis on arbitration and mediation.
MEDIATION
ARBITRATION
Arbitration is adjudication over disputes between parties by a neutral person who has been
agreed upon by the parties to be the arbiter and decide upon the matter. Arbitrator chosen by the
parties adjudicates their disputes on merits through a simplified private process culminating into
a binding arbitral award. In India, the law governing arbitration is the Arbitration and
Conciliation Act, 1996 based upon the UNCITRAL Model Law on Arbitration of the year 1985.
Arbitration, like mediation, has a long history in India. The panchayats, as mentioned before,
were this congregation of wise old men to whom the people voluntarily submitted their disputes.
The resolutions of these panchayats were ultimate and abided by all.
Modern arbitration laws in India were created during the british rule by the Bengal regulations in
1772. The Bengal Regulations provided for reference by a court to arbitration, with the consent
of the parties, in lawsuits for accounts, partnership deeds, and breach of contract, amongst others.
Until 1996, the law governing arbitration in India consisted mainly of three statutes: (i) the 1937
Arbitration (Protocol and Convention) Act, (ii) the 1940 Indian Arbitration Act, and (iii) the
1961 Foreign Awards (Recognition and Enforcement) Act. The 1940 Act was the general law
governing arbitration in India along the lines of the English Arbitration Act of 1934, and both the
1937 and the 1961 Acts were designed to enforce foreign arbitral awards (the
1961 Act implemented the New York Convention of 1958).
There are different classifications of Arbitration In India. There's the domestic arbitration which
takes place when the arbitration proceedings, the subject matter of the contract and the merits of
the dispute are all governed by Indian Law, or when the cause of action for the dispute arises
wholly in India or where the parties are otherwise subject to Indian jurisdiction. There is also
foreign and international arbitration which takes place either within India or outside India in
cases where there are ingredients of foreign origin relating to the parties or the subject matter of
the dispute. The law applicable to the conduct of the arbitration and the merits of the dispute may
be Indian Law or foreign law, depending on the contract in this regard, and the rules of conflict
of laws. The predominant system of rules here is the UNCITRAL Arbitration Rules, as well as
the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards
of 1958 (the "New York Convention").
There is also the ad hoc arbitration which is not administered by an institution and therefore, the
parties are required to determine all aspects of the arbitration like the number of arbitrators,
manner of their appointment, procedure for conducting the arbitration, etc.
In the case of Institutional arbitration the arbitration agreement stipulates that in case of dispute
or differences arising between the parties, they will be referred to a particular institution such as:
Indian Council of Arbitration(ICA) International Chamber of Commerce(ICC).
Some of the advantages of Arbitration are:
● Privacy and Confidentiality
● Convenience of Parties and Flexibility of Procedure
● Liberty to Choose Arbitrator
● Arbitration is Potentially Expeditious
● Finality of Awards
● Extensive Enforceability of Arbitral Awards
The issues pertaining to arbitration are:
● High Cost Factors
● Ethical concerns
● The Problem of Delay
● Judicial Intervention in the Arbitral Process.
CONCLUSION
Therefore with the advent of the alternate dispute resolution, there is new avenue for the people
to settle their disputes. The settlement of disputes in Lok Adalat quickly has acquired good
popularity among the public which undoubtedly will reduce the pendency in law Courts. There is
an urgent need for justice dispensation through ADR mechanisms. The ADR movement needs to
be carried forward with greater speed. This will considerably reduce the load on the courts apart
from providing instant justice, without substantial cost being involved. If they are successfully
given effect then it will really achieve the goal of rendering social justice to the parties to the
dispute.
REFERENCES