ARBITRATION: UNDERSTANDING EXTRA JUDICIAL MECHANISM

Authored by: Saloni Rani, first year law student at Rajiv Gandhi National University of Law, Punjab

EXTENDING CURATIVE JURISDICTION TO ARBITRATION MATTERS EXPLORING THE CONSEQUENCES

We live in humane society where disputes are indispensible part of life. In order to settle this we have our Judiciary that’s court where we the common people can go and settle our disputes. But is it really amicable to go beyond the litigation system every time, there us find another alternative for resolution of disputes that’s Arbitration system.

Consensual and effective in resolving commercial problems is Arbitration. It permits disapproving parties to capitalize on a private adjudication mechanism to sort out their contentions outside of the national court systemwhichtendstolessexpensiveandfastprocess. Itis governed by the Arbitration and Conciliation Act , 1996, which aligns with international standards as per theUNCITRAL Model Law. It is a comprehensive overview of arbitration in India.

It is evolving rapidly with a strong legal framework and increasing support from institutions. It offers a viable alternative to traditional litigation, especially for commercial disputes providing a mechanism that is efficient, flexible, and conducive to maintaining business relationships.Continuous reforms and increased awareness are likely to enhance effectiveness and popularity of Arbitration in India.

Other benefits include:

1. It protect from prolonged time taken by Indian Judiciary system due to overburden of cases.

2. It is more amicable as already discussed because both parties sit in same table to actively participate and resolve the issue by appointing arbitrator.

3. This may be appointed by parties independently but still they can challenge the decision, so thereis transparency for appealing by either party.

One of the foremost initiatives taken recently with regards to arbitration is set Arbitration Bar of India in May 2024.

It was also regulated to give arbitral award within 6 months which make this system more feasible by protecting us from backlogs of court cases.

Indian Council of Arbitration (ICA)provides framework for its proceedings.

International Centre for alternative dispute resolution promote ADR mechanism through training, research, and development.

ARBITRATION AND CONCILIATION ACT

The law relating to arbitration is Arbitration and Conciliation Act 1996. It come into force on 25th of Jan 1996.It extends to whole of India except State of Jammu and Kashmir.

This act is of consolidating and amending nature and is not exhaustive.

OBJECTIVE OF ACT

• To comprehensively cover international commercial arbitration and conciliation as well as domestic.
• To make provision for an arbitral procedure which is fair, efficient and capable of meeting needs off specific arbitration.
• To provide that every final arbitration award is enforced in same manner as if it were decree of court.
• To minimize supervisory role of courts in arbitral process.
• To ensure arbitral tribunal award remain within limit of its jurisdiction.

SUPREME COURT has also declared the benefits of act as follows:

Fair resolution of a dispute by an impartial tribunal without any unnecessary delay or expense, party autonomy is paramount subject only to such safeguard as are necessary in public interest.

ARBITRATION AGREEMENT

It mean an agreement by parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect ofa defined legal relationship whether contractual or not.

If an agreement is in writing it will bind even if some of its details are filled by oral understanding.

If there is assertion of existence of an arbitration agreement in any suit, petition or application field before any court and if there is no denial of its existence in defence counter or written filed by any party it can be said that there is an exchange of statement of claim and defence.

Place OF AGREEMENT

The parties are free to agree on palace of arbitration failing which place of arbitration shall be determined by Arbitral Tribunal having regards to circumstances of case including the convenience of parties.

COMPOSITON OF ARBITRAL TRIBUNAL

The parties are free to determine number of arbitrator provided that such number shall not be an even number failing which it must be consisted of sole arbitrator.

But this is not that it make agreement invalid because as per SC ruling two arbitrator than can further appoint third arbitrator who shall act as presiding arbitrator.

MATTER OF APPOINTMENT

Unless the parties agree differently, an arbitrator may be a person of any nationality. If the parties are not of same nationality, chief Justice of India or the designated person will choose an arbitrator of a different nationality to serve as the sole or third arbitrator in the international commercial arbitration. CJI may make such scheme as he may deem appropriate for dealing with matter entrusted.

FORM AND CONTENTS OF AWARD

Arbitral award shall be made in writing and shall be signed by all members of arbitral tribunal.

1.The arbitral award shall state its date and place of arbitration in accordance with section 20 and award shall be deemedto have been made at that place.

2.After an award is made , a signed copy shall be delivered to each party.

3. The arbitral award at any time during arbitral proceeding, make an interim award on any matter with respect to which it may make a final arbitral award.

Not only arbitration is limited to certain matter but we also find it in sports as :

COURT OF ARBITRATION FOR SPORTS

The COURT of Arbitration for sports was established in 1984 at Lausanne, Switzerland.

It is independent of any sport organisation and has the task to resolve legal disputes in field of sports through arbitration. It can also help parties to solve their disputes on an amicable basis through mediation.

Finally, if this process is approved, nonpermanent tribunals are established. These tribunals are used for the Olympic, Commonwealth, and other games, among other events, and are divided into three divisions: ordinary arbitration, sports, and other.

CHALLENGES OF ARBITRATION

A party may challenge an arbitrator he appointed or in whose appointment he participated ony for reasons he learned of after the appointment. The antidoping division and appeal arbitration decision challenges of arbitration can only be raised in situations that give rise to jurisdiction doubts as to hisindependence or impartiality or he does not pose the qualification agreed upon by the parties.