The court proceedings take a long duration of time we have heard that extremely high fees were charged or plenty of hearings took place but still remedy is not appropriately provided. We have observed a number of these kinds of complaints due to the advancement of alternative dispute resolution. Arbitration is a way by which we preserve the relationship between the two parties it is seen in commercial contracts and disputes. Arbitration is a form of ADR known as alternative dispute resolution where dispute disputes are resolved outside the courts.
In the case of Guru Nanak Foundation v. Rattan Singh and Sons, “time consumption. Complexity, costly court procedure for finding alternative forums, and informal, and fast and speedy resolution led to the formation of the arbitration act of 1940
WHAT IS ARBITRATION?
When a dispute is submitted to an arbitrator for a resolution this process is known as arbitration. It is a method for the two parties to resolve any dispute through a private procedure of dispute resolution instead of going to court to resolve the matter. If a dispute is of commercial nature the most commonly used method of resolution is arbitration. Parties having the clause related to arbitration in their contract can opt for it. In arbitration to make sure no person or a particular party gets an advantage as the laws which will be applicable, the language, etc. are selected by both parties. In the case of arbitration parties mutually hand over the matter to a third party which is called an arbitrator for a resolution, this is called as arbitration. The arbitration and conciliation act 1996 is followed in India.
In the judgment named Collins v. Collins court gave a wide definition to the concept of Arbitration which reads as follows:
“An arbitration is a reference to the decisions of one or more persons either with or without an umpire, a particular matter in difference between the parties. It was further observed by the court that proceedings are structured for dispute resolution wherein executives of the parties to the dispute meet in presence of a neutral advisor and on hearing both sides and considering the facts and merits of the dispute, an attempt is made for a voluntary settlement.”
TYPES OF ARBITRATION THAT ARE IN INDIA
The arbitration was broadly classified based on jurisdiction and based on procedure and rules.
Based on jurisdiction arbitration is classified as
- DOMESTIC ARBITRATION:
When both the parties involved in the matter of dispute are Indians and in happening in India then it is called Domestic arbitration. There is no definition of domestic arbitration but we can understand it by referring to Section 2(2) and section (7) of the Act 1996 together. It means that any arbitration where the proceedings are held in India follows the Indian substantiative and laws for resolution of any dispute that has occurred in India.
In the case of Dominant offset Pvt. Ltd. Vs AdamouskeStrojerny agreement which parties entered a contained clause in which it was written that London will be the place where the arbitration will take place When there was a dispute, the parties invoked this arbitration clause, and the petitioners asked the Delhi High Court to uphold the arbitral awards. To determine whether or not this matter falls under Part I, the Court properly examined the provisions of Part I. The statement in section 2(2) that “Part I shall apply where the place of arbitration is in India” is an inclusive statement and does not exclude the applicability of Part I to those matters where the Arbitration is not held in India, the Court held. The ensuing issue was thus determined to be within the court’s jurisdiction. However, the Court stated that it is necessary to exercise caution when granting relief when both parties are foreign nationals and the location of the arbitration is outside of India.
- INTERNATIONAL ARBITRATION:
International arbitration as the name itself suggests is the concept that is opposite of domestic arbitration. The arbitrations which take place either abroad or in India if the party involved is a foreign party or one of the parties is a foreign party and the subject matter of the dispute arises in a foreign country or be it the terms and conditions of a contract between the parties involved in the dispute are such that it is on the basis that you can decide whether Indian law of foreign law would apply to the dispute which is under resolution.
- any of the parties is domiciled abroad
- the subject matter of the involved dispute is foreign/ international in nature.
Bhatia International v/s. Bulk Trading, where it was determined that Indian courts have the authority to exercise their jurisdiction to assess the significance of an arbitral award rendered in India, even if the actual law governing the contract is foreign. The court acknowledged that Part 1 of the Arbitration and Conciliation Act, 1996 gives effect to UNCITRAL Model Law, enabling courts to award interim relief even when the location of international commercial arbitration is outside of India.
- INTERNATIONAL COMMERCIAL ARBITRATION:
By section 2(1)(f)it is inferred thatInternational commercial arbitration arises out of commercial contractual obligations between the dispute and parties it concerns either foreign nationals or foreign companies or the government or organization of any country other than India.
It also refers to any association or organization or body where the all-important management and control are in the foreign country. As the name itself suggests international commercial arbitration is purely for commercial contracts or commercial purposes here no personal disputes would apply and either party or both parties would be domiciled abroad or the companies involved would have a foreign origin. when the government of any other country is involved in the dispute then it would qualify as an international commercial arbitration type.
In the case of TDM infrastructure. UE Development India. It was held “that If any company is in the foreign hands still it will be known as Indian company if it is incorporated in India.”
Based on procedure and rules classified as
- INSTITUTIONAL ARBITRATION:
Institutional arbitration is where any arbitrary institution performs the arbitration. here the parties don’t decide on which arbitrator to choose they will decide the rules regulations and proceedings of the arbitration. Institutional arbitration is conducted where the institution has its own rules and regulations and it will have its own panel of arbitrators that control how the arbitration pans out. Here the established institution decides and selects one or more than one arbitrator who has the possessed skills in knowledge with the required experience. The parties can also choose to use their own arbitrators from the arbitrators provided by the institution. Examples of a few of the Arbitration centres Singapore International Arbitration Centre, Arbitration Forum USA, and International Court of Paris, etc.
- AD-HOC ARBITRATION:
Ad-hoc arbitration is a non-institutional arbitration, it is arbitration where parties agree to enter and they arrange for it themselves they choose an arbitrator or a model of arbitrators. arbitration can be domestic it can be foreign arbitration or international arbitration. Here the flexibility lies with the parties involved in the arbitration which is not there in institutional arbitration, parties have no obligation to follow the rules of an arbitrary institution since they are free to frame their own set of guidelines and rules. The geographical jurisdiction of Ad hoc Arbitration is of the essence as most of the issues concerning arbitration can be resolved in accordance with the national law of arbitration seat.
The Supreme Court finally intervened in ONGC Ltd. v. Afcons Gunanusa JVand ruled that An arbitral tribunal cannot act unilaterally on its fees; Arbitrators’ fees should be determined by a deal made between the parties and the arbitral tribunal; and If no settlement is reached, then arbitrators’ fees can be settled in accordance with the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
- FAST TRACK ARBITRATION:
The time-consuming and delayed proceeding is a problem widely faced. Fast-track arbitration is the best remedy and solution to solve this issue here the issues are resolved in a short period. Fast-track arbitrationis as the name itself suggests it is a time-saving method of arbitration because arbitration even though it is an alternate dispute resolution mechanism and it is the aim is for quicker resolution of disputes still arbitration can be a longand tedious process and a fast-track arbitration abandons all the methods which consume time.
For the effective resolution of a dispute between parties, arbitration is one of the best solutions to benefit them. There is a requirement for awareness of citizens for alternative dispute resolution and various benefits related to it by this the pendency of cases could be reduced and people could be saved from exploitation.
Autrhor(s) Name: Jigyasa Ojha (Bharati Vidyapeeth New Law College Pune)