The Concept of Arbitration
Date : 12 Oct, 2020
Post By Adv Kohinoor Narayan Bhattacharyya
What are the different types of Alternative Dispute Resolution Mechanisms in India?
An Alternative Dispute Resolution Mechanism also called ADR is a method of resolving disputes between parties in a non-adversarial manner. This is an effective method as it helps avoid the process of having to approach the Court for dispute resolution. In the vast couple of years, alternative dispute resolution mechanism has become quite popular due to an increase in the cases of commercial nature. Most companies avoid going to a Court and prefer solving the dispute using ADR. This is done to avoid the long legal battle and save time. Different types of Alternative Dispute Resolution Mechanisms are as follows:-
- Arbitration
- Conciliation
- Mediation
- Lok Adalat
What is the concept of Arbitration in India?
The concept of Arbitration as an alternative dispute Resolution Mechanism in India is governed by Arbitration and Conciliation Act 1996. As per the mechanism prescribed in the Act, either the parties to the Arbitration or the Court appoint an Arbitral Tribunal. The order or award passed by the Arbitral Tribunals will be binding on both the parties and enforceable in a Court of law similar to a civil decree. The prevalent Arbitration Law in India was the Arbitration and Conciliation Act of 1940 which was later repealed and the Arbitration and Conciliation Act of 1996 was passed. The Act was based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law of the International Commercial Arbitration Council.
What are the different types of Arbitration in India?
The different types of Arbitration can be characterized on the basis of either-
- jurisdiction or
- procedural and rules
On the basis of jurisdiction:
On the basis of jurisdiction, types of arbitration are as follows*
Domestic Arbitration
The phrase domestic arbitration has not been defined in the Arbitration and Conciliation Act, 1996. However, it can be implied from reading the relevant section in the Act that domestic arbitration occurs where the parties involved are Indians and the dispute arose in India and has to be resolved in accordance with the substantive law applicable to India.
International Arbitration
If the arbitration proceedings contain any foreign element in relation to the parties or the subject matter of the dispute, irrespective of whether the arbitration takes place in India or outside India, it is called International Arbitration. Or in other words, if one of the parties to the dispute are disputes are domiciled outside India, the proceedings accompanying such a dispute becomes International Arbitration.
International Commercial Arbitration International Commercial Arbitration is any international arbitration between parties arising out of transactions that are considered commercial as per the laws of India and where one of the parties is – - “A national of, or habitual resident in, any country other than India or - A body corporate which has to be incorporated in any foreign country, or - An association or a body of individuals whose core management and control in a country which is not India or - The government of another country other in India.” What is an Arbitration Agreement? An arbitration Agreement is defined under Arbitration and Conciliation Act 1996 as any agreement that prescribes to submit to Arbitration any or all the disputes that may arise or might have already arisen between the parties with respect to any relationship existing between the parties i.e. contractual or not. However, the mandatory condition is that the agreement must be in writing. No oral arbitration agreements are recognized as per law. Additionally, an agreement prescribing for mediation cannot be treated as an Arbitration Agreement. Judicial Intervention in Arbitration The Arbitration and Conciliation Act of 1996 is based on UNCITRAL Model Law whereby Article 5 of the UNCITRAL Model Law which attempts to limit judicial intervention by Courts. Likewise, under section 5 of the Arbitration and Conciliation Act, 1996 the scope of judicial intervention has been limited in the Arbitration proceedings. Additionally, the scope of judicial intervention has also been reduced under section 34 of the Arbitration and Conciliation Act by delimiting the grounds under which an Arbitration Award can be set aside. Section 34 of the Act of 1996 also delimits the grounds on which judicial intervention can be made. This is how the Arbitration and Conciliation Act 1996 aims at limiting judicial intervention of the Court. The author of this blog is Advocate Kohinoor Narayan Bhattacharya having an experience of 10 years in handling arbitration-related matters from his experience he wants to share this beneficial information for the individuals having any issues with respect to arbitration-related matters.
