ARBITRATION
Arbitration is one form of Alternative Dispute
Resolution; it is the most widely used form of ADR. It is a way to solve
disputes outside the court. The dispute is decided by arbitrators and the
decision or the judgement that they give is known as an arbitration award. This
award is binding on both the parties in the dispute and is also enforceable in
the courts. The award given is of the same value as that of the judgment given
by the civil courts.
Arbitration
basically means the proceeding in which a dispute is resolved by an impartial
adjudicator, whose decision will be binding on the parties to the dispute.
TYPES OF ARBITRATION:
● Voluntary Arbitration
It
implies that two contending parties, unable to compose their differences, agree
to submit their conflict to an impartial authority, whose decision they are
ready to accept. The enforcement of the award may not be necessary and binding.
In other words, it is up to the parties’ whether they want to go with the award
or not.
● Compulsory Arbitration
It
is the one where parties are required to accept the arbitration without any
willingness. It leaves no strikes or lockouts; it deprives both the parties of
their important and fundamental rights. Once the award has been given then the
parties have to abide by it no matter what. Hence this is why it is said to be
known as compulsory Arbitration.
● Ad hoc Arbitration
When
a dispute arises between two parties during the course of a commercial
transaction. This arbitration is agreed to get justice for the unsettled part
or portion of the dispute. This type of
arbitration is preferred by a lot of people nowadays. Ad hoc arbitration is the
one which is not administered by any of the mentioned institutions like the
ICC, LCIA, DIAC or DIFC. The parties, therefore, have to determine various
aspects of arbitration themselves. It is preferable to specify the place or
'seat' of the arbitration as well since this will have a significant impact on
several important issues such as the procedural laws governing the arbitration
and also the enforceability of the arbitral award.
● Institutional Arbitration
There
is a prior agreement between the parties that in the case of future differences
or dispute arising between the parties during their commercial transactions
that such differences or dispute will be settled by arbitration as per the
clauses provided in the agreement or the contract of the two parties. Every
institution has its own rules set which provides a framework for the
arbitration procedure, and its own form of administration to help in the
process. In an institutional form of arbitration, the arbitration agreement
designates an arbitral institution to administer the arbitration process.
● Statutory Arbitration
It
is mandatory arbitration which is imposed on the parties by the operation of
law. In such cases, the parties in the dispute have no option as such but to
abide by the law of the land. The Statutory Arbitration is the arbitration
which is conducted in accordance with the provision of some special Acts which
provide for arbitration in respect of disputes arising on matters covered in
those Acts.
● Domestic Arbitration and International Arbitration
Arbitration
which occurs in India and happens all over India is termed as domestic
arbitration. In this type of arbitration, the dispute takes place in India and
the parties to the dispute are also Indian citizens and the award is also given
in India, in accordance with the Indian laws. An arbitration in which one or
both the parties in the dispute belongs to any country other than India and the
dispute that has to be resolved will take place in any part or state of India,
then it can be termed as International
arbitration.
● Foreign Arbitration
When
the arbitration proceedings are conducted in a place outside India and the
award is required to be enforced in India, it is termed as foreign arbitration.
Foreign arbitration is often confused with international arbitration but they
are not one and the same thing. This form of arbitration is usually used by
foreign-based companies that have branches in India.
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