Introduction 1 technique for 4,
ion, is a 1e84
ic Se a the parties to a dispute rej,
ters”
A form of alternative disput!
or “arbitral tribunay,
resolution of disputes outside the courts, Wh
it to one or more persons (the "arbitrators", “aro pound. It is a settloms,
by whose decision (the award") they agree 10 a imposes 2 decision th,
technique in which a third party reviews the case
is legally binding for both sides.x
Other forms of ADR include mediation
A form of settlement negotiation facilitated by
non-binding resolution by eet it is more helpful, none tn eee
classify arbitration as a form of binding dispute resolution, equ! ¢ di i
litigation in the courts, and entirely distinct from the other forms-o ispuy
resolution, such as negotiation, mediation, or determinations by experts, whic
are usually non- binding. Arbitration is most commonly used for the resolutic
of commercial disputes, particularly in the context of international commerciz
transactions. The use of arbitration is far more controversial in consumer an
employment matters, where arbitration is not voluntary but is instead impos:
on consumers or employees through fine-print contracts, denying individual
of their right to access the courts. Arbitration can be either voluntary o
mandatory and can be cither binding or non- binding. Non-binding arbitratic
is. on the surface, similar to mediation. However, the principal distinction
that whereas a mediator will try to help the parties find a middle ground ¢
which to compromise, the (non-binding) arbitrator remains totally remove
from the settlement process and will only give a determination of liability an
if appropriate, an indication of the quantum of damages payable.
a neutral third party ay
AM.Be
aR
rf i
obj ‘Jo comprehensively
* and conciliation
To ensure that arbitral award is enforced j
* Gecrce of the court
To ensure that settlement agreements
status as that of awards or decrees
cover i i
‘er domestic and international arbitration
in similar manner as
OF parties will have the same
To ensure that supervisory and intervensionary rules
Tod: ry of the courts
To make provision for an arbitral procedure which is fair, efficient
and capable of meeting the needs of the specific arbitration.
+ To ensure that the arbitral tribunal remains within limits of the
jurisdiction.
+ To permit an arbitral tribunal to use meditation, conciliation or
other procedures during the arbitral Proceedings to encourage
settlement of disputes.
+ ~ To provide that the settlement agreement reached by the parties as
a result of conciliation Proceedings will have the same status and
effect as an arbitral award on agreed terms on the substance of the
dispute rendered by an arbitral tribunal,
+ To provide that, for purposes of enforcement of foreign awards,
every arbitral award made in the country to which one of the two
international conventions relating to the foteign arbitral awards to
which India is a party applies, will be treated as a foreign award.
Essentials of Arbitration Agreement:- It must be in writing:
Like the old law, the new also requires the arbitration agreement must
be in writing. An arbitration agreement is in writing, if it is contained in:
+ A document signed by the parties,
* An exchange of letters, telex, telegrams,
* Or other means of telecommunication, providing a record of
agreement,
* Or an exchange of claims and defence in which the existence of
the agreement is alleged by one party and not denied by the other.
* The document containing an arbitration clause may be adopted by
"reference", by a contract in writing.
It should be in the form of an arbitration clause in a contract or it may
sg form of a Separate agreement. It must have all the essential elements
# Valid contract:
An Arbitration agreement stands on the same footing as any otherae
agreement. Every person capable of entering into a contract may be a party to
an arbitration agreement. The terms of the agreement must be definite and
certain; if the terms are vague it is bad for indefiniteness.
The agreement must be to refer a dispute, present or future, between
the parties to the arbitration.
If there is no dispute, there can be no right to demand arbitration. A
point to which there is no dispute cannot be referred to arbitration. The dispute
may relate to act of omission or commission.
> Other essential conditions of Arbitration are :
(1) The Arbitration Agreement is a contract entered into by two
parties. The provision of the Indian contract Act, 1872 shall apply
to it as to any other agreement.
(2) There may be a separate arbitration agreement. In general, the
parties include “arbitration clause or clauses” in the contract.
There arbitration clause or clauses is/are also equally effective
with that of arbitration agreement.
(3) The arbitration agreement must relate only “Civil” matters, but
not “Criminal” matters. There is no scope for “Criminal” disputes
in arbitration agreements.
(4) The arbitration agreement shall be in “Writing”.
(5) Reference to arbitration: the authorisation of the arbritrators to
arbitrate flows from the arbitration agreement. There must be
“reference” giving the power to the parties to arbitration clause
(5) of sec 7 clarifies it.