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What is Arbitration?
Definition of Arbitration

Arbitration is a legal
technique for resolution
of Dispute, outside the
courts wherein parties to
a dispute refer it to one
or more person (the
"arbitrators", "arbiters" or
"arbitral tribunal"), by
whose decision (the
"award") they agree to be

• A person chosen to judge and decide a disputed issue.

• Another word → A Referee

• Arbitration is a method of dispute resolution out of the court.

The parties to a conflict agree to be bound by a decision made
by an arbiter, an independent third party or a panel of arbiters.
Arbitration The arbitration may be voluntary as well as statutory

• A private, neutral person chosen to arbitrate a

disagreement, as opposed to a court of law.
• Unless the context otherwise requires, includes a
counterclaimant, and related expressions shall be
Claimant construed accordingly

• Any difference

• After considering the parties’ submissions, the arbitrator

issues a final and binding ‘award’
Arbitrations have the following in common
• Parties involved must be willing to use the same process

• An independent third party(Arbitrator) considers both sides in a


• The decision is made by Arbitrator, not the people involved

• An Arbitrator is impartial. Decision is made on the basis of written

information & proofs available

• The process is final and legally binding i.e. , decision is legally

binding on both sides, so it is not possible to go to court if you are
unhappy with the decision.
Why arbitration is preferred against Court
• Less Time Consuming

• Less complicated

• Cost effective

• No hurdles of the strict rules of procedure

or law of evidence, yet legal binding

• It can be completed within 3-6 months,

when the same can take years or decades
in courts.

• Unbiased decisions as panel can be of 3

or 5 Arbitrators
Process Of Arbitration
Arbitration Process @ Wipro
Matters it can be Matters cannot be
referred referred
• Arbitration is used widely for • Matrimonial matters, like
domestic & international divorce or maintenance;
• Insolvency matters, like
• disputes between major declaring a person as an
corporations insolvent;

• employment rights disputes, • Criminal offences;

and consumer disputes.
• Dissolution or winding up of a
Pre Arbitration Act 1996 After Arbitration Act 1996
1.Multiple Acts • Enforcement of a domestic
o The Arbitration Act 1940 award as also foreign award
o The Arbitration(Protocol & under the self same Act.
Convention) Act 1937 led to
delays rendering arbitrations
inefficient and unattractive.
o The Foreign Awards
(Recognition & Enforcement)
Act 1961
When the dispute is highly technical,
arbitrators with an appropriate degree of
expertise can be appointed (as one cannot
"choose the judge" in litigation)

 Faster than litigation in court

Cheaper and more flexible for businesses

Proceedings and an arbitral award are

generally non-public, and can be made

Easier to enforce in other nations than court

judgments (New York Convention 1958)

Very limited avenues for appeal of an

arbitral award
•Some the parties are required to pay for
the arbitrators additional legal cost

•Very limited avenues for appeal, which

means that an erroneous decision cannot
be easily overturned

• Multiple arbitrators on the panel 

juggling their schedules for passing an
awards delays in hearings

•In some legal systems, arbitral awards

have fewer enforcement remedies than
judgments; although in USA, arbitration
awards are enforced in the same manner
as court judgments and have the same
• Recovery may be more limited in arbitration

• Arbitrators are generally unable to enforce interlocutory measures

against a party, making it easier for a party to take steps to avoid
enforcement of an award, such as the relocation of assets offshore
Education of an Arbitrator
An arbitrator should be any one judicial entity
having professional competence, the citizenship

An arbitrator must have capacity as agreed by the


An arbitrator must be impartial and independent

with regard to the parties and the matter in

An arbitrator may not be a person sentenced to a

non suspended prison sentence, while the
consequences of the sentence are having effect.
What is the role of IIAM(Indian
Inst of Arbitration)?

Provides an atmosphere &

infrastructure assistance to the parties
to select the arbitrator

Conduct the arbitration in a

professional, neutral & fair manner
How much does it Cost?

IIAM has a scheduled fee structure

enlisting the applicable arbitrator and
administrative fees.

The party bringing the case is

responsible for paying a nominal
filing fee.

Cheaper than court

How long does an arbitration

Length of an arbitration depends on

factors involved as

types of claims being brought,

the number of parties involved,

the ability to work with the

schedules of the parties and their
Can a party recover its fees if it wins in

The winning party can

request and be awarded
the fees and costs it
expended in the

 The Act provides for

such a relief.
Can Arbitration be done Online ?

 Some providers offer an

internet-based arbitration
service for money and consumer

 The Association of British Travel

Agents (ABTA) make their
arbitration service available
online, so that all documents
can be submitted by email.

 This facility is mainly availed in

USA, UK, Australia.
Cases filed v/s Settled
Industrial Distribution
Thank You