His decisions regarding the dispute are always binding upon the parties. It is an adequate way to save time and resources. This Act saves the parties from the hassle of spending years in the Courts and saves them a lot of time and money, which otherwise would have been a lot to invest.
Arbitration is a quasi-judicial process and the parties are referred to a domestic tribunal. The formation of an arbitration agreement takes place when two parties, enter into a contract and in which, the contract states that any dispute arising between the parties have to be solved without going to the courts with the assistance of a person, who would be a neutral person, a third party, appointed by both of the parties, known as the Arbitrator, who would act as a judge.
The arbitrator so appointed should have been previously mentioned in the contract that they made. They should also state who should select the arbitrator, regarding the kind of dispute the arbitrator should give decisions on, the place where the arbitration would take place. Furthermore, they should also state the other kinds of procedures mentioned or that has to be required during an arbitration agreement. The parties are generally required to sign an Arbitration Agreement.
The decision taken by the arbitrator regarding any issue, is binding on both the parties, as stated by the agreement. In any event, where one party decides that an agreement must be made prior to entering the contract, it can be stated that the agreement was made to deviate from the hassles of the court. These agreements are like contingent contracts, which means that these agreements shall only come into force or become enforceable if any dispute happens, and on the basis of the same dispute between two parties mentioned in the contract.
It also takes place or is enforceable in the light of any dispute that arises between the parties to the contract. In the landmark case of K. International awards are enforced by national courts under the New York Convention , which permits them to be set aside only in very limited circumstances. More than States are party to this Convention.
IP and Business Universities Judiciaries. Its principal characteristics are: Arbitration is consensual Arbitration can only take place if both parties have agreed to it. The main focus is given to the choice of law as determined by the parties to the contract which is binding for the arbitration agreement with utmost care and caution.
According to the nature of the case, the parties have an option to choose their own arbitrator depending upon the abilities to decide the case as per their expertise. Even though if the parties fail to decide the appointment of an arbitrator then in that case the Chief Justice of the High Court for domestic arbitration and the Chief Justice of the Supreme Court of India for International Commercial Arbitration are approached for the same. The petition for relief is maintainable under section 9 if there is a prima facie finding that an arbitration agreement exists and a dispute must have arisen which is referred for the Arbitration.
The parties can move to the Court before the commencement of the arbitral proceedings or after making the arbitral award but before it is enforced as per section 36 of the Act.
With respect to the Section 17 of the Act, at the request of the party, the Arbitral tribunal may order the other party to take interim measures as it may deem necessary in respect to the subject matter of the dispute.
Finality of an arbitral award Section 34 :- An arbitral award is regarded as the final and binding order applicable upon the parties and once the decree is granted by the Court, it shall be enforceable as per section 34 of the Act. With respect to the setting aside of an arbitral award given under section 34 if the arbitrator was prejudiced or such awards is in contradict with the public policy. Appeal Section 37 :- Generally, the decisions of the Arbitration matters are considered as final and it is very difficult to get a court to review or vacate them.
As per section 37, an appeal lies under section 37 1 against an order of the court granting or refusing to grant any measure under section 9 and also against setting aside or refusing to set aside an award.
An appeal shall also lie to a court under section 37 2 against an order of the arbitral tribunal accepting the plea referred to in section 16 2 or 3 or granting or refusing to grant an interim measure under section There is no provision for appeal against orders under section 11 appointing or refusing to appoint an arbitrator.
However, there are certain things which have to be kept in the mind while drafting the contract for resolving the dispute through Arbitration with respect to the consent of the parties.
If you have something like this in place, you will want it to be active for everyone you do business with anyway. You can avoid including a jury — When you have an arbitration agreement, you will not use a jury to help determine any disputes. A jury can be very beneficial in many situations, but they can also be very stressful in a situation where there is a business dispute or even in business matters.
It does not usually make sense to use a jury and you can make sure you avoid the entire thing by having an arbitration agreement in place for all of your business relationships. It can help you to avoid hostility — When a case goes to court, there is more of a likelihood that there will be constant disputes and fighting on every single issue.
This added hostility may never go away and may even make it difficult for you to do business with others later on. However, arbitration is a much more relaxed kind of environment, and while there is an existing conflict, it can be a lot easier to manage without hostility because there is an arbitrator present. Both parties will have to cooperate with each other in order to reach a mutual agreement.
This can lead to less hostility and can help keep the reputation of both parties intact. These are some of the main disadvantages: You cannot appeal an arbitration decision — Once a decision has been made in the matter by the arbitrator, you cannot fight it any further.
This means that you cannot then decide to take the matter to court and you cannot try arbitration again with another arbitrator simply because you did not like the decision that was made. You cannot opt for a jury trial — By definition, arbitration does not include any other parties other than the two parties with their lawyers and the arbitrator or arbitrators. You cannot have a jury decide the matter, and if your case has to do with an employment dispute, this is something you want to avoid anyway because jury members tend to side with the employee more often than not.
The exchange of information between parties is limited — In arbitration, you may find that it is more difficult to form a case against the other party simply because there is more of a limitation on the exchange of information than if you were to go to court.
In situations where the other party has more documentation and information, you may be at a disadvantage because they may not be required to share all of their information with you for the arbitration. If you have this agreement before a dispute, it can be hard to determine if you want to arbitrate later — This is simply a matter of signing this agreement before there is ever a dispute. You may not ever have a dispute, but if you do and you decide that you do not want to arbitrate, then you will have no other option if you have already signed this agreement.
If you try to go against it and void the agreement, you will likely spend a lot of money on legal fees in the process. The arbitration agreement has the potential of being one sided — If you are not the party that has written the agreement, you may find out later that it was written in a way that favors the party who initially wrote it.
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