Status as on- 23/11/21
Alternative Dispute Resolution (ADR) is the procedure for settling disputes without litigation, such as arbitration, mediation, or negotiation. ADR procedures are usually less costly and more expeditious. They are increasingly being utilized in disputes that would otherwise result in litigation, including high-profile labour disputes, divorce actions, and personal injury claims.
In arbitration proceedings the dispute is decided either by a single arbitrator or a panel of arbitrators (odd in number). An arbitrator performs a similar role to that of a judge in that they are responsible for managing the proceedings to ensure the parties to the dispute have a reasonable opportunity of presenting their case. At the conclusion of the arbitration, the arbitrator will deliver an award which is final and binding on the parties.
Reasons for choosing Arbitration
While arbitration sometimes mirrors the courtroom process, there are a number of distinguishing features that often persuade parties to choose arbitration as opposed to court litigation for the resolution of their dispute. These include:
- Flexibility- Parties can agree on the procedures they want to use in an arbitration because of its consensual nature. These processes will normally be included in the arbitration agreement or in a set of rules that the parties agree to apply to the arbitration, or they may be decided on an ad hoc basis between the parties during the arbitration. As a result, arbitration allows the parties to use methods that are specifically tailored to each disagreement.
- Choice of Arbitrators- The parties can (and frequently do) agree in arbitration that they will have a say in selecting the arbitrator or arbitrators who will settle their dispute. This allows the parties to choose an arbitrator who is impartial and knowledgeable about the disagreement, which is especially important if the dispute involves unique or technical concerns that are industry- or case-specific.
- Neutrality- In addition to picking a neutral arbiter, the parties can choose a neutral venue for their arbitration that is unaffected by the parties’ nationalities. The location of the arbitration is significant because it decides which court has supervisory jurisdiction over the arbitration. Selecting a neutral venue is especially important in international conflicts, as parties frequently do not want to be in the opposing party’s home area.
- Confidentiality- Arbitration sessions are held in secret, as opposed to court procedures, which are usually held in public. Furthermore, the parties can agree that the arbitration shall be kept private between them. This is conducive to keeping sensitive commercial information out of the public domain and resolving disputes discretely in order to preserve the commercial relationship between the parties.
- Enforcibility- The enforcement of cross-border court decisions can be a problem, especially in the absence of an applicable enforcement treaty. In contrast, arbitral awards are enforceable in over 150 countries under the New York Convention (which is the most widely recognized enforcement instrument in the world).
- Finality- The arbitrator’s award is final and can generally only be challenged on limited and sporadic grounds. This means that the usual judicial appeal process can be bypassed, providing greater certainty and a faster path to enforcement for the winning party.
Arbitration has developed significantly in India and also the justice is served to the people without any delay. Nowadays most of the people are including the arbitration clause in their contracts or agreements to resolve their disputes through arbitration without court’s involvement. However, there are a lot of reasons why one may choose arbitration over court proceedings.
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