Module 2: Assignment 4: Arbitration
Arbitration, a form of Alternate Dispute Resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the "arbitrators", or "arbitral tribunal"), by whose decision (the "award") they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.
Arbitration is a very common approach for resolving international commercial or domestic disputes, and a number of international organizations have been established for doing this. Each of these bodies has its own procedures for ...view middle of the document...
Because arbitral awards are not subject to appeal, they are much more likely to be final than the judgments of courts of first instance. Although arbitral awards may be subject to being challenged (usually in either the country where the arbitral award is rendered or where enforcement is sought), the grounds of challenge available against arbitral awards are limited.
Judicial systems do not allow the parties to a dispute to choose their own judges. In contrast, arbitration offers the parties the unique opportunity to designate persons of their choice as arbitrators, provided they are independent. This enables the parties to have their disputes resolved by people who have specialized competence in the relevant field.
Arbitration is faster and less expensive than litigation in the courts. Although a complex international dispute may sometimes take a great deal of time and money to resolve, even by arbitration, the limited scope for challenge against arbitral awards, as compared with court judgments, offers a clear advantage. Above all, it helps to ensure that the parties will not subsequently be entangled in a prolonged and costly series of appeals. Furthermore, arbitration offers the parties the flexibility to set up proceedings that can be conducted as quickly and economically as the circumstances allow.
Increasingly, arbitration is recognised as the most effective method of solving commercial and international disputes. It can achieve equitable solutions more quickly than litigation, and at less cost; it allows parties to adopt whatever procedure they choose for the resolution of differences; it enables parties to decide where disputes shall be heard.
The Indians have long been aware of the advantages of arbitration, acknowledging its value as a method of resolving disputes, and more recently has extended tradition by the statutory adoption of the UNCITRAL Model Law for international commercial arbitration and the UNCITRAL Rules of Arbitration, with relevant modifications to fit into its institutional framework.
India has a comprehensive, contemporary and progressive legal framework to support international arbitration that is on a par with that...