Arbitration

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Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who
make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of
going to court.

Indian Council of Arbitration

The ICA was established in 1965 as a specialized arbitral body at the national level under the initiatives of the Govt. of India and apex business organizations like
FICCI etc. Based in New Delhi, the main objective of ICA is to promote amicable, quick and inexpensive settlement of commercial disputes by means of arbitration,
conciliation, regardless of location.
Today, ICA is not only the leading arbitral institution in India, it is one of the most important arbitration centers in Asia Pacific, handling more than 400 domestic and
international arbitration cases each year. It also provides the commercial world with an unrivalled and time-tested Maritime Arbitration services and imparts
education and training in alternative dispute resolution mechanisms. Coupled with our quality case administration and panel of arbitrators, ICA is the one resource
for all your dispute resolution needs.

Its principal characteristics are:

Arbitration is consensual
Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties
insert an arbitrationclause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission
agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

The parties choose the arbitrator(s)

Under the WIPO Arbitration Rules, the parties can select a sole arbitrator together. If they choose to have a three-member arbitral
tribunal, each party appoints one of the arbitrators; those two persons then agree on the presiding arbitrator. Alternatively, the
Center can suggest potential arbitrators with relevant expertise or directly appoint members of the arbitral tribunal. The Center
maintains an extensive roster of arbitratorsranging from seasoned dispute-resolution generalists to highly specialized practitioners
and experts covering the entire legal and technical spectrum of intellectual property.

Arbitration is neutral
In addition to their selection of neutrals of appropriate nationality, parties are able to choose such important elements as the
applicable law, language and venue of the arbitration. This allows them to ensure that no party enjoys a home court advantage.

Arbitration is a confidential procedure

The WIPO Rules specifically protect the confidentiality of the existence of the arbitration, any disclosures made during that
procedure, and the award. In certain circumstances, the WIPO Rules allow a party to restrict access to trade secrets or other
confidential information that is submitted to the arbitral tribunal or to a confidentiality advisor to the tribunal.

The decision of the arbitral tribunal is final and easy to enforce

Under the WIPO Rules, the parties agree to carry out the decision of the arbitral tribunal without delay. 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 140 States are party to this Convention.

Arbitral awards
Although arbitration awards are characteristically an award of damages against a party, in many jurisdictions tribunals have a range of remedies that
can form a part of the award. These may include:
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payment of a sum of money (conventional damages)

2.

the making of a "declaration" as to any matter to be determined in the proceedings

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4.

in some[which?] jurisdictions, the tribunal may have the same power as a court to:
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order a party to do or refrain from doing something ("injunctive relief")

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to order specific performance of a contract

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to order the rectification, setting aside or cancellation of a deed or other document.

In other jurisdictions, however, unless the parties have expressly granted the arbitrators the right to decide such matters, the tribunal's
powers may be limited to deciding whether a party is entitled to damages. It may not have the legal authority to order injunctive relief, issue
a declaration, or rectify a contract, such powers being reserved to the exclusive jurisdiction of the courts.

Arbitral tribunal[edit]
Main article: Arbitral tribunal
The arbitrators which determine the outcome of the dispute are called the arbitral tribunal. The composition of the arbitral tribunal can vary
enormously, with either a sole arbitrator sitting, two or more arbitrators, with or without a chairman or umpire, and various other
combinations. In most jurisdictions, an arbitrator enjoys immunity from liability for anything done or omitted whilst acting as arbitrator unless
the arbitrator acts in bad faith.
Arbitrations are usually divided into two types: ad hoc arbitrations and administered arbitrations.
In ad hoc arbitrations, the arbitral tribunals are appointed by the parties or by an appointing authority chosen by the parties. After the
tribunal has been formed, the appointing authority will normally have no other role and the arbitation will be managed by the tribunal.
In administered arbitration, the arbitration will be administered by a professional arbitration institution providing arbitration services, such as
the LCIA in London, or the ICC in Paris, or the American Arbitration Association in the United States. Normally the arbitration institution also
will be the appointing authority. Arbitration institutions tend to have their own rules and procedures, and may be more formal. They also tend
to be more expensive, and, for procedural reasons, slower.[29]

Advantages and disadvantages

Parties often seek to resolve disputes through arbitration because of a number of perceived potential advantages over judicial proceedings:

In contrast to litigation, where one cannot "choose the judge", [5] arbitration allows the parties to choose their own tribunal. This is especially
useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity
surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute [6]) can be
chosen.

Arbitration is often faster than litigation in court[5]

Arbitration can be cheaper and more flexible for businesses [citation needed]

Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential [7]

In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the
competent court will be automatically applied

Because of the provisions of the New York Convention 1958, arbitration awards are generally easier to enforce in other nations than court
judgments

In most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the
duration of the dispute and any associated liability

Some of the disadvantages include:

Arbitration may be subject to pressures from powerful law firms representing the stronger and wealthier party [citation needed]
Arbitration agreements are sometimes contained in ancillary agreements, or in small print in other agreements, and consumers and
employees often do not know in advance that they have agreed to mandatory binding pre-dispute arbitration by purchasing a product or taking a
job

If the arbitration is mandatory and binding, the parties waive their rights to access the courts and to have a judge or jury decide the case

In some arbitration agreements, the parties are required to pay for the arbitrators, which adds an additional layer of legal cost that can be
prohibitive, especially in small consumer disputes[citation needed]

In some arbitration agreements and systems, the recovery of attorneys' fees is unavailable, making it difficult or impossible for consumers
or employees to get legal representation[citation needed]; however most arbitration codes and agreements provide for the same relief that could be
granted in court

If the arbitrator or the arbitration forum depends on the corporation for repeat business, there may be an inherent incentive to rule against
the consumer or employee

There are very limited avenues for appeal, which means that an erroneous decision cannot be easily overturned

Although usually thought to be speedier, when there are multiple arbitrators on the panel, juggling their schedules for hearing dates in long
cases can lead to delays

In some legal systems, arbitral awards have fewer enforcement options than judgments; although in the United States arbitration awards
are enforced in the same manner as court judgments and have the same effect

Arbitrators are generally unable to enforce interlocutory measures against a party, making it easier for a party to take steps to avoid
enforcement of member or a small group of members in arbitration due to increasing legal fees, without explaining to the members the adverse
consequences of an unfavorable ruling

Rule of applicable law is not necessarily binding on the arbitrators, although they cannot disregard the law [citation needed]

Discovery may be more limited in arbitration or entirely nonexistent

The potential to generate billings by attorneys may be less than pursuing the dispute through trial

Unlike court judgments, arbitration awards themselves are not directly enforceable. A party seeking to enforce an arbitration award must
resort to judicial remedies, called an action to "confirm" an award

Although grounds for attacking an arbitration award in court are limited, efforts to confirm the award can be fiercely fought [citation needed], thus
necessitating huge legal expenses that negate the perceived economic incentive to arbitrate the dispute in the first place.

Kinds of Arbitration
(1) Ad-hoc Arbitration: When a dispute or difference arises between the parties in
course
of commercial transaction and the same could not be settled friendly by
negotiation inform fo conciliation or mediation, in such case ad-hoc
arbitration may be sought by theconflicting parties. This arbitration is agreed
to get justice for the balance of the un-settled part of the dispute only.
2.Institutional Arbitration:
This kind of arbitration there is prior agreement between the parties that in case of
future differences or disputes arising between the parties duringtheir commercial

transactions, such differences or disputes will be settled by arbitrationas per clause

provide in the agreement.(3)
3. Statutory Arbitration:
It is mandatory arbitration which is imposed on the parties byoperation of law. In
such a case the parties have no option as such but to abide by the lawof land. It is
apparent that statutory arbitration differs from the above 2 types of arbitration
because (i) The consent of parties is not necessary; (ii) It is compulsoryArbitration;
(iii) It is binding on the Parties as the law of land; For Example: Section 31of the
North Eastern Hill University ACt, 1973, Section 24,31 and 32 of the Defence of India
Act, 1971 and Section 43(c) of The Indian Trusts Act, 1882 are the
statutory provision, which deal with statutory arbitration. Therefore, all disputes
referred to"Disputes-Settlement-Trust", shall be decided through "Arbitral Tribunals"
under Statutory Arbitration.
(4) Domestic or International Arbitration:
Arbitration which occurs in India and have allthe parties within India is termed as
Domestic Arbitration. An Arbitration in which any party belongs to other than India
and the dispute is to be settled in India is termed asInternational Arbitration.(5)
Foreign Arbitration: When arbitration proceedings are conducted in a place
outsideIndia and the Award is required to be enforced in India, it is termed as
ForeignArbitration

Arbitration Process:
Filing and Initiation
The AAA generally commences administration of an arbitration case when one party submits a
Demand for Arbitration, a copy of the arbitration provision and the appropriate filing fee to the AAA.
From there, the respondent will be notified by the AAA, and a deadline will be set for an answer and/or
counterclaim. Cases also may commence with a Submission to Dispute Resolution, the appropriate
filing fee to the AAA and the consent of all parties if no arbitration agreement exists or the AAA is not
named as the resolution provider in the agreement.

Arbitrator Selection
Following the respondent's answer, the AAA works with the parties to identify and select arbitrators
from its roster of neutrals. The parties' criteria are used to identify neutrals with qualifications that
match the needs of the case. Once parties agree on the neutral, the arbitration proceedings may
begin.

Preliminary Hearing
This meeting, conducted by the arbitrator, is the first opportunity for the parties and the arbitrator to
discuss directly the substantive issues of the case. At this point, procedural matters such as the
exchange of information, witness lists, etc., also will be discussed.

Information Exchange and Preparation

Parties make ready their presentations, and the arbitrator can address any impasses or challenges
related to information sharing. The goal of this stage is to arrive at the point where evidence and
arguments may be presented in the hearings

Hearings
At this stage, parties have an opportunity to present testimony and evidence to the arbitrator in order
to arrive at resolution.

Post-Hearing Submissions
This stage of the process provides parties with an opportunity to submit additional documentation, if
allowed by the arbitrator. If this stage is necessary, it usually occurs shortly after hearings.

The Award
The arbitrator closes the record regarding the case and issues a decision, inclusive of an award.

An Arbitrator's Role
An arbitrator serves as the decision-maker and 'referee' in an arbitration proceeding, much like a judge during court litigation. The arbitrator is bound by
the rules outlined in the parties' arbitration agreement. If an arbitrator is a member of a special arbitration organization, such as the American
Arbitration Association, the arbitrator will be bound by the rules of that organization as well, including a set of ethical rules.

An Arbitrator's Duties:
1. Interprets and applies the rules and laws applicable to the arbitration.
The rules applicable should be outlined in the arbitration agreement. The parties may also designate a particular state's law to govern the dispute in the
arbitration agreement.

2. Manages the scope of discovery that can be undertaken by both parties.

Discovery is a formal process of investigation to determine facts relevant to the dispute. The investigation can include taking witness statements and
reviewing documents required to be disclosed by the other disputing party.

3. Conducts the arbitration hearing in which both sides of the dispute may submit testimony, other evidence
such as documents, and arguments.
Each side's position may be summarized in a written document often called a statement of the case and be submitted to the arbitrator for review as
part of the hearing process.

4. Makes a decision resolving the dispute based on the testimony, evidence and arguments submitted by
both sides of the dispute.

Litigation
The process of taking a case to a court of law so that a judgmentcan be made
Resoleving the dispute in the court law.

Arbitration vs. Litigation

Arbitration

Litigation

Private - between the two

parties

Public - in a courtroom

Type of Proceeding

Civil - private

Civil and criminal

Evidence allowed

Limited evidentiary process

Rules of evidence allowed

How arbitrator/judge selected

Parties select arbitrator

Court appoints judge - parties have

limited input

Formality

Informal

Formal

Appeal available

Usually binding; no appeal

possible

Appeal possible

Use of attorneys

At discretion of parties;
limited

Extensive use of attorneys

Waiting time for case to be heard

As soon as arbitrator
selected; short

Must wait for case to be scheduled;

long

Costs

Fee for arbitrator, attorneys

Court costs, attorney fees; costly

Private/Public