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Q Whether the Arbitrator or the Arbitrator tribunal is empowered to fix the arbitration venue at his level?
A

No. under section 20(1) of the arbitration and Conciliation Act,1996, both the parties are free to agree on the place of arbitration, while section 20(2) of the said Act empowers the arbitrator/ tribunal to the determine the place of arbitration having regards to the circumstances of the case including the convenience of the parties.

Q What are the advantages of resolving disputes by arbitration?
A

Arbitration is a less formal procedure than court litigation, and it is conducted in private, away from the glare of the media and the public. Parties are free to appoint their own arbitrators and can choose more practical procedures and rules for the conduct of an arbitration. Arbitration awards are final and binding, and have extra-territorial enforceability in over 130 countries under the New York Convention. Generally, arbitration can also be more cost-efficient and speedier than court litigation.

Q Whether the award made and signed by the Arbitrator can be with held due to non-payment of the arbitration fee by one of the parties?
 

Where the arbitrator award is made and signed but not delivered to the parties, arbitrator can with held the award in case of non payment of arbitration fee by the one of the parties. However, under these condition, the Court may order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded.

Q Which mode is better for the resolving disputes?
 

COMPARISON CHART OF VARIOUS DISPUTE RESOLUTION METHODS :-

S No Procedure Arbitration Conciliation Litigation
1 Parties have liberty to choose the person ('the Neutral') to Adjudicate their dispute Yes Yes No
2 Flexibility of the procedure High Very high Low
3 Possibility of delay in the outcome Low Very Low High
4 Control of the parties over the procedure High Very High Process determined by rules of the Court and discretion of the judge
5 Control of 'the Neutral' over the procedure Moderate None None
6 Confidentiality of proceedings High High None
7 Enforceability of the decision Yes The final agreement drawn up is enforceable as an award Yes
8 Scope for appeal Restricted availability Not applicable since the parties themselves arrive at a settlement Available

On the basis of above analysis it is apparent that the ADR specifically Arbitration is the best and most effective solution to reduce the Himalayan pendency in various courts of our country. It is not to forget that the ADR is more effective as it is an amicable solution and both parties are in win – win position and brings about harmonious relationship between both the parties.
Q What is the difference between the Institutional arbitration and Ad-hoc Arbitration?
 

Ad hoc Arbitration :-

An ad hoc arbitration is one which is not administered by an institution and therefore, the parties are required to determine all aspects of the arbitration like

  • The number of arbitrators,
  • Manner of their appointment,
  • Procedure for conducting the arbitration, etc
Ad hoc Arbitration is mainly governed by the provisions of Arbitration and conciliation Act 1996 and parties are free to determine the procedure of proceedings, appointment of Arbitrators etc. Ad hoc arbitration is a proceeding that is not administered by others and requires the parties to make their own arrangements for selection of arbitrators and for designation of rules, applicable law, procedures and administrative support. Provided the parties approach the arbitration in a spirit of cooperation, ad hoc proceedings can be more flexible, cheaper and faster than an administered proceeding. The absence of administrative fees alone makes this a popular choice.

Institutional Arbitration

In institutional arbitration, a specialized institution with a permanent character intervenes and assumes the functions of aiding and administering the arbitral process, as provided by the rules of that institution. The institution only facilitates & administers the process- it does not arbitrate the dispute, it is the arbitrators who arbitrate. Often, the contract between the parties will contain an arbitration clause which will designate an institution as the arbitration administrator. If the institutional administrative charges, which may be substantial, are not a factor, the institutional approach is generally preferred. The primary disadvantages attending the institutional approach are:

    • Administrative fees for services and use of facilities may be high in disputes over large amounts, especially where fees are related to the amount in dispute. For lesser amounts in dispute, institutional fees may be greater than the amount in controversy;
    • Availability of pre-established rules and procedures which assure that arbitration will get off the ground and proceed to conclusion with dispatch;
    • The disputants may be required to respond within unrealistic time frames.
In institutional arbitration, the first issue arising for agreement of the parties is choice of the institution, appropriate for the resolution of disputes, arising out of their contract. Whilst making such choice, there are various factors to be considered i.e. nature & commercial value of the dispute, rules of the institution as these rules differ, past record and reputation of the institution and also that the institutional rules are in tune with the latest developments in international commercial arbitration practice.
Q What are the advantages of Institutional arbitration?
 

The advantages of institutional arbitration to those who can afford it are apparent. Foremost are:

    • Administrative fees for services and use of facilities may be high in disputes over large amounts, especially where fees are related to the amount in dispute. For lesser amounts in dispute, institutional fees may be greater than the amount in controversy;
    • The institution's bureaucracy may lead to added costs and delays and
    • Administrative assistance from institutions providing a secretariat or court of arbitration;
    • lists of qualified arbitrators, often broken out by fields of expertise;
    • Appointment of arbitrators by the institution should the parties request it;
    • Physical facilities and support services for arbitrations;
    • Assistance in encouraging reluctant parties to proceed with arbitration and
    • An established format with a proven record.
Q Whether the arbitrator or the arbitral tribunal is empowered to fix the arbitration venue at his level?
A

No. under section 20 (1) of the Arbitration & Conciliation Act, 1996, both the parties are free to agree on the place of the said Act, 1996 empowers the arbitrator/arbitral tribunal to determine the place of arbitration having regard to the circumsentences of the case including the convenience of the parties, whenever there is a disagreement between the parties in deciding the placement of arbitration.

In general, there is a provision in contract agreement that the department shall appoint a particular person by name or otherwise to act as sole arbitrator to adjudicate the disputes, if so arises, between the department and the contactor. Whereas the contractor challenge such appointment of the arbitrator on the plea that a departmental arbitrator can not be independent or impartial. Please advice on this issue.

Q Senor officer/ (usually heads of department or equivalent) of a corporation/ Public under taking not associated with the contract, are considered to be independent and impartial and are not barred from functioning as arbitrators merely because their employer is a party to the contract.
A

Further the supreme Court held that the chief justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named arbitral tribunal. Ignoring the named arbitrator/ arbitral tribunal and nominating an independent arbitrator shall be exception to the rule, to be resorted for valid reasons. Indian oil corporation Ltd. & ors v/s Raja transport (P) Ltd. – supreme court of India – 2009 (3) Arb. L R 354 (SC) – Decided on 24.8.2009.

Q Is it mandatory that the arbitration proceedings are conducted in English language?
A

Under section 22 (1) 1996 Arbitration Act, both the parties are free to agree upon the used in the arbitration proceedings. Failing and agreement refereed to in section 22(1), the arbitrator/ arbitral tribunal shall determine the language or languages to be used in the arbitration proceedings. Further under section 22.4 of the said Act, the arbitrator/ Arbitral tribunal any order that any documentary evidence shall be accompanied by a transaction into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

Q What is the crucial date on which the commencement of arbitral proceedings is considered?
A

According to section 21 of 1996 Arbitration act, unless otherwise agreed by the parties, the arbitration proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

You can send your any query regarding on various aspects of Arbitration law, Contract law, Construction Contract, Standard Bidding document to us at mail@ciac.in

 
 
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