AD HOC ARBITRATION AND INSTITUTIONAL ARBITRATION (By-Aanchal Dhuria)
AD
HOC ARBITRATION AND INSTITUTIONAL ARBITRATION
Authored By-Aanchal Dhuria
Abstract
Arbitration is
one of the oldest systems of alternative dispute resolution to the traditional
state administered court litigation. According to Aristotle, ‘it is equitable
to be patient under wrong (not to retaliate); to be willing that a difference
shall be settled by discussion rather than by force; to agree to arbitration
rather than to go to court- for the umpire in an arbitration looks to equity,
whereas the juryman sees only the law. Indeed, arbitration was devised to the
end that equity might have full sway’.[1]
This precept has been echoed by William O Douglas J. in Bernhardt v
Polygraphic Co.[2]
in the following language: ‘The nature of the tribunal where suits are
tried is an important part of the parcel of rights behind a cause of action.
The change from a court of law to an arbitration panel may make a radical
difference in ultimate result’
The origin of
arbitration may be traced back to the age-old system of village Panchayats
prevalent in ancient India. The decision of the Panchas while sitting collectively as Panchayat commanded great respect because
of the popular belief that they were the embodiment of voice of God and
therefore had to be accepted and obeyed un uestionably. In course of time this
mode of divine dispensation of justice throughg Panch Parnwswar underwent
radical and civilization. changes with the changing pattern of society and
growth of human knowledge and
civilization.
Introduction
Arbitration
in India during the 20th Century was governed by the Indian Arbitration Act,
1859 with limited application and the Second Schedule to the Code of Civil
Procedure. Thereafter, it was replaced by the Arbitration Act, 1940. The
Arbitration Act, 1940 was replaced by the Arbitration and Conciliation Act,
1996 which, by virtue of its Section 85, repealed the earlier Act of 1940. The
Act of 1996 was introduced in view of the growing[3]
complexities of modern commercial transactions in the wake of globalization of
economy which necessitated an effective redressal mechanism for speedy
settlement of domestic as well as international commercial disputes so as to
ensure uninterrupted flow of trade and commerce. This has been possible through
measures such as conciliation, mediation or arbitration which are considered as
relatively less expensive and speedy mechanism as compared with the court
proceedings which are expensive, dilatory and involve a complex and cumbersome
procedure.
The
Arbitration and Conciliation Act, 1996 was intended to comprehensively cover
international and commercial arbitrations and conciliations as also domestic
arbitrations and conciliations. It envisages the making of an arbitral
procedure which is fair, efficient and capable of meeting the needs of the
globalised economy. It sought to consolidate and amend the law relating to
domestic arbitrations and international commercial arbitration as also to lay
down the law relating to conciliation and matters connected therewith or
incidental thereto.
Arbitration
Arbitration is a
process in which a dispute is submitted to an impartial outsider who makes a
decision which is usually binding on both the parties.
Arbitration is a
means of securing an award on a conflict issue by reference to a third party.
It is a process in which a dispute is submitted to an impartial outsider who
makes a decision which is usually binding on both the parties.
It is a process
where there is a hearing and a determination of a cause between parties in
controversy by a person or persons chosen by them, or appointed under a
statutory provision.
The
parties submit their disputes/issues and are bound by the award of an
arbitrator in relation to the matter which is in dispute between them.
The
definition of “Arbitration” in Section 2 (1) (a) of the Arbitration and
Conciliation Act 1996[4]
is merely a clarification that the Act covers both ad hoc and institutional
arbitration. This definition corresponds to the definition as mentioned in
clause (a) of Article 2 of
UNCITRAL
Model Law on International Commercial Arbitration. Evidently, this definition
does not spell out the denotation of the term ‘arbitration’. At its core,
arbitration as a method of solving the litigation has been in meaning for
centuries. The need for a definition has always been subsidiary to its purpose
although attempts have been made at a definition. Quite a large number of
definitions of arbitration have been given from time to time. Halsbury says: “
An arbitration is the reference of a dispute or difference between not less
than two parties for determination, after hearing both sides in a judicial
manner, by a person or persons other than a court of competent jurisdiction”. [5]
Ad Hoc Arbitration And Institutional Arbitration
In India,
arbitration proceedings are of two types: ad-hoc arbitration and institutional
arbitration. The parties have the option to seek recourse to either of them
depending on their choice and convenience.
Ad-Hoc Arbitration:
It refers to an
arbitration where the procedure is either agreed upon by the parties or in the
absence of an agreement, the procedure is laid down by the arbitral tribunal.
Thus, it is an arbitration agreed to and arranged by the parties themselves
without seeking the help of any arbitral institution.
The parties then
have to determine all aspects of the arbitration like the selection and manner
of appointment of the arbitral tribunal, applicable law, procedure for
conducting the arbitration and administrative support without assistance from
or recourse to an arbitral institution. The arbitral mechanism is therefore
structured specifically for the particular agreement or dispute. If the parties
cannot agree on such arbitral detail or, in default of agreement, laid down by
the arbitral tribunal at a preliminary meeting once the arbitration has begun,
it will be resolved by the law of the seat of arbitration.4 It is open to the
parties to adopt the rules framed by a particular arbitral institution without
submitting its disputes to such institution. Parties may when they cannot agree
on the arbitral tribunal may agree to designate an arbitral institutional as
the appointing authority Parties can also incorporate statutory procedures such
as applicable arbitral law or adopt the UNCITRAL Arbitration Rules which are
specifically designed for ad hoc arbitral proceedings.
In Ad-hoc
arbitration, if the parties are not able to nominate arbitrator/arbitrators by
consent, the appointment of arbitrator is made by the High Court (in case of
domestic arbitration) and by the Supreme Court(in case of international
commercial arbitration). In India, still most of the arbitrations are Ad-Hoc
Arbitrations.
Advantages Of Ad Hoc Arbitration:
1. Suitable for all types of claims
Ad hoc arbitration if
properly structured should be less expensive than institutional arbitration. It
is suitable for use with for all types of claims, large or small. Bigger
corporations may prefer ad hoc arbitration as they often have large and
sophisticated in-house legal departments and have accrued experience in
managing arbitration proceedings. Ad hoc arbitration may be designed according
to the requirements of the parties, particularly where the stakes are large or
where a state or government agency is involved. The parties are in a position
to devise a procedure fair and suitable to both sides by adopting or adapting
to suitable arbitration rules.
2. Control of the process
Parties are in control of the process. They
can write their own rules, set their own timelines and move the arbitration
along their own pace. The arbitral tribunal and to a lesser extent the parties
have to shoulder the burden of organising and administering the arbitration
proceedings.
3. Agreed procedures
The effectiveness of ad hoc arbitration
depends upon the parties’ willingness to agree upon procedures at the time when
they are already in dispute. If the parties do not cooperate in facilitating
the arbitration, there could be loss of time in resolving the issues.
4. Flexibility
Ad hoc arbitration is
flexible in allowing the parties to cooperate and decide upon the dispute
resolution procedure. It is only natural that once a dispute arises, parties
tend to disagree even on the most basic of things. For example, parties of
different nationalities and jurisdiction may misunderstand each other. They may
find it difficult to agree and cooperate, which can delay the arbitration and
frustrate the resolution of the dispute.
5. Ready-made arbitration rules
Parties can avoid such disagreement and avoid
delays if [6]they
agree to conduct the arbitration under for example, UNCITRAL selected
arbitration rules. The result is less time and legal expense spent in
determining complex arbitration rules to be used in the arbitration.
6. Sovereignty issue
State parties may prefer ad
hoc arbitration if they are concerned that a submission to institutional
arbitration devalues their sovereignty particularly when the disputes involve
public interest and large sums of public monies. They would want the
flexibility to define issues quickly and also adopt acceptable procedures; for
example; they may wish to file simultaneous pleadings as neither party would
want to be a respondent as they both believe they have justifiable claims
against each other.
7. Cost-effectiveness
Ad hoc arbitration is less expensive
than institutional arbitration. The parties only pay fees of the arbitral
tribunal, lawyers or representatives, and the costs incurred for conducting the
arbitration, i.e. expenses of the venue charges, etc. They do not have to pay
the arbitration institution’s administration fees which, if the amount in
dispute is considerable, can be prohibitively expensive. The parties also have
the flexibility of holding the hearings at any venue. Normally, an
institutional arbitration will be held in the institution premises.
8. Remuneration of arbitral tribunal
In ad hoc arbitrations, the
parties will have to agree the scale of remuneration with the arbitral panel
and agree fees directly with the arbitral tribunal who will have to collect the
money directly from the parties. Although most arbitrators are detached in
dealing with these matters, there will inevitably be some degree of distraction
which may lead to awkwardness LatestLaws.com for all concerned. There is no
opportunity for negotiation of the fees in institutional arbitration, which
requires the parties pay arbitral tribunal fees as stipulated by the
institution.
Disadvantages Of Ad Hoc
Arbitration:
· Parties
in ad hoc arbitrations normally have to rely on their own good judgment as to
the identity and quality of the individual arbitrator. This may be particularly
difficult, in the context of international arbitration, as a party may not be
able to choose a well known arbitrator from his country due to objections of
national bias and would have little, or no, knowledge of arbitrators outside
his country.
· Only
effective when both parties are ready to cooperate with each other as it
depends for its full effectiveness upon the spirit of cooperation between the
parties and their lawyers backed up an adequate legal system in the place of
arbitration.
Institutional
Arbitration
In an institutional arbitration, the arbitration agreement
may stipulate that in case of dispute or differences arising between the
parties, they will be referred to a particular institution such as:
·
Indian Council of Arbitration(ICA)
·
International Chamber of Commerce(ICC)
·
Federation of Indian Chamber of Commerce &
Industry(FICCI) [7]
·
World Intellectual Property Organisation(WIPO)
·
The International Centre for Alternative Dispute
Resolution(ICADR)
·
London Court of International Arbitration(LCIA)
All these institutions have framed
their own rules of arbitration which would be applicable to arbitral
proceedings conducted by these institutions. Such rules supplement provisions
of the Arbitration Act in matters of procedure and other details as the Act
permits. They may provide for domestic arbitration or for international
commercial arbitration or both and the disputes dealt with by them may be
general or specific in nature.
In an institutional arbitration, the
arbitration agreement designates an arbitral institution to administer the
arbitration. The parties then submit their disputes to the institution that
intervenes and administers the arbitral process as provided by the rules of
that institution. The institution does not arbitrate the dispute. It is the
arbitral panel which arbitrates the dispute.7 There are many excellent
organizations, world-wide,
that have the capability and the knowhow to
deliver this service. The parties may stipulate, in the arbitration agreement,
to refer a dispute between them for resolution to a regional institution, for
example, Cairo Regional Centre for International Commercial (CRCICA), Singapore
International Arbitration Centre (SIAC) .
Advantages Of Institutional
Arbitration
1. Reputation
One of the biggest
advantages of opting for institutional arbitration is the reputation of the
institution. Decisions given under the name of any prestigious institution is
easier to enforce as it is accepted by a majority of other bodies.
2. Efficient Administration
One more advantages of going for institutional
arbitration is that such institutes provide trained staff to the parties for administering the
whole process. The administrative staff will lay down the rules, ensure that
the time limits are being complied to, and the process is going ahead as
smoothly as possible.
In the case of institutional arbitration, the
rules of the arbitration are generally fixed by the institution. There is no
further dispute between the parties regarding the rules of the procedure, which
might happen in the case of ad-hoc arbitration. Also, the rules are framed
keeping all eventualities in mind, as these institutions have an experience of
going through various arbitration proceedings and know what eventualities may
arise. Also, the rules are flexible in nature. There is a mechanism to oppose
any part of the process which is not consistent.
One of the major advantages of
institutional arbitration is that they have an extensive panel of experts, who
acts as arbitrators. These institutions also have arbitrators who specialize in
different areas, so that any type of dispute can be resolved. Big institutions
like ICC also have a network of national committee for appointment of
arbitrators to ensure that there is no bias based on the country to which the
parties belong.
Apart from the
administration of the arbitrational process, some institute also supervises the
process, i.e., examine the award or penalty sanctioned ensuring that due
process of law has been followed, and proper reasoning has been given to the
parties for taking that particular decision.
Remuneration of the Tribunal
In the case of institutional
arbitration, the remuneration to be paid to the arbitrators is already fixed.
The disputing parties do not have to haggle with the arbitrators to decide the
terms and amount of remuneration. The remuneration of the arbitrators in case
of institutional arbitration is based on a fixed scale. The money is paid to
the arbitrators without involving them directly.
6.
Default
Procedure
Many institutional arbitrators
expressly provide the rule that the proceedings will continue and not stop in
between, even if one of the parties defaults in the course of the proceedings.
For instance, Article 21 (2) of the ICC Rules states that if any party fails to
appear for the proceeding without giving any valid excuse, even after it has
been duly summoned by the institution, the Tribunal will proceed with the
proceedings.
Disadvantages Of Institutional
Arbitration
There may be situations where the
parties need to respond to the institution or pursuant to its rules within
unrealistic time frames, though the parties may be able to agree to time frames
more appropriate for the situation.
· Some
users tend to complain about an overly “bureaucratic” feeling to the process. · Some
institutional fees may be expensive, in particular where they reflect a percentage
of the value of a significant amount in dispute.
·
Inflexible as it takes away the exclusive autonomy of the parties over
arbitration proceeding
Which Form Is Acceptable In Present
Indian Scenario
The Indian Arbitration and
Conciliation Act, 1996 is 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 is
also a party to the New York Convention (on enforcement of arbitration awards)
allowing arbitral awards to be enforced by the
courts in almost any country around
the world. The Act provides for party autonomy, maximum judicial support of
arbitration and minimal intervention. Section 89 of Civil Procedure Code, 1908
also supports settlement of disputes outside the court through the methods of
Alternate Dispute Resolutions. Among the various forms of ADR, arbitration
stands out as the most favourable mode. It is widely accepted that India
prefers Ad Hoc Arbitration over Institutional Arbitration. Though various
arbitral institutions have been set up in India, ad hoc arbitration continues
to be the preferred mode of arbitration as in the Indian business community,
people relied upon and put their faith on the ad hoc form of arbitration, and
the concept of institutional arbitration is r[11]elatively
new to the Indian community. The growth of institutional arbitration
LatestLaws.com mechanism is inevitable. Also, the support of the Courts to the
institutional arbitration mechanism gives it a huge boost. The Arbitration and
Conciliation Act, 1996 is based on the UNCITRAL Model, which provides it with a
lot of stability and uniformity, and it is at par with international standards
of arbitration, which will surely be very beneficial for the institutional
arbitration mechanism in the long run.
Challenges Faced By Institutional Arbitration In India
It is widely accepted that India prefers Ad Hoc
Arbitration over Institutional Arbitration. Though various arbitral
institutions have been set up in India, especially in the last five years, ad
hoc arbitration continues to be the preferred mode of arbitration. Moreover, a
large number of international arbitrations involving Indian parties are seated
abroad and administered by foreign arbitral institution.[12]Challenges
to Institutional Arbitration in India, examines the reasons why Institutional
Arbitrationis not the preferred mode of arbitration in India, with particular
focus on: (1) misconceptions regarding institutional arbitration;
(2) lack of governmental support for institutional
arbitration;
(3) lack of statutory backing for institutional
arbitration; and
(4) problems with delays and excessive judicial
involvement in arbitration proceedings.
- Misconceptions Regarding
Institutional Arbitration – There are several misconceptions relating to
institutional arbitration that exist among parties. One of these is
related to costs. Parties consider Institutional Arbitration to be
substantially more expensive than ad Hoc Arbitration, primarily because of
the administrative fees payable to arbitral institutions.
This assessment is largely misconceived because:
(a) numerous arbitral institutions charge very
reasonable fees;
(b) the use of an arbitral institution helps avoid disputes
over procedural matters resulting in cost savings; and
(c) the costs of an ad hoc arbitration can easily
exceed the costs of an institutional arbitration in case of additional
procedural hearings, adjournments, use of per-hearing fees, litigation arising
from procedural infirmities in ad hoc arbitrations etc.
Parties also often believe that institutional
arbitration is inflexible because arbitral institutions follow rules that take
away exclusive autonomy of the parties over arbitration proceedings. However,
most arbitral institutions that exist in the international scenario have made
an attempt to balance institutionalisation with party autonomy, they only keep
those issues which deal with the legality and integrity of proceedings out of
the purview of party autonomy.
These misconceptions could be due to a general lack of
awareness regarding institutional arbitration and its advantages. This could
also be due to the lack of [13]initiative
on the part of arbitral institutions to promote their work and facilities as
well as on the part of lawyers to properly advise parties about the advantages
of institutional arbitration. Even when there is awareness on the existence of
institutional arbitration as an option, there is often the misconception that
this option is only available to bigger businesses and/or high value disputes.
- Governmental Support For
Institutional Arbitration – One of the reasons for a weak Institutional
Arbitration framework in India is the lack of sufficient governmental
support for the same over the years. While the government is the most
prolific litigant in India, it
can do more in this capacity to
encourage institutional arbitration. The general conditions of contract used by
the government and public sector undertakings often contain arbitration
clauses, but these clauses usually do not expressly provide for institutional
arbitration.
Further, the government policy on
arbitration requires a relook if institutional arbitration is to become the
norm, particularly for disputes valued at large amounts. For instance, if the
government, being the biggest litigant, were to adopt institutional arbitration
as regular practice, the sheer volume of cases moving to arbitral institutions
would provide a powerful impetus to Institutional Arbitration.
There have recently been discussions
and initiatives on the part of some state governments as well to promote
Institutional Arbitration, citing that it would be more organised and
cost-effective One of the recommendations made by
the Law Commission of India. was that trade
and commerce bodies must establish chambers with their own rules. However,
effectively, the government has so far focussed its attention on arbitration in
general. To encourage Institutional Arbitration, special action aimed at the development
of arbitral institutions is required.
- Lack Of Statutory Backing For
Institutional Arbitration – The Act has been arbitration-agnostic, with no
provisions specifically geared towards promoting institutional
arbitration. This is in contrast with jurisdictions like Singapore, where
the Singapore International Arbitration Centre (“SIAC”) is the default
appointing authority for arbitrators under the International Arbitration
Act, 1994 (“IAA”) which governs international arbitrations.
In fact, one of the provisions of the
Act, Section 29A which was inserted by the 2015 Amendments, is perceived to
have made arbitral institutions wary of arbitrations in India. Section 29A
provides for strict timelines for completion of arbitration proceedings. This
has been criticised as unduly restrictive of arbitral institutions which
provide for timelines for different stages of the arbitration proceedings.[13] The
merits of such a view require examination in light of the endemic problem of
delays plaguing arbitration in India.
- Problems With Delays And
Excessive Judicial Involvement In Arbitration – Delays in Indian courts
and excessive judicial involvement in arbitration proceedings have
resulted in India not being favoured as a seat for arbitration, and
consequently stunted the growth of international arbitration (including
institutional arbitration) in India. Parties often delay arbitration
proceedings by initiating court proceedings before or during arbitration
proceedings, or at the enforcement stage of the arbitral award. The high
pendency of litigation before Indian courts means that arbitration-related
court proceedings take a long time to be disposed of. The Commercial Courts
Act sought to remedy this situation by setting up commercial courts at the
district level or commercial divisions in high courts having ordinary
original civil jurisdiction. These commercial courts /[14]divisions
hear arbitration matters involving commercial disputes, amongst other
commercial matters
However, an examination of the recent roster of the
Bombay High Court, for example, indicates that commercial division judges often
hear matters other than commercial matters, such as family law matters, juvenile
justice-related matters etc. If commercial division judges are tasked with
hearing matters other than commercial matters, it would detract from the
legislative intent of speedy disposal of commercial matters, including
arbitration matters. Additionally, we noted that the rotation policy of these
High Courts was also applicable to commercial division judges. An excessively
frequent rotation might hinder the creation of specialist arbitration judges
who are well-versed in arbitration law and practice. Indian courts’ tendency to
frequently interfere in arbitration proceedings have also contributed to
India’s reputation as an ‘arbitration-unfriendly’ jurisdiction.
It is a well-known fact that courts in India are
generally interventionist when it comes to regulating arbitration proceedings,
whether it is at an initial stage of arbitration proceedings (such as the
appointment of arbitrators, referral of disputes to arbitration or grant of
interim relief) or at the enforcement stage. They have, despite good intentions
and justifications, often misjudged the course to take, doing justice in the
case at hand but laying down questionable precedent for the future .Further,
inconsistent judicial precedent on several crucial issues] has
contributed to uncertainty regarding the law, with severe consequences for
India’s reputation as a seat of arbitration.
In addition to the above-mentioned negatives
of Institutional arbitration, following are the challenges of the
institutional arbitration in India.
- Issues relating to administration and
management of arbitral institutions.
- Perceptions regarding arbitrators and expertise
issues relating to resources and government support, lack of initial
capital, poor and inadequate infrastructure, lack of properly trained administrative
staff, lack of qualified arbitrators, etc.
- Issues in developing India as an international
arbitration seat.
To address the challenges and
shortcoming of the Institutional arbitration, a High-Level Committee (HLC)
to Review the Institutionalisation of Arbitration Mechanism in India under Mr
Justice B N Srikrishna was constituted in 2016. The committee submitted its
report on 3 August, 2017 in relation to institutional arbitration
landscape in India the committee had put forward following view
- Set up an autonomous body, styled
the Arbitration Promotion Council of India (APCI), having
representatives from all stakeholders for grading arbitral institutions in
India.[16]
- The APCI may
- recognize professional institutes providing for
accreditation of arbitrators.
- hold training workshops and interact with law firms and
law schools to train advocates with interest in arbitration.
- create a specialist arbitration bar comprising of
advocates dedicated to the field.
- A good arbitration bar could
help in the speedy and efficient conduct of arbitral proceedings.
- Creation of a specialist Arbitration Bench
to deal with such commercial disputes, in the domain of the Courts.
- Changes suggested in various provisions of the 2015
Amendments of the Arbitration and Conciliation Actwith a view to making
arbitration speedier and more efficacious and incorporate international
best practices (immunity to arbitrators, confidentiality of arbitral
proceedings, etc.).
- The Committee is also of the opinion that
the National Litigation Policy (NLP) must promote arbitration in
government contracts.
- Government’s role – The Central Government
and various state governments may stipulate in arbitration
clauses/agreements in government contractsthat only arbitrators accredited
by any such recognised professional institute may be appointed as
arbitrators under such arbitration clauses/agreements.
Comparative Analysis Of Indian
Arbitration Institutions And Othersuccessful Arbitration Institutions Across
The Globe[17]
Institutional Arbitration in a nation flourishes only when its
arbitral institutions fulfill the basic requirements to successfully and
effectively carry out an arbitration process. These requirements include:
Degree of Permanency – Disputes
frequently arise many years after the making of the original commercial
agreement, particularly in long term contracts. It is important that the
institutions named in the arbitration clause should still be in existence when
the dispute arises, otherwise, the arbitration agreement may prove to be “inoperative
or incapable of being performed”, in the words of New York Convention, and
the only recourse will be to the national court.[18]
It is easier to have confidence if the institution or the centre
that is chosen has an established track record or, if it is a recent creation,
has some reasonable guarantee of permanency. The International Chamber Commerce
and London Court of International Arbitration established in 1923 and 1892
respectively have a track record of successful arbitrations over the course of
their prolonged existence.
The Indian Council Arbitration was established in 1965. At the
beginning of the year 2010, 574 arbitration cases were pending with the Council
at different stages of arbitration proceedings but by the end of that year, 579
arbitration cases were under process including 20 arbitration matters which
have been pending in courts pursuant to litigation between the parties.Thus,
though not as successful as the ICC or the LCIA, the ICA has shown reasonable
guarantee of permanency.
2. Modern Rules of Arbitration – The
practice of International Commercial Arbitration changes as new laws and
procedures come into existence, both nationally and internationally. It
important that the rules of arbitral institutions should be altered to reflect
these changes and not rest in some comfortable time wrap. The ICA rules
are in accordance with the IACA, 1996. For instance, the appointment of sole
arbitrator or three arbitrators in the arbitral tribunal is in harmony
with section 10(1) of the IACA, 1996.
3. Qualified Staff – One
of the main objects of an arbitral institution is to assist arbitrators and the
parties in the conduct of arbitration. This assistance may extend not only to
explaining the rules, making sure that the time limits are observed, collecting
fees, arranging visas and reserving accommodations, but also to advising on
appropriate procedures by reference to past experience. It is a task that
requires a combination of qualities, tact and diplomacy as well as legal
knowledge and experience.
It
is an area in which ICC sets the standard, with each arbitration being under
the supervision of a designated “Counsel”, drawn from the ICC’ staff of
experienced and multi-lingual lawyers. Though, the ICA does not has such a
designated counsel to supervise arbitration, it does boats a panel of around
1500 arbitrators with an extensive array of professional qualifications and
expertise (legal and non- legal), guaranteeing a tribunal of the highest
aptitude and proficiency. The ICA has access to the most eminent and experienced
arbitrators and with the widest range of expertise from India, U.K., Singapore,
France, USA, Malaysia, Germany and Belgium.
4.
Reasonable Charges – The
process of Arbitration is deemed efficacious if along with being expeditious
and just, it is cost effective as well. Some arbitral institutions including
the International Chamber of Commerce and the Indian Council of Arbitration
assess their own administrative fees and expenses, and the fees payable to the
arbitrator, by reference to a sliding scale which is based on the amounts in
dispute. This has the advantage of certainty, in that the parties can find out
at a reasonably early stage what the total cost of arbitration is likely to be.
5.
Other
institutions, such as the LCIA, assess their administrative costs and expenses,
and the fees of the arbitrator, by reference to the time spent on the case.
Conclusion
The Arbitration Conciliation Act, 2015 has made an attempt to
come to rescue in this regard by fixing fees and timeline for arbitration but
the thorn in the flower is that courts are again to intervene to investigate as
to who is to be blamed for the delay in meeting the timeline. Further, the High
Courts have been provided the power to make rules for fees and the manner of
payment which again would lead to lack of uniformity as each High Court of
different states across India would have their own rules. Therefore, one needs
to promote Institutional Arbitration in India.
It is universally acknowledged that, the quality of arbitration
proceeding depends on the quality and skill of the arbitrators chosen and the
Courts may not have the expertise in appointment of arbitrators who would be
expert qua the subject matter in dispute. Moreover, in International Commercial
Arbitrations, a national court judge understandably will have limited
experience, expertise and resources for selecting suitable international
arbitrators; particularly if practitioners form other countries must be
selected. While having an arbitral institution making an appointment would be
more beneficial as then they would be specifically organized to perform the
function of selecting international arbitrators because of their day-to-day
involvement in international arbitration and access to a pool of highly
qualified arbitrators.
Also, Institutional Arbitration should be promoted where arbitration
is carried out on a day to day basis say for instance 10 am – 4 pm so that
there is no backlog of cases or delay in concluding the arbitration
proceedings. Fees issue would also be taken care of by Institutional
Arbitration as such Institutions have a fix fee schedule which will negate
space for ambiguity
Further, steps can be taken to make the order passed by the
Arbitrator under Institutional Arbitration open to appeal or review only by a
President/Registrar(Head) of the Institution so as to negate parties taking the
court route and the decision of the abovementioned authority can be made final
and binding upon the parties and also the parties shall be taken to have waived
any right to appeal or review in respect of any decision of the abovementioned
authority to any state
court or other judicial authority. Besides, Court intervention in
arbitration proceeding could be allowed only when arbitration agreement
specifically provides for it.
We should make Institutional Arbitration an attractive hub for
foreign parties and investors, certain things are to be kept in mind like a
forum is attractive as a seat only if it has a judiciary that is supportive of
arbitration. Further, the Institutions conducting Arbitrations in India should
be provided ample resources and opportunities to participate in important
international arbitration conferences and to host one to two major
international arbitration conferences at least in a year so that it would
invite worldwide participation/attention and exposure that can enhance the
international image of Institutional Arbitrations in India and attract foreign
parties to arbitrate in India.
Thus, Institutional Arbitrations should be given a green flag with
patient expectations about its results rather than taking any hasty decisions
because one thing is trustworthy that if countries like Singapore and Hong Kong
can become Arbitration hubs on the strength of Institutional Arbitrations, so
can India. India is on the track of establishing confidence in its legal system
which is the fundamental condition for any country to become an international
arbitration venue.
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·
Markanda.P.C, Law relation to Arbitration and
Conciliation (1998) Universal, Delhi
·
P.C.Rao & William Sheffield, Alternative
Disputes Resolution- What it is and how it works? (1997), Universal, Delhi
·
S.K. Chawla, Law of Arbitration and Conciliation
(2012), Eastern Book House, New DelhI
Webliography
·
https://shodhganga.inflibnet.ac.in/bitstream/10603/201577/9/09_chapter%203.pdf.